VZCZCXYZ0009
OO RUEHWEB

DE RUEHJM #1697/01 1170939
ZNR UUUUU ZZH
O 270939Z APR 06
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1790
INFO RUEHXK/ARAB ISRAELI COLLECTIVE IMMEDIATE
RUEHLO/AMEMBASSY LONDON IMMEDIATE 3033
RHEHNSC/NSC WASHDC IMMEDIATE
RUEATRS/DEPT OF TREASURY WASHDC IMMEDIATE

UNCLAS JERUSALEM 001697 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
LONDON PASS TO A/S WELCH AND D/NSA ABRAMS; NEA FOR FRONT 
OFFICE; NEA/IPA FOR WILLIAMS/GREENE/WAECHTER; NSC FOR 
ABRAMS/DORAN/LOGERFO; STATE PASS TO USAID/BORODIN; TREASURY 
FOR ADKINS 
 
E.O. 12958: N/A 
TAGS: ECON EAID EFIN KWBG IS
SUBJECT: PA OWES EAST JERUSALEM HOSPITALS FOR WEST BANK 
PATIENTS DESPITE EMPTY COFFERS 
 
REF: KANESHIRO/O'DOWD EMAIL:4/26/06 
 
¶1.  (SBU) Summary.  According to East Jerusalem medical care 
providers, the Palestinian Authority (PA) continues to incur 
costs of over USD 800,000 per month for specialized care for 
the cases it refers from the West Bank despite  empty 
coffers.  (Note:  A negligible number of cases are referred 
from Gaza.  End Note.)  However, as of February 2006, the PA 
has not been able to deliver these payments, and it is 
unclear how the government will be able to meet its financial 
commitments.  The PA owes USD 9.8 million to these providers 
for services already provided.  Although one of the providers 
(St. Joseph) has threatened to cut off its specialty care 
services to West Bankers, the majority of providers have 
indicated that they will turn to donors for emergency funding 
to continue providing services to referrals.  End Summary. 
 
 
¶2.  (SBU) Due to a lack of specialty care providers in the 
West Bank and Gaza, the PA Ministry of Health (MOH) routinely 
refers Palestinian patients to East Jerusalem hospitals for 
specialty care, or to treatment centers overseas.  The 
Minister or Deputy Minister of Health signs an official 
referral document authorizing the patient to receive care 
outside of the West Bank or Gaza.  The PA has entered into a 
contractual obligation to pay for the costs of its referrals 
with each hospital in the East Jerusalem consortium with the 
exception of the Palestine Red Crescent Society (PRCS) 
Maternity Hospital. 
 
Al-Makassad Islamic Charitable Hospital agrees 
to USD 375,000 per month for PA referrals 
--------------------------------------------- - 
 
¶3.  (SBU) Al-Makassad Hospital, an East Jerusalem hospital on 
the Mount of Olives with tertiary care and training 
facilities, as well as a blood bank, treats 2,700 inpatients 
and 3,500 outpatients per month; 60 percent are PA referrals 
from the West Bank.  (Note:  Al-Makassad has 250 beds.  End 
Note.)  According to General Director Haitham al-Hassan, as 
of January 1, the PA had agreed to pay NIS 1.75 million (USD 
375,000) per month, compared to estimated actual costs of NIS 
2.30 million (USD 495,000) per month.  Despite this fixed 
cost, he stressed that the number of PA referrals from the 
West Bank continued to increase.  Thus far, the PA had only 
made a fixed payment for January and were overdue on payments 
for February and March. 
 
¶4.  (SBU) Al-Hassan said that over the last six years, the PA 
had accrued debts of NIS 32.5 million (USD 7 million) to 
Al-Makassad.  Although al-Hassan had contacted the PA 
Ministries of Health and Finance for payment, no one had 
responded to his inquiries.  He said he needed payment from 
the PA in order to continue providing services to 
Palestinians from the West Bank.  To maintain services, 
Al-Makassad has been forced to carry an overdraft of NIS 4 
million (USD 860,000).  Financial Director Rushdi Asshab said 
the hospital had appealed to the EU, as part of the East 
Jerusalem consortium of six hospitals, to transfer a 
commitment of 1.5 million euros (USD 1.9 million) from a 
capacity-building project to the emergency fund to cover 
unfunded ongoing costs.  Asshab said they had not approached 
the GOI given political sensitivities.  (Note:  332 members 
of Al-Makassad's 512-person staff are from the West Bank. 
Out of the monthly budget of NIS 5.5 million (USD 1.2 
million), salaries comprised two-thirds or NIS 3.5 million 
(USD 750,000), while medical supplies were the remaining 
one-third of the budget, or NIS 1.5 million (USD 322,000). 
End Note.) 
 
Augusta Victoria Hospital agrees to 
USD 322,000 per month for PA referrals 
-------------------------------------- 
 
¶5.  (SBU) Located in the Sheikh Jarrah section of East 
Jerusalem, Augusta Victoria Hospital (AVH), a secondary and 
tertiary care hospital, admits 440 patients per month. 
Monthly PA referrals have averaged 341 inpatients and 180 
outpatients.  Director of Finance Alex Kuttab told EconOff 
April 4 that, as of February 1, AVH had signed a one-year 
agreement with the PA to set up monthly payments for 
referrals at USD 322,000, including oncology treatments.   By 
the end of December 2005, Kuttab said the PA owed AVH USD 
 
1.25 million.  In the interim, AVH carried an overdraft with 
local banks and had already begun to appeal to church donors 
to provide emergency funding.  Kuttab said AVH would organize 
appeals to the USG and European governments in the next few 
months. 
 
¶6.  (SBU) Kuttab said dialysis product suppliers would stop 
shipments to AVH until they were paid.  The PA's delinquency 
was also hurting West Bank-based pharmaceutical companies, he 
underscored.  Kuttab warned that if the PA did not pay up, 
AVH could not sustain the cost of oncology treatments for 
West Bankers.  United Nations Relief and Works Agency (UNRWA) 
has a contractual relationship with AVH with an annual 
ceiling of USD 900,000 for services provided by AVH to 
refugees.  In 2005, UNRWA paid USD 625,000 to AVH for actual 
services provided (ref email).  (Note:  Payment of salaries 
comprises 68 percent of the budget.  165 members of the 
211-person staff are from the West Bank.  End Note.) 
 
Palestine Red Crescent Society (PRCS) Maternity 
Hospital has no agreement with the PA 
--------------------------------------------- -- 
 
¶7.  (SBU) Palestine Red Crescent Society (PRCS) Maternity 
Hospital in Beit Hanina, a specialized maternity and 
gynecology hospital, has an average of 250 monthly admissions 
with 75 cases from the West Bank.  PRCS staff told EconOff 
April 4 that patient fees are the primary source of funding 
for its USD 3 million budget.  Out of an estimated 3,200 
annual deliveries, 190 cases did not pay their fees, while 
162 were written off as social cases.  The PA pays nothing 
for its referrals, but continues to send patients.  PRCS 
estimated that the PA owed PRCS about NIS 100,000 (USD 
21,500) for referrals over the last two years.  Although PRCS 
had contacted the PA Ministry of Finance, they had received 
no response to their request for payment for referrals from 
the West Bank.  Financial Director Ziad Mushasha said PRCS 
had not made any other appeals to other agencies and had not 
appealed to GOI for assistance.  (Note: PRCS monthly budget 
is USD 3 to 4 million, of which salaries comprise 65 percent. 
 90 members of the 135-person staff are from the West Bank. 
End Note.) 
 
The Jerusalem Princess Basma Center for Disabled Children 
agrees to USD 20,000 per month for PA referrals 
--------------------------------------------- ------------ 
 
¶8.  (SBU) The Princess Basma Center, a rehabilitation and 
education center for disabled children on the Mount of 
Olives, treated 849 patients at the center in 2005; 60 
percent were PA referrals.  There are 40 in-patient beds, all 
reserved for West Bankers.  Day-care education and 
physiotherapy is only available for Jerusalemites, who can 
travel to the Center on a daily basis.  Director Betty Majjaj 
told EconOff April 4 that patient fees cover 64 percent of 
their annual budget of USD 1.4 million.  She said that the PA 
Ministry of Health owed the Center USD 236,000 for patient 
care from 2001.  At the beginning of 2006, the PA had agreed 
to pay the Basma Center USD 20,000 per month for PA referrals 
from the West Bank.  As of April 4, the PA owes the center 
USD 60,000 on payments from January until March. 
 
¶9.  (SBU) Given the PA's financial insolvency, Majjaj was 
concerned that the annual amount of USD 240,000 promised by 
the PA would go unpaid.  She said she was informed that a 
donation of USD 120,000 per year to the center, previously 
approved by Arafat, would also stop.  The Basma Center would 
turn to fundraising from private donors and trusts, 
particularly to meet basic needs like utilities which cost 
upward of USD 1,300 per week, she added.  (Note:  Salaries 
comprised 68 percent of the budget for 90 staff; 30 of them 
from the West Bank.  End Note.) 
 
St. John Eye Hospital agrees to 
USD 80,645 per month for PA referrals 
------------------------------------- 
 
¶10.  (SBU) Located in the Sheikh Jarrah section of East 
Jerusalem, St. John Eye Hospital, the main hospital for 
ophthalmologic tertiary referrals from the West Bank and 
Gaza, treating 3,400 outpatient cases per month with 50 
percent of outpatient referrals coming from the West Bank. 
(Note:  There are 72 inpatient beds, typically reserved for 
 
West Bankers, who comprise 90 percent of inpatient referrals. 
 End Note.)  According to Chief Executive Steven James, half 
of its annual budget of USD 7.9 million dollars is offset by 
payments from the PA for West Bank referrals.  The PA is 
often late in reimbursing St. John for referrals, meaning St. 
John has to carry fifteen months of unpaid debt on its books. 
 As of March 28, 2005, the PA owed St. John USD 1.0 million 
for accrued patient costs in FY2005 for 2,753 West Bank 
Palestinians. 
 
¶11.  (SBU) Per a March 16 agreement with St. John, the PA 
Ministry of Health said it would pay NIS 375,000 (USD 80,645) 
per month for referrals.  (Note:  The actual cost of care for 
PA referrals in FY2005 averaged NIS 458,000 (USD 98,500) per 
month.  End Note.)  If the PA is unable to fulfill its 
agreement to pay St. John, James said they would turn to 
fundraising to cover the costs of the Palestinian referrals. 
Most of their fundraising is directed towards St. John's 
priories as well as private trusts and foundations. (Note: 
Salaries comprise 70 percent of the annual budget for 190 
staff, half of them from the West Bank.  End comment.) 
 
St. Joseph's Hospital will stop accepting PA referrals, 
unless PA pays agreed-upon amount of USD 40,000 per month 
--------------------------------------------- ------------ 
 
¶12.  (SBU) Also located in the Sheikh Jarrah section of East 
Jerusalem, St. Joseph's Hospital, a secondary and tertiary 
facility, has a monthly load of about 500 patients.  Of 
those, PA outpatient referrals amount to 20 to 25 cases for 
brain surgery, urology, and orthopedic surgery.  Director 
General Jamil Kussa told EconOff April 10 that the PA used to 
refer these specialized cases to Jordan or Israel, and would 
pay in cash.  Over the last two years, the PA has accrued a 
debt of NIS 1.2 million (USD 258,000) for referrals to St. 
Joseph's.  As of September 2005, the PA had agreed to pay a 
fixed amount of USD 40,000 per month, in addition to USD 
10,000 - 20,000 worth of prosthetic equipment each month. 
(Note:  According to Kussa, the actual cost for 20 - 25 
referrals is closer to USD 100,000 per month, and that USD 
40,000 covers only three or four patients at the most.  End 
Note.) 
 
¶13.  (SBU) Kussa said the PA had promised to pay St. Joseph's 
the week of April 16, but he anticipated that the PA would 
not be able to fulfill its promise.  As a result, he said he 
would be forced to nullify the contract by the end of April 
and would refuse to accept any further PA referrals.  He 
stressed that his Israeli prosthetic suppliers demanded a 
cash payment every month and would not accept any delays. 
(Note: Out of a 105-person staff,  56 are from the West Bank. 
 Salaries comprise 65 percent of the total budget.  End Note.) 
WALLES