The Shriners hospital system has announced that, contrary to an earlier proposal, it will continue to provide free medical care to children in all 22 of its urban hospitals.
In April, Shriners then-CEO Ralph Semb had announced that members had proposed closing the charity’s six least-used hospitals and leaving shuttered a Galveston hospital damaged by Hurricane Ike. The proposed cuts were due to down-spiraling donations and an endowment that had shrunk by more than $3 billion-down from $8.5 billion-in the past year. According to Semb, a budget shortfall was draining more than $1 million per day from the remaining endowment. (See related story, “Shriners May Close Six Hospitals.”)
On July 9, Shriners announced its solution to the financial puzzle: accept insurance payments from willing families and “right-size” some of its full-scale orthopedic hospitals down to outpatient surgical centers. Current Shriners CEO Douglas Maxwell also said that Shriners International, the fraternal order that supports the Shriners Hospitals, will consider selling or leasing some of its hospital real estate.
Maxwell justified the change to outpatient treatments by noting that when the hospitals were built, some as early as 1922, children were commonly admitted for weeks at a time. Now, many more conditions can be treated on an outpatient basis. Maxwell stressed that children who need inpatient treatment will continue to receive any needed care, though they might have to travel to the nearest Shriners inpatient facility.
Though Maxwell did not estimate how soon the hospitals would establish an insurance-billing system or how much money he expected the reimbursements to provide, he told the Associated Press that he hoped the system would be functional within the year. He also told the San Antonio Express News that in a sample survey of patients’ families, 98 percent stated that they would be willing to use insurance to pay for treatment. The handful who refused, he explained, feared using up their policy’s lifetime coverage limits.
