Seismic Safety

By Hal Hassin, MD

The Hospital Seismic Safety Act has placed a huge financial burden on hospitals. The Marin Healthcare District is behind the curve in addressing needs at Marin General Hospital.

The September 29th IJ editorial Safety should be No. 1 highlighted an important issue- the safety of acute care hospital buildings during a major earthquake. The editors concluded that it is important to complete the job of making the buildings at Marin General Hospital (MGH) safe in a major earthquake as soon as possible.

The editors went on to state that giving hospitals as long as 30 years to brace their building is risky, and this is not the time for politics but for a practical commitment to do what is right for the safety of the Marin community. I think we can all agree with the stated position. And it's clear that the required commitment must come from those we elect to the MGH District Board.

The complexity and financial magnitude of the "...call to do what is right for the safety of the Marin community..." is best appreciated by reviewing a brief historical perspective of the legislation governing seismic compliance by hospitals in California.

Northridge Earthquake Changes Standards

The Hospital Facilities Seismic Safety Act (HFSSA) was enacted in 1973 in response to the extensive structural damage hospital buildings sustained during the 1971 Sylmar earthquake. Analysis of the damage to hospital buildings following The San Fernando Valley Northridge earthquake on 17 January 1994, demonstrated that those structures built after the enactment of HFSSA performed better than their older counterparts. These findings resulted in the enactment of SB 1953 later that year.

SB 1953 is aimed at increasing the likelihood that hospitals can maintain uninterrupted operations following a major earthquake. To accomplish this, the Act created a series of milestones that must be met or the facility must be closed to acute care. The important dates are:

• 2002 - specific non-structural bracing systems must be completed and compliance plans submitted to the State.
• 2008 - hospitals must meet State requirements so their buildings do not pose a risk of collapsing. A delay has been granted if the hospital agrees that, on or before January 1, 2013, acute care services will be moved into a structure that meets 2030 standards.
• 2030 - hospitals must be capable continuing acute care services after a major earthquake.

The State has identified no specific way for California hospitals to meet the capital needs mandated by SB 1953. Recent down grades in the bond ratings of several hospital systems (but not Sutter Health which has an A+ Stable rating from Standard and Poor and an A2 Stable rating from Moody) will increase the challenge for the down graded hospitals.

Stand-alone hospitals, as now being advocated by the MGH District Board for MGH, may face severe obstacles to obtaining financing in the bond market. Terry Goode, an associate director of public finance for Standard and Poor, said, "...it might be the straw that breaks the camel's back ..." when speaking of stand-alone hospitals and the impact of SB1953.

The current estimates for 2008 retrofit construction at MGH is approximately $20 million and replacement costs could reach $100 million. When financing costs are added, assuming MGH as a stand-alone can obtain a bond rating equivalent to that of MGH/Sutter Health, total debt service could exceed $200 million.

Tenant On The Hook

These estimates must be weighed against the provisions of the lease held by the current operator of MGH, MGH/Sutter Health. The current lease holds MGH/Sutter Health, responsible for capital expenditures such as the seismic improvements outlined above. Now, rather than inviting MGH/Sutter Health to brief the MGH District Board on their plans to fulfill their contractual obligation to meet the seismic requirements of SB1953, the MGH District Board, as reported in the Marin IJ, announced at its meeting on 10 October that it would retain three consultants who are to be paid $5,000 to determine how much work must be done, what it will cost, and how it might be financed.

Politics As Usual

Spreading $5,000 across three consultants raises serious questions about the scope, depth, and adequacy of the advice that can be provided on issues this complex. Despite the IJ's editorial advice that this matter be handled outside of the political arena, the Healthcare's Board chairwoman, Dr. Parnell said she hoped the results of the consultant's work would be available "...before the election." Clearly, it looks like money is about to be spent on the basis of political expediency rather than reasoned judgment. At a minimum, the MGH Healthcare Board owes the public more information about these consultants along with an explanation of their respective contracts and work scope documents.

The MGH District Board has chosen to strike out on its own rather than inviting MGH/Sutter Health to disclose and review their plans for complying with SB1953. This has all the earmarks of another knee jerk reaction similar to the lawsuit, which the MGH District Board has been pursuing over the last 3 years. This lawsuit has thus far consumed approximately $3 million of the public's hard-earned healthcare dollars. One cannot help but wonder if the $5,000 for three seismic consultants isn't just a down payment on another ill conceived venture like the current lawsuit.

It's incumbent on everyone to closely question each of the candidates now running for seats on the MGH Healthcare Board to determine where they stand on the issue of seismic compliance for MGH.