Hadassah Medical Center is preparing to lay off some 200 doctors, nurses, administrative, maintenance and clerical workers this month, and its parent organization may this summer begin pumping in perhaps more than $10 million as the hospital continues struggling for its very survival, The Jewish Week has learned.
The hospital is now bracing for a threatened employee strike once the layoffs are announced.
Marcie Natan, national president of Hadassah, the Women’s Zionist Organization of America — which founded, owns and supports the hospital — said her organization would continue to do what it can to make sure the hospital cuts costs and receives sufficient funding so that a $4 million turnaround plan has time to take effect.
“The hospital is running a $50 million-a-year deficit, and even if all the usual cost savings were implemented, it could not save it,” she told The Jewish Week. “That is the reason we brought in PricewaterhouseCoopers” to develop and implement a turnaround plan.
After about two months of work, experts from PricewaterhouseCoopers issued a preliminary report that reportedly calls for the layoff of 200 staffers. A final report is to be presented May 30 and June 2.
Natan said she is confident that through a combination of cost cutting, efficiencies, infusions of money and new management — which she called a “key to success” — “the hospital can be put on a sound financial footing.”
“It is going to take a year and a half to two years, and the hospital will need support during that time,” she said.
A decision is expected early next month on the selection of a new director-general to succeed Dr. Ehud Kokia, who resigned earlier this year after being unable to make more than $16 million in cuts in this year’s budget. The hospital’s executive board had asked him to come up with $26 million in savings.
Natan said she has not seen the preliminary report and can’t verify that 200 employees are to be laid off, but she said the layoffs would come “sooner rather than later — by June 1.”
“I’m not comfortable with the 200 number,” she said. “I would be happy if it was lower, but I do not want to set expectations lower and then have it be higher.”
Dr. Yuval Weiss, acting director-general of the hospital, also did not specify the number of layoffs that will be coming, but said in a letter to employees Sunday that the “efficiency plan will be implemented in all sectors in the hospital and will reach every sector and position in Hadassah administration and maintenance, nursing and physicians.”
“We all understand that in order to emerge from the present crisis there will need to be far-reaching changes in every aspect of the hospital activities, including on the one hand expansion of the clinical work at the hospital and on the other hand a cut in the number of workers,” he wrote. “However, we believe that with the cooperation of all HMO [Hadassah Medical Organization] employees, we will be able to accomplish the necessary major changes and bring Hadassah forward to a secure economically successful future.”
Natan said PwC still believes it can save about $21 million this year and approximately $60 million over two or three years.
Weiss described the problems at Hadassah as “tremendous and complex economic challenges.” He said that in recent weeks several steps were taken to improve efficiency, including freezing part of the overtime hours, “drastically reducing the intake of new workers,” and freezing new promotions and appointments. But, he said, this is still “not sufficient” to close the budget gap.
“With every passing day, the enormity of the economic crisis that we face continues to grow, and the decisions we need to take are both immediate and painful,” Weiss said.
That letter prompted Amnon Bruchian, chairman of Hadassah’s Workers Committee, to threaten a strike because the hospital decided “one-sidedly to break all agreements, conclusions and understandings.”
“We will use all the tools of legitimate demonstration that are in our disposal, including a total strike of the hospital,” he said in his own letter Sunday to employees. “We will make it clear to the hospital management that without us no recovery process will come into fruition, no initiative will succeed without us. … We will not allow this failing management to take any decision in bad faith and to continue to lead us nowhere.”
Natan said, “We are in communication with all of the unions and we would be delighted if we could come to an understanding that eliminates a strike. But we cannot satisfy all of their demands. They will do what they have to do, and we are aware that a strike is a real possibility.”
Bruchian was quoted also as saying that the Israeli government should consider nationalizing the hospital, a suggestion Natan rejected out of hand.
“For a fact, the government is not interested in becoming the owner of this hospital,” she said, noting that the government is now considering a hospital request for money.
“The government is far more interested in a one-time cash infusion,” Natan said. “It doesn’t want to own this hospital.”
The hospital has reportedly asked the government for a $185 million bailout. Natan said the request for government aid was first made in a meeting she held last June in Jerusalem with Israeli Prime Minister Benjamin Netanyahu. She noted that although the hospital does not routinely receive government money, it has on occasion. The last time was “at least a dozen years ago,” she said.
Natan said her organization would be making its own cash infusion for the hospital next month. The exact amount has not been determined, but she said that “it could conceivably be more than the $10 million loan we gave them last year.”
“But it’s not a matter of writing a check and saying use it as you see fit,” Natan added. “It will be parceled out. They will have to call for it and show the need and that they are making advances in the implementation of the [turnaround] plan.”
She noted that Hadassah annually gives the hospital $19 million for operating expenses, as well as other money in special gifts and from fundraising for construction of the Sarah Wetsman Davidson Hospital Tower that opened March 19. By the end of the summer, Natan said it is hoped that 14 of the 20 operating rooms will be open.
“At this point, we are pretty much on schedule,” she said regarding construction and fundraising. Some $311 million of the $363 million has already been raised.