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Important Message from National President Marcie Natan

Beth Admin

January 14, 2013
3 Shevat, 5773

Dear Friends,

Three months ago, Hadassah dedicated the Sarah Wetsman Davidson Hospital Tower in Jerusalem, a seven year, $363-million project that will help keep Israel in the forefront of global medical care and research. But, even as we realize our largest building project in the past half century, we are also facing financial challenges at Hadassah Medical Organization (HMO), challenges similar to those faced by other hospitals in Israel. We project that in 2013 there will be a cash flow shortfall of approximately $50 million.

HMO has a sterling reputation and an annual budget of $500 million, but protecting its future requires strengthening its financial structure. With this in mind, the HMO Board, with the support of Hadassah, the Women's Zionist Organization of America, Inc. (HWZOA), intends to retain a highly-regarded, independent consulting firm, with offices in the U.S. and Israel, to develop a plan to improve the financial performance of HMO while maintaining current high levels of health care and research in the region. The firm will analyze finances, accounting policies, administration and cost centers and will explore strategies for reducing expenses and increasing revenue. Based on its review, it will make recommendations on how our medical center can maintain its record of excellence while achieving greater efficiency. During the period of assessment, the consultants will identify some cost improvements that will be implemented immediately. After their report is completed, full implementation will begin.

HWZOA has been monitoring the financial situation of HMO. When we became increasingly aware of the cash flow status, we sent a team of HWZOA's Chief Financial Officer and an outside consultant to Israel several times to work with the hospital staff to analyze the situation and prepare recommendations to the HMO Board, including staff reductions through attrition and early retirement, postponing plans for non-essential services, and supply chain cost reductions.

At this time we have also been informed of the resignation by Prof. Ehud Kokia as Director General of HMO. Prof. Kokia said: "When I arrived at HMO I had a different understanding of the challenges facing the organization. Given the changed circumstances I feel that this is a time for a different kind of leadership." Prof. Kokia will remain at HMO for at least three months to allow time to help with the transition to a new Director General. A Search Committee will be put into place immediately.

During the transition period, Gen. Esti Dominissini, Chairman of the HMO Board, will be the go-to person for any dealings with the turnaround firm. If there are any immediate solutions for cost cutting identified and approved, she will also be the person to oversee their implementation. Ms. Dominissini will be dealing with the Government for additional funds for HMO as she was instrumental in addressing the threat of losing VAT funds.

We are more committed than ever to provide world class medical care and pioneering research. HMO is the jewel in our crown. We will all need to pull together now to strengthen this gem by supporting the HMO Board in its engagement of internationally renowned financial consultants, considering an infusion of funds to bridge the financial gap until HMO is back on its feet, and continuing to extend our generosity to the ongoing needs of the Tower, breakthrough research and state of the art equipment.

Our effort to ensure a more fiscally stable medical center is critical to Hadassah's Nobel Prize-nominated mission of building bridges to peace, to our commitment to serve over 1 million citizens annually from the greater Jerusalem area alone, and to our goal of instituting greater self sufficiency at HMO.

I thank all of you for your understanding, support and continued commitment.

Marcie Natan
National President

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