Hadassah Hospital Faces Scandal Over Unapproved Cyprus Medical Center Launch

Israeli medical center Hadassah is embroiled in a controversy with the Ministry of Health following the launch of a subsidiary project in Cyprus. A clinic operating under the Hadassah brand was inaugurated last month in Limassol, with Israeli President Yitzhak Herzog attending the ceremony. However, the Ministries of Health and Finance claim they were unaware of the initiative, prompting authorities to investigate the project's launch and funding, according to Globes.

The first phase of the Cyprus project involves a clinic in Limassol, with plans to establish a full hospital in Nicosia. Sources close to Hadassah indicate the project is Cypriot-owned, with Hadassah not holding a stake and its doctors not being permanent staff. Instead, Hadassah specialists will train Cypriot colleagues and may offer consultations, receiving compensation, with a portion of revenue going to the Jerusalem hospital. Hadassah anticipates the Cyprus venture will boost medical tourism, a sector impacted by reduced foreign patient flow since the recent war.

The Nicosia medical complex, slated for completion by 2027, is planned to include a hospital, rehabilitation center, elder care facilities, retail areas, a guest hotel, and residential apartments. The construction is being managed by Osopil, a company co-founded by Israelis David Alster and Eli Israeli.

Hadassah asserts the project aligns with a 2016 agreement allowing international development in Russia, Cyprus, and Mexico, signed by then-Director General Professor Ze'ev Rotstein. The hospital claims the Ministry of Health has been aware of this agreement since 2018, a claim the ministry disputes, stating the Cyprus launch was unexpected and demanding a review of the business model.

Concerns have been raised within the medical community about Hadassah's potential lack of familiarity with the Cypriot real estate market and project participants. Hadassah maintains thorough due diligence has been conducted on developers and investors to prevent illicit use of the project. The Ministry of Health also worries about Israeli public healthcare resources being diverted for foreign patients. Hadassah counters that doctors are legally permitted to engage in private practice with foreign clients outside of public hospital hours, which are considered a "blind spot" for oversight.

Hadassah has a history of financial challenges and past disputes with the Ministry of Health, seeking financial independence while relying on state aid during crises. A 2014-2020 financial recovery plan saw the state provide 1.4 billion shekels in exchange for increased oversight. Hadassah reports a deficit of approximately 1.5% of its annual operating turnover for 2025.

The hospital has prior international experience, including a branded hospital in Moscow's Skolkovo Innovation Center, owned by Medscan and Rosatom. This Moscow facility generated 5 billion rubles (around $50 million) in revenue in 2024. Hadassah states it holds no stake in the Moscow venture and its involvement has decreased since the war in Ukraine, likely due to its status as a U.S. non-profit organization. The Ministry of Health also flagged potential compensation liabilities of up to $30 million to Russian doctors, which Hadassah clarified relate to guarantees for Israeli doctors in the Russian project, necessitated by international insurers leaving Russia.

A planned hospital in Mexico has not yet materialized, though Hadassah continues to offer specialized genetic testing and medical tourism services there, primarily for the Jewish community. Representatives from Hadassah, the Ministry of Health, and the Ministry of Finance are scheduled to meet soon to discuss the project and address concerns, with potential changes in government policy looming due to upcoming elections.