Operational Efficiency and Liquidity Within Hurricane Prone Hospitals in the United States: A Regional Study

TL;DR

This study examines how hurricanes affect hospital financial readiness, finding that government hospitals have significantly more cash reserves than private ones.

Contribution

The paper provides new regional insights into hospital liquidity differences between government and private hospitals during hurricane risks.

Findings

Government hospitals hold 61 more days of cash on hand compared to private hospitals.

Rural hospitals face unique challenges during hurricanes, often leading to closures.

Days Cash on Hand is a critical metric for hospital financial resilience during disasters.

Abstract

Natural disasters, in particular hurricanes, are linked to hospitals’ financial performance, how various parameters affect hospitals’ financial metrics, and financial indicators that are extremely relevant in establishing hospitals’ sustainability in any eventual emergency (Mah & Andrew, 2022; Schick et al., 2025). Most notably, hurricanes have led to the shutting down of hospitals in rural settings because rural health systems, especially hospitals, have unique issues when they face disasters (Traynor, 2020; Desai et al., 2019). Days Cash on Hand is a key financial indicator used to mark a hospital’s capability to recover from a financial crunch, such as a calamity. Data were obtained from the 2023 American Hospital Association (AHA) Annual Survey. The Bonferroni multiple comparisons test reveals that government-owned hospitals keep 101.75 days’ worth of cash on hand, whereas private hospitals keep 40.75 days’ worth of cash on hand. This results in government hospitals holding 61 more days of cash on hand than their private counterparts.