One system’s use of centralization has allowed it to avoid disruption to its back-office functions.


Aug. 31—Hospitals in Texas and Louisiana reported a range of impacts from Hurricane Harvey, and experience with other storms indicates some facilities may take years to recover.

CHRISTUS Southeast Texas St. Elizabeth, the lone operational hospital in Beaumont, Texas, was providing care despite the discontinuation—as of Thursday—of local utilities, said Donald Lloyd II, ‎CEO of CHRISTUS Health Southwest Louisiana. The hospital was relying on its own generators, stored water, and wells to provide emergency care to 256 patients, according to its website, after the two other hospitals in that hard-hit city closed.

Officials in Texas have confirmed more than 38 storm-related deaths. Nearly 780,000 residents have been forced to evacuate their homes, and 32,000 have been forced into shelters, according to the Federal Emergency Management Agency (FEMA).

Also impacted was the CHRISTUS Southeast Texas St. Mary facility, which was limited to providing “essential emergency services” after extensive flooding on and around the medical campus, Lloyd said in an interview.

“Most of that community has either been previously evacuated or has been subsequently rescued there,” Lloyd said.

The storm’s full impact on hospitals was still unclear days after it ended. News outlets reported that hospitals in other parts of Texas have closed or were sending some patients to other facilities. However, the Texas Hospital Association (THA) declined to hazard a guess on the statewide impact.

“We have been hesitant to take a running tally only because of the flow of information and potential for inaccurate info,” Lance Lunsford, a spokesman for THA, said in emailed comments. “I think it is safe to say that while some of the facilities aren’t in the middle of rainfall and oncoming floodwaters, they are still dealing with struggles of various forms, so we are trying to let them conduct operations before doing an impact assessment and report.”

An official with the Louisiana Hospital Association (LHA) said no hospitals in that state were closed or had major disruptions, even though the storm backed out of Texas and reentered the United States through Louisiana. At least one hospital in that state was preparing to accept evacuated patients from Texas hospitals, he said.

The THA established a Hospital Employee Assistance Fund in the wake of the storm to help hospital employees in Texas who experienced significant property loss or damage. The American Hospital Association contributed an initial $50,000 and the LHA contributed $10,000. More information is available at https://www.tha.org/Harvey/ReliefFund.

The CHRISTUS system’s nine Corpus Christi-area hospitals were spared major damage even though the storm made its first landfall there. However, some outpatient facilities had more extensive damage, according to Lloyd. 

Much less impacted were the CHRISTUS hospitals and facilities in other parts of Texas. For instance, its seven hospitals in the San Antonio area suffered “mostly minor” water and wind damage, he said.

Outside of southeastern Texas, the system’s hospitals were restored to fully operational status within 48 to 72 hours of the storm, Lloyd said.

“We’re all focused as a system on southeast Texas and our operations in specifically Beaumont and Port Arthur at this time,” Lloyd said.

A Benefit of Consolidation

Despite the severe impacts on some facilities, the CHRISTUS system avoided major disruption of its back-office functions because it has undertaken a systemwide consolidation of those functions in Irving, Texas.

“CHRISTUS has spent a lot of time—because of where we operate in the mid-South—building redundant systems and appropriate mechanisms to continue operations,” Lloyd said. “They were tested very mightily in this scenario and so far have performed just wonderfully.”

The Financial Impact

CHRISTUS has not produced estimates of the financial impacts from the storm in areas such as property damage, lost elective surgery business, and operations disruption.

“We’re in the midst of making those assessments now, and I honestly couldn’t give you even a remote idea at this juncture,” Lloyd said.

The possible extent of such losses was illustrated in August 2011, when Hurricane Irene struck the East Coast and damaged healthcare facilities, including those of the North Shore-Long Island Jewish Health System, now known as Northwell Health. The health system’s finance officials estimated the overall cost associated with the hurricane was $13 million, including about $4 million attributed to labor and supplies and $9 million to revenue lost from three hospital closures, according to an overview in Health Affairs.

New York hospitals as a group suffered an estimated $3 billion in damages from Hurricane Sandy in 2012, and Charity Hospital in New Orleans obtained a $475 million arbitrated reimbursement for damages after Hurricane Katrina in 2005, according to a Harvard School of Public Health report on hospital disaster recovery.

That report urged hospitals to consider all their assets and to be prepared to file claims for the partial or complete loss of those assets. Northwell Health received $2.5 million from property casualty and business interruption insurance policy claims, and sought payments from FEMA’s Disaster Relief Fund.

Facilities also should be prepared to deal with uncompensated care following a disaster. The Harvard report warned that for hospitals providing health care during a disaster, “normal financial tracking methods may be unavailable and reimbursement for services provided can be challenging to obtain during recovery.”

Renovations and staff turnover are two “potentially crippling financial challenges” that hospitals may face following a natural disaster, according to the report.

Hospitals and health systems in Harvey’s path may face those challenges going forward.

“We’re a pretty conservative organization, so we always assume there is going to be a degradation of earnings and operations,” Lloyd said.

Especially large financial impacts were felt by CHRISTUS hospitals when the population was evacuated. Lloyd said the health system has contingency plans to try to recover quickly from such losses and to manage its expenses during that time.

“But obviously you’re bringing in additional resources to manage your operations and serve the communities,” Lloyd. “So, on one hand you’re losing revenue, while you’re also increasing expenses. And that is exclusive of any damage remediation, intervention, or interdiction and restarting of facilities.”


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Friday, September 01, 2017