Hadassah Hospital to restrict private practice

The hospital and the Finance Ministry agree to limit doctors' private surgeries as part of the financial recovery plan.

The Ministry of Finance and Hadassah Medical Center CEO Avigdor Kaplan plan to rein in private healthcare services at the hospital, thoroughly changing the business model and affecting doctors' income.

Sources inform ''Globes'' that in the talks on Hadassah Hospital's recovery plan, Kaplan and Ministry of Finance officials have agreed in principle that private healthcare services will only be offered during the afternoon, except for complicated surgical procedures that take many hours. Doctors will no longer be allowed to conduct their private practice during the morning, as they can at present, basically enjoying two sources of income simultaneously.

Another change agreed upon will also face opposition from doctors: Hadassah Hospital will increase its share of income from private healthcare at the doctors' expense. The original agreement with the doctors set the hospital's take from private healthcare at 27%, although in practice, its actual take has been 10-20%. Kaplan intends wants to implement the 27% gross take, but the Ministry of Finance wants more - at least 30% net.

Notwithstanding the disagreement over the numbers, the ministry and the hospital agree that the current private healthcare model enriches star doctors, but has left the hospital with a deficit of NIS 1.3 billion.

Although private healthcare is one of the hottest and most complicated topics as far as the expected struggle with the doctors is concerned, Hadassah Hospital's financial recovery requires thorough change in its budgeting. The Ministry of Finance agrees. The hospital's annual expenditure total NIS 2 billion, but its income is NIS 1.7 billion, resulting in an annual shortfall of NIS 300 million.

One of the main reasons for this is the huge number of surgical procedures Hadassah Hospital provides for health funds, at 20-40% of fixed rates. The high discounts are because of the health funds' bargaining power in Jerusalem, where there are essentially just two hospitals - Hadassah and Shaare Zedek Medical Center (which now owns Bikur Holim Hospital). If this were not enough, the Ministry of Health and the health funds recently signed an agreement requiring hospitals to extend their contracts with the health funds through 2016, which is not good news for Hadassah Hospital, to put it mildly.

The Ministry of Finance admits that there is no alternative to a capital injection into Hadassah Hospital, at least in the short term, but it insists on streamlining measures to cut costs. These include layoffs and the elimination of positions, especially among administration and support staff, who are already waging a personal and aggressive campaign against Kaplan. They are protesting the fact that he earns NIS 100,000 a month even as he is demanding pay cuts and reductions in their benefits.

Meanwhile, both Hadassah Hospital's management and employees look at the new recently built grandiose hospital building with the knowledge that this expense cannot be cut.

Published by Globes [online], Israel business news - www.globes-online.com - on January 9, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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