Navigating California’s HCAI 2030 Seismic Compliance for Hospitals

By Grant Gutenberg and Conor Clarke 

As a state prone to earthquakes, which can significantly disrupt and impede access to critical healthcare services, California instituted the General Acute-Care Hospital Seismic Retrofit Program (SB 1953) in 1994. The program aims to enhance survivability during a seismic event that impacts a hospital’s life safety components, both structural and nonstructural, making hospital buildings the safest in the state. The goal is that—during and following a seismic event—patients and medical personnel will be safe, and the hospital will be operational to continue serving communities with uninterrupted access to healthcare.  

With compliance phases extended to 2025 and 2030, a holistic approach to the required upgrades (or full replacement) is essential for meeting the code requirements. Any hospital building that fails to meet these upgrade deadlines will be forced to cease patient services. As patient care is vital to California’s population, hospital facilities should prioritize the availability of patient care. 

The Challenge Ahead 

According to HCAI data, only 65% of hospitals meet 2020 life safety seismic requirements, and 45% have five years to comply with the 2030 extension of SB 1953 requirements. As the 2030 deadline approaches, healthcare systems should consider working with professional partners to assess options, mitigate risks, and manage project costs and schedules.  

A 2019 study by the RAND Corporation indicated the seismic upgrades needed to bring all general acute-care hospitals in compliance with the 2030 requirements could cost as much as $176 billion in 2025 dollars. 

Headwinds to Compliance 

Several factors beyond a healthcare system’s control complicate the path to HCAI 2030 compliance: 

Current Market Conditions: Material and equipment procurement timing is critical for managing project costs and schedules. While material pricing has stabilized, shortages persist for specific mechancial, electrical and plumbing systems, including electrical switchgear, HVAC equipment, transformers, generators and custom-fabricated steel. Long lead times are standard, with some specialty equipment and materials having lead times as long as 12 months.  

Labor Shortages: Long lead times and procurement timing are compounded by broad-based skilled labor shortages in the construction industry, which is increasing costs and lengthening construction durations.  

Cost of Capital: Recent inflation and interest rate volatility impact the feasibility of capital projects. Managing debt and capitalized expenditures are straining the healthcare construction industry. Healthcare systems must carefully model total project costs and consider revenue and operating expense forecasts.  

Outside Pressures: The increasing reliance on technology in healthcare requires additional electrical infrastructure, stretching resources. Statewide sustainability mandates for low-carbon or net-zero emissions consume MEP resources more than other comparably priced projects. These pressures further exacerbate the regional material and labor challenges.  

Approaches for Successful Implementation 

Renovate or Replace: Before design, evaluate whether upgrading or declassifying an existing acute-care facility is more cost-effective than constructing a new one. Renovations can trigger additional code upgrades, adding unexpected scope, risk, cost and time. Conducting a Life Cycle Cost Analysis helps factor in operational and long-term maintenance expenses. 

Investigating and Pricing Simultaneously: Engage experts early in predesign for cost engineering strategies to build construction budgets as part of the feasibility process as the team evaluates the required upgrades through site walks, investigations, testing and inspections. On Veterans Affairs renovations across the country, for example, OCMI, which provides quality management solutions for the built environment, assisted architects with assembling realistic estimates encompassing material, labor and the less easily attributable cost drivers. The average variance to bid across the 80-plus project program is below 5%, inclusive of COVID-driven pricing variances.  

Target Value Delivery: Proactively set realistic construction cost targets and monitor costs to eliminate surprises.  

Analyze Risk: Conduct an early risk assessment to identify uncertainties, maximize savings and increase financial efficiency. 

Evaluating a Building’s Total Cost: When renovations become too costly, consider declassifying or reducing occupancy. Cost estimates for renovation or complete replacement inform the business case, considering the financial impacts of speed to market. 

A Holistic Approach to Renovation Impacts: Cost estimating teams with experience in Non-Structural Performance Category (NPC) and Structural Performance Category (SPC) upgrades are well-versed in complicated renovations in existing facilities, including phasing and coordination to minimize disruptions to hospital operations.  

Leveraging Third-Party Cost Management 

When a healthcare system plans to spend millions of dollars on upgrades, engaging a cost-estimating firm early in design is invaluable for providing an independent review of scope, quantities and pricing alongside the general contractor or construction manager at-risk. This reconciliation process offers cost and scope certainty, mitigating the owner’s risk. Peer reviews of construction cost estimates help owners understand if their project will meet budget constraints. These processes provide proactive knowledge and confidence in the project budget, saving owners 5%-15% in hard construction costs.  

Navigating California’s HCAI 2030 seismic compliance requires a proactive, informed approach. In the face of increasing market volatility, capital costs and external pressures, it is important to employ robust early-stage project and cost management tools to achieve successful outcomes.   

Grant Gutenberg is a senior director of cost management specializing in healthcare with OCMI Inc. 

Conor Clarke is a vice president and director of West Coast cost management with OCMI Inc. 

OCMI Inc. supports owners, architects and engineers by providing cost certainty early in predesign and programmatic/conceptual preconstruction stages, arming key project stakeholders with critical information to make informed decisions. The company offers a guide that provides a more detailed guide on how to navigate the cost uncertainties of meeting HCAI seismic compliance.