The Hospital Seismic Mandate: A Balance Between Seismically Safe Buildings and Forced Closures

The Hospital Seismic Mandate: A Balance Between Seismically Safe Buildings and Forced ClosuresPresented to the Bay Area Earthquake Alliance

August 27, 2009

Roger Richter, Senior Vice President

California Hospital Association

Alfred E. AlquistHospital Facilities Seismic Safety Act

1971 Sylmar Earthquake– 50 Hospital deaths

1973 HFSSA for New and Major Renovations

– 1967-1973 Medicare and Medi-Cal Boom

1983 CSSC “California at Risk”– 19% of GACH Beds Compliant

Alfred E. AlquistHospital Facilities Seismic Safety Act (Con’t)

1989 Loma Prieta Earthquake– Two hospitals structural damage– Many had non-structural damage

1994 Northridge Earthquake– $3 Billion in hospital damage– SB 1953 (Chapter 740) 1994 Statutes

SB 1953 Implementation History

Based on SPC and NPC gradations

FEMA 178 only evaluation methodology

Approximately 1,100 hospital buildings at seismic risk

Hospital Building Seismic Classification

SPC-1Potential Collapse 2008/2013/2015/2020

SPC-2Life/Safety – Non-Operational 2030

SPC-3, 4 and 5Remain Operational 2030 & Beyond

Also NPC Requirements

SB 1953 Implementation Issues

Many issues arose:

– Access Compliance/ADA

– Non-structural costly

– Some service areas would have to be inefficiently retrofittedin a piecemeal manner

– Addressing non-compliant buildings affected compliant

– With the late 90’s and early 2000’s building boom contractors and subs lost interest in complex hospital work

– Mid-2000’s cost and shortage of materials

Projected Mandate Costs (without financing costs):

1994 HBSB SB 1953 Cost Estimate $14 billion

2002 CHA Consultants Estimate $24 billion(2006 = $40 billion)

2002 RAND Estimate Up to $41 billion(2006 = $68 billion)

2006 DAVIS Langdon66% increase 2003-2005

2007 RAND Estimate Up to $110 billion

SB 1953 Deadlines Unrealistic

1994 the first year California hospitals had negative O.M.

Force hospitals to close

Extended 2008 to 2013 & 2015

2030 by 2020 for financially stressed

HAZUS – approximately 50% of SPC-1s qualify for SPC-2

California Hospitals and the State Economy

Percent of Hospitals Reporting Problems Accessing CapitalNovember 2008

Percent of hospitals that cannot exit auction 27% rate securities market with alternate financing

Percent of hospitals unable to secure capital 25% for seismic mandated projects

Percent of hospitals unable to secure capital 36% for non-seismic mandated projects

Percent of hospitals unable to secure capital 24% for medical equipment purchases

Source: Preliminary results from CHA survey to hospital CFOs on economic impact

Status of the Seismic Mandate

SPC-1 875

SPC-2 288SPC-3

380

SPC-4 819

SPC-5 361

Source: OSHPDJune 2, 2009

Hospital Buildings by SPC Classification

San Francisco County

Map Key

SPC-1 HospitalSPC-2 HospitalSPC-3/4/5 HospitalCounty Boundary

SPC BreakdownSPC-1 34SPC-2 4SPC-3 6SPC-4 7SPC-5 2

Marin County

Map Key



Sonoma County

Map Key



Napa County

Map Key



Solano County

Map Key



Contra Costa County

139

Map Key


SPC BreakdownSPC-1 14SPC-2 7SPC-3 14 SPC-4 18SPC-5 14

Alameda County

Map Key



San Mateo County

Map Key



Santa Clara County

Map Key



Nine County Bay Area Totals

Bay Area State

# Buildings % # Buildings %

SPC-1 189 36 875 32

SPC-2 55 10 288 11

SPC-3 111 21 380 14

SPC-4 93 18 819 30

SPC-5 77 15 361 13

Where Does the Seismic Mandate Go From Here?

Extensions

2013 to 2015 for all hospitals

2030 to 2020 for all hospitals

Additional annual extensions for extenuating circumstances

Fines for extensions for up to 5 years

Documents

The Hospital Seismic Mandate: A Balance Between Seismically Safe Buildings and Forced Closures