Posts Tagged ‘crisis management’

Remembering Katrina

Monday, August 30th, 2010

If you haven’t discovered the gem that is the Boston Globe’s “Big Picture” yet, you are missing a wonderful feature. Billed as “news stories in photographs” it is a themed news essay curated by Alan Taylor. From the BP oil disaster to the floods in Pakistan, the photos add a visual narrative to breaking stories of the day.
This past week, as in many media outlets, the focus was on Katrina. With a human toll of more than 1,800 dead and an economic toll exceeding $80 billion, the 5-year anniversary merits our attention.
For many of us, the anniversary is a look back, but for many of those who experienced it first hand, Katrina is a continuing nightmare. News reports point to ongoing health problems, from mental health issues to general health problems, such as skin infections and respiratory illnesses: “A recent study published in a special issue of Environmental Toxicology and Chemistry found elevated concentrations of lead, arsenic and other toxic chemicals were present throughout New Orleans, particularly in the poorer areas of the city. It suggested that widespread cleanup efforts and demolition had stirred up airborne toxins known to cause adverse health effects.”
Many residents, particularly children, are still still experiencing severe emotional and psychological disturbances. The National Center for Disaster Preparedness at Columbia University’s Mailman School of Public Health has been conducting studies on Gulf coast residents, and recently issued a white paper in coordination with the Children’s Health Fund:

“Together, these documents indicate that although considerable progress has been made in rebuilding the local economy and infrastructure, there is still an alarming level of psychological distress and housing instability. Investigators believe that housing and community instability and the uncertainty of recovery undermine family resilience and the emotional health of children. These factors characterize what researchers are calling a failed recovery for the Gulf region’s most vulnerable population: economically disadvantaged children whose families remain displaced.”

Looking back to look ahead
It’s no mystery why FEMA would designate September as National Preparedness Month. Between the man-made disaster of 9-11 and nature’s twin-wallop of Katrina and Rita, it’s certainly been a month fraught with peril, at least in terms of the last decade. In particular, FEMA is calling on businesses to be ready with disaster plans, and offers resources for that purpose.
A crisis by its very nature is unpredictable and random. But from a risk management point of view, it’s important for businesses to examine past events so that lessons learned can become part of planning for future crises with an eye to minimizing losses and disruption.
Perhaps one of the best articles we’ve seen on this theme is Crisis Management of Human Resources: Lessons From Hurricanes Katrina and Rita. This article discusses the three phases of crisis management: planning and preparation; immediate event response; and post crisis, or recovery. It cites specific companies and the way they problem-solved aspects of the Katrina crisis, and points to the importance of putting some plans in place: having and circulating an alternative emergency communication systems plan; keeping contact information and next-of-kin data current; maintaining communications with employees during an emergency; having updated policies and procedures for compensation and benefit continuation; making resources such as EAP services available to employees; and having flexible and alternative work arrangements.

Cavalcade of Risk and Katrina’s aftermath

Thursday, August 30th, 2007

Jane Hiebert-White has a special edition of Cavalcade of Risk posted at Health Affairs Blog. In addition to the usual smörgåsbord, she has a special focus on examining risk two years after Katrina. She links to some excellent articles: one on risk analysis; another being a rather depressing account of the state of health care disaster preparation; and another discussing the ways that many of Katrina’s ills simply represent a super-sized version of problems facing the country as a whole, from health care and homelessness to infrastructure and crime.
Our thoughts have also been on Katrina. USA Today featured a report on the challenges facing small businesses, which we found quite interesting. Unsurprisingly, insurance tops the list of challenges facing businesses that are trying to put the pieces back together.

“Everything I sell goes to pay insurance,” says Harrison of Loretta’s Authentic Pralines. She’s paying $17,000 a year for insurance on the 3,000-square-foot candy warehouse, compared with less than half that amount before Katrina for coverage on the same space as well as a shop in the French Quarter. (The shop is closed while the building is renovated.)
Insurance costs were already high before Katrina, and many owners couldn’t afford to fully insure their business. “You buy what you can,” says Leah Chase, who owns Dooky Chase’s restaurant in Treme, one of the oldest African-American neighborhoods in New Orleans, with her husband, Edgar. “If you can’t pay $5,000 or $10,000 a month, you don’t buy it, because (the policy) will be canceled. You never think you’ll lose everything in one shot.”
Since the storm, more businesses — small and large — are underinsuring out of financial necessity, just hoping the next hurricane won’t wipe out their livelihood. In Gulfport, Miss., Jeffrey O’Keefe of Bradford-O’Keefe Funeral Homes has one-eighth the coverage on his five funeral homes and a crematorium that he had before Katrina. Buying more, he says, would be a financial hardship. Even so, his overall premium has risen 45%, to $88,612 a year.

While there are certainly opportunities for some business sectors — banks and construction companies are booming — small family-owned businesses are among those that have been hardest hit. As they are in any community, these small businesses were the backbone of the community, and they greatly contributed to the particular character of New Orleans.

While nearly one in four businesses is ringing up more sales than before Katrina, almost half of small businesses have 75% or less revenue than before — even with fewer competitors, the council found. Overall, two of every three small-business owners — those with fewer than 25 employees — are bringing in lower revenue than before Katrina, its research shows.
“What this means,” Turner says, “is staff reductions, salary cuts, the inability (of businesses) to fulfill credit obligations.”Many common business practices need to be rethought in the wake of a disaster. For example, while many small businesses would have qualified for SBA grants or loans, they ran into a catch 22: they needed a home for collateral and many no longer had homes.
In another status update at the two year point, Insurance Journal reports that the majority of all Katrina claims – some $40.6 billion involving 1.7 million claims – have been paid. This compares to 790,000 claims in Hurricane Andrew, with a 2006 settlement value of about $22.2 billion. The article also notes that although litigated claims have been prominent in the news, the Insurance Information Institute estimates that fewer than two percent of homeowners claims in Louisiana and Mississippi were disputed either through mediation or litigation.