Moody’s Investors Service said Hurricane Harvey’s influence on Texas nonprofit hospitals may linger for months or years, reported Becker’s Hospital Review.
Patient volumes, especially for outpatient and elective procedures, will play a major part in the impact on hospitals. The report said “the severity will depend on the magnitude of property loss, the amount and timing of insurance recovery and the availability of Federal Emergency Management Agency funds.”
Moody’s said Texas Medical Center’s Harris County Hospital District, Memorial Hermann Health System and Texas Children's Hospital, as well as Catholic Health Initiative (CHI), may experience a negative credit impact, though CHI may avoid most of the potential damage because the system is in multiple states.
Hurricane Harvey caused service interruptions, canceled procedures and hospital closures throughout southeast Texas during and after the storm. The monumental task of cleaning up is just beginning.
One of the area’s nonprofit health systems, CHI, which operates 17 hospitals in southeast Texas, said the system provided uninterrupted care during the early days of the storm. However, flood waters caused the evacuation of two facilities and the closure of two more later in the week. Another facility lost power temporarily and another had to stop accepting patients. CHI said there are no reports of structural damage to its hospitals, but a team of executives is assessing damage and will manage long-term recovery efforts.
Another major healthcare provider, MD Anderson Cancer Center in Houston closed patient appointments and surgeries during the storm's aftermath.
These service interruptions will affect the area hospitals' finances and those ripples could last for months or years. Moody’s report is the second in a week to predict lower patient volumes in the months ahead as survivors concentrate on repairing and rebuilding. Jeffries released an investor note earlier last week noting patients will likely delay procedures in the aftermath to focus on rebuilding their lives.
Of course, what’s most important is the human tool Hurricane Harvey caused in Texas and Louisiana. Dozens have lost their lives and that number could rise once flood waters recede. However, southeast Texas hospitals will also have to move forward from the economic reality caused by temporarily facility closures, patient evacuations and delayed procedures.
Once southeast Texas begins to get back on its feet, hospital leaders will need to face a post-hurricane world that will likely include capital repairs to damaged buildings, fewer elective procedures (at least temporarily) and a shell-shocked region. There will likely be an increased need for mental health services. There are also concerns about public health issues caused by the flood waters that hospitals may need to handle in the coming weeks, such as contact with contaminated water and increased risk for mosquito-borne illness.
Multi-state hospital systems will feel pain, but will likely be able to move forward in the coming months. However, health systems with multiple facilities in southeast Texas may have a harder time righting the ship over the next quarter or two at least.
Another powerful hurricane could make landfall in the U.S. in the coming days. Florida has declared a state of emergency in preparation for Hurricane Irma.