Dear Friends of Shriners Hospital for Children – Spokane,

Well it is official! At the recent Imperial Session the delegates approved overwhelmingly the adoption of co-pays and deductibles under the 3rd party pay program. Once again, Shriners when presented with the facts made a courageous and forward thinking decision. To those that say the Shrine culture is too conservative to change—I say bunk!

Over the coming weeks, and perhaps months, you will hear different versions of why this vote was so important. I want to give you my perspective from where I sit. First, the decision to allow collection of co-pays and deductibles was a $70 million dollar decision. This was the amount of potential revenue that would have been lost because insurance companies would have refused to contract with us. This is too much money to walk away from for a healthcare system that is still in financial distress.

The more compelling reason in my mind to implement a co-pay and deductible program is the access to care that will be afforded to tens of thousands of children that do not use our services today. Why is this you might ask?

By virtue of entering into a managed care contract with insurance companies we agree to join their network of physicians and hospitals in return for discounts on reimbursement. From this point on the insurance company is incentivized to send children to our hospital. Our hospital will be added to their list of preferred providers. Primary care and pediatric physicians in the network will be notified of our capability to treat children and instructed to refer children to us when medically feasible. What does this mean in real numbers?

Right now the Managed Care contracting department at headquarters has 42 contracts under legal review. Many of these contracts were on hold awaiting the results of this week’s vote. These contracts would have been dropped had the vote been against collecting co-pays and deductibles. OK so what does this mean for Spokane?

The largest commercial insurance payer for our region is Premera Blue Cross Blue Shield. There are 1.5 million people enrolled in Premera healthcare products! These families buy and/or their employers purchase Premera health plans to provide care for themselves and their families. Premera will not contract with us absent a co-pay and deductible program. Therefore we are not in the Premera referral network and miss the opportunity to treat children at our hospital. Once we ink the contract with Premera we expect referrals to increase. This will be true for many of the contracts currently in negotiation.

The knock on SHC-Spokane has been our historically low patient volumes. Not being part of any managed care network contributed to this problem. With the approval of the co-pay and deductible program our leadership has taken the first step toward helping Spokane find a sustainable source of referrals. I hear Nobles say all the time that all they want to do is take care of children. With this vote they have opened the door to many more children that otherwise would receive care outside the Shrine system.

I want to thank those Nobles that travelled to Denver to vote on the future of our hospital system. They made a courageous decision to move toward the future by allowing hospitals to generate income that will help sustain this philanthropy for many years to come.

Sincerely,

Gene Raynaud, FACHE
Administrator