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California and the West

State's Hospitals Face Daunting Mandate to Prepare for Quakes

Safety: Cost of retrofitting required under 1994 law will be staggering. Industry groups are seeking government help.


A fiscal temblor is rattling the state's hospital community, which this year begins to confront a series of state deadlines mandating billions of dollars in earthquake preparedness upgrades by 2030.

Statewide, more than 2,600 buildings at 473 hospitals must be evaluated and possibly upgraded under the 1994 Hospitals Facilities Seismic Safety Act, passed in the wake of the devastating Jan. 17, 1994, Northridge temblor, which halted services temporarily at 28 Southern California hospitals and forced three to close.

The California Healthcare Assn., the trade group for hospitals, estimates that it could cost $10 billion in statewide repairs to meet the 2008 standards, which require upgrades to prevent potentially fatal structural collapses. An additional $14 billion would be needed to meet the 2030 standards, which require hospitals not only to withstand a quake but also to be able to continue meeting patient needs after one.

Because the price tag--which is in dispute--is so high, hospital leaders are parading to Washington and Sacramento seeking assistance. "The cost of repair exceeds the value of all existing state hospitals," said C. Duane Dauner, head of the trade group.

Particularly hard hit would be rural and inner-city hospitals that provide care to underserved populations and often lose money doing so. These hospitals commonly are weaker financially and are the least able to pay for or get loans to finance rebuilding.

California Hospital Medical Center in downtown Los Angeles this month began tearing down the oldest of its four buildings as part of a $30-million to $50-million retrofit and construction program that still isn't fully funded, President and CEO Melinda Beswick said.

Built in 1926, the 11-story building was damaged in the Northridge quake. A 1964 building that now has 55 acute care beds will become a support services building rather than have to meet the 2008 deadline. And a 1972 building will be upgraded and remain an acute care facility.

But whether the hospital can proceed with the entire project, which includes a new two-story building specializing in women's diagnostic services and obstetrical care, depends on fund-raising and hospital revenues.

The hospital makes a critical difference in its community. It has one of the busiest emergency rooms in the county, having treated 47,000 patients last year. And 57% of the people living in its service area are uninsured, Beswick said.

Despite an $11-million grant from the Federal Emergency Management Agency after the 1994 quake, the nonprofit hospital operated by the Catholic Healthcare West chain is having trouble finding the money.

The hospital has launched a $10-million fund drive for the work. Officials will also try to generate funding through cost cutting and efficiency. Beswick remains hopeful.

"I will be blunt: It is iffy," she said. "My payer mix is largely Medi-Cal and low-income, and it is a stretch."

Reacting to the avalanche of lobbying by the trade group, the state Senate last week voted 39 to 0 in support of three bills on the problem. One would drop the 2008 deadline for hospitals that agree to meet the tougher 2030 standards in 2013. Another would extend the deadlines for hospitals in less seismically active areas. A third would authorize information gathering that could lead to state assistance in the future.

Some state officials say the $24-billion figure may be inflated by as much as 25%, and includes capital construction costs that hospitals would have anyway. Still, most experts say compliance will be costly.

Some, however, worry that extending the deadlines could threaten lives, turning buildings that have structural problems into quake disaster areas instead of refuges for the injured. Some point out that hospitals have had years to comply with the law.

"The 1994 law set time frames that were very fair," said Chris Tokas, a structural engineer and the seismic expert for the Office of Statewide Health Planning and Development, which oversees the standards. "I take great exception when hospitals say they didn't have the time."

Gov. Gray Davis has taken no position on the measures.

The expense of the seismic program already is ratcheting up the cost of health care and bringing added revenue to hospitals. CalPERS, the giant state employee pension system, last month cited the "cost pressure" from earthquake retrofit capital expenditures as one factor in its 9% increase in health insurance rates for 2001.

Hospital leaders also are proposing to tap FEMA for money. The line of argument being pushed in Washington is that it makes more sense for the agency, which normally provides assistance after disasters, to invest a fraction of that money now to avoid larger post-quake costs.

Dauner and others have lobbied Sen. Dianne Feinstein (D-Calif.) on the issue, as well as nearly every member in the state's congressional delegation.

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