As Katrina neared landfall,all but 35 patients were transferred to other facilities. Nearly 100 hospital staff and seven physicians moved the remaining patients to HMC’s second floor,where they continued to provide care for four days after electrical power and communication with the outside world were lost.

Taking Stock

Though many had no word about their families in the wake of the storm,HMC staff worked four days without relief. Until Disaster Military Assistance Teams arrived August 31, the staff provided emergency care (including the delivery of a baby) for approximately 850 area residents as well as the hospital’s patients.

While HMC sustained moderate structural damage,all of the equipment on the first floor—which housed the ICU,OR,ER,Lab, Diagnostic Imaging and most patient care units—was ruined.The total damage exceeded $25 million. Many of HMC’s employees had evacuated the area and could not return because roads were impassable and their homes were badly damaged or destroyed.

Maintaining a Lifeline

Though electrical power was not restored for 14 days, QHR’s on-site CEO remained at the hospital.He and the CFO began working with QHR’s corporate staff to speed HMC’s eventual reopening and to meet the needs of the hospital’s employees and physicians

• Working from Birmingham,AL, HMC’s CFO served as a primary liaison with insurance companies and vendors.He also worked with banks to redirect payroll deposits of employees to institutions not affected by Katrina.
• While communications remained down, QHR corporate staff checked references of contractors that could help with the clean-up and adjustors who could assist with HMC’s claim to FEMA.
• QHR helped the hospital move its business office operations temporarily to the headquarters of its IT vendor, CPSI (a QHR strategic service partner),in Mobile, AL. Downloading warehoused data onto its own system,the vendor processed Hancock’s payroll, AR and account coding, enabling the hospital to maintain a flow of revenue and pay employees.
• To keep as much of the remaining staff as possible intact while the hospital remained closed, HMC employees worked as the salvage crew. While contractors removed wet sheet rock and carpet, dried the building and treated it to prevent mold, hospital staff salvaged equipment, records and supplies.
• Meanwhile,the hospital set up a multi- specialty physician group to help make it possible for them to remain in the community.

“Our employees pretty much abandoned job descriptions. Everyone helped with the cleanup.Whoever was nearby got to do whatever needed to be done,” said Janet McQueen, HMC’s marketing and development director.

• With all of HMC’s major medical technology ruined, QHR worked with vendors to help the hospital obtain deep discounts and extended payment terms on the purchases of replacement equipment,aiding cash flow as the facility reopened and recovered.
• Employees from other QHR hospital clients across the country pitched in, too.Together with the company, they contributed over $50,000 to the hospital’s foundation to assist employees at HMC who lost homes and their possessions.
• QHR,which hosted the hospital’s website from Nashville, updated it as needed. With phone lines down for weeks,the website became a critical channel of communication by which employees could receive information.

Refocusing Strategically

Because Katrina changed the environment along the Mississippi Gulf Coast—with much of the population displaced,perhaps permanently—QHR consultants helped HMC adapt in order to survive.

• HMC’s board members (most of whom lost their homes) approved QHR’s plan to downsize HMC from 104 beds to 25.The plan,based on a detailed cost-benefit analysis,enabled HMC to win approval to be designated as a critical access hospital,receiving more favorable reimbursements.

“The critical access designation was key—it meant the hospital would receive reimbursement from Medicare and Medicaid based on our actual costs of delivering care,” says CFO Brandon Slocum.“It ensures our ongoing financial viability.”

• QHR also developed a new staffing model based on the hospital’s projected census after reopening.The new model reduced full-time employees from 350 to approximately 200.Most of the losses occurred through attrition.

“We were able to keep most if not all key employees,”says CEO Hal Leftwich.“Our medical staff is smaller, but we have maintained a good group of surgeons, primary care physicians and OBs.That has been very important to this community.”

A Grand Reopening

Thanks to the extraordinary efforts of its staff and management, Hancock became the first hospital closed by Katrina’s floodwaters to reopen. The emergency department reopened on October 5, barely one month after the storm.Surgery was restored on December 13. On the day that the OB department reopened, January 11,the first baby of the new year was born at Hancock.

“The US 90 bridge is closed and won’t reopen for 2 years,making it a 45-minute drive to Gulfport, and the closest hospitals in Louisiana are swamped,”says HMC Board of Trustees president William A.Tate III.“It was vital for Hancock to reopen. Otherwise,the local
physicians would not have returned,and access to care for people in this area would have been severely limited. The QHR team and our staff did an amazing job to bring this hospital back to life.”

Next Steps

Like all hospitals that lay in Katrina’s path,HMC still faces formidable challenges.Federal flood insurance covered $2 million of the $25 million damage. FEMA, with whom the county-owned hospital is still negotiating,will fund some portion of the remaining reconstruction costs.

The hospital plans to maintain its “critical access” designation—which allows a maximum patient census of 25— on an interim basis through 2006 as the Bay St. Louis area revives.

By April 2006,“the community has started to bounce back and our business is building back up,”says CEO Leftwich,who continued to live in a travel trailer on the hospital campus after his home was destroyed.“ Over 70% of our employees lost their homes and were still going the extra mile to care for patients,”says Leftwich.“We made T-shirts that showed our logo half underwater and fish swimming around it.The shirts read,‘Katrina tried, but our spirit is waterproof.’”