A new state law requiring structural improvements to help older hospitals survive an earthquake could force the closure of Ojai's only hospital and cost other local institutions millions of dollars over the next decade.
According to hospital industry projections, about half of the state's 2,700 medical buildings at 450 hospital sites must be reinforced or rebuilt at a cost of $10 billion to meet stiff seismic standards imposed after the 1994 Northridge earthquake.
But so many hospitals make so little money--fewer than half make a profit on operations--that they may not be able to borrow the millions of dollars they need for the upgrades, which must be complete by 2008.
In Southern California alone, industry officials estimate that dozens of hospitals will close.
"I would bet a month's wages that at least 50 will be closed in this region alone," said James Lott, executive vice president of the Healthcare Assn. of Southern California. "That's one in five closed because of the seismic retrofitting. And it could be one in three if you consider other factors too."
At Ojai Valley Community Hospital, for example, Chief Executive Mark Turner hasn't yet figured out how his small hospital chain can spend $3.3 million to strengthen a facility that barely breaks even.
If it closed, the nearest hospital for Ojai Valley's 30,000 residents would be 30 minutes away in Ventura.
"It's a question of how do we make this investment, or does it make any sense at all," Turner said. "I don't know at this point."
Officials at Ventura County's seven other general hospitals said the costs of earthquake improvements will not force them out of business, though two, Santa Paula Memorial and Ventura's Community Memorial, are only marginally profitable and do not have the resources of large chains to fall back on.
So concerned is Community Memorial about a potential $35-million to $55-million retrofitting project that the venerable private hospital recently urged a merger with its public rival down the street, Ventura County Medical Center.
"We have two facilities spending $70 million or $80 million, or we can have one [joint] facility spending $50 million and giving the community what it really needs," said Michael Bakst, chief administrator at Community. County hospital estimates don't agree, projecting rebuilding costs as low as $2 million.
