Shriners Hospitals to Remain Open with Changes Reflecting Financial Squeeze

The Shriners have decided that they will keep the doors of all their hospitals open to children for treatment in 20 cities across America, as well as one in both Canada and Mexico. These include Springfield's orthopedic hospital on Carew Street, as well as a burn unit located in Galveston, Texas, that was seriously damaged by Hurricane Ike. However, some of the locations could be forced to downgrade to outpatient surgical centers. In addition, the possible sale or lease of real estate will be considered. The news comes from the Shriners Hospitals For Children’s newly elected Chief Executive Officer, Douglas Maxwell.

A proposal to permanently close six of the Shriner’s facilities was rejected by the 1,300 member governing body this week. These included hospitals located in Springfield, Massachusetts; Greenville, South Carolina; Spokane, Washington; Shreveport, Louisiana; Erie, Pennsylvania: and Galveston, Texas. Instead the decision was made during the Shriners annual convention in San Antonio, Texas, to investigate downsizing hospital operations as well as to begin to accept insurance payments.

According to Maxwell, “We've not changed who we are. We will always take care of children the best we can.” He then acknowledged that the Shriners hospital system will need to be "right-sized," and mentioned the possibility of turning some of the nonprofit organization’s orthopedic facilities into outpatient surgical centers.

Maxwell also noted that Shriners International, based in Florida, would look into selling or leasing some of the hospital real estate in order to trim down its current operating budget of $856,000,000. He explained that eventually the system could have only eight regional inpatient hospitals, with the other 14 becoming outpatient centers. In addition, some centers could be moved to smaller facilities, allowing for the sale of the old buildings to nearby hospitals that are in need of additional space.

Throughout their 87-year history, the Shriner’s hospitals have offered free care for children, without the need for insurance billing. However, with mounting financial pressures, reimbursements provided by insurance companies could help to ease the financial crisis faced by the fraternity. Although Maxwell hopes that insurance billing will begin within the year, the fraternity has just begun the task of examining how operations will need to change and how quickly hospitals can establish systems to bill insurance providers.

It remains unclear as to the amount of revenues insurance reimbursements would provide and it is unlikely that the hospitals will charge families insurance company co-payments. Children of families with no insurance will continue to be treated for free. For now, Maxwell held that all children suffering from orthopedic conditions, spinal cord injuries, burns and cleft palates would continue to be treated free of charge.

The Shriner Hospital system has treated hundreds of thousands of children since it opened back in 1922. Although the Shriner’s hospitals have primarily been funded through an endowment, the plummeting stock market of a sputtering economy diminished the bequest from $8 billion to $5 billion in less than a year.

Only a fraction of the operating budget comes from donations gathered by well-recognized Shriner members wearing their red fezzes. However, Maxwell said that the Shriners are confident the hospital system will be able to continue operations over the long term.