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HMO Agreement - Talking Points

May 22, 2014

  • The court approved the recovery plan that will put the Hadassah Medical Organization (HMO) on the path to financial stability and ensure a strong HMO for the future.
  • This recovery plan is supported by a basic principle – HWZOA and the Government of Israel (GOI) have agreed to make certain contributions, while HMO has agreed to embrace certain reforms and improvements. The recovery plan is a seven year plan.
  • The Government of Israel will make an enormous pledge of support to HMO, giving HMO in excess of 1 billion NIS over the next 7 years.
  • HMO’s unions will accept difficult cuts. HMO has already reduced its numbers but there will be further reductions.
  • For our part, HWZOA will provide $19 million annually through 2020. We will forgive the $10 million loan provided to HMO in 2012 and will provide HMO with a new loan of $25 million. In addition, HWZOA will transfer real estate to the GOI. This does not include our additional fundraising for all of our projects, including the completion and equipping of the Sarah Wetsman Davidson Hospital Tower.
  • In exchange for this stepped up support, HMO will embrace certain reforms and improvements including:
    • An independent overseer will be selected by HWZOA and the GOI to monitor all significant proposed financial transactions.
    • Monthly board meetings of HMO will take place.
    • Management will be implementing numerous efficiencies, and decreasing expenses and growth. Initiatives will be undertaken, including efforts to bring in additional patients and income.
  • From a governance perspective, HWZOA will appoint four of the nine members of the HMO Board, two from the United States and two from Israel, and will also appoint the Chairperson of the Board. The Government of Israel must approve the appointment of the Chairperson.
  • Looking ahead, we recognize that there is great deal of work to be done including finalizing the details of the agreement between HWZOA, HMO, and the GOI. But we are confident that with the strengthened partnership that now exists with the GOI, HMO’s best days are ahead. With this new plan, the Government of Israel has shown that it values the importance of Hadassah’s unique Zionist contribution and commitment to health care in Israel.
  • Thank you to the HWZOA Board, our membership and supporters for their steadfast support and shared commitment to HMO throughout this time.
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