First the nurses and other workers, then the doctors, went back to work this week at Hadassah’s two Jerusalem hospitals. After two weeks of gradually escalating strike action, and very public recriminations between government, management and staff, the crisis was resolved. A temporary bailout plan was agreed upon, missing salary slices were paid, and all was rosy again in the Hadassah garden. Right? Far from it.

To use the appropriate metaphors, a band-aid has been applied, but the wound beneath is deep and septic. The two private Hadassah hospitals are carrying some NIS 1.3 billion ($370 million) in debt. And their near-chronic financial injuries won’t be healed until their agreements with the Israeli health sector are reopened, redrafted and rendered more realistic, according to the Hadassah women’s organization’s Jerusalem-based executive vice president Barbara Goldstein.

Goldstein, a New Jersey-raised 30-year Hadassah Women’s Zionist Organization of America board member who immigrated to Israel 15 years ago, spoke to The Times of Israel on Wednesday — soon after some hospital staffers staged a sleep-in at Hadassah that helped break the stalemate over partial non-payment of salaries, and opened the path to a return to something like work-as-usual at the Ein Kerem and Mount Scopus facilities.

At the root of the deeper crisis, said Goldstein, is not outrageous salaries — though there are some of those, and they need to be addressed. It is not losses sustained by Hadassah because it “invested” money with Ponzi scamster Bernard Madoff. Said Goldstein: “He hurt everybody, but he didn’t ruin us. It was pretty awful to have to write a $45 million check to the trustees, but we had made money from Madoff — lots of money. Many of the buildings that stand here wouldn’t be here otherwise.” And it is not the problematics of the Sharap private medical service — though that has to be rethought so that the hospitals gain a fairer, as in larger, portion of the revenues.

Barbara Goldstein (photo credit: Courtesy)

Barbara Goldstein (photo credit: Courtesy)

The root of the hospitals’ financial sickness, rather, lies in the agreements that govern how much Hadassah is paid for the health services it provides to the public via the various kupot — Israel’s HMOs. The current agreements run for the next three years, Goldstein said, and unless they are reopened — which she believes ultimately requires the intervention of Prime Minister Benjamin Netanyahu — they will cause Hadassah a further 300 million shekel ($85 million) loss each year, massively exacerbating the debt crisis. The way she told it, Hadassah is locked into contracts that mean it loses money every time a patient walks in.

Hadassah University Hospital in Ein Kerem, Jerusalem (Courtesy)

Hadassah University Hospital in Ein Kerem, Jerusalem (Courtesy)

Goldstein said she remembers directors general years and years ago phoning Hadassah board members in the United States and saying, “’We’re $20 million short because this or that health fund owes us money.’ So we helped. We raised extra money.” But as the years have gone by, she said, ever worse agreements were made with the HMOs and the most recent agreements, which run through to 2017, simply have to be reopened if Hadassah is going to be put back on a sound financial footing. (The same kinds of deals apply between the HMOs and Israel’s other hospitals. But those are government hospitals, and so they get government bailouts.)

To date, Health Minister Yael German (Yesh Atid) has not floated this or any other specific remedy. Last week, she announced a “thorough investigation… to identify the problems and difficulties at the heart of the processes that led to the crisis.” The Times of Israel put Goldstein’s points to the Health Ministry on Wednesday; German’s media adviser said Thursday she would put them to the minister; no response had been received by Friday.

Health Minister Yael German (photo credit: Flash90)

Health Minister Yael German (photo credit: Flash90)

Housing and Construction Minister Uri Ariel (Jewish Home), meanwhile, suggested that large-scale housing projects be advanced on lands owned by Hadassah, mainly in the Ein Kerem area, where he said at least 1,500, and perhaps as many as 2,700 homes could be built, yielding hundreds of millions of shekels to help Hadassah out of the financial hole. Confronted with environmental objections to such projects, Ariel told Army Radio on Thursday morning that some construction in the area had already received initial approval, and the key was to find “the right balance.”

Some analysts and politicians have suggested that the hospitals be nationalized or taken over by one of the HMOs. Goldstein noted that the Finance Ministry wants nothing to do with the first idea — “Why would it?” she laughed, when Hadassah women are funding so much of the hospitals’ development — and dismissed the second idea by pointing out that the HMOs are laboring under heavy debts of their own.

The picture Goldstein painted in our conversation was of a committed organization of 330,000 American Jewish women who, along with their predecessors over the decades, pioneered modern health care in Israel. They have raised a conservative estimate of $3 billion, she said. They consider themselves not philanthropists but “partners” in practical Zionism, engaged in projects that “bind us to the land.” But they have been let down by poor Israeli management in recent years — management that has “not known which departments made money, which departments lost money,” she said, and that has signed a series of bad agreements. And, she indicated, the Hadassah organization has not been treated as fairly as it should have been by the Israeli authorities.

Director-General of Israel's National Insurance Institute and former CEO of Hadassah hospital, Prof. Shlomo Mor-Yosef, attends a Knesset Finance Committee meeting on February 12, 2014. (photo credit:  Flash 90)

Director-General of Israel’s National Insurance Institute and former CEO of Hadassah hospital, Prof. Shlomo Mor-Yosef, attends a Knesset Finance Committee meeting on February 12, 2014. (photo credit: Flash 90)

(Hadassah’s 11-year former director Shlomo Mor-Yosef last week bitterly rejected the notion that the hospitals’ previous management had got them into the current mess. The “Hadassah [women’s organization’s] presentation to the court and the Finance Committee is biased and inaccurate information in the guise of an objective document,” Mor-Yosef told that Knesset committee last week. “They portray the previous management as the root of the problem and forget that the owner and the Treasury are part of the problem.” He added that the Hadassah organization “significantly reduced their contributions, saw the organization’s situation worsen and did not lift a finger. They opposed any attempts by me to raise money. They only wanted their way.”)

Asked flat-out whether she feels the Israeli government has been abusing the Hadassah women’s commitment and cash, Goldstein firmly resisted that assessment, instead answering as follows: “It’s hard when you’re a Zionist. Your love is unequivocal. We’re the first people in millennia to be able to say ‘the State of Israel.’ But you have to ask the question of the Israeli government right now: Where are you? Because the solution here lies with the government. We need a dramatic recovery plan. We need the government.”

She stressed that nobody put money into their pocket illegally, nobody defrauded Hadassah. Hospital staffers are exceptionally dedicated, she said. “Whoever needs treatment — Israelis, Palestinians, Eritreans — we’re there.” Everything went to building “a wonderful, beautiful institution. I never say ‘conned’ or ‘duped’ [by official Israel] and I’m an optimist. [This crisis] has to be sorted out for the State of Israel.”

The arrangements by which Hadassah has been built and financed, she said, have constituted “a great deal for Israel.” Since 1962, when Hadassah Ein Kerem was opened — David Ben-Gurion asked Hadassah to build it — or even since the late 1950s, when it was planned, “the government has had someone willing to [finance] the infrastructure” of the hospitals. While the government kicked in $30 million to finance Ein Kerem’s new Davidson Tower, for instance, Hadassah women raised $360 million for it. They fund $19 million per year toward Hadassah’s operating costs, and untold millions for research funds, she added.

Henrietta Szold (photo credit: National Library of Israel, Schwadron collection; Alexander Ganan; Wikipedia)

Henrietta Szold (photo credit: National Library of Israel, Schwadron collection; Alexander Ganan; Wikipedia)

Going further back, she stressed that Hadassah created “the whole medical infrastructure of Israel.” Its first driving force, Henrietta Szold, came to pre-state Palestine in 1909 and saw the “awful medical situation” in Jerusalem. “She got the nurses and doctors involved to bring in modern medicine. They wiped out [the infectious eye disease] trachoma. They started Tipat Halav [the nationwide well-baby clinics]. These nurses from fancy America, they came to Jerusalem and they were walking around with donkeys and pasteurized milk.”

Hadassah decided to build the Mount Scopus hospital and medical school in the midst of the Great Depression, in 1936, she went on. Years later, visionary director-general Dr. Kalman Mann, she said, “had the vision to enable bright young Israeli students to be trailblazers in medicine. So he set up fellowships that would bring them to the US for some of their training. That’s why Israel has been at the cutting edge in transplants, the first in so many areas. It was all about ensuring the best for Israel.” She recalled that there were periods that Hadassah ran all of the Youth Aliya programs. It set up vocational schools and the first community college. Again, Goldstein stressed, these women were and are “part of the Zionist movement.” Hadassah is not a “Friends of” organization.

In addition to the renegotiation of the financial deals with the HMOs, Goldstein readily acknowledged that reform is needed inside the hospitals as well. “Income has to go up and yes, of course, expenses have to go down. With 6,000 workers, there’s room. When Professor Shmuel Penchas was director general in the 1980s, he oversaw a period of growth but he initially fired 500 or 600 people.” And Sharap, she said, urgently needed overhauling.

The Sarah Wetsman Davidson Hospital Tower at Hadassah Medical Center in Ein Kerem, Jerusalem (photo credit: Courtesy Hadassah)

The Sarah Wetsman Davidson Hospital Tower at Hadassah Medical Center in Ein Kerem, Jerusalem (photo credit: Courtesy Hadassah)

But she flatly rejected the notion that the Hadassah women would have been better off directing their money to ongoing upkeep rather than funding Ein Kerem’s new emergency room and the Davidson Tower. (The tower, which was dedicated 16 months ago, now houses many of the hospital’s key departments, including neurology, neurosurgery, cardiothoracic surgery, gynecology, obstetrics, orthopedics and general surgery.) “Jerusalem needs a 21st century hospital,” she said. “People say, so what, so there are four patients in a room? Well, do you know the rate of infection that causes? People say the same money should have been used for hospital upkeep. That’s just not true. That money wasn’t there. People gave money for these specific projects. It inspired them to give.”

The Hadassah organization has money in the bank; it’s most certainly not bankrupt, she stressed. And it has kicked in more money to help resolve the immediate salary dispute. But the sums involved in the overall debt crisis are so vast that a fundamental reform is critical. “Moreover,” she stressed, “Hadassah has other obligations, notably a commitment to Jewish education in the US in perpetuity. “Memory and nostalgia will fade away,” she said, referring to the connection between the Diaspora and Israel that is at the root of Hadassah’s work. “Part of Hadassah’s role is in the continuity of the Jewish people. Major Hadassah programs in the United States deal with Jewish life. US Jewry is the best educated Jewish community ever in secular education, and the worst educated Jewishly.”

In that vein, Goldstein noted Foreign Minister Avigdor Liberman’s declaration on Tuesday that he planned to allocate hundreds of millions of dollars to educational programs to ensure Diaspora Jewish continuity. (Liberman called for the creation of a “global network of Jewish schools” and said the Israel government should dedicate $365 million per year for the purpose, which he hoped Jewish communities in the Diaspora would be willing to match.) “US Jews are the richest community in the world,” said Goldstein, suggesting that the Israeli money mentioned by Liberman should be used closer to home. “The Israeli government says it doesn’t have the money [to solve the Hadassah crisis]? Of course they have the money. They have to decide what to spend it on. “

Now, she said, it’s time for the government to step up, and ensure more equitable ongoing arrangements. The government keeps talking about Jerusalem as the heart of Israel, the crown of Israel, she noted. “So we need the government to pay attention now.”