Natural disasters in the United States: Hurricane risk, hospital closures, and healthcare finance

Natural disasters, including hurricanes, floods, wildfires, tornadoes, and earthquakes, represent acute socioecological disturbances that generate cascading impacts across healthcare systems, social structures, and economic frameworks. Contemporary climate science demonstrates that these catastrophic events are becoming increasingly frequent and intense due to climate change and environmental degradation, particularly in the United States.^{[1, 2]} The geographical and climatological diversity of the United States creates a complex landscape of disaster vulnerability that varies significantly across regions, with the southeastern states experiencing disproportionate exposure to hurricane events.^[3] According to the National Oceanic and Atmospheric Administration, the United States now experiences an average of 15 major disasters annually, with associated economic costs exceeding $1.8 trillion between 2010 and 2023.^{[2, 4]} Hurricane events comprise approximately 60% of these costs. However, despite the economic magnitude of these impacts, theoretical frameworks for understanding how disaster vulnerability intersects with healthcare infrastructure resilience remain unknown, particularly concerning rural-urban disparities in healthcare finance.^[5]

The southeastern states, particularly within the Gulf Coast region, have been susceptible to more than 40% of hurricanes that land in the United States.^{[6, 7]} Therefore, the southeastern United States represents a region of particular concern for hurricane vulnerability assessment. Both frequency and intensity metrics demonstrate concerning increasing trends, with the 2020–2023 Atlantic hurricane seasons averaging 19.5 named storms per year compared to the historical average of 14.4 storms annually.^[2] More critically, rapid intensification events, in which storm wind speeds increase by at least 35 mph within 24 hours, have increased by 38% since 1979, according to recent satellite data analysis.^[8] This intensification creates challenges for hospitals’ disaster planning by compressing response timeframes. Regional analysis reveals that 43% of Atlantic hurricanes making landfall in the United States between 2000–2023 affected southeastern states, with Florida, North Carolina, and Louisiana experiencing the highest frequency of direct impacts.^[7]

Hurricane damages are not distributed uniformly among these states; they follow demographic and infrastructure vulnerability patterns that often correspond with healthcare access challenges.^[8] Previous research has been focused extensively on immediate physical damages to healthcare infrastructure during hurricane events.^{[9, 10]} However, methodological limitations have constrained the understanding of longer-term financial impacts. Most researchers employ case study approaches examining individual facilities or events (e.g., Hurricane Katrina, Hurricane Ian) rather than systematic longitudinal analyses.^[11] Notwithstanding, few studies have involved control comparisons to isolate hurricane effects from other healthcare finance trends, creating challenges for causal inference.

The significant financial impact of yearly major disasters such as Hurricane Katrina (2005), Hurricane Irma (2017), and Hurricane Ian (2022) underscore the short- and long-term effects on health and infrastructure and the significant losses due to floods, storm surges, and wind effects.^[10] Additional compounding factors, such as disruption in the transportation of resources, supplies, and people with limited access to healthcare or low-income status, are the most vulnerable in such events.^{[9, 12]}

The financial vulnerability is particularly acute for hospitals serving low-income populations, as these facilities often operate with thin margins and limited financial reserves. Post-hurricane periods frequently involve increased demand for emergency services and reduced revenue due to postponed elective procedures and patient displacement. Supply chain disruptions can increase operational costs by 15%-30% in the weeks following major hurricanes, and staffing shortages due to evacuation and infrastructure damage further strain hospital budgets.^[12]

Beyond immediate impacts, hurricanes create long-term financial pressures through infrastructure rebuilding costs, increased insurance premiums, and the need for enhanced disaster preparedness investments. Rural hospitals face disproportionate challenges, as their smaller patient bases and limited financial resources make recovery more difficult. Some facilities never fully recover financially, contributing to the pattern of rural hospital closures observed in hurricane-prone regions. Understanding these financial dynamics is crucial for developing sustainable healthcare delivery models that can withstand increasingly frequent and severe weather events while maintaining access to essential medical services for vulnerable populations.

Natural disasters affected by climate change, particularly hurricanes, affect healthcare systems, causing a byproduct of unplanned interruptions in treatment processes, increased use of emergency services, and the need for prompt medical response.^[2] The strain on hospital care delivery systems is evident across all four domains: infrastructure, resources, patients, and staff. In addition to providing acute care, healthcare providers must navigate patients’ mental health status, chronic diseases, physical damage to hospital structure, short supplies of medicines, power disruptions, high utilization of health facilities, and personnel exhaustion. Structural preparedness is a key to contingency hospital adaptation in natural disasters. Specific building codes enforced on existing health facilities ensure that structures used as hospitals can withstand earthquakes, floods, or any other likely disasters.^[13]

The Centers for Disease Control and Prevention emphasizes the importance of public health coordination at the organizational and community levels to promote preparedness for natural disasters. As natural disasters become more frequent and intense, healthcare systems must continually explore and implement diverse strategies. Structural preparedness, adequate funding, trained personnel, and community engagement in disaster response will help mitigate the disruption of patient care services.

The U.S. hospital landscape comprises over 6,000 hospitals that vary significantly in size, service offerings, and financial structures.^[14] Understanding the preexisting structural differences between rural and urban hospitals is essential for contextualizing differential hurricane impacts. Urban hospitals typically feature larger bed capacity (average of 270 beds versus 25 beds in rural facilities), higher staffing ratios, more specialized technologies, and greater service diversification.^[15] These structural advantages create operational redundancies that can enhance disaster resilience. For example, urban facilities can often reallocate staff across departments during emergency events or transfer patients within networked systems.^[16] In contrast, rural facilities typically operate with minimal redundancy and limited specialty coverage, creating points of increased vulnerability during disruptions.^[17]

Urban and rural hospitals differ in various ways, primarily due to their geographical location and the population they serve. Urban hospitals tend to be supported by more capital and higher insured populations that contribute to better provisions of facilities, staff, and better-specialized technologies.^{[15, 16]} Rural hospitals, on the other hand, are typically small organizations that may not have the same financial resources as large, multi-site, and multi-hospital systems; they are focused on meeting the needs of people living in less populated and remote regions. Rural hospitals are also less equipped and generally have few beds and fewer services than larger city hospitals. They are usually more customer-oriented because of the closer proximity to service end users. However, they may incur problems delivering the same service diversification and technological sophistication.^[18] Rural hospitals also face financial challenges and a higher risk of closure due to their smaller patient base and higher proportion of uninsured or underinsured patients, making it hard to fund themselves.^[11] One of the main issues is the shortage of healthcare professionals, including doctors and specialists, causing residents to travel for services.^[17]

Hospital closures in rural and urban areas have become a significant issue in the healthcare system, leading to widespread disruption of care for patients.^[19] In rural hospitals, factors contributing to closures include systemic and financial vulnerability, limited patient base, inadequate staffing, and challenges in containing specialized clinical services or technology.^[20] The dynamics involving urban hospitals differ slightly, mainly resulting from mergers, transformation of the healthcare system, or corporate decisions to transition to centralized services and downsize.^[21] Restructuring to increase organizational efficiency results a decreased number of hospital beds available, increased service waiting time, and less provision of specialty services. Closures ultimately disproportionately impact low-income residents already experiencing barriers to accessing healthcare services and adequate primary care physicians.^[20] Hospital closures strain nearby healthcare facilities, which can cause collapse due to the congestion of unreimbursed care from patients.^{[22, 23]} By increasing funding support at the policy level, measures can be taken to promote sustainable healthcare delivery models.^[24]

During hurricanes, hospitals see an influx of patients that strains resources, compromises care quality, and delays providing care to patients with chronic illness or injury.^[25] Under normal circumstances, digital health technology can assist with solving these problems because it facilitates efficient resource centralization and coordination.^[26] Additionally, high burnout among healthcare workers caused by physically and emotionally challenging expectations influences the stability of a hospital’s workforce during natural disasters. For example, nephrology staff were distressed due to long working hours and patients’ escalating needs.^[27] The synergism of fatigued healthcare workers, interrupted communication, and supply chain breakdowns can limit the effectiveness of patient care services.

Utilizing past disaster management experiences to inform the current preparation of current healthcare systems can save people and money and aid in delivering quality healthcare services after a disaster. Unfortunately, recurring errors in planning and resource allocation amongst hospitals highlight the lack of insight gained from previous disasters,^[28] considering the effects of hurricanes on numerous dimensions: structures, patients, resources, communication, and healthcare workers. Disaster preparedness must be used to expand resources in areas of surge capacity, innovative digital communication capabilities, and staff support to cover such dimensions affected by natural disasters like hurricanes.

Understanding how hurricane vulnerability affects hospital financial viability requires examining the metrics and mechanisms through which hospital financial performance is measured and managed. The cost-to-charge ratio (CCR) represents a critical metric for assessing hospital financial efficiency. It measures what hospitals spend on delivering healthcare relative to what they charge patients. This ratio provides critical insights into operational efficiency, pricing strategies, and financial sustainability. A higher CCR, especially in institutions serving underfunded institutions, means more financial pressure and inefficiency, whereas a lower CCR can lead to cost control and utilization, thus supporting financial stability.^{[29, 30]} Ultimately, this tool, which connects financial health to outcomes and efficiency, assists hospitals in aligning their cost models with strategic pricing to drive profitability and resilience.^[31] CCR is calculated by dividing total costs by total charges, with lower ratios indicating greater markup between costs and charges. A CCR serves as both an indicator and determinant of hospital financial health. A recent study demonstrated through multivariate analysis of 2,456 US hospitals that CCR correlates significantly with operating margin (r = 0.67, p < .001), days cash on hand (r = 0.54, p < .001), and bond ratings (r = 0.48, p < .01). These relationships remained significant after controlling for hospital size, case mix index, and geographic location.

Rural–urban disparities in CCR have been documented in several studies, though methodological limitations constrain generalizability.^[29] One study found that rural hospitals had CCR values averaging 0.14 points higher than urban facilities, suggesting thinner financial margins between costs and charges. This disparity persisted after controlling for payor mix, case complexity, and organizational characteristics.^[32] However, this analysis did not incorporate hurricane vulnerability as a potential moderating variable. Limited research has directly examined how hurricane events affect hospital financial metrics, with even fewer studies investigating CCR impacts. Therefore, this study addresses a critical knowledge gap by examining how hurricane risk interacts with the rural–urban divide to influence hospital financial sustainability.

The proactive management of CCR thus becomes a mechanism for maintaining competitiveness and driving performance improvements and patient experiences in multiple ways in the management of hospitals. A hospital with a well-functioning CCR can provide quality services at reasonable costs, bringing in more patients.^[29] Additionally, the role of CCR is critical in highly specialized fields such as neurosurgery, in which cost control can increase a hospital’s market profile without reducing the quality of care.^[32] However, solely focusing on cost effectiveness can have a direct impact on patent satisfaction, as this can decrease the quality of care provided. CCR is not only of operational and competitive value but is also vital to financial forecasting and risk management. CCR and other financial metrics indicate possible financial trouble, prompting hospitals to take preventative action to avert bankruptcy. Incorporating CCR in systems with value-based care will be critical in the future to better align clinical efficiencies within hospitals.^[31]