More than half of California’s 410 hospitals have at least one building that likely couldn’t operate after a major earthquake hit their region, and many institutions say they don’t have the money to meet the 2030 legal deadline for after the earthquake. post-earthquake retrofits, the state is now providing aid to some while increasing pressure on others to get the job done.
In September, Gov. Gavin Newsom vetoed legislation championed by the California Hospital Association that would have allowed all hospitals to request a deadline extension of up to five years. Instead, the Democratic governor signed a more specific bill allowing small, rural or “distressed” hospitals to get an extension of up to three years.
“It’s expensive and complicated for hospitals, particularly freestanding hospitals,” said Elizabeth Mahler, associate chief medical officer for Alameda Health System, which serves Northern California’s East Bay and is undergoing a modernization. of its hospital in Alameda worth $25 million. , on an island next to Oakland.
The debate over how seismically safe California hospitals should be dates back to the 1971 Sylmar earthquake near Los Angeles, which led to a law requiring new hospitals to be built to withstand an earthquake and continue working. In 1994, after the magnitude 6.7 Northridge earthquake killed at least 57 people, lawmakers demanded that existing facilities be upgraded.
The two laws have left California hospitals with two sets of standards to meet. The first, which originally had a deadline of 2008 but was delayed until 2020, required hospital buildings to remain standing after an earthquake. About 20 facilities have yet to meet that requirement 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 set of standards, which require hospital facilities to remain operational in the event of a major earthquake. That work is supposed to be completed by 2030.
“It’s hard to argue with the importance of this,” said Jonathan Stewart, a professor at UCLA’s Samueli School of Engineering, citing an earthquake in Turkey in 2023 that damaged or destroyed several hospitals. “There were several hospitals that were intact but not usable. That’s better than a collapsed structure. But it is still not what is needed in a time of emergency like that.”
The influential hospital industry has unsuccessfully lobbied lawmakers for years to extend the 2030 deadline, although the state has granted several extensions to specific facilities. Newsom’s signature on 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 will be forced by state law to close,” wrote Carmela Coyle, president and CEO of the California Hospital Association, in a letter to Newsom before he vetoed the CHA Bill. A 2019 Rand Corp. study paid for by the CHA put the price of meeting the 2030 standards at between $34 billion and $143 billion statewide.
However, unions representing nurses and other medical workers say hospitals have had a long time to bring their buildings into compliance and that most have the money to do so.
“They’ve had 30 years to do this,” Cathy Kennedy, a Roseville nurse and one of the presidents of the California Nurses Association, said in an interview before the governor’s action. “Year after year we are kicking the can down the road and, unfortunately, lives are going to be lost.”
In his veto message on the CHA bill, Newsom wrote that a blanket five-year extension was not warranted and that any extension “should be limited in scope, granted only on a case-by-case basis to hospitals with demonstrated need and a clear path forward.” towards compliance, and in combination with strong accountability and law enforcement mechanisms.”
He also vetoed a bill specifically aimed at helping several 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 a three-year extension, and directing the Department of Health Care Access and Information to offer them “ technical assistance”. in compliance with the deadline.
The state designates 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 “district” hospitals, meaning which are financed by special government funds. entities called “health care districts.” They can request a three-year extension as long as they submit a seismic compliance plan and identify milestones to implement it.
Debi Stebbins, executive director of the Alameda Health Care District, which owns the Alameda Hospital buildings, said small hospitals face a big challenge. Although Alameda is very close to San Francisco and Oakland, the tunnels, bridges and ferries that connect it to the mainland could easily be closed in an emergency, making the island’s hospital a lifeline.
“It’s an unfunded mandate,” Stebbins said of the state’s 2030 deadline.
Rand’s study estimated the average cost of a retrofit at more than $92 million per building, but the amount could vary greatly depending on whether it is a building that houses hospital beds.
Small and rural hospitals can get some help from the state through grants funded by California’s Electronic Cigarette Excise Tax, but HCAI spokesman Andrew DiLuccia said it would produce only $2 million to $3 million in total annually. He added that the Small and Rural Hospital Assistance Program also received a one-time injection of $50 million from a tax on health insurers to help with seismic work.
Unions and critics of extensions often point to the big profits some hospitals make: A California Health Care Foundation report released in August found that California hospitals made $3.2 billion in profits during the first quarter of 2024. The The study notes that “there is a 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 has had to help his district come up with a plan.
After Newsom vetoed a bill in 2022 that would have granted an extension on the seismic retrofit deadline specifically for Alameda Hospital, the hospital system and its partner health care district used parcel tax money to help support a loan.
The cost of the modernization will be about $25 million, and the system is also investing millions more in other projects, such as a new skilled nursing center. Construction work is scheduled to be completed in 2027.
“No one wants things to crash in an earthquake or anything else, but at the same time, it’s a burden,” said Mahler, associate medical director for the Alameda Health System. “How do we make sure they get what they need to stay open?”
This article was produced by KFF Health Newswho publishes California Healthlinean editorially independent service California Health Care Foundation.
