California hospitals scramble for earthquake retrofits as state limits expansions

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More than half of California's 410 hospitals have at least one building that likely won't be able to operate after a major earthquake hits their area, and with many institutions claiming they don't have the funds to meet the legal deadline of 2030 after an earthquake retrofit, progress The state now provides relief for some while increasing pressure on others to get the job done.

Gov. Gavin Newsom in September vetoed legislation backed by the California Hospital Association that would have allowed all hospitals to apply to extend the deadline for up to five years. Instead, the Democratic governor signed a more narrowly designed bill that allows small, rural or “distressed” hospitals to get an extension of up to three years.

“It's expensive and complicated for hospitals — independent hospitals in particular,” said Elizabeth Mahler, associate chief medical officer at Alameda Health System, which serves Northern California's East Bay and is leading a $25 million renovation of Alameda Hospital. , on an island next to Auckland.

The debate over how seismically safe California hospitals are dates back to the 1971 Sylmar earthquake near Los Angeles, which led to a law requiring new hospitals to be built that can withstand earthquakes and continue to operate. In 1994, after the 6.7-magnitude Northridge earthquake killed at least 57 people, lawmakers demanded modernization of existing facilities.

The two laws left California hospitals with two sets of standards to meet. The first — whose deadline was originally 2008 but was postponed to 2020 — requires hospital buildings to remain standing after an earthquake. About 20 facilities have not yet met that requirement for at least one of their buildings, although some have received expansions from the state.

Many other buildings — 674 buildings, spread across 251 licensed hospitals — do not meet the second set of standards, which require hospital facilities to remain operational in the event of a major earthquake. This work is supposed to be completed by 2030.

“It's hard to argue the importance of that,” said Jonathan Stewart, a professor at UCLA's Samueli School of Engineering, citing the 2023 earthquake that struck Turkey and damaged or destroyed several hospitals. “There were a number of hospitals intact but unusable. This is better than a collapsed structure. But still that's not what you need in a time of emergency like this.

The influential hospital industry has lobbied lawmakers for years unsuccessfully to extend the 2030 deadline, though the state has granted various extensions to specific facilities. Newsom's signing of one of three bills addressing the issue this year represents a partial victory for the industry.

Hospital administrators have long complained about the high cost of seismic retrofits.

“While hospitals are working to meet these requirements, many simply will not meet the 2030 deadline and state law will be forced to close,” Carmella Coyle, president and CEO of the California Hospital Association, wrote in a letter to Newsom before he objected to the decision. cha bill. A study conducted by Rand Corp. In 2019, which CHA funded, the cost of meeting the 2030 standards was estimated at between $34 billion and $143 billion statewide.

However, labor unions representing nurses and other medical workers say hospitals have had plenty of time to bring their buildings into compliance, and that most have the money to do so.

“They've had 30 years to do this,” Kathy Kennedy, a Roseville nurse and one of the presidents of the California Nurses Association, said in an interview before the governor made his decision. He added: “We postpone things year after year, and unfortunately, we will lose lives.”

In his letter against the CHA bill, Newsom wrote that a blanket five-year extension was not justified, and that any extension “should be limited in scope, granted only on a case-by-case basis to hospitals with a clear need and a clear path to compliance, as well as mechanisms for compliance.” Strong accountability and enforcement.

He also vetoed a bill specifically directed to help several hospitals run by Providence, a Catholic hospital chain.

But he signed a third bill, allowing small, rural, “acute access” hospitals, and some others, to apply for a three-year extension, and directing the Ministry of Health Care Access and Information to provide “technical assistance” to them. In meeting the deadline.

The state identifies 37 hospitals as providing “critical access,” while 56 are considered “small,” meaning they have fewer than 50 beds, 59 are considered “rural,” and 32 are “regional,” meaning they are funded by Private government. Entities called “health care regions.” They can request a three-year extension as long as they submit a seismic compliance plan and identify milestones for its implementation.

Small hospitals face a major challenge, said Debbie Stebbins, CEO of Alameda Healthcare District, which owns the Alameda Hospital buildings. Although Alameda is very close to San Francisco and Oakland, the tunnels, bridges and ferries that connect it to the mainland can easily be closed in the event of an emergency, making the island's hospital a lifeline.

“It's an unfunded mandate,” Stebbins said of the state's 2030 deadline.

The RAND study estimated the average cost of retrofitting at more than $92 million per building, but the amount can vary widely depending on whether the building houses hospital beds.

Small and rural hospitals could get some help from the state via grants funded by California's e-cigarette tax, but HCAI spokesman Andrew DeLucia said it would only generate $2-3 million annually. The Small and Rural Hospital Relief Program also received a one-time infusion of $50 million from a tax on health insurance companies to help with seismic survey work, he added.

Labor unions and critics of the extensions often point to the large profits some hospitals are making: A California HealthCare Foundation report published in August found that California hospitals made $3.2 billion in profits during the first quarter of 2024. The study notes that there is “continuity” “Wide variation in financial performance among hospitals, with the bottom quartile showing a net income margin of -5%, compared to +13% for the top quartile.”

Stebbins had to help her district come up with a plan.

After Newsom vetoed a bill in 2022 that would have given an extension to the seismic retrofit deadline specifically for Alameda Hospital, the hospital system and its partner health care district used parcel tax money to help pay off the loan.

The upgrade will cost about $25 million, and the system is investing millions more in other projects, such as a new skilled nursing facility. Construction work is scheduled to be completed in 2027.

“No one wants things to break in an earthquake or anything, but at the same time, it's a burden,” said Mahler, associate chief medical officer at Alameda Health System. “How do we make sure they get what they need to stay open?”

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

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