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Hospitals to close under strain of California seismic requirements (updated)

The requirements have also slowed the progression of Dignity Health's micro-hospital model into California due to red tape and higher costs.

Beth Jones Sanborn, Managing Editor

Pacific Alliance Medical Center in Los Angeles has announced it will close on Dec. 11, citing insurmountable expenses associated with retrofitting to meet seismic standards. The hospital housed 138 beds, but was not a trauma center and had no emergency department, according to the system.

State law demands that structures meet certain seismic standards that would help structures survive an earthquake, imposing a deadline for compliance of Jan. 1 2030. PAMC said it had no way to pay for the necessary updates, which would total nearly $100 million. A complete rebuild would cost more, the hospital said.

"Pacific Alliance Medical Center has opted not to renew its lease and will close on Dec. 11, 2017. PAMC does not own the land on which our hospital sits and the owner is unwilling to sell the land to us. The hospital building does not meet current California seismic standards and it is not economically viable for us to invest nearly $100 million to build a hospital on land that we would not own."

[Also: Los Angeles' Pacific Alliance Medical Center potentially breached by ransomware attack]

According to a notice per the Worker Adjustment and Retraining Notification Act, or WARN notice, the closing will affect all 638 employees, and they have been notified. PAMC said it will remain "appropriately staffed" until it closes its doors permanently.

"We will assist any inpatients and their physicians in transitioning their care to another area hospital prior to closing. We did not take this decision lightly, and we are committed to doing everything we can to ease the transition for affected employees. We will work with other local hospitals to help find employment opportunities for our impacted staff."

It has been a rough year for PAMC. Back in June, the hospital's owners were hit with a $42 million settlement over allegations they had "improper financial relationships" with referring physicians, according to the Justice Department. PAMC, Ltd. and Pacific Alliance Medical Center own the hospital.

In August the hospital disclosed that they had suffered a massive cyber breach thanks to a ransomware attack, potentially exposing the protected health information of 266,123 patients. Officials said the organization didn't uncover evidence to suggest the data was stolen, but couldn't rule out whether the possibility that it had been viewed or stolen.

[Also: Los Angeles hospital Pacific Alliance Medical Center to pay $42 million to settle kickback allegations]

Sutter Health's Alta Bates Summit Medical Center in Berkeley also said it will close its doors, though not in the near future. The hospital said it would close by 2030, at least in part due to seismic structural requirements but also shifting demand. The system said they will consolidate all services to their medical center in Oakland, which has the needed space to become a larger, regional medical center, and is located on a roughly 17-square block area that includes many other medical services and doctors' offices.

"As healthcare evolves over the next 20 to 30 years, it makes more sense to consolidate our services, employees, physicians and patients from our Berkeley hospital into a new modern, expanded, seismically compliant campus in Oakland," the system said on its website.

The requirements have also slowed the progression of Dignity Health's micro-hospital model into California. While the system has opened at least half a dozen facilities in other western states like Nevada, red tape and higher construction costs to satisfy structural guidelines have slowed the expansion of these facilities into California, the system said.

[Also: Are micro-hospitals the answer for systems looking for low-cost expansions? They might be]

The Seismic Compliance Program originated after the Sylmar earthquake of 1971, which killed more than 60 people and collapsed hospitals, as well as freeways and numerous other structures. A notable area of loss was the San Fernando Veterans Administration Hospital in Sylmar, whose unreinforced concrete wings collapsed, killing at least 44 people. The wings had been built in 1926, according to an article recounting the disaster by the Los Angeles Daily News. A psychiatric ward at Olive View Community Hospital also collapsed, killing three people.

The Alfred E. Alquist Seismic Safety Act was born and stressed that essential facilities must be constructed such that they can remain open and operational after an earthquake. It was later revised through Senate Bill 1953 to include nonstructural components of essential facilities as required to be compliant with guidelines.

Among other things, the Act demanded that essential facility owners must conduct seismic evaluations, and prepare a comprehensive report and compliance plan that must be submitted to the Health Planning and Development Office. It also established both structural and nonstructural seismic performance categories on which buildings would be judged. Hospitals could be deemed somewhere at or between "capable of providing services to the public after a seismic event to those at significant risk of collapse and that represent a danger to the public." Each facility receives an SPC and NPC rating that determine compliance or lack thereof.

Seismic retrofit regulations sought to develop retrofit and repair designs for existing hospital buildings in order to achieve "predictable seismic performance, whether at the essential life safety level or post-earthquake continued operations level." The requirements are used to steer the modification or alteration of existing hospital buildings from their current seismic performance category to a higher one.

Subsequent legislation has allowed compliance extensions, but the final date by which all hospitals must comply is January 1, 2020.

Twitter: @BethJSanborn
Email the writer: beth.sanborn@himssmedia.com

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