Twin Cities Shriners Hospital Faces Crisis

What can a hospital closure mean?

For "Shriners' Kids," it could be devastating.

Shriners Hospitals for Children (SHC) have provided top-quality care for 80 years to children with orthopedic conditions, burns, and other special health care needs without cost to patients and families.

However, Shriners Hospitals have not been immune from the impact of the sweeping changes in the last few years on the healthcare scene: industry consolidation, new payment models, technology and research advances, and government policy changes.

Critical issues are facing individual Shriners Hospitals as well as the SHC system as a whole. Costs have been rising, endowment has declined, and some hospitals are experiencing excess capacity, according to the Special Committee for the Future of Shriners Hospitals (Nobles Committee), which is charged with looking into these and other issues and making recommendations to meet these challenges. The committee is chaired by John Nobles, chair of the Board of Trustees Investment Committee and former Imperial Potentate, and comprises members of the Boards of Trustees and Directors, along with various advisors.

The committee has said that only [about] 14 hospitals can be operated, which means closing seven or eight of the 22 hospitals. The committee recommends consolidating services and creating "Centers of Excellence."

The first hospital recommended to be closed is Twin Cities Shriners Hospital for Children, Minneapolis, Minnesota. Naturally, this has caused consternation among Twin Cities SHC's patients, families, and staff, who feel that closure could have catastrophic effects for all concerned.

However, it currently requires a two-thirds majority vote of the Shrine's Imperial Council to close a hospital. The committee has recommended adopting a resolution to authorize the Shrine's Boards of Directors and Trustees to close hospitals as they think necessary, without waiting for a two-thirds vote. Cited is the need to move rapidly to keep up with changes in healthcare and financial and economic conditions in order to operate the hospitals efficiently.

This critical vote authorizing the Board of Directors and Board of Trustees to modify hospitals operations and to close hospitals will come up in the Imperial Council meeting in July.

Meanwhile the uncertainty has affected patients and staff at Twin Cities SHC. Some professional staff members have already left for new positions and, without knowing the hospital's future at this point, the hospital is not replacing all of them. Some staff members are doing double duty-for instance, Rick Weber, CO, is not only head of the O&P department but also is serving as radiology manager. Morale of patients and families-who often have strong relationships with their physicians and allied health professionals-is affected, as well as that of the staff members themselves, Weber said.

Various factors, including a decline in the endowment fund, have driven the need to evaluate the current system and look for ways to increase efficiency while maintaining quality patient care. The endowment fund finances the hospital system through income generated from the endowment. The decline in the stock market, coupled with rising operating costs, has reduced the fund.

But are hospital closures, specifically closing Twin Cities, the best way to accomplish this? Many associated with the Twin Cities SHC believe the hospital should stay open and have formed a committee called "Put Children First" (referred to in this article for convenience as the "Twin Cities Committee"). The committee comprises volunteers for the Twin Cities Hospital Board of Governors, nobles from Shrine Temples affiliated with the hospital, members of the Women's General Auxiliary, parents, local business people, and others.

A major concern is that if the hospital is closed and children shifted to another, farther location, that many children will leave the system. Although Shrine temples provide transportation help for patients, the time and stress involved with extra travel may cause some families to drop out, it was noted. Basing their estimate on the Nobles Committee report and the closing of eight hospitals, the Twin Cities committee said that up to 50 percent of current patients-20,000-25,000 children-will leave the SHC system overall. These children may end up not getting medical care anywhere, Weber pointed out.

Also, uncertainty over the hospital's future has caused a drop in donations of over $1 million, the Twin Cities Committee said

Why has the Nobles Committee recommended closing Twin Cities SHC? A major reason is its 22-percent occupancy rate. However, the Twin Cities Committee noted that increased outpatient care and more same-day surgeries has reduced inpatient length of stay (LOS)-which is a measure of efficiency, not inefficiency. Twin Cities SHC LOS is 4.1 days (2.7 days YTD 2003), compared with 9.3 days for another SHC orthopedic hospital with the highest percentage of occupancy, even though this hospital treats fewer complex cases. Twin Cities also has the busiest prosthetics department of any Shriners hospital, according to the 2002 SHC Key Volumes Jan-Dec, quoted by the Committee.

Other reasons cited were the resignation of the chief of staff and concerns over quality of care, factors vigorously rebutted by the Twin Cities Committee.

The committee notes that Stephen Sundberg, MD, is serving as acting chief of staff.

Regarding being "excellent" enough, the committee points out that Twin Cities was the only SHC to receive Joint Commission on Accreditation of Healthcare Organizations (JCAHO) with Commendation three times in a row: in 1993, 1996, and 1999.* Also Twin Cities tied for best in overall score of SHC orthopedic hospitals in Picker Patient Satisfaction Surveys in 1998 and all Shriners Hospitals in 2000.* The first-quarter report of the Press Ganey survey (see footnote marked with an asterisk) shows that Twin Cities is two points higher than the average for all Shriners Hospitals-which means that 86 percent of all Shriners Hospitals were lower, according to Twin Cities SHC.

The Twin Cities Committee disputes some of the financial findings of the Nobles Committee. It acknowledges that operating expenses have doubled since 1990 but argues that the endowment fund has likewise doubled-that it simply is not as high as it was a few years ago when the stock market was peaking.

While denying the existence of any short-term financial crisis, the Twin Cities committee does urge looking at ways to increase revenue in the future, saying, "Unless we are willing to look at the revenue side, SHC will have a financial crisis looming every time the stock market declines."

The Twin Cities committee wants the hospitals to consider taking insurance payments. Jim Mikula, the father of two Twin Cities patients, asks, "We would like to know why Shriners Hospitals does not take insurance? We pay a large premium for our children, and for Shriners to not use our insurance-this just subsidizes the profits of the insurance company&please consider using our insurance."

Concerns have been expressed that, by taking insurance, Shriners Hospitals would be unable to continue providing full "wraparound" care for children, plus new procedures and treatments considered "experimental" would not be covered and complex cases would be inadequately covered. Fears also have been expressed that accepting insurance would compromise quality of care and service levels and increase hassles for patients and families.

The Twin Cities committee rebuttal is that SHC could simply accept whatever the insurance will cover and pay the rest for what is felt to be medically necessary for the best patient outcome.

However, administrative costs and other issues would arise, with both committees examining relevant questions regarding these.

What will happen to the Twin Cities Shriners Hospital and all the children and families it serves? The Imperial Council vote in July on whether or not to authorize the Boards of Directors and Trustees to decide without the lengthy two-thirds vote process for each hospital considered for closure will lead the way. After that, time will tell.

*JCAHO accreditation is every three years. Accreditation with Commendation is no longer given by the Joint Commission.

*2000 was the last year full data is available from Picker. Twin Cities continues to receive high scores from the new service provider, Press Ganey, according to the Twin Cities committee.

For more information, contact William F. Messerli, Chairman, Put Children First Committee, 2550 University Avenue West, Suite 350 South, St. Paul, MN 55114-1900; 651.659.1431; fax: 651.659.1477; info@put-children-first.org ; www.put-children-first.org .

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