Imperial Potentate Douglas Maxwell message to the Nobility

The Imperial Council
Of the Ancient Arabic Order
Nobles of the Mystic Shrine

Office of
Douglas Maxwell
Imperial Potentate

A MESSAGE FROM THE IMPERIAL POTENTATE ABOUT YOUR FRATERNITY
AND YOUR HOSPITALS

My Dear Fellow Noble,

As I write my last message to you as your Imperial Potentate, I want to take a moment to reflect….  from whence I came.  I started… as perhaps you did… many years ago, with the wonder and mystery of joining the Masonic/Shrine family. 

Many of you may be like myself… and joined, because that is what the men in the family did. But an interesting thing happened along the way…we found masonry and shrinedom becoming a part of our daily lives.  We became a part of something bigger and better than ourselves. Just as I am, I’m sure you are very proud of all we represent as Masons and Shriners.

I have had the privilege of serving this great fraternity for many years, 10 years of it on the Moolah Divan in St Louis. During those years, I never really had any aspirations of serving on the Imperial Divan, it just seemed to evolve. 

For these last eleven years, Patricia’s and my travels throughout shrinedom, have been the fastest and most rewarding years of our lives. We have made so many friends in the far corners of the country and the world. 

We have children from our hospitals that stay in regular contact with us. That is the greatest reward…the children. Those amongst us who have healthy children and grandchildren can say…”there but for the grace of God, go you and I”.

I feel so honored to have been able to serve our great fraternity and philanthropy for these many years.
You have opened your temples and your hearts to us on our visits with you. With the immense size of our organization, it is impossible to visit and see everyone, but hopefully in our last eleven years our paths have crossed in some way. I thank each and every one of you, for placing me into this position of service to our fraternity and our hospitals. I could never put into words the wonderful journey this has been for both Patricia and myself. 

I would like to leave you with some parting thoughts on our hospitals.

Hopefully by now you have received something in the mail that looks like a small “Yellow Pages”….it is the “official call” for the San Antonio session….36 separate items…the most ever I am told….this may turn into a seven day “Annual Meeting”.

I’m just kidding….don’t change any reservations

This past spring, as I have traveled around the country to each of our regional Shrine Associations, I tried to go through all of the issues in an “Open Format Forum”….where everyone was encouraged to contribute their thoughts. Many new and interesting ideas were brought forward and then carried on to the next association for their comments on the same.

I’d like to try to help you understand all of the different issues relating to our beloved Shriners Hospitals for Children.

Our basic financial situation is….

Over the last 7 years…
In addition to the increased cost of …“basic medical care”…

We have accepted many of the requests and recommendations for more programs … from our hospital and headquarter’s staffs…

Adding these additional “new programs”… has added new cost and “additional employees

This has gotten us into the position of having our “Expenses”…
grow to $200 million dollars per year greater than our “Revenues”

We have been thinking with our “hearts” and not our… “business heads”…

Shriners Hospitals is a “Business” and must be run that way
“Expenses must not exceed Revenues… as a normal way of doing business”

We were able to cover these… “additional new programs costs”…to our basic mission of
“Taking care of Children” … by using the “Realized Gains”,
from the Good Years of our Endowment Fund, such as during the years 2005, 2006, 2007.

Up until this past year, we have been able… so to speak… “Keep all the Balls in the Air”… to cover the “over-expense of our operating practices”.

This can work….until you have a substantial down turn in the economy, as we have had in the last 12 months. Then you start spending the “Principle” of the “Endowment Fund” to cover the over-expenses…
until you lower that principle amount to a point of “No Return”. (You just can’t earn enough on what’s remaining to get back on top.)

A note of “Good News”
I was informed by our V-P of Finance that…We did not have to sell off any “Equities”… to continue to pay the bills through these last months…and now that the “Dow Jones Index is going back up…so is our “Endowment Fund…but remember…even when our Endowment returns to its previous amount…that is not the answer…

This is not part of “Good Business Practices” and will eventually lead to the demise of what has been known as the Greatest Philanthropy in the World.

The Good news is…Every Shriner, of the 19 regional Shrine Associations I attended when asked the question… “who feels we should continue to do business this way”….no one raised their hand.
Everyone understands that this is something we must correct… in how we operate our beloved Shriners Hospitals.

Our future Children… of Shriners Hospitals say…
“God Bless the Shriners for that thinking”…but how do we get there.

There are multiple proposals….
You are the leaders and the decision makers of this Great Organization…
The time is now… 

Here are the issues to think about before you get to San Antonio

On the Revenue Side:…

• Should Shriners Hospitals receive Compensation for services provided… from private insurance companies…and Governmental entities, such as “Medicaid.

On the Expense Side:…

• Reducing the Expenses… to a yet to be determined percentage (perhaps up to as much as 30% … if normal services can be maintained)…for all 22 hospitals (2009 Combined Adjusted Budget $453.9 million)… and
• Reduce the Expenses of Headquarters in Tampa, to begin to help narrow the “Gap” between Revenue and Expenses. (2009 Adjusted Budget $39.3 million)
• Reduce the amount currently spent on Research and combine the 9 current research lab locations in the United States to 4 locations. (2009 Adjusted Budget $39.8 million)
• Reduce the amount currently spent on Information Services (2009 Adjusted Budget $14.8 million)
• Modify some of our current hospitals to an “Ambulatory Model” (Day Surgery)…
  to reduce expenses… by only performing surgical procedures to a child, that would not require an overnight stay… and only being open 5 days a week (60 hours vs. 168 hours currently).
       (Cost Reduction yet to be determined…rough estimate reduction of 30% to 60%)
• Close 5 Orthopedic Hospitals…Springfield, Greenville, Shreveport, Erie, and Spokane, (Combined 2009 Adjusted Budget of $86.7 million) and continue the suspension of services to our Galveston Burns Hospital. (“Full year” 2009 Adjusted Budget $35.6 million)
•  Combine the Galveston Burns Hospital (2009 Adjusted Budget $35.6 million) with the Houston Orthopedic Hospital, (2009 Adjusted Budget $22.5 million)
  45 miles to the north… into a model as exists in Northern California… for a reduction of duplication of services, i.e. food services, laundry, pharmacy, staffing, security, etc.

As I referred to earlier...having visited no less than 19 Shrine association meetings in my travels this year and having spoken with many of you… 

I have seen in your faces and have heard in your voices… the passion for our situation… 

I would expect nothing less from you because it is that passion, that genuine love for our hospital system that we Shriners have created and supported for over 87 years,
that has allowed us to create the greatest philanthropy the world has ever known. 

As your Imperial Potentate, I ask that we channel that passion…. in a positive way… so as to allow us to leave San Antonio…

“Probably one of the most important sessions in our history”…

Having made the right decisions…

That will be the best… for our children that we help…now… and in the future…

God Bless you…and God Bless the Shrine of North America.

Fraternally yours,