California hospital owners are having trouble meeting the state-mandated deadlines for making their buildings more resistant to damage from earthquakes, saying that the ailing economy has left them unable to fund the improvements.
Seismic mandate deadline near
Calif. hospitals lack money to meet building codes
Hospital officials plan to lobby state lawmakers this fall and spring to amend the state building-code mandate, either by extending the deadlines beyond dates in 2013 and 2015, asking for permission to implement staggered schedules for some of the work, or simply enforcing the stricter changes due to apply in 2030.
Nine systems that say they represent about one-third of all hospital beds in the state have joined together in a coalition to urge relaxation of the pending seismic deadlines: 38-hospital Catholic Healthcare West, San Francisco; 29-hospital Kaiser Permanente, Oakland, Calif.; six-hospital MemorialCare, Fountain Valley, Calif.; 24-hospital Providence Health & Services, Seattle; four-hospital Scripps Health, San Diego; nine-hospital St. Joseph Health System, Orange, Calif.; two-hospital Stanford Health Care, Palo Alto, Calif.; 23-hospital Sutter Health, Sacramento, Calif.; and five-hospital Sharp Healthcare, San Diego, according to a memo from Providence.
“The looming interim seismic deadlines pose an unreasonable burden on California hospitals,” said Shelly Schlenker, vice president for public policy and advocacy for Catholic Healthcare West, in a written statement. “Many hospitals will be unable to meet the short-term deadlines, thus forcing the state of California to take them out of service for noncompliance. The state closing hospital buildings would place an even greater hardship on the communities and people that they serve.”
The pending deadlines stem from a state mandate that followed the 6.7-magnitude earthquake that struck Northridge, Calif., just north of Los Angeles in 1994. After the quake, lawmakers imposed stricter standards for seismic safety on acute-care hospitals. The deadlines were set for 2008, later pushed back to 2013, and then extended to 2015 or 2020 for certain facilities (June 22, p. 32).
Roger Richter, senior vice president of professional services at the California Hospital Association, said the turbulent economy has made meeting the deadline of 2013 difficult or impossible for providers both large and small.
“There are a number of hospitals that, because of the economy, just cannot afford to meet these seismic deadlines, and many of them are larger systems who a couple years ago thought it would be no problem,” Richter said. Now “they just can't do it, or at least not all of it.”
David O'Neill, a senior program officer with the California HealthCare Foundation's Innovations for the Underserved program, said the recession's impact on the cost of borrowing and on payer mix at hospitals has exacerbated the complex set of pre-existing financial challenges facing state hospitals. “Responsible hospitals and systems have acknowledged and worked on dealing with their seismic safety challenges, and they've worked hard at it,” O'Neill said. “Are there hospitals that for whatever reason have decided that given their economics and circumstances that they don't have any alternatives and are not going to take any action? There may be a handful of those. But most hospitals and systems and boards take this very seriously, as they must.”
According to the Office of Statewide Health Planning and Development, which is charged with enforcing the seismic mandate, hospitals in California have seen their operating margins and overall margins rebound in 2009, based on quarterly utilization reports. After sinking to a negative 1.6% operating margin in the third quarter 2008, the office said hospitals in the first quarter of 2009 were posting positive 1.0% margins, according to the graph that was posted Oct. 8.
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