Katrina! What Went Right

For Rick Earls, the days before Hurricane Katrina hit were pretty much routine. As branch manager of Columbus, Miss.-based Southern Pharmaceutical Corp.’s Gulfport and Hattiesburg locations, Earls was no stranger to keeping an eye out for developing storms.

Only blocks from the beach, SPC’s Gulfport facility, with an active rental list of 1,100 patients for its home medical equipment — 400 of those on oxygen — is particularly vulnerable. Earls typically prepares for hurricanes as many as eight times in a given year. Up to this point in his career, each time had been a false alarm.

But Aug. 29 would be different.

On Friday morning, Aug. 26, Earls says the storm looked like just another hurricane headed for Florida. But continually receiving updates from a number of different weather reporting sources, he soon learned that the hurricane’s path was headed farther west.

“Friday morning, people didn’t even know who Katrina was,” Earls says.

They certainly won’t forget her now.

SPC’s operating procedures dictate that the staff start patient notification 72 hours before a hurricane’s projected landfall. With a weekend landing a real possibility, they didn’t have a moment to lose. Friday afternoon at five o’clock is not exactly the ideal time to be implementing a disaster plan, Earls points out. But all of the Gulfport employees knew exactly what was expected of them and what needed to be done.

On Saturday morning the weather was deceptively beautiful: blue skies, a nice breeze. But by Sunday night, after company vehicles had been moved, windows boarded up and patient charts, oxygen tanks and other equipment loaded and driven away, the winds were quickly approaching the 35 mph threshold at which employees are required by SPC to evacuate the facility.

That evening, Earls delivered last-minute supplies to local Red Cross shelters. After a check to make sure that the Hattiesburg branch would be staffed immediately following the storm, he headed to his home in Biloxi to ride it out.

On Monday morning, Earls watched as raging winds twisted huge trees just outside his window. “Just a half mile from our house, homes were literally destroyed, swept completely off their slabs,” he says. “We lost a significant number of shingles and a few trees, but that was most of the damage.”

The Gulfport branch building wasn’t as lucky. The showroom was blown apart, wheelchairs and other equipment scattered, and the roof of one the warehouses torn off.

Despite having no building to work from, with limited staff, communications out, roads impassable and all the other chaos throughout the region, SPC was fully operational in Gulfport the day after the storm, supplying oxygen not only to its own patients but to the Red Cross and fire departments as well.

So what went right?

A New Standard

The real story goes back two years earlier, to the company’s decision to take part in a beta test by the Accreditation Commission for Health Care (ACHC), Raleigh, N.C., for a joint audit based on its own HME accreditation standards coupled with those of the International Organization for Standardization (ISO).

Originally applied in the manufacturing industry, the ISO 9000 standard has now been adopted by a wide range of service organizations, including in health care. ISO 9000 is a process management auditing standard that focuses on quality management, and what a company does to enhance customer satisfaction.

“We have been accredited by ACHC since 1996, but that focuses on the clinical side and doesn’t look at the business or resource side,” explains SPC Vice President Doug Martin. “ISO is more of a continual process where you learn from your mistakes, identify corrective actions and develop processes and policies that will fix things for good.”

The corrective action feature is particularly useful. In the ISO paradigm, a company must be open to suggestions for improvements in its processes from all employees, not just those in upper management. So even after implementation, a company may be continually improving.

Utilizing the services of ISO certification consultant Charli Hoialmen, president of Diversified Management Systems Inc., Clarkesville, Ga., ACHC was itself certified to ISO standards last year. Hoialmen also consulted with SPC.

When the company began the ISO process, key personnel were chosen from throughout SPC and established as a board of directors that governs the entire company. The newly created board then formed a quality policy.

The next step was to review all policies and procedures, determine which ones didn’t conform to ISO standards and then improve them. The company looked at its billing procedures, communications and customer service, among a long list — and gave its disaster mitigation plan a scrutinizing review. In the face of a catastrophe, how exactly would SPC still provide care for its patients?

“We wanted to know how we were going to service our critical care customers if the power went out,” Martin says. “We’re mainly talking about our non-invasive ventilator patients and our oxygen patients. We wanted to make sure that they had equipment that would function in disaster-related scenarios. So one of the first things we did [was to go into] liquid oxygen, because we knew that without power a patient can still use it.”

Lessons Learned

From previous storms, Martin says, SPC had learned another lesson. The company’s patients sometimes lost power temporarily, and there were problems getting oxygen for them because suppliers were overloaded with requests.

“We invested in a transfilling system, got it registered with the FDA and set that up in Gulfport,” Martin explains, so the company could fill its own tanks using generator power to keep customers supplied. “We also put a 190-gallon bulk [liquid oxygen] tank on a Freightliner truck so we could put base units in shelters to help the Red Cross out when they had no power.”

But then ISO’s corrective action feature came into play.

Earls, considering what might have happened with Hurricane Ivan last year, called into question the decision to locate the transfilling station in Gulfport. “Hurricane Ivan made me realize that had that been a direct hit, that transfilling system may not have been there the morning after the storm,” he explains. “So with ISO, we evaluated that decision, and within months we had relocated that transfilling system to our distribution facility [farther north] in Hattiesburg.”

When the company acted on Earl’s suggestion, moving the system involved considerable cost. But it turned out to be a very wise decision: Katrina ravaged the section of the Gulfport warehouse where the station had previously been located.

“What were the chances of a direct hit destroying that transfilling system? Pretty slim. But here a year later it happened, and that system would have been severely damaged if not destroyed,” says Earls. “But since we went through the ISO process, we identified that that might happen and we acted on it, so our system was safe in Hattiesburg and up and running the next day.”

ISO’s requirements also caused SPC to rethink the company’s communications strategy in handling calls from customers during a disaster.

“We thought we really were smart,” Martin laughs. “We had our two-way radios and a local answering service that would handle those calls. What we found out was that during severe weather those radios go out, and the local answering service loses power.”

Based on those facts, SPC changed to a central answering service for all of its locations, one with a call center that is on generator backup. During Hurricane Katrina, phone calls were routed to corporate headquarters then transferred to Hattiesburg, which became the base for company employees whose facilities had no electricity.

With the re-evaluation of other emergency processes necessary for ISO certification, SPC improved procedures in pre-staging 11 cargo vans that the Gulfport and Hattiesburg locations share, which during times of disaster are loaded with supplies and moved to areas where the company thinks they will be safe from damage.

“Before [ISO], we basically would just load the vans up and park them north of Interstate 90,” Earls explains. “But then we started reviewing that [procedure], and it wasn’t very effective.”

While the previous move would have gotten the vans away from the coast, he says, more than likely they still would have been damaged or destroyed during Katrina.

“We made changes not only to back up our [Gulfport] facility with the vehicles but to stage them so that they could respond to any area,” Earls says. “Here on the coast, we have offices in Alabama and Louisiana, so had the storm moved either way, east or west, those assets would have been in place to respond to those areas, not just to [Gulfport or Hattiesburg].”

The result?

“We didn’t have a windshield break, we didn’t have a flat tire — we didn’t have anything,” says Martin. “Every one of our vehicles was ready to go the next day.”

The Day After

Tuesday (Aug. 30) following the storm was one Earls says was unlike any day he has ever seen. As he made his way to the Gulfport location, he found the route he had taken to work for the last six years nearly unrecognizable.

“It was unbelievable,” says Earls. “I had to look for landmarks. Street signs were completely gone. There were buildings that were destroyed, and some were not even identifiable … There were houses that had been swept from their foundations and collapsed in the middle of roads.

“It was like déjà vu; I knew I’d been there before but I couldn’t recognize certain areas.”

The trees were filled with debris — wood, clothing, plastic. It was difficult getting the company’s trucks through because of the wreckage and downed power lines, Earls recalls. Several trees had to be cut out of the way. When he reached the Gulfport facility, Earls found the damage severe.

“We had a large showroom with floor-to-ceiling glass windows, and the first thing I noticed was that those windows — frame and all — were pushed into the building,” he remembers. A section of the roof was gone. The building was littered with ceiling tiles, insulation, shingles and other debris. Nearby, the main warehouse had lost most of its roof, and the roll-up doors were twisted.

But the communications plan was working, and the customers SPC was able to contact seemed to be fine. The corporate office was getting calls, “but they were more from customers who wanted to find out what they needed to do, because a lot of them were being told that they couldn’t return to their homes, so our office was making arrangements,” says Earls.

Meanwhile, Martin and SPC President Glenn Lingle were making their way to the Hattiesburg facility, the company’s rally point. Of SPC’s 16 locations, five had no electricity or phone service, nine had no Internet access, and the company’s branch in Ponchatoula, La., was without all three.

“The first thing we did was to assess the damage to our capability to deliver services to our customers,” Martin says.

SPC employees got the transfilling system up and running using generator power, and began to locate more personnel.

“What personnel we couldn’t locate down in Gulfport we pulled from our other branches,” Martin says. Per the company’s new and improved disaster plan, a branch manager in Columbus had filled a 220-gallon fuel tank with gas and transported it on a trailer to Hattiesburg.

SPC set up a mobile command post near Red Cross headquarters in Gulfport. They loaded the company’s Freightliner with oxygen tanks and supplies, and also used a company RV so staff could stay in the area around the clock.

“We got set up, got with the Red Cross and got with American Medical Response ambulance company, telling them exactly where we were located and explaining that if patients had medical needs — equipment, oxygen — we were there to service them,” Martin explains, adding that it didn’t matter whether those in need were SPC’s customers or not. “Our objective was that we were going to make sure that these patients had oxygen,” he says.

“During that day, I would say 20 percent of the people that we serviced weren’t our patients,” Earls recalls. “Since communications were down, a lot of people were going to the Red Cross for assistance, and the Red Cross directed those people to us.”

The company delivered 10 liquid oxygen base units to shelters in Gulfport and Biloxi, “and we ran two patients off of each base,” Martin says.

In addition to the base camp, the company put four stocked vans on the road. “A lot of patients would flag us down as our vehicles passed through neighborhoods,” Earls says, explaining that many people weren’t able to get in touch with their suppliers, or vice versa. “One technician called in and said people were chasing the van down the road to get supplies.”

The company’s primary concern was oxygen. “We were filling whoever’s tanks we had,” Earls says. “At that point, it wasn’t about just our patients — we were a community service.”

Later, after power outages had continued for days, nebulizers, respiratory medications and enteral nutrition became an issue, and the provider — which also offers a pharmacy and infusion — started getting calls for those products as well. “There were a lot of elderly evacuated to shelters, and enteral nutrition was a big problem for those patients,” Martin says. “Some people were having to reuse their bags.”

During the week after the hurricane, another aspect of ISO’s quality standards became significant: the emphasis on processes rather than personnel. Since disaster response processes were now so clearly delineated, Earls was able to overcome the unavailability of 11 of his 20 staff members — some had lost homes to the storm — by relegating duties to other company staff at the base camp.

The following week, SPC was able to start operating at the site of its Gulfport facility by patching up an outbuilding. States Martin, “If we’ve got to operate out of a portable building for a year, we’re staying in Gulfport.”

Earls adds, “The fact that we’ve got all of our vehicles and our staff up and running and we’re out serving patients — that was our primary concern, and we’re accomplishing that.”

Despite the damage sustained, the company’s officials were grateful they were able to provide for their customers and others — Martin estimates that about half of the other HME providers in the region were rendered completely inoperable — during the most trying of circumstances.

But the cost of providing that help wasn’t cheap. Martin estimates that SPC spent as much as $30,000 on fuel, oxygen, tanks, personnel and other services, expenditures that may or may not be reimbursed by FEMA or the Red Cross.

“Whether we’ll get paid or not is probably a coin toss,” he says. “But our quality policy is that we provide for needs and figure out who’s going to pay us after we’re done.

“Does it matter to us? Yes. Is it a huge priority for us right now? No. It was about humanitarian efforts, not about whether we were going to get paid.”

SPC is also thankful that going through the ISO certification process required the company to rethink its disaster mitigation plan.

“If not for that, we would have been like several other companies here, at the mercy of someone else,” says Earls.

“We would have been in line for assistance just like they were, and our patients would have been chasing their vehicles down the streets. Quite frankly, we would have been unable to operate in any capacity following the storm.”

First Hybrid Audit Marries HME Accreditation, ISO Standard

The Accreditation Commission for Health Care, Raleigh, N.C., and SGS US Testing Co., Geneva, Switzerland, have partnered to offer joint surveys/audits based on ACHC’s accreditation standards and the ISO 9001:2000 standard. In a beta test of the program, Southern Pharmaceutical Corp., Columbus, Miss., will be the first company to undergo the hybrid audit.

The integration of the ISO standard and a traditional accreditation program offers the industry another approach for improved process management, according to ACHC President Tom Cesar. As the person who decided to marry the two, Cesar says they bring a unique kind of connectivity into a home care provider’s organizational structure. “Accreditation is somewhat weak in that area,” he says.

For several years, Cesar says, quality experts have suggested that there are better ways for assessing the quality of health care, adding that combining process management with accreditation standards of clinical best practices should help decrease medical errors, reduce costs and improve the quality of care.

To highlight the need for better process management in medical care, he gives as an example the heart transplant patient at Duke Medical Center who, due to a process problem, was given a heart of the wrong blood type and died.

With ISO, “an accident like that would happen once, and then right away ISO would require you to correct your whole system to make sure the wrong blood type doesn’t get to a patient again,” Cesar says. “ISO requires you to make the connections across the line.”

That’s why Cesar thinks integration of the two sets of standards will bring a new dynamic to the health care field.

“We believe both from the business side and the clinical side this type of new product could be better for the provider and better for the patient,” he says.

Though it will take some time, Cesar sees the day when there won’t be separate people conducting the ACHC survey and the ISO audit, as is the case in the beta test with SPC. Instead, there will be one document and one person doing both. And though the beta test is with an HME, he sees that as changing, too.

The next phase of the integration project will be the development of a hybrid standard that combines ACHC standards with the International Workshop Agreement, a guideline for health service organizations. Cesar hopes this phase will include the second hybrid audit at a home health agency.

“Our theory is this: If we can prove that this can improve the process at this level and with this type of organization, and then a home health agency, and then maybe even a hospice, then it will also work in hospitals,” Cesar says.

Of SPC branches preparing for the dual audit for the past two years, seven are ready. At presstime, the audit was scheduled for Oct. 21.

Improved Processes = Efficiency, Profit

One of the things ISO implementation created for Southern Pharmaceutical Corp. was an attitudinal shift in perception of who the company’s customer is.

“We recognize that we have basically three customers — the patient who’s getting the service, the referral source and the payer source,” explains Vice President Doug Martin.

The company focused on improving communications with customers, ensuring they knew what their responsibility — physically and financially — was to SPC and what the company’s responsibility was to them. SPC also made a commitment to educate referral sources on the criteria for each type of equipment they put out based on the patient and the payer source.

“The attitude prior to ISO was whatever the referral source wanted. If they called, we jumped,” says Martin. “We didn’t ask questions. Like everybody else in this industry, we just said, ‘How high do you want us to jump?’

But without clarifying the details beforehand, patients could end up with equipment that is not covered, he says.

Now that ISO standards have been implemented, SPC demands through its procedures that the referral source is called back to discuss the order, but only after SPC has verified the criteria, the coverage and the need.

“The end result is we have happier customers,” Martin says. “Our payer sources who are our customers are happier with us because we’re doing the right thing, and our patients are happy because in the end, they don’t get billed for something that’s a surprise.”

SPC’s process re-evaluation also improved its response to market conditions. “As a company, we respond quicker,” says Martin. “So, if we know that there’s going to be a significant reimbursement cut, and we know that that is going to [be] six or eight months down the road, we can start taking preventive measures now … in order to anticipate that. Then we can survive as a company to keep providing services to our customers.”

ISO helps with business development as well, Martin says.

“Any time we bring on a new product or we open up a new branch, we write criteria on everything that we need to look at prior to making those decisions,” he explains. “And [the decisions] have to be approved by our board, where they sit down and analyze all the facts and information. So no more do we just shoot from the hip; we have a criteria that we have to go through to gather all the facts so we can make a sound decision.”

The decisions are then tracked until the company accomplishes a return on its investment.

“We have to make sure that we track what our objectives were to accomplish, and make any corrections until we get to where we want to go,” says Martin.

The result of such changes? Astounding efficiency.

Martin remembers when reimbursements were substantial and a provider could have slippage of 30 or even 40 percent and still make a living. But that all came to “a screaming halt” in 2002, when SPC came off its worst year ever because of inefficiencies in its services, losing more than $1 million.

In 2003, as the company implemented ISO 9001:2000, standardizing its processes and focusing on its objective of needs-based selling, SPC made $1 million profit. And in 2004, even after a cut in respiratory reimbursements — then 40 percent of the company’s business — SPC still managed to net $1.2 million.

“We went into this year expecting — with the reimbursement cut on respiratory meds and in oxygen and all the DME cuts we took — a losing situation of $2 million,” Martin says, but now “at the end of the year we’re anticipating to break even. And that’s pretty exciting … A lot of companies that have gone through these massive cuts can’t even deal with it. But we’ve stood fast and said ‘This is our objective,’ and we’ve [stayed] focused on our quality policy.”

No Phones, No Power, No Building!

Although its corporate office in Mississippi experienced no problems, all eight of SPC’s branch locations in the state were affected by Katrina, as was a branch in Ponchatoula, La. The company’s Gulfport branch building was severely damaged, but was fully operational the next day. Six additional branches in other states and Puerto Rico were unharmed.

Corporate Office, Columbus — No problems

Retail Office, Columbus — No Internet

Durant — No Internet

Gulfport — No Internet, no phones, no electricity; no location to work out of

Hazlehurst — No Internet, no phones, no electricity

Hattiesburg — No Internet, no phones, no electricity. (The company’s warehouse location and oxygen transfilling system were run off a generator.)

Jackson — No Internet, no phones, no electricity

New Albany — No Internet

Philadelphia — No Internet

Ponchatoula, La. — No Internet, no phones, no electricity

HomeCare salutes the professionals who responded so generously during Hurricanes Katrina and Rita — and who do their jobs with compassion and care each and every day.
— The Editors