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Shriners Membership now 395,000, down from 943,000 in 1980

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Philadelphia Inquirer

Helpers Seeking Help

by Stacey Burling, Inquirer Staff Writer, Posted: November 4, 2007

That's what the Shriners Hospitals for Children are doing this month as they begin their first marketing campaign since their founding in 1922.

The $14-million-a-year advertising effort - meant to attract patients and, more obviously, donations - is a sign of how much society and medical care have changed since the Shriners entered the hospital business.

Membership in the fraternal organization - known for the archaic red hats, fezzes, its members wear - has dwindled. The average member is in his mid-60s. The Shriners need outsiders to foot more of the bill for their 22 hospitals, including one in North Philadelphia.

Meanwhile, insurance coverage for children has improved, reducing the need for hospitals that provide totally free care, said Gerald Katz, a health-care consultant in Plymouth Meeting with Kurt Salmon Associates Inc. And patients in general are spending less time in the hospital and getting more treatment on an outpatient basis.

Nationally, the Shriners hospitals, which specialize in orthopedic and burn care, are only about one-third full, said James Full, the hospital system's chief operating officer. Outpatient care has been expanding, and the system plans to reconfigure space to take advantage of that trend.

Shriners leaders say the hospitals offer care unavailable at many other places without the restrictions that insurance companies impose. Patients, who must apply for admission, pay nothing, and the hospitals don't accept insurance reimbursement.

The system needs more patients to maintain physician skills - higher patient volume is associated with higher-quality care - and to fuel research, said Randal Betz, chief of staff at the Philadelphia Shriners Hospital, which focuses on complex orthopedic and spinal-cord problems. Other leaders said that adding patients would increase efficiency and help attract staff.

"We want to care for as many needy kids as possible," Full said.

The hospitals depend on the Shriners' $8 billion endowment for much of their $721 million annual budget. Last year, the hospitals used $280 million that came from philanthropy, not the endowment.

"We're very dependent on donations and our investment returns," Full said.

He conceded that $8 billion sounds like a lot of money, but said it could dry up in a decade without additional fund-raising, or if the stock market stagnated. Betz said it costs the Philadelphia hospital $1,100 a day to care for a patient who has been admitted.

The Shriners' goal is to have a $12 billion endowment by 2012.

They can't do it alone. Their membership, which peaked at 943,000 in 1980, is now 395,000. Members raised $14 million last year at 498 fund-raising events, what the group's chief operating officer, Mike Andrews, called "almost a drop in the bucket."

The system stepped up its development efforts about three years ago, increasing donations from $240 million in 2004 to $280 million last year, said Edgar McGonigal, corporate director of development. Much of that money was bequests from Shriners or their relatives.

The new ads, meant to expand the giving pool, began running recently in People magazine and national cable channels like the Food Network and Oxygen. The spots feature active, photogenic children and a plea for money. Local advertising will start sometime next year.

Locally, the Shriners facility, at 3551 N. Broad St., faces a lot of competition for patients. The Philadelphia area is home to several pediatric hospitals, including Children's Hospital of Philadelphia, St. Christopher's Hospital for Children and Alfred I. duPont Hospital for Children near Wilmington. In South Jersey, Cooper University Hospital has operated the Children's Regional Hospital at Cooper since 1996.

In the past, the only publicity Shriners got was public-service announcements in the middle of the night or word of mouth from Shriners events, said Kathy Goodstein, director of public relations for Shriners Hospital in Philadelphia.

As part of the new branding initiative, the hospitals have a new logo, a simple drawing of a fez-topped Shriner and child inside a red circle. The organization's previous symbol was a Shriner seen from behind carrying a child and the child's crutches.

The Shriners themselves are thinking of recruiting among college fraternities and running their own public-service announcements. The National Treasure and DaVinci Code movies have raised awareness of the Masons - you have to be a Mason before you can be a Shriner - among young men, Andrews said. There's also some evidence, he said, that young men are more drawn to organizations like the Shriners than members of the Vietnam generation were.

Shriners hospitals compete, if you can call it that, by offering very specialized services. The Philadelphia hospital is known for electrical stimulation of damaged muscles, and custom-made braces and artificial limbs. It has 59 beds, but is operating only 30 now, administrator Ernie Perilli said. Most of those are full each day, he said.

Shriners is next door to Temple University Children's Medical Center, which is in the process of closing. Temple has provided some services, such as pharmacy, to Shriners and has agreed to continue doing so, a Temple spokesman said.

The Shriners hospitals are also attempting to strengthen ties with doctors who work in the nonprofit and for-profit world - doctors who control referrals to hospitals. Those physicians may not know about Shriners or may simply be accustomed to referring patients within their insurance networks. They may also want to keep patients within their own hospital systems.

Betz said 80 percent of his patients have insurance. Their parents usually hear about Shriners from the Internet, not from their doctors. "Most physicians won't even tell their patients about these advanced techniques available to them," he said, "because it's a competitive world."

Katz said there were now more children's hospitals around the country than when the Shriners hospitals were founded, and many are booming. Shriners has a good reputation, but the competition is tougher now. "Existing children's hospitals around the country," he said, "are getting bigger, and better, and very competitive with the Shriners clinically and research-wise."

Shriners Hospitals for Children
Headquarters: Tampa, Fla.

First hospital: Shreveport, La., in 1922.

Original Philadelphia hospital opened: 1926.

Current Philadelphia hospital (left) opened: 1998.

Total 2007 budget: $721 million.

Amount spent on research: $37 million.

Who is eligible: Children up to age 18 regardless of financial need.

New-patient applications (2006): 38,984.

Patients seen (2006): 128,578.

Number of orthopedic hospitals: 18, including Philadelphia.

Number of burn centers: Four.

Philadelphia specialty: spinal-cord injury rehabilitation.


Contact staff writer Stacey Burling at 215-854-4944 or sburling@phillynews.com.

Posted: November 4, 2007 - 4:01 AM

Stacey Burling, Inquirer Staff Writer

Further Reading:

The Royal Order of Jesters - The Shriners Secret Society Secret Society - 'Mirth is King'

The Shriners - The 'Krafty' Klowns