Company insures hospitals against pandemics

An offshore insurance company is offering a new kind of liability coverage for hospitals, indemnifying them against a pandemic or similar outbreaks.

The coverage from AXIS Healthcare would go into effect if there was a governmental quarantine of a hospital; if 25 percent or more of the hospital personnel don't report for work; a 25 percent reduction in inpatient stays; or a 25 percent or more reduction in emergency room visits.

Public health experts suggest that the United States is not prepared to combat a pandemic, and that many nurses and other clinicians believe many of the nation's hospitals would not be able to properly respond.

These fears are due in part to the limited outbreak of the Ebola virus in the United States in 2014. Two nurses from Texas Health Presbyterian Hospital in Dallas became infected with the virus when caring for a patient with Ebola, and as a result, the organization wound up losing inpatients in large numbers and taking a short-term financial hit that was so severe that Moody's Investor's Service downgraded the outlook for its parent company, Texas Health Resources.

Insurance for medical catastrophe business interruption has been unaddressed until now, the company said in a statement.

"Pandemics represent an especially serious risk for healthcare providers," AXIS Healthcare CEO Kimber Lantry said in the announcement. "During the 2003 SARS outbreak, hospitals were identified as the source of the spread of infection, resulting in the partial or complete shutdown of three hospitals in Canada. Indeed, after the first Ebola patient was admitted to Texas Presbyterian Hospital in October of 2014, the hospital lost $20.3M in revenue over a two-month period, with a decline in inpatient days of 22 percent and a decline in ER visits of 49 percent during the first month."

To learn more:
- read the announcement