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SAN ANTONIO -- For generations, children with clubbed feet, severe burns and other debilitating conditions and injuries have been treated for free at Shriners hospitals. That care could be in jeopardy.
As the charity's endowment shrivels, the fraternal group known for wearing red fezzes and driving miniature cars in parades faces a serious decision: whether to close six of its hospitals or alter the way the system offers care.
About 1,300 Shriners International members who sit on the hospital system's governing body are deciding the hospital system's fate at the group's annual meeting in San Antonio this week. They are considering permanently closing a quarter of the hospital system's facilities, among other changes.
In initial votes, the Shriners agreed to keep all 22 of their hospitals open and to begin accepting insurance money for some services. They also voted to replace Ralph Semb, the CEO of Shriners Hospitals for Children, said Rod Brown, chairman of the Greenville, S.C., hospital. None of the decisions, however, is binding until the convention ends Thursday.
"People think you can just keep going, but you can't," Semb said this week. "If nothing changes, in seven years, we go through the endowment fund."
He didn't immediately return a call Wednesday seeking comment on his reported ouster, though Brown said the group frequently changes leadership at its annual meeting.
Using an annual $2 member assessment, the Shriners Hospitals system opened in 1922 with a facility in Shreveport, La., that specialized in treating polio. The modest start has grown into a network of hospitals in the United States, Canada and Mexico that operates on $856 million a year in donations and investment proceeds.
Patients are treated free of charge, and the hospitals don't take insurance, which has allowed them to provide care without worrying about insurance coverage, limits or bureaucratic procedures, Semb said.
The Florida-based fraternal organization was hit in 2007 with accusations that it had used money intended for the hospitals to throw parties and that lax accounting had mingled hospital donations and club funds in some locations. The Shriners disputed those allegations.
Only a fraction of the donations raised by members are used to fund the hospitals. Most of the operating fund comes from an endowment that has shrunk to $5 billion from $8 billion in less than a year because of the sputtering economy.
Word of the proposed closures upset many patients and caregivers at the hospitals, where numerous treatments for childhood burns and disfiguring conditions have been pioneered over the last 87 years.
