California Hospitals Strain to Meet Seismic Deadline

Some California hospitals may have trouble meeting looming state seismic rebuild deadlines because of a soft credit market and deteriorating revenue, according to a member survey by the state hospital association.

Some 28% of hospitals responding to the survey said they have seen interest expenses rise in the first quarter of 2009, while 45% said their operating margins have declined this year, according to the survey of hospital chief financial officers conducted in April.

And 64% of respondents said they will not be able to secure the capital necessary to comply with state seismic deadlines. California hospital buildings that are at the most risk of collapse must be rebuilt or retrofitted by 2013 or, in some cases, 2015, or face state closure. Some hospitals have secured a hardship extension until 2020.

“California hospitals are not unique to the negative impacts of the economic recession,” said C. Duane Dauner, president and CEO of the California Hospital Association, in a news release. “The unfunded seismic mandate, however, places an extraordinary burden on our community hospitals at a time when they can least afford it.”

More than 57% of hospitals have seen a rise in the number of uninsured patients, an increase of 22% since the hospital association last conducted the survey in January.

The California Hospital Association sent the April survey to all 430 member hospitals and had a response rate of 30%.