By Mike Polaski, Executive Director, Supply Chain, OC Reilly, Inc.

(Oct. 7, 2019)—Autumn means the return to the classroom, football season, and natural disasters, primarily hurricanes and the flooding and property devastation left in their wake.

As with any business operation, executing the proper preparation before disaster strikes makes all the difference – including maintaining contractual supply chain agreements and having the funds in place to meet them.

An article in the July 2019 edition of Health Care Financial Management discusses this concept, stating, “Having the following three elements in place prior to a disaster can mean the difference between a health care organization’s weathering a disaster or closing its doors, according to health care leaders who have experience helping their organizations through major events.”

The three principles include:

  1. A business continuity plan in writing that has a solid budget in place.
  2. A good documentation process to help the organization collect insurance payments and assistance from the Federal Emergency Management Agency (FEMA).
  3. Formal, written, collaborative partnerships with community agencies and other finance leaders at local health care organizations.

When all or parts of a facility have been damaged by a natural disaster, leadership must have a system and a plan in place to maintain relationships, assist in recovery, continue to provide patient care (whether onsite or at another location), and have the wherewithal to keep receiving and paying for necessary inventory and services.

Another critical element of a disaster recovery plan includes having enough cash in reserve to cover late or suspended payments from suppliers also affected by the event. The article describes the problems of a health system in Mississippi caught in this dilemma. “The organization’s survival depended not only on its surplus of cash before the storm, but also on its ability to track – and get reimbursed for – storm-related expenses.”

Fall is a lovely time of year. But dangers arise during these autumn months, as well. Having a solid game plan in place before the waters rise is always wise.

© 2019 OC Reilly, Inc.