The announcement was made at a closed door meeting Thursday morning. The hospital treats burn patients, but announced it will suspend renovation and reconstruction until further notice. It stopped seeing patients after Hurricane Ike. More than 300 employees are on the payroll, and most will continue to be paid until the end of March.
The hospital, which relies on donations, says it was forced to make the decision because the value of its endowment diminished by $2 billion last year.
The hospital shutdown has area facilities looking at their plans to get ready for the possibility of treating more children with burns. We also learned of the impact Shriners has had on thousands of kids who have now grown into successful adults.
Amy Woodard-Davis spent most of her first two decades of life at Shriners Burns Hospital in Galveston.
"I'm personally hurt because I spent 22 years in that hospital," said Woodard-Davis.
She was set on fire as a baby and had burns over 70 percent of her body. She says Shriners became her family and the staff didn't make her feel like she was at a hospital, but at home.
"They just cared about us, they loved us," said Woodard-Davis.
Through 200 surgeries, she says they taught her that despite her disfigurements, she should always stand tall.
"I didn't look like this before and I know I didn't I had to get burned to look like this and I accept that. They did a wonderful job with me," said Woodard-Davis.
News of Shriners closing also saddened many medical professionals in the Houston area.
"The Shriners Burn Hospital for this community was a huge resource," said Dr. Kevin Lally, chief of surgery at Children's Memorial Hermann Hospital in Houston.
In the past, Dr. Lally and the hospital managed children with burns up to 20 percent of their body in the pediatric intensive care unit. Anything over that would be moved to Galveston, but not anymore.
"We're going to have to immediately expand our capacity to at least care for up to thirty percent burns, we can't send these children out," said Dr. Lally.
The surgeon says Memorial Hermann is already holding meetings to see how they can meet the demand and work to create the infrastructure and manpower to eventually treat the entire spectrum of pediatric burns.
"We can't not have the capacity to take care of major burn children in Houston, Texas," said Dr. Lally.
While Woodard-Davis hopes success stories like hers can still somehow live on.
"We need that hospital down there. That's the closest we have in the Galveston-Houston area," said Woodard-Davis.
Otherwise, she says it's a sad disassembling of a family that's been a lifesaver to thousands.
"I thank all of them who worked on me for the 22 years I was there. I thank every one of them. If you don't say thank you now, you won't ever get to say thank you," said Woodard-Davis.
Woodard-Davis is one of 18,000 patients treated by Shriners in Galveston.
Children's Memorial Hermann Hospital says it could take a year to get to full capacity in treating children with burns.