The Shriners intend to collect money from insurers and taxpayer-subsidized health programs for the first time, a change that should prevent the closure of its Spokane hospital and five others that treat children with orthopedic conditions.
The move, announced at the end of a weeklong Shriners meeting in San Antonio, is expected to take hold in two years and collect more than $180 million annually.
Families will not be asked to make co-pays or be billed for deductibles. The Shriners will continue writing off such sums to keep intact their mission of providing free specialized medical care for children.
Gene Raynaud, administrator of the Shriners Hospital for Children in Spokane, acknowledged that other changes are still coming. The hospital is expected to trim its budget for the second time this year. A 7 percent cut was ordered in January as the hospital system absorbed a staggering loss of $3 billion from its $8 billion endowment.
The 30-bed Spokane hospital is relatively small. About half of its $13 million budget is funded by the endowment. The rest is funded through donations.
Other changes could include a partnership with Providence Sacred Heart Medical Center. Executives of the two hospitals plan to meet regularly.
Raynaud said employees remain anxious about the hospital’s future.
“So far we’ve avoided draconian cuts,” he said, “but our folks know that the system is looking at change.”
While billing insurers, trimming budgets and collaborating with other hospitals may ease the Shriners financial crisis, other possible scenarios include downgrading some hospitals to outpatient surgical centers and selling or leasing buildings.
The Shriners built the glimmering Spokane hospital, across the street from Deaconess Medical Center at 911 W. Fifth Ave., for $20 million. It opened in 1991.
Raynaud said the Shriners have not ordered a new appraisal. Nor are they actively marketing the tax-exempt property.
A study conducted by accounting firm PricewaterhouseCoopers six years ago found that the 22 Shriners hospitals across the country could collect between $150 million and $180 million from insurers each year, Shriners spokeswoman Sally Mildren said.
It’s a sum that would have more than made up the $128 million national budget shortfall this year. Billing insurers could be a boon for the local facility. About 80 percent of the children treated by Shriners in Spokane are insured.
Raynaud pointed out that surgeons this year have performed 38 spinal fusions. Such treatments carry a $140,000 price tag. Local Shriners, many parents, and hospital employees say billing private insurers and the Medicaid program makes fiscal sense.
“It’s not the way we’ve done things over the years,” said Curly Werner, a member of the El Katif Shrine in Spokane. “But sometimes you have to change.”