Probabilistic Estimation of Earthquake Losses for Acute Care Hospitals in California

Abstract eng:
Recent seismic performance evaluations of acute care hospital buildings in the state of California show that a considerable percentage of such hospitals have extremely high potential risk of collapse or significant loss of life in the event of a strong earthquake. One of the major challenges in seismically upgrading these facilities is the highly expensive reconstruction costs of hospitals. One possible financial resource to pay for the high costs of reconstruction is to use the reduction in the hospitals pure premium for earthquake insurance once they are upgraded. In this study the level of reduction in the average annual losses for a group of hospitals located in California is quantified. To estimate losses of the hospital facilities an earthquake model that is recently developed at the Risk Management Solutions, Inc. (RMS) and is released as part of the RMS 2008 release is used. The developed model is based on the latest research publications on performance-based earthquake engineering and in particular the performance of hospital equipment during earthquakes. It is found that upgrading poor performing hospital facilities can lead to major savings in the earthquake pure premium of such hospitals. It is suggested that the savings in the level of expected losses as a result of upgrading hospitals are taken into account when conducting feasibility studies on hospital reconstruction.

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