The Morning After

On what began as a sunny Sunday in May, one of the most powerful tornados ever recorded raged through Joplin, Missouri, disfiguring the landscape and destroying, among hundreds of buildings, St. John's Regional Medical Center. Five years later, what has taken its place is the new Mercy Hospital Joplin, a dazzling facility that symbolizes a life-affirming story of revitalization and rebirth.

The story of Joplin's St. John's hospital is one that is by now etched deeply into our subconscious. It's a harrowing narrative that serves as a reminder of the awesome power possessed by nature.

Back in 2011, an EF5 tornado, actually a convergence of three separate tornados, and packing the powerful punch of 200-mph (322-kph) winds, cut a mile-wide (1.6 km), 13-mile (21-km) long, path of destruction through the Missouri town. The nine-story hospital withstood the brutality of the tornado for less than a minute. But it was long enough to rumple a vibrant community building into ruins. In the end, the tornado became one of the deadliest in U.S. history. The event took a total of 162 lives—including some at the hospital—injured hundreds, and temporarily wiped the region off the map.

Temporarily. What started out as a cautionary tale of devastation and destruction has become one of revival and rebirth. The town of Joplin is now rebuilt, and a centerpiece of that reconstruction is the new Mercy Hospital Joplin, a state-of-the-art, built-for-anything facility that is as strong and storm-hardened as it is beautiful. Today, the story of Joplin and the new hospital is about resilience.

The new hospital, located three miles from the original site, is a fortress atop a gentle green and rolling hill. It is also, behind its attractive veneer and statuesque setting, a brilliant example of how hospital construction can fight back against the ferocity of nature, and how tornado belt facilities should be—and need to be—built in order to withstand today's extreme weather events. Unfortunately, and as seems to be the case so often, it took an almost apocalyptic event to engender real change.

President of Mercy Hospital Joplin Gary Pulsipher and Chief Financial Officer Shelly Hunter were among the first to arrive on the scene after the tornado passed.

"I pulled up on a hillside above the hospital and I could see that virtually every window was out," says Pulsipher, who arrived early enough to evacuate the remaining patients from the facility. "I could see one window actually had a mattress in it and my thought was, I don't know that anyone in there has survived."

"When I first got out of the car," Hunter recalls, "I looked around and everything was flattened. It was like Armageddon. It was surreal."

Inside the 341-bed hospital, all hell had broken loose. Ceilings were caved in, pipes were snapped, windows shattered, mattresses blown out of windows. The building itself had become nothing more than a massive container for destroyed contents.

John Farnen, who leads the planning and design of Mercy Hospital facilities, was also among the first to show up at the site. "We spent the first few days in awe of all the destruction," he says. "We had been under the impression we were prepared for just about anything, but we clearly weren't."

The Claim
Soon after the event, FM Global claims adjusters Mike Perkins, Mike Smith and Dominic Thurston were dispatched to the location. It turned out to be the embarkation of an 18-month journey, involving investigation, discovery, calculation and debate.

The adjusters' early days at the site were spent rummaging through the wreckage, making notes of the debris. "Just imagine the building in those first few weeks," says Thurston. "There were no lights, no air-conditioning, trying to dig through everything and count it: office furniture, medical equipment, food supplies, any other assets..."

Mercy and FM Global personnel talked a great deal about settling the claim quickly and amenably. "There was a strong desire on both sides to not let the process overwhelm us," says Lynn Britton, the Mercy Hospital system president and chief executive officer. "We didn't want to strain at every little nut and bolt about what needed to go on some claim schedule. That was demonstrated multiple times at different meetings that I had with FM Global leaders."

Speaking for himself as well as for the other adjusters on the job, Thurston enjoyed the challenge. "We like working the big losses," he says, "so challenges are welcome, even though they were really significant. But I have to say this loss experience ranks right up there with the most challenging I've ever worked."

The Check
The first week after the tornado, FM Global executives came to Mercy's corporate offices to express their commitment, share their concern and offer support for their client. But the visit also served a very different, arguably more useful purpose. Britton explains: "They gave us a significant down payment on the hospital claim. We hadn't even begun to process anything related to the claim," says Britton. "But, still, they presented us with a check for US$50 million dollars."

"But it wasn't just, 'Here's a check, shake my hand and I'll be headed back now,'" he continues. "It was a deep concern about what had happened, a commitment that we were going to sort through it together. I found that to be very reassuring."

As a former "finance guy," Pulsipher, president of Mercy Hospital Joplin, had been skeptical of insurance, viewing it as a "necessary evil" and as something "you hoped you never had to use." But he realized FM Global belied that stereotype.

"Very early in our relationship," he says, "we realized there would be tremendous support. They recognized the magnitude of the loss and they were ready to do the work to help us figure it all out."

When Pulsipher heard about the check, his skepticism dissolved completely. "It was a real shot in the arm. At the time, everyone was still wondering whether we could return to business as usual, so when we got the check, US$50 million, we knew we would get back to where we wanted to be. It was pretty amazing."

In the End
Michael McCurry, the chief operating officer of the Mercy system, put it best during a conversation he had with Denis Shine, FM Global vice president, operations manager, St. Louis, Mo., following the loss. "You know, a decision was made to go with FM Global and I'm so thankful to those who made that decision, because I'm not sure I would have. It's the gold standard, the Cadillac."

In insurance, when handled properly, large losses bring companies closer together. Insurers find out how well they can do the job they've signed on for, and whether they can keep the promise they've made to their clients. Clients find out how well they have been taken care of, and whether they will get what they paid for.

Interesting fact: For years before the loss, Mercy's policy limit was US$500 million. FM Global's account team, concerned about its client being underinsured, called it to their attention. Per Shine: "Our account team basically said to the Mercy folks, you're going to US$750 million." The total loss of the Joplin tornado just two years after raising their limit: just over US$700 million.

"This whole experience," says Britton, "taught me a lot about risk, that it can happen, and you have to be prepared for it. You have to plan for it. Of course, since witnessing this event, I also believe you can never fully plan for something like this."

Mercy personnel now know the answer to the question, 'What's the worst that could happen?' They have survived dreadful times. Now, at least, they believe with the new facility, that they've given themselves, their patients and the community they serve, the best chance possible to survive virtually anything.

"This could have been a fatal blow to Mercy," says Shelly Hunter, Mercy Hospital Joplin's chief financial officer. "I have heard stories of other businesses that were not adequately covered and they never recovered completely. But, for us, having a good partnership with our insurance company was so crucial to making that happen."

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