Shriners may shut 25% of hospitals

GREENVILLE, S.C. - Shriners hospitals, which have provided free care since before the Great Depression, are considering closing a quarter of their facilities as donations stagnate, costs increase and the charity's endowment shrivels.

The group's director says it's the only viable option.

Officials at the Florida-based group say it is siphoning $1 million a day from its endowment to balance the budget for 22 hospitals in the United States, Canada and Mexico. Meanwhile, they say, that fund has fallen to $5 billion from $8 billion in less than a year because of the poor stock market and a charitable giving slump that has hurt philanthropies. The fund has been declining since 2001.

"Unless we do something, the clock is ticking and within five to seven years we'll probably be out of the hospital business and not have any hospitals," Ralph Semb, chief executive officer of Shriners Hospitals for Children, said.

The 53-bed Shriners Hospital for Children in Philadelphia is not slated for closure. The $40 million facility, which opened in January 1998 on North Broad Street, treats about 12,000 patients a year for free. It specializes in orthopedic and spinal-cord injuries.

In cities where hospitals may close, supporters and hospital staff are scheduling fund-raisers and posting online messages of support.

In Greenville, S.C., Bridget Myers and her daughter are collecting money in a bucket tagged with pictures of X-rays and Shriners patients.

Brooklynn Myers, 14, who received scoliosis care at the Greenville hospital, said, "Me and my mom feel like it's heartbreaking we'd have to drive all the way to Lexington [Kentucky], and we've made special bonds here."

Widely known today for burn and orthopedic care for children, the Shriners Hospitals system opened in 1922 with a polio facility in Shreveport, La. By the 1960s, the group had hospitals nationwide and expanded its care to include spinal-cord injury rehabilitation, cleft lip and palate care and research.

More than one million children have been treated at the hospitals, which were created by the fraternal group of the same name whose members are known for wearing red fezzes. The care is free to all.

In 2007, the group was hit with accusations it used money intended for the hospitals to throw parties - but only a fraction of the hospitals' funds are raised by the group. Most of the money to operate the hospitals has come from interest on the endowment, Semb said.

Semb said this year's operating budget is $856 million. The budget has risen by $100 million each of the last two years while donation levels remained static, he said.

Last month, the Shiners' board of trustees voted to close four of the group's eight research centers and lay off 40 people in administration.

At the annual meeting July 6 to 8 in San Antonio, about 1,200 Shriners will vote on whether to close hospitals in Erie; Shreveport, La.; Spokane, Wash.; Springfield, Mass.; and Greenville. Semb said they were chosen mainly because of too many vacant beds. Patients would go to other Shriners hospitals.