The Shriners Hospital for Children in Spokane begins billing insurance companies next week, a major change for a charitable organization that for decades cared for children with crippling bone, joint and muscle problems, and absorbed the expense.
Soaring health care costs, declining membership and the deep recession weakened the proud fraternity whose members wear fezzes, zoom around on scooters and carts in parades to the delight of children, sponsor college football’s East-West Shrine game, and helped underwrite ticket sales to circuses across the country.
The problems were so severe that last summer the organization pondered the unthinkable: closing six of 22 hospitals, including its brick and glass landmark on West Fifth Avenue in Spokane. At this time last year the Shriners endowment for running its hospitals fell from $8.5 billion to $5 billion.
The Shriners’ mission runs deep in Spokane – nurses and surgeons have healed children for more than 80 years. Yet the local hospital had not lived up to expectations. Despite a busy outpatient center, about six of the hospital’s 30 beds were filled on any given night.
Such numbers left some leaders wondering if dollars would be better spent by concentrating more patients in fewer facilities to save on payroll, supplies, and maintenance and building costs.
During a national meeting last summer the general membership instead chose to act more like other hospitals and charge fees.
“Absolutely the right decision,” said Doug Maxwell, chairman of the board of the national Shriners Hospitals for Children.
Shriners is a philanthropy and closing down some hospitals to save others, he said, is akin to a family abandoning one child to save the others.
“We’re in this together and our future looks bright,” he said.
Billing insurers is just fine with Lynett Viehouser. Her 14-year-old daughter Samantha was diagnosed with scoliosis in her upper back a couple years ago.
The family started going to Shriners and eventually surgeons implanted a slender titanium rod, hooks and screws to her upper spine to help Samantha overcome her genetic condition.
Samantha had been having trouble sleeping because her back was sore. If left untreated, the curvature of her spine would have worsened and possibly left her disabled.
“This is why families – why we – have insurance,” Lynett said.
Samantha’s surgery was May 3. The incoming freshman at Lakeside High School was told by her physician, Dr. Paul Caskey, that she will have to endure a summer of no running, no jumping, no diving, and perhaps worst of all, no Silverwood rollercoaster rides.
On the bright side: no brace, no cast, and she can be in the water. Best of all, the surgery is successfully correcting the 22-degree curvature of her spine. It is now about 12 degrees.
Families such as the Viehousers will now be asked for an insurance card upon their first visit to Shriners.
If they don’t have insurance, it won’t matter, said local Shriners spokeswoman Sally Mildren.
“Nothing has changed in that regard,” she said. “Children we can help will not be turned away.”
She said the Spokane hospital has nearly doubled its inpatient numbers to 13 a night after an aggressive marketing campaign that reached out to pediatricians across the region.
Maxwell said families may receive a statement that shows the cost of treatment and the percentage paid by insurance. But the statement will not have a balance due. Nor will parents be asked for a credit card or co-pay.
While Spokane’s is among the hospitals in the initial phase to bill insurers, Maxwell said all Shriners hospitals in the United States will change by the end of 2011.
The organization’s hospital in Mexico will not seek reimbursements. Its hospital in Canada already participates in a federal program.
A billing study conducted by accounting firm PriceWaterhouseCoopers determined that the Shriners will be able to collect enough from insurers to cover the hospitals’ expenses and stop the endowment drain, Maxwell said.
It hasn’t all been easy.
The Spokane hospital laid off nine people, cut the hours of some staff and initiated a hiring freeze across most departments. The hospital has 127 full-time employees and an annual budget of about $13 million.
Maxwell said the Spokane hospital is expected to be a financial contributor because of the high rates of insured children.
“Spokane and Portland are hospitals that may help our organization subsidize the cost of providing care in areas like Northern California and Houston … where not as many families have insurance.”