Following this week’s start of an open-ended partial strike at both of Hadassah Medical Organization’s campuses in Jerusalem, rumors are swirling that the two flagship medical centers of the Hadassah Women’s Zionist Organization of America are drowning in debt thanks to fallout from Bernie Madoff’s notorious Ponzi scheme. But according to Hadassah’s National President Marcie Natan, there is little to no link between this century’s most notorious white-collar criminal and the financial woes currently plaguing Ein Kerem and Mount Scopus.
“Much to the frustration of those of us in the leadership of the organization, many people are seeing a connection to what Hadassah is facing today and a tie-in to Madoff. But there is no connection,” Natan told the Times of Israel in an interview. “The organization did lose [money], but it’s not why the hospital is in trouble today.”
Hadassah Ein Kerem and Hadassah Mount Scopus are facing a NIS 1.3 billion ($367 million) deficit, and on Tuesday both medical staffs launched an open-ended strike to protest the collapse of negotiations with the Finance Ministry to cover what they owe.
Hadassah Women’s Zionist Organization of America, the umbrella organization for both hospitals, lost a whopping $90 million thanks to Madoff’s fraudulent investments. But a year before that 2008 mishap, HWZOA had informed Hadassah hospitals that it would be dramatically scaling back its annual funding, from $40 million per year to $25 million.
“We had been dipping in our reserves every year to cover the $40 million, and we had informed them that if we continued to do so, we would dip ourselves into oblivion,” Natan says.
After the Madoff scheme sent Hadassah’s bookkeepers reeling, that $25 million per year was trimmed further, to $19 million. But that reduction aside, Natan says, Hadassah was always planning to cut back its funding to the hospital, because it had no other choice.
“We’re doing what we have always done,” she says, adding that in addition to paying the $19 million in full each year, in the last 10 years her organization has given the hospitals more than $800 million. “But we did turn to the hospital and say they could not continue to just keep coming back to HWZOA as if we were a bottomless pit … So when everyone tries to bring it back to Madoff, it’s very frustrating.”
The strike — which doctors nationwide will join for two hours from 10 a.m. Sunday in solidarity — has been both frustrating and painful for Natan and her colleagues at Hadassah, she says, because she fully believes the time is long overdue for the government to intervene and help Hadassah Medical Organization get out of the red.
“Circumstances have put us in a position where something that should have happened some years ago will now be forced on all of us, and that is that the State of Israel accept some responsibility for the operational expenses of what is now a two-campus university hospital,” she says.
Asked how the medical organization found itself in such deep debt, Natan points to what she calls “an unfortunate culture” of believing that HWZOA could provide endless funding, a fact she takes some responsibility for.
“Historically, when the hospital asked for something, we ultimately found a way to provide for it. But the truth of the matter is that now, the scope of the deficit is beyond the capacity of the mother organization to support it,” she says.
“There is a culture in Hadassah that ‘the ladies will come through in the end.’ And this time, the ladies simply cannot come through.”