Although it's rare, occasionally a hospital is destroyed or shut down by a natural disaster. The skills hospital chief financial officers bring to such a scenario can make a difference as to when a facility reopens, and how much it will cost, according to Healthcare Finance News.
"It's a very complicated and in-depth process," Shelly Hunter, CFO at Mercy Hospital Joplin in Missouri, a facility that was badly damaged by a 2011 tornado, told the publication. After taking a direct hit from the tornado, the hospital reopened earlier this year.
A CFO must know the details of the hospital's insurance policy, including the period of indemnity, and contact the Federal Emergency Management Agency (FEMA) immediately, Hunter said.
The cost for the hospital to rebuild was $434 million--of which $27 million came from FEMA. It may qualify for another $20 million from the agency, the article reports.
If a hospital is damaged by a natural phenomenon that is not part of an area declared a federal disaster, CFOs have other options, such as declaring a portion of the losses as an operational expense. However, Mercy Hospital Joplin saw a 20 percent drop in market share and a steep drop in revenue while its facility was closed to inpatients, according to Healthcare Finance News
Another hospital CFO who navigated both literal and regulatory rough waters was South Nassau Communities Hospitals' Mark Bogen. A dialysis center run by the hospital system was flooded by Hurricane Sandy. It cost about $5 million to rebuild, and was back in operation just a few months after the storm hit. But South Nassau Communities only finalized its insurance claim in June 2014, the article reports.
Hurricane Sandy damaged a number of New York City-area hospitals extensively. Bellevue Hospital's basement flooded, requiring extensive post-repair revisions to its structure.
To learn more:
- read the Healthcare Finance News article