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Financial Jolt
(continued)

Page 3

 
 

Continued from Page 2

California’s major hospital networks—Kaiser Permanente, Catholic Healthcare West and Sutter Health—are spending substantial amounts to meet the standards, but are large enough systems to absorb the costs. Even so, Tenet Healthcare announced in January that it was putting 19 California hospitals up for sale, partly because of the expense of seismic upgrades.

Tenet President Trevor Fetter said weak performance from the hospitals makes “it impossible for Tenet to justify the $1.6 billion investment we now estimate these hospitals require to comply with the state’s seismic standards.” He estimated costs of less than $300 million to meet seismic standards for the remaining 17 California hospitals the company will continue to operate.

Kaiser estimates that it will spend more than $4 billion during the next 10 years on seismic upgrading, said Kaiser spokesman Mike Rossiter. The majority of this cost will be funded by Kaiser Permanente directly, with about $227 million funded through the Federal Emergency Management Agency’s Seismic Mitigation Program.

Kaiser also plans to have its hospitals prepared to offer service after earthquakes by the year 2013. This deadline would meet the functionality standard 17 years in advance of requirements set by SB 1953, according to a report from the Earthquake Engineering Research Institute.

Colleen McLaughlin, MSN, RN, managing director of hospital strategy and implementation for Kaiser’s Southern California region, said seismic upgrades and new construction projects “give us the opportunity to build what we call ‘hospitals of the future.’ ” Kaiser is building four hospitals this year and plans to begin construction on seven more in 2005.

After demolishing old buildings and replacing them at the Kaiser Permanente Los Angeles Medical Center, for example, new technologies will be used to make the replacement buildings easier to navigate, McLaughlin said.

“We’re also emphasizing a healthy healing environment—bringing light into buildings, planting trees and opening up previously enclosed staff spaces,” McLaughlin said. “The hospitals will be more safe seismically and they’ll also be up to date on the safest things we can do for patients.”

Catholic Healthcare West-owned Northridge Hospital, where Gonsoski and other nurses worked heroically during the 1994 quake, sustained $83 million in damage without any collapsed buildings. Since then, four patient care towers have been replaced, with 90 percent of the costs being reimbursed by FEMA, said Ron Rozanski, senior vice president of professional, ancillary and facility services.

In inspecting the work, cracks were found in the columns of some buildings, resulting in an additional $9 million in repairs, with FEMA again contributing 90 percent. FEMA’s hazardous mitigation program also paid 75 percent of the $1.8 million spent to secure equipment within buildings, Rozanski said.

Northridge still needs to bring two towers up to code. One will house the ER, surgery, radiology, a GI lab and a pharmacy that will be upgraded at a cost of $19 million, and $100 million will be spent on a replacement tower that will handle the inpatient bed capacity of two older towers. These will be completed by 2013 with a five-year extension granted by OSHPD for the buildings that needed to be able to withstand a major quake by 2008. With the extension, the finished projects are required to meet the 2030 codes.

In 1994, Rozanski recalls his house shaking violently in the early-morning quake, knocking over a 400-pound armoire “like a toothpick” and causing $130,000 worth of damage. When he got to the hospital, the buildings were still standing, patients were being treated and there were no major injuries. “It was a miracle, being on the epicenter,” he said.

That’s why all the construction work—with the noise, shrouded buildings and landscape disfigurement—although frustrating for patients and staff, is worth the end result of having a safer, quake-resistant medical center, Rozanski said.

Contact John Leighty at johnsan@aol.com.