Emergency Preparedness: Planning for the Worst

September 1, 2006
Theresa Defino

Hurricane Katrina was a stark reminder that the worst thing that can happen sometimes does. Be ready before the clouds darken.


Fires and hurricanes. Coding errors and Medicare audits. Which pair do you spend more time thinking about?

Chances are the second group commands much of your attention. But not preparing for emergencies and disasters could prove as costly as administrative missteps - if not more so.

Clinton Sanford knows. A family physician in a two-person practice in Silverton, Ore., Sanford saw his computers, some of his paper charts, and his framed diplomas go up in smoke.

In February 1999, a trash can in Sanford’s practice accidentally caught fire. “The office was a shell,” says Sanford. “Everything had to be gutted, down to the studs.”

Rebuilding took months and thousands of dollars. Owing to several mistakes and oversights, including an out-of-date insurance policy and no inventory list, the practice suffered a roughly $20,000 loss.

With the support of his patients and community and through sheer will, Sanford rebuilt. You could, too, should you experience a similar catastrophe. But Sanford and others recommend taking a more proactive approach and having a procedure in place for potential disasters.

Your office should already have a disaster recovery plan, as one is required by the Occupational Health and Safety Administration (OSHA), which oversees medical offices. But OSHA does not enforce compliance with its regulations - no government official will ever enter your office and demand to see your emergency plan (unless a complaint is filed). While health plans usually ask their contracted providers if they are in compliance with all regulations, they won’t bother to check.

But if a health plan wants to audit a chart, you must be able to produce it (not to mention that you’d surely like it available the next time that patient pops in). That would be difficult to do if your charts fell victim to fire or flood.

David Zetter, a consultant with Health Care Professional Management Services in Mechanicsburg, Pa., says practices should ask themselves to what degree they want to be able to handle emergencies and whether there are specific disasters for which they should be prepared. “Whether it’s a flood or a fire, you should have a way to back up your information systems, to get everything back up and running as quickly as possible,” Zetter says.

For many offices, losing patient charts is among their biggest fears. Most of the practices Zetter works with - like the majority of practices nationwide - still use paper. “Right now if my practices have a flood or fire, they have to rebuild [charts],” he says. “They may have some data in their heads, and they may be able to get some hospitalization data.” Fireproof file cabinets may protect paper charts, but they are typically too expensive for the average practice, says Zetter.

Practices with an EMR are at an advantage - as long as they have a fail-safe data recovery plan, which is required by the federal security rule that went into effect last spring.

Zetter recalls a three-physician practice with which he worked that had an EMR and was able to open up just one day after an overloaded power strip caused a small fire in the office. The physicians lost no data. “They had three hard drives that slipped in and out, and are backed up every 15 minutes,” Zetter recalls. “Their office manager takes them home and locks them up in a fireproof chest in her house.”

Until the office had new computers in place and functioning, “they were down from an IT perspective,” says Zetter. “But they were still able to see patients. They did scheduling on paper, wrote documentation, and then scanned the notes in.”

Creating a disaster plan

So what goes into a disaster plan, and how detailed should it be? The thoroughness of your plan will depend, in part, “on how quickly you want to open up” following a disaster, says Zetter. “No two disaster recovery plans are alike.”


Most practices would prefer to reopen as soon as possible. But that might mean working from a different location. How would you go about finding such a place?

Your plan should be specific enough to be effectively implemented by someone without intimate knowledge of your practice. For example, if you keep a set of spare keys in your office, your plan should identify their exact location.

To begin thinking about what your plan will require, do a walk-through of your office and take note of your most basic functions as well as your inventory. After you put your plan into place, train your staff on its details, run practice drills, and keep a copy of the required steps available for periodic review. Store another copy in a safe, off-site location.

Here are some of the basic elements you will want to consider when formulating your plan:

  • Have a point person - or two. Assign point people specific responsibilities, including data recovery, staff communication, supply ordering, etc. “The larger the practice and the more proactive you want to be, the more people you need involved, so you can move quickly and not overwhelm any one person,” advises Zetter.

  • Stockpile supplies. It may be a good idea to store any supplies at least a few miles away from your practice in the event your area is caught up in a regional disaster. This can keep them safe and retrievable. “If you want to be available for any type of disaster, you might want to stockpile medicines,” says Zetter.

Of course, you should have fire extinguishers in place. But in the case of small fires, don’t use them instead of calling the fire department, Zetter warns. Some fires you probably could fight on your own, but a good rule of thumb is not to attempt to extinguish a blaze that is “above your knees.”

“Your first priority is to evacuate everybody and then worry about the fire,” Zetter says. “That’s what the fire department is for; that’s what 911 is for.”

  • You’ll need money. How long could your practice survive if your revenues suddenly dropped off? “If you can only go a couple of days, you should have a line of credit available,” says Zetter. You will want to identify one or two people who have control over the practice’s credit line and can tap into it if necessary.

The amount of your loan or line of credit will depend on your revenue stream and your history with your bank. Maintaining a line of credit is a good idea regardless of why you think you might need it. “We open a line of credit or a loan for every practice we start,” says Zetter. He notes that doctors in particular have student loans to pay and little access to cash. Zetter says most practices should be able to access between $100,000 and $300,000 through a line of credit if necessary. But the needs of individual practices vary. One eight-physician practice Zetter knows maintains a $150,000 credit line because it generates a healthy revenue stream.

Some practices also purchase salary insurance to cover potential financial losses in emergency scenarios. Zetter generally advises against these policies, as their premiums can be high.

  • Have an escape plan. If an emergency requires evacuation, identify where your staff will meet after leaving the building. Run through your evacuation plan periodically, and revise it if necessary.

  • Arrange for an alternate location. Locate spaces where you might be able to set up shop in the event your office is destroyed or unreachable. Consider the costs of maintaining an off-site facility and whether free locations such as churches are worth any trade-offs you might have to make.

  • Keep your insurance up-to-date. Insurance that covers floods, fires, and other natural disasters is a must. Nowadays, insurers may ask you to sign a rider indicating that you don’t want coverage for the consequences of damage resulting from terrorist activity. Zetter recommends against signing such riders. Typically, terrorist coverage doesn’t add much to your premium, he says, and you’ll certainly be glad you have it in the unfortunate event of an attack.

Make sure your insurance is adequate, and review it annually to determine whether it is keeping up with changes in your practice. Most offices obtain a policy and never see their agent again. “A good agent will come back and re-evaluate,” says Zetter. “If you have more computers or more equipment, you need to change your policy.”

  • Ask for help. Most fire departments will send a representative to your business if you ask them to conduct a thorough review of your office’s safety plans. They can identify trouble spots you may have overlooked. Make any recommended changes as soon as possible.

Lessons learned

It was evident after the fire destroyed Sanford’s office that he would have to close or move until repairs were complete. Four days later, the practice’s physicians began seeing patients in a three-bedroom house offered at no cost by the local hospital. Although the gesture was a generous one, it was a decision Sanford later regretted. The house was cramped, and staff productivity plummeted.

“We were trying to work a half-schedule. Nobody had any privacy,” Sanford says. “Our collections suffered miserably.” He had considered renting a modular building but ultimately decided the downtime and expense were not worth it. Sanford says he would have reversed that decision if he had to make it again.

Reconstructing the practice’s smoke-damaged paper charts was a monumental task that took 800 hours and cost $24,000 - more than the amount allowed by Sanford’s insurer. A local businessman offered the practice a shuttered Taco Bell as space for performing this tedious work, which Sanford says was an excellent option.

With rented copy machines buzzing, everyone spread out in the former fast-food eatery and went to work, hoping to salvage as much of the charts as possible. Office staff helped, as did volunteers and temporary workers.

While Sanford’s insurance company was fair about replacing lost items, when it came to lost income there was a big disparity in the calculations the practice and its insurers made.

Part of the problem arose because the practice wasn’t able to keep up with all its accounts, and it had gotten more than a year behind in collecting and billing for some of its services. The insurer would cover only financial losses that the practice’s physicians could document had occurred within one year; they had to absorb outstanding nonpayments beyond that.

Sanford recently outsourced his billing functions, and he says that perhaps his old practice would have suffered less financially if after the disaster he had placed his biller in an office outside the house in which his practice was temporarily working. “If you have a disaster, I guess the point is you don’t need to have everyone in the same place; the biller could be in another location,” Sanford says.

He also regrets not keeping his insurance policy current. He says there was more equipment inside his office than his policy covered. But the physician admits that the fire did force him to upgrade his practice. “Despite all the disruption, extra hours, and income loss, the whole experience was worth it to walk into a sparkling clean and updated office four months later,” says Sanford. “Our staff and community responded to the disaster and helped us find the silver lining in the dark cloud.”

Surviving Katrina

Last summer, Hurricane Katrina forced hundreds of physician practices in Louisiana and Mississippi out of their offices. Many were too devastated to recover. The ordeal was a learning experience for the Family Practice After Hours Clinic in Hattiesburg, Miss., which closed for a couple of days and then reopened to a swarm of patients who, in many cases, carried no money and no identification.

The clinic distributed food and medicines, and many staffers struggled for weeks afterward without power or phone service. The practice’s physicians continued to pay all of their employees’ regular salaries, even if they were unable to come to work.

After a dip in billings, the clinic has recovered financially, and in fact has seen its patient base grow by 10 percent, says Debbie Adamson, clinic administrator. It is also eligible for some tax breaks, which will offset a portion of the hurricane’s costs.

As the 2006 hurricane season approached, the practice tested walkie-talkies for staff to use if cellphones and land lines went down again. It also investigated the cost of “business interruption insurance,” and it revised and added details to its disaster plan.

The two local hospitals - which both failed to one degree or another during the hurricane - also worked with the town’s physicians to get a plan on paper.


“The thing is to not become complacent,” warns Michael May, one of the practice’s physicians. “Do have some emergency preparedness done. Have those supplies ready, because you never know.”

Theresa Defino can be reached via editor@physicianspractice.com.

This article originally appeared in the September 2006 issue of Physicians Practice.