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SAN ANTONIO -- Since opening the doors to their first hospital in 1922, the Shriners have used a simple formula to offer care to children: If they needed help and the Shriners could provide it, they did so, free of charge.
But with its endowment badly depleted, the nonprofit fraternal group faced decisions this week about whether to close some of its hospitals, to begin taking insurance money or to make other changes to salvage the 22-hospital system. They planned to announce those changes Thursday.
In initial votes earlier this week, the 1,300 members of the Shriners International hospital governing body rejected proposals to close six hospitals and agreed to begin accepting insurance money for some services. They also voted to replace Ralph Semb, the CEO of Shriners Hospitals for Children. None of the decisions, however, was considered binding until after the convention's close on Thursday.
The Florida-based Shriners opened their first hospital in Shreveport, La., to treat children crippled by polio. They now run hospitals in the United States, Canada and Mexico, offering care to children with burns, orthopedic conditions, spinal cord injuries and cleft palates.
The system, with an annual budget of $856 million, is funded by donations and investment proceeds.
The Shriners previously did not take insurance, even when families had coverage -- something the group said allowed it to provide care without worrying about bureaucratic hurdles. Semb and other Shriners have said they'll continue to offer whatever care their doctors prescribe free of charge to the families, even if the hospitals seek reimbursement for some insurance-covered procedures.
In 2007, the Shriners were accused of using donations intended for hospitals to throw parties and of lax accounting that mingled hospital donations with club funds in some locations, claims the Shriners disputed.
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 economic plummet. Semb said without changes, the system risked financial collapse within a matter of years.
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On the Net:
Shriners International: http://www.shrinershq.org/
