More than half of California’s 410 hospitals have at least one building that will likely be unable to operate after a major earthquake hits their region, and many institutions claim they don’t have the money to meet the law’s 2030 deadline. the state is now providing assistance to some parties and increasing pressure on others to complete the work.
Gov. Gavin Newsom in September vetoed legislation championed by the California Hospital Association that would have allowed all hospitals to apply for a deadline extension of up to five years. Instead, the Democratic governor signed a narrower bill that allows small, rural or “distressed” hospitals to get extensions of up to three years.
“This is an expensive and complicated thing for hospitals – especially independent hospitals,” said Elizabeth Mahler, chief medical officer at Alameda Health System, which serves Northern California’s East Bay and is undertaking a $25 million retrofit of its hospital in Alameda. , on an island next to Oakland.
The debate over how safe California’s hospitals are stems from the 1971 Sylmar earthquake near Los Angeles, which prompted legislation requiring that new hospitals be built to withstand earthquakes and continue operating. In 1994, after the 6.7-magnitude Northridge earthquake killed at least 57 people, lawmakers called for existing facilities to be upgraded.
These two laws have subjected California hospitals to two standards that must be met. The first – which originally had a deadline in 2008 but was pushed back to 2020 – requires hospital buildings to remain standing after an earthquake. About 20 facilities have not met those requirements for at least one of their buildings, although some have received extensions from the state.
Many more – 674 buildings, spread across 251 licensed hospitals – do not meet the second standard, which requires hospital facilities to remain functional in the event of a major earthquake. The work should be completed by 2030.
“The importance of this is hard to argue,” said Jonathan Stewart, a professor at UCLA’s Samueli School of Engineering, citing a 2023 earthquake in Turkey that damaged or destroyed many hospitals. “There are a number of hospitals that are still intact but cannot be used. It was better than the structure collapsing. But still not what you need in such an emergency.”
The influential hospital industry has for years unsuccessfully lobbied lawmakers to extend the 2030 deadline, although the state has granted various extensions for certain 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.
“Despite hospital efforts to meet these requirements, many hospitals did not meet the 2030 deadline and were forced to close by state law,” wrote Carmela Coyle, president and CEO of the California Hospital Association, in a letter to Newsom before he vetoed the bill -the law. CHA bill. A Rand Corp study. in 2019 funding by the CHA put the cost of meeting the 2030 standards at between $34 billion and $143 billion statewide.
However, unions representing nurses and other medical workers say hospitals have plenty of time to bring their buildings into compliance, and most hospitals have the funds to do so.
“They’ve had 30 years to do this,” said Cathy Kennedy, a nurse in Roseville and co-president of the California Nurses Association, in an interview before the governor’s action. “We continue to make these efforts year after year, and unfortunately, many lives are lost.”
In his veto message regarding the CHA bill, Newsom wrote that a five-year extension was unjustified, and any extension “should be limited in scope, granted only on a case-by-case basis to hospitals that demonstrate need and a clear path to compliance, and combined with accountability and strong law enforcement mechanisms.”
He also vetoed a bill aimed specifically at helping some hospitals operated by Providence, a Catholic hospital chain.
But he signed a third bill, allowing small, rural and “critical access” hospitals, and some others, to apply for three-year extensions, and directing the Department of Health Care Access and Information to offer them “technical assistance” . in meeting deadlines.
The state designates 37 hospitals as “essential access” providers, while 56 hospitals are considered “small,” meaning they have fewer than 50 beds, 59 hospitals are considered “rural,” and 32 hospitals are “ district”, meaning that the hospital is funded by a special government. entities called “health care districts.” They can request a three-year extension provided they submit a seismic compliance plan and identify milestones for implementing it.
Debi Stebbins, executive director of the Alameda Health Services District, which owns the Alameda Hospital building, said small hospitals face big challenges. Although Alameda is very close to San Francisco and Oakland, the tunnels, bridges, and ferries connecting Alameda to the mainland can easily be closed in an emergency, making the island’s hospitals a lifeline.
“This is an unfunded mandate,” Stebbins said of the state’s 2030 deadline.
The Rand study estimates the average cost of retrofits at more than $92 million per building, but that number can vary widely depending on whether the building houses hospital beds.
Small and rural hospitals can get help from the state through grants funded by California’s E-Cigarette Excise Tax, but HCAI spokesman Andrew DiLuccia said the funds would only bring in a total of $2-3 million per year. He added that the Small and Rural Hospital Assistance Program has also received a $50 million injection from health insurance company taxes to help with seismic work.
Unions and critics of the extension often point to the huge profits some hospitals are making: A California Health Care Foundation report published in August found that California hospitals earned $3.2 billion in profits during the first quarter of 2024. The study noted that “profits continue.” there is wide variation in financial performance between hospitals, with the bottom quartile showing a net profit margin of -5%, compared to +13% for the top quartile.”
Stebbins should help his district come up with a plan.
After Newsom vetoed a bill in 2022 that would have provided an extension to the deadline for special seismic retrofits for Alameda Hospital, the hospital system and its partner health care districts used parcel tax money to help pay off the loan.
Costs for the retrofit will be about $25 million, and the system is also investing millions more dollars in other projects, such as a new skilled nursing facility. Construction work is planned to be completed in 2027.
“Nobody wants a disaster to happen because of an earthquake or anything else, but at the same time, it’s a burden,” said Mahler, chief medical officer at Alameda Health System. “How do we make sure that they get what they need to stay open?”
This article was produced by KFF Health Newswho publishes California Health Channelan editorial service independent of California Health Care Foundation.