Jerusalem District Court Judge David Mintz today extended the stay of proceedings for Hadassah Medical Center, despite its operating deficit, and scheduled a new hearing for April 24. He told the parties, especially the government's representatives, that anyone who was planning a Passover holiday vacation with their families, should forget about it. "We talking about the saving of lives," he said, and ordered the parties to pursue continuous negotiations on a recovery plan for the hospital in line with the demands by Hadassah Women's Zionist Organization of America.
Today's hearing comes after the public committee established by Minister of Health Yael German (the Gabbay Committee) last week recommended taking control of Hadassah Hospital away from the Hadassah Organization, even as it said, "The Organization will continue to make substantial donations to the hospital.
In an urgent motion filed on Friday with the Jerusalem District Court, the Hadassah Organization threatens that if control of the hospital is taken away from the organization, not only will it halt donations to the hospital, the US philanthropic network for all Israeli organizations will be affected, as well as "the delicate fabric of relations with the Diaspora".
Before today's hearing, Judge David Mintz ordered the Ministry of Health and the Ministry of Finance to respond to the harsh allegations made by the Hadassah Organization even though the government is not yet ready to do so.
In the motion, the Hadassah Organization says that the government bears the main responsibility for the financial condition of Hadassah Hospital and that the government's position as presented in the negotiations on a recovery plan and in the Gabbay Committee recommendations is shameless. "If it were not enough that the state is responsible for the deficit, it now wants to transfer control of Hadassah Medical Center from the Hadassah Women's Organization, taking assets owned by the petitioner, at a time when the petitioner is supposed, under the state's method, to continue contributing to the medical center as before and as if this were binding… The state treats the petitioner's immense contribution in a humiliating way, takes for granted its huge capital inflows, and is prepared to illegally and unhesitatingly harm its rights. It is superfluous to mention that beyond the severe harm to the petitioner, this conduct harms the delicate relations with the Diaspora, with the state trying to seize assets, which many Diaspora Jews helped purchase."
The Hadassah Organization asks the court, "The petitioner wishes to make it clear that it owns the land, assets, and the rights of the hospital as reflected in the financing agreement and in the request for a stay of proceedings, and it will not agree to any attempt to harm its assets by the state, it will not agree to contribute, and it will not agree to continue and allow use of its assets without payment of proper rent, if the state will not carry out and fulfill its obligations with regard to the hospital."
The Hadassah Organization says that the government is responsible for Hadassah Hospital's financial condition, because the hospital has always been required to provide public medical services, without being eligible for the balance grants and support given to public hospitals. The organization is now demanding that the government decide the nature of Hadassah Hospital: if it wants the hospital to continue to serve as a public hospital, then it should end the discrimination compared with public hospitals with regard to budgets; if it refuses to do this, then it should allow Hadassah to function as a private hospital for all intents and purposes, which means that it will only carry out profitable activity.
Given the fact there is only one other hospital in Jerusalem - Shaare Zedek Medical Center - it seems that the government cannot allow the second option, a fact that the Hadassah Organization is undoubtedly aware of. The organization says that if the government agrees to its proposal that includes not only regular aid for the hospital, but also a substantial inflow to cover the hospital's debt and allow it expand its private healthcare practice, the organization will make a one-time $25 million capital injection in addition to its annual contribution of at least $19 million a year during the recovery period.
The Hadassah Organization's motion is full of pathos, including serious accusations about the government's conduct regarding the hospital. It states, "The petitioner is not an 'ordinary' controlling shareholder in the insolvent company. The petitioner is a Zionist non-profit philanthropic organization, whose goal is to promote Israel's health system, and which over decades has donated billions of dollars to establish a magnificent, professional, and high quality university medical center in Jerusalem, the capital of Israel…
"The state has infuriatingly ignored every request for aid by the petitioner and the medical center, and their warnings that without this aid, the medical center will collapse. It seems that the state has acted this way with the clear purpose of causing the hospital's huge deficits with the idea that the petitioner's deep pockets will cover any deficit, and that it is therefore possible to impose the heaviest regulation on Hadassah Hospital and ignore the financial reality created by the state, because the American uncle, or in this case, the American aunt, will bear the burden."
Published by Globes [online], Israel business news - www.globes-online.com - on April 13, 2014
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