Insurance Covers Only $100M of Ike Damage to Hospital, Med School

November 14, 2008

Citing $710 million in losses from Hurricane Ike, University of Texas Medical Branch in Galveston intends to lay off about 3,800 workers because the teaching hospital is running out of money. Officials have said insurance covered only about $100 million of the Ike-related damages.

The University of Texas Board of Regents said in a news release that the Galveston hospital would have no money to operate in about three months, at its current spending rate.

The University of Texas system doesn't have the money to cover the hospital's needs and Federal Emergency Management Agency funds cannot be used for operating expenses, or wages and benefits of staff, officials say.

Ike blasted ashore near Galveston on Sept. 13, flattening buildings and killing at least 37 people in Texas and more than 70 nationally. The monster storm was 600 miles wide when it hit land and is the most expensive in Texas history, an estimated $11.4 billion in damages - so far.

UT officials had not yet identified which employees would be laid off but plan to pay them through January, according to The Galveston County Daily News.

The regents said the impact of the job losses could be lessened by hiring those affected in open positions at other University of Texas facilities or assisting them in job searches elsewhere.