One page HMO update:
As many of you already have heard, on February 7, the Hadassah Medical Organization (HMO) announced their application to file to the Israel courts for relief under Section 350 the Israeli law that allows for an organization to restructure.
This is a difficult moment for us all. For over a century, HMO has been a world-leading medical center and the premier medical institution serving the people of Israel. While HMO has achieved so many wonderful things over almost 100 years, today it faces a fiscal crisis that allows for no other solution than an organized restructuring process similar in nature to that experienced by American automakers in the wake of the financial crisis.
On Tuesday, February 11, the Jerusalem District Court granted HMO¹s request for a stay of proceedings and appointed two trustees to formulate a plan for the hospitals. The decision gives HMO 90 days to continue operations under its governing board and current management led by Director General Dr. Avigdor Kaplan, while giving the hospitals respite from creditors.
The financial challenges confronting HMO have no single root cause. Rather, this crisis is the result of dynamics that have been building for years including unsustainably low reimbursement rates from the National Health Funds for services; unaffordable union contracts; and insufficient funds to train students at HMO facilities. The board of directors, on which Hadassah, the Women¹s Zionist Organization of America (HWZOA) is well represented, asked the administration for information for many years until we finally brought in Pricewaterhouse Coopers (PwC) to do a thorough audit and evaluation of the organizational structure and finances.
HWZOA's position is very clear; we will support HMO and do our part to help see HMO through the restructuring process to financial stability and operational integrity. It is our expectation that HMO¹s other stakeholders the Government of Israel, the unions, and the hospitals¹ creditors and suppliers will join us in that effort.
Over the coming weeks and months, Director General Avigdor Kaplan will help lead HMO through the court supervised restructuring process. This will be a challenging period. He recently shared his thoughts saying, ³It is important for me to assure and reassure you, dear friends, that during this time, all donations that you generously contribute to HMO will be used solely for the purposes for which they are given. This is something that all parties have agreed to, including the Court-appointed Trustees. We have also agreed that construction of the Sarah Wetsman Davidson Hospital Tower shall continue during this period.² He concluded by saying "I am convinced that we will overcome the current crisis, and I truly believe that we will emerge with an even stronger HMO, one that will continue to be a national asset and one of the finest medical institutions in Israel and in the world."
The board of HWZOA remains, as ever, profoundly proud of HMO. No financial setback can erase all HMO has accomplished and contributed to the Zionist enterprise in the last 101 years. And just as the State of Israel has faced countless challenges and overcome them, so too HMO must and will go through this difficult moment and prove its resiliency.
Just this week, Prime Minister Benjamin Netanyahu told the Members of Knesset that just as all of them have come to Hadassah for healing, now it is time to heal Hadassah. With that kind of support, we are renewed in our hope that HMO will reach its recovery goals.
Thank you for your ongoing support!