Last month, a Hadassah clinic was inaugurated in Limassol, Cyprus, during an official ceremony attended by Israel’s President Isaac Herzog. But the Ministry of Health and Ministry of Finance claimed they had no prior knowledge of the initiative, and the business model itself remains unclear. What exactly has been launched under the "Hadassah" brand, and how does this relate to the hospital’s other ventures in Russia and Mexico?
The Israelis behind the venture
According to Hadassah’s plan, the first phase involves opening a medical clinic in Limassol, Cyprus’s second-largest city and a major tourism hub. The long-term aim is to establish a full-scale hospital in Nicosia.
According to sources close to Hadassah, the venture is under Cypriot ownership. Hadassah Hospital itself holds no equity in the project, and Hadassah’s own physicians will not be employed there. They will, however, provide training for the doctors working at the clinic and may earn fees for consulting with the Cypriot facility’s medical staff. A portion of this revenue will also flow to the hospital.
Hadassah also hopes that the Cypriot project will serve as a channel to attract medical tourists to its hospital in Jerusalem - a welcome prospect following a period of war, during which medical tourism to Israel has significantly declined. The project’s website in Cyprus outlines an ambitious plan including a medical campus in Nicosia, to be completed by 2027. It will feature a full-scale hospital encompassing all major medical specialties, a rehabilitation center, assisted living facilities, a commercial zone, a hotel for families, and 210 apartments for the general public and staff.
The actual construction will be carried out by a company named Osopil, registered to Israelis David Alster and Eli Israeli. Israeli was one of the founders of Mul HaYam mall in Eilat, which he later sold to Azrieli Group.
Who was unaware of the project's existence?
The announcement regarding the Cypriot venture caught the Ministry of Health by surprise. While Hadassah maintains that the project in Cyprus is, in fact, the execution of a long-standing contract, of which the Ministry of Health should have been aware, the Ministry says the initiative was launched without its knowledge and is demanding an examination of its business model.
Concerns have been raised within the healthcare sector that Hadassah’s lack of familiarity with the Cypriot real estate market might mean they do not fully know who their partners in the venture are. The hospital stated that it conducted extensive due diligence, covering both the Cypriot project developers and all investors brought on board, to ensure there is not the slightest risk that the operations are being used for improper purposes.
The Ministry of Health also fears that resources from the Israeli public healthcare system could be diverted to benefit foreign patients. However, sources close to Hadassah insist, "There is no law or regulation prohibiting doctors in Israeli public hospitals from working with international clients during their private practice hours - a practice that is, in fact, quite common. In reality, from 15.00 onwards, the working hours of a physician in the public system are essentially a 'black hole' as far as the system is concerned."
Many hospitals in Israel maintain teaching or support relationships with entities abroad and also dispatch training and aid delegations. "At Hadassah, any hours a physician works beyond their public-sector hours fall under our private medical service (Sharap) framework, so we know exactly what they are doing," the sources add.
The tension between the parties is not an isolated incident. As a non-governmental public hospital that has faced budgetary crises over the years, Hadassah tends to "test the boundaries" in its dealings with the state. The hospital claims it is discriminated against by the state compared with government-run hospitals, and it strives to sustain itself independently.
At the same time, it relies on the state to extricate itself from crises. Under a major recovery plan signed in 2014, which concluded in 2020, the state injected NIS 1.4 billion into the hospital in exchange for tighter oversight of its operations. Currently, Hadassah notes that, according to audited financial statements, the deficit for 2025, even accounting for the war, amounts to about 1.5% of its annual operating turnover.
On the current initiative, Hadassah maintains that its operations in Cyprus are based on an agreement signed back in 2016, which authorized Hadassah to enter into engagements with three countries: Russia, Cyprus, and Mexico. The agreement was signed by then Hadassah CEO, Prof. Zeev Rotstein. According to a 2018 report by Shai Niv in ‘Globes," both the Hadassah board and the state-appointed comptroller overseeing the hospital only learned of the agreement after the fact. In any event, Hadassah states today that the Ministry of Health has been well aware of this agreement since 2018.
Operations in Moscow scaled back
A hospital operating under the Hadassah brand was opened at the Skolkovo Innovation Park in Moscow. Until now, its operations have proceeded largely under the media radar. Russian President Vladimir Putin had envisioned a complex of international hospitals at the site, where patients would be treated according to the medical protocols of each hospital’s country of origin, even if those protocols had not yet been approved within Russia. This concept was developed in collaboration with the consulting firm Boston Consulting Group. Hadassah Moscow was the first hospital established at the site and remains the anchor of the complex today.
The Moscow hospital is owned by Medscan, a partnership between Russian businessman Evgeny Tugolukov and Rosatom, the Russian state-owned nuclear corporation. In a 2025 interview with the Russian outlet RBC Radio, conducted as part of a potential public offering for Medscan, Tugolukov identified Hadassah Moscow as the company’s flagship clinic, noting that it generated 5 billion rubles (some $50 million at the time) in revenue during 2024. In Russia, the project is considered a success and proudly bears the Hadassah name.
Sources close to Hadassah say the organization holds no equity in the hospital and its involvement with the venture is very limited. Initially, doctors from Hadassah would travel to the hospital to provide treatment, but after the outbreak of the Russia-Ukraine war, involvement decreased significantly. Given that Hadassah is owned by a US non-profit organization, it is likely that, the organization deemed it prudent to scale back its ties with Russia.
In a letter to Hadassah requesting clarification about the hospital in Cyprus, the Ministry of Health noted that Hadassah faces a potential $30 million indemnification liability toward doctors at the Russian facility - a matter the Ministry argued it should be informed about and approve. Hadassah stated that this indemnification applies to its own Israeli physicians involved in the project, though fewer are involved now than in the past. Hadassah says this arrangement became necessary after international insurance companies ceased operations in Russia.
And what about Mexico? The plan was to build a large hospital there under the Hadassah brand. This has not yet materialized, though Hadassah has not ruled it out. Currently, operations are focused primarily on the Jewish community, involving specialized genetic tests developed at Hadassah as part of an aid program for the local community facilitated by the hospital’s Jewish donors. Hadassah conducts these tests as part of its medical tourism activities.
In the coming weeks, representatives from Hadassah Hospital, the Ministry of Health, and the Ministry of Finance will meet to review the full plan and discuss feedback. This comes because of the elections, which could lead to leadership changes within these ministries and, consequently, a potential shift in policy on the relationship between the private and public healthcare sectors.
Published by Globes, Israel business news - en.globes.co.il - on October 26, 2026.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2026.