When the new 169-bed inpatient tower at Methodist Hospital of Southern California in Arcadia opens later this year, it could symbolize the creativity many believe will be required to effectively comply with California's rigorous seismic retrofitting laws.
Or it could fall short of what the state's hospitals will need to cope with a multibillion-dollar challenge.
Some $8 million for the $42.5 million Methodist project came from private fund raising, one of the largest philanthropic efforts ever in the San Gabriel Valley, a sprawling, smog-shrouded suburban region just east of downtown Los Angeles. The facility was built mainly to comply with the seismic laws but also to repair earthquake-damaged property. Hospital administrators and architects grappled with the design for several years, attempting to fit it in the long-range plans of the hospital.
Yet despite the work, the completion of the tower represents just the first of many steps the hospital must accomplish to comply with recently enacted seismic retrofitting laws. The hospital's management has yet to agree on a plan to upgrade the other buildings on campus that house the remainder of Methodist's 304 beds. Chief Executive Officer Dennis Lee estimates that project would cost at least "several million dollars" more.
"We don't know if we're going to reduce the number of beds yet. We have several ways of looking at it and figuring how to accomplish it," he says.
Methodist is not alone. Experts agree virtually all California hospitals will be scratching their heads on how to comply with broad legislation enacted 31/2 years ago to ensure the seismic safety of the state's 495 inpatient facilities.
Those hospitals that already are tackling the issue are doing so in a variety of ways. The 610-bed University of California Los Angeles Medical Center has Hollywood mogul Michael Ovitz raising hundreds of millions of dollars to build an I.M. Pei-designed replacement hospital. The 409-bed Queen of Angels/Hollywood Presbyterian Medical Center in Los Angeles has decided to sell out to Tenet Healthcare Corp., a Santa Barbara-based for-profit operator with relatively deep pockets.
The impetus for all this maneuvering can be traced back almost 30 years to the 1971 Sylmar earthquake. Three-quarters of the earthquake's 65 fatalities occurred when a newly constructed wing of 241-bed Olive View-UCLA Medical Center -- located within miles of the epicenter -- collapsed. That prompted the first round of seismic upgrade legislation for the state's hospitals.
Although a catastrophic collapse on the scale of Olive View was not repeated in the 1994 Northridge earthquake, older hospitals such as 234-bed Saint John's Hospital and Health Center in Santa Monica suffered far greater damage than newer facilities. The discrepancies prompted many calls to strengthen the existing laws. The new law, a product of intense lobbying on behalf of the hospital industry, was enacted just eight months after the Northridge temblor.
"We sponsored the legislation ourselves to make sure this was done in a reasonable manner," says Jim Lott, senior vice president in charge of advocacy for the Healthcare Association of Southern California. "There were proposals calling for compliance within five years of the (Northridge) earthquake, and the industry could not stand that kind of immediacy."
The new law requires all hospitals with inpatient beds to comply with building standards drafted in 1983 or later. Hospitals must submit plans for upgrades to the Office of Statewide Health Planning and Development, the California's hospital oversight agency, by 2000. If upgrades are not completed by 2008, the facility will face closure or will no longer be allowed to accept inpatients.
Estimates vary wildly for how much it will cost the state's healthcare system to pay for the upgrades, but they range from $17 billion to as much as a $40 billion, a figure offered by Lott.
That presents a quandary for many older hospitals, which are expected to shell out far more for upgrades than newer facilities.
"I have one client that faces about $17 million worth of work, and a similar-sized hospital that's looking at $40 million or more, simply because it's older," says Kelly Styles, senior manager of western healthcare operations for the KPMG Peat Marwick consulting firm.
Although the Federal Emergency Management Agency has offered some funding for seismic upgrades, it is for work separate from the new law's requirements. The state doesn't plan to offer special financing to pay for those requirements.
Industry observers expect the law will throw many hospitals that are already financially marginal even deeper into debt, forcing some to close.
"I think almost every hospital is going to have a difficult time dealing with it financially," says Armando Gonzalez, principal with CHCG Architects, a Pasadena, Calif.-based architectural firm. Gonzalez is also chairman of Citrus Valley Health Partners, a three-hospital network in the San Gabriel Valley. "There are other more global issues driving consolidation, but this certainly will be an impetus."
"The state may be using this law as an opportunity to thin out excess capacity," agrees Steve Valentine, president of the Camden Group, an El Segundo, Calif.-based consulting firm.
Indeed, Lott estimates the new seismic requirements eventually will trim an estimated 28% of Southern California's 3,000 beds.
However, most of those interviewed agree that with careful planning, the law actually could serve to streamline and optimize a hospital's operation, rather than hobble it.
"(The law) could actually become part of a strategic plan, where the hospitals can use it to spot their deficiencies," Gonzalez says.
In a best-case scenario, KPMG's Styles speculates that many hospitals will accent ambulatory care over inpatient beds (outpatient facilities are exempt from performing many upgrades), merge more beds into semi-private rooms and create more efficient work spaces in hospitals by moving interdependent departments closer.
The burden is on providers to think creatively, and some observers are skeptical that all will do so.
"Many of the providers should solve the problem by dealing with seismic upgrades in flexible ways -- downsizing, eliminating beds, contracting with other providers," says Marlene Burkhoff, director of healthcare facility strategies for HLW Strategies, a San Francisco-based architectural firm. "But from my perspective, many institutions are looking at the seismic regulations in a narrow way. They may be planning for the most cost-effective manner, but not actually stepping back and looking at it in a broader picture, sorting out their priorities and making capital investments consistent with their business plan."
Adds Paul Justison, vice president of Flad & Associates, another architectural firm in San Francisco: "The most astute hospitals are paying attention to this issue now, but many are treating this as a burden they hope will go away. The longer they wait, and the more resistant they are to integrating this work into their overall business plan, the bigger the problem they will have."
Addressing the issue now also will result in better solutions, Burkhoff says. "If they wait until their deadlines are upon them, they'll have to do the work in the most straightforward and expensive way possible," he says. "But if they make some intelligent decisions, it could create some wonderful opportunities."