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Alameda Hospital faces pricey quake fixes

Submitted by on 1, February 22, 2010 – 6:00 am6 Comments

By Jan Greene

Alameda Hospital is facing millions of dollars in repairs to bring its 1950s-era facility into compliance with state laws mandating earthquake-safe hospitals.

Administrators are working with seismic engineers and architects to design bracing for one part of the main hospital building and to move the kitchen and some administrative offices out the oldest building, erected in 1925. They’re supposed to submit those plans to the state by this July, and have the work done by July 2013. They might have until 2015 if the hospital can get an extension they’re seeking under provisions of a new state law adjusting details of the seismic program.

It remains unclear how much the move and structural work would cost, but hospital associate administrator Kerry Easthope confirmed that a $10 million estimate would be “in the ballpark.” He emphasized that it could vary quite a bit up or down depending on the ultimate design.

Even though the hospital’s historically dismal finances began to turn around in the past couple of years, its operating budget will take a hit in April with the end of a contract with Kaiser Permanente. The hospital has limited reserves and has other expensive needs, such as electronic storage of patient records and images (such as MRIs and CT scans).

Easthope said administrators and the hospital board have not made specific plans for financing the seismic project, but their options are few. They would most likely borrow from the private bond market. The good news for Alameda Hospital is that it has no other debt weighing down its balance sheet; on the other hand, financial markets are tight for hospitals in the current climate, and investors like to see a strong operating income over time. Alameda Hospital’s fiscal turnaround is just a couple of years old.

However, hospital administrators have little choice but to comply with the state law mandating seismic upgrades for hospitals. The law was approved in 1994 soon after the Northridge earthquake. Since then, several bills have extended deadlines and otherwise adjusted the program, which a Rand study estimated would cost the California hospital industry about $110 billion in all.

Alameda Hospital’s oldest building, the freestanding one on the east side of the property on Clinton Avenue and Willow Street, was erected in 1925 and cannot be brought up to current hospital safety standards, Easthope said. It is currently used for food service, administration and physician offices. The state requires that hospital patient care and certain key services (such as the kitchen and a main administrative office) be in seismically safe buildings, so those will be moved to the main buildings.

The hospital building that houses the main entrance and emergency department was built in the early 1980s and is seismically sound according to the state’s standards. A third building behind it was built in the 1950s and 1960s, has weaknesses and needs bracing.

Alameda Hospital’s three listed structures are among the 825 hospital structures around the state that remain on the state’s highest-risk list. The state hospital association continues to lobby for more concessions, given the high cost of rebuilding and the economic hit some hospitals have suffered during the economic slowdown. At the same time, other groups such as the California Nurses Association lobby for strict adherence to the law, arguing their members should have safe workplaces.

Alameda Hospital is unlikely to come off the list of high-risk hospital structures because of the property’s location near the Hayward fault, Easthope said. Hospital officials told state regulators in mid-2009 that they expected the three sections of concern to be dealt with by 2013, but that the “hospital’s ability to comply with 2013 deadline is heavily contingent upon its ability to obtain financing required to pay for this unfunded mandate. This could be a big challenge,” they said in a state facility report.

Easthope said the seismic issue has not been raised by patients. Still, the hospital’s leaders are committed to complying with the law one way or another. “We’re working on a plan to address the seismic challenges like every other hospital in California, so we can be here to serve the community beyond 2015,” Easthope said.

6 Comments »

  • Sharon says:

    This information about the hospital’s financial instability and required earthquake retrofitting was publicized at the time the parcel tax was approved by voters.

    All those senior citizens who voted for the hospital parcel tax but who were exempt from paying it should now step up to the plate and volunteer to pay their fair share.

  • Dennis V. says:

    Seniors are NOT exempt from the hospital parcel tax. Seniors can seek an exemption from the school parcel tax.

  • H. Ewert says:

    I had understood that the parcel tax was to keep the hospital and pay for the retro fit–not until it became financially sound-which it will never be-and has as yet to show profit–true profit would exclude the parcel tax moneys. Why not just demolish the oldest parts of the hospital??

  • anon says:

    Why does this newspaper, the Hospital Board, and hospital management insist on reporting “profitability” after the massive subsidy of the parcel tax has been applied. Of course the answer is the same reason they should not do it – it makes what is an incompetent job of running the hospital look good.

  • E W says:

    As someone who is very happily insured by Kaiser, it’s becoming increasingly obvious to me that we need to repeal the parcel tax subsidy for a hospital where so many residents don’t receive treatment. Before spending the money on these repairs, the parcel tax should come up for a vote again. It’s outrageous that it was worded so it doesn’t need approval every four years.

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