PwC: The financial risks of hurricanes hospitals might not be prepared for

Hurricane Florence
Hurricane Florence is set to batter the Carolinas this weekend, and it could have some long-lasting effects on hospitals there. (NOAA)

As seen in the Carolinas with Hurricane Florence, hospitals and health systems within a storm's path need to be ready for the long-term effects—which can linger months and even years after floodwaters recede.

A new report from PricewaterhouseCoopers dives into these long-term considerations, which can include significant financial disruption, an impact on community reputation or ongoing supply chain disruptions.

Hospitals farther inland need to be thinking about these risks as hurricanes and other national disasters grow beyond their traditional zones, Benjamin Isgur, PwC’s health research institute leader, told FierceHealthcare in an interview.


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PwC identified five major areas that hospitals and health systems should address when building plans for hurricanes or other disasters, including:

1. Should service cuts be necessary, restore or expand care delivery.

2. Provide support to staffers and their family members.

3. Re-establish patient safety or regulatory protocols.

4. Address the financial risks.

5. Bring operational elements, such as the supply chain, back online.

“The areas that are affected by these [natural disasters] seem to be increasing and that’s where you get the mixed bag—some health systems just haven’t been thinking about it,” Isgur said.

RELATED: Florida hospitals offer lessons from Hurricane Irma: Prepare for crowds seeking shelter, support employees

    NYU Langone Medical Center, for example, saw its inpatient visits decline following Superstorm Sandy in 2012, which led to a credit review, according to the report. Since its emergency plan accounted for this possibility, it was able to get services back online quickly and avoid a credit rating downgrade.

    Workforce concerns and the impact a disaster can have on a hospital’s reputation are two key areas that may get overlooked, Isgur said.

    At the micro level, most providers are prepared for staffing issues, but on a wider scale they may not have protocols in place to address licensing problems or other concerns that can arise when trying to bring in enough people to address gaps.

    RELATED: Puerto Rico’s healthcare system slowly recovering after Hurricane Maria

    Poor communication, he said, can really make patients look at a hospital or health system differently. For example, if a facility needs to close in a storm but people in the surrounding community aren’t made aware, they may come for care and be turned away—souring their opinion of the hospital, he said.

    “How a facility is going to communicate with the public ... that can really reduce things like reputational damage,” Isgur said.

    CMS to launch several support actions due to Hurricane Florence

    The Centers for Medicare & Medicaid Services announced Thursday that it would take a slew of administrative actions following the public health emergency declared in North and South Carolina for Hurricane Florence.

    The agency has waived several Medicaid, Medicare and CHIP requirements in those two states, and has also made special enrollment opportunities available for people impacted by the storm, CMS announced.

    It also working to ensure patients in the region can access dialysis care and providing a disaster response toolkit.

    “We are coordinating with federal and local officials to make sure that our beneficiaries, many of whom are some of America’s most vulnerable citizens, have access to what they need,” CMS Administrator Seema Verma said.

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