Hospitals try to recover from unfortunate events.

In January, for three days, there were no acute care beds for adults anywhere in the San Fernando Valley. Every one was taken. Doctors with patients recovering from surgery or suffering from a particularly bad case of the flu had nowhere to send them; they were forced to call hospitals in other

For Arnold Schaffer, CEO of Providence Saint Joseph and Providence Holy Cross in Burbank and Mission Hills, respectively, the experience was a perfect illustration of just how bad things are getting for local hospitals.

"I had doctors calling me up and begging me for beds. I'm just a white collar worker, I'm the CEO but I can't free up a bed," said Schaffer. "They were calling me from all over town, saying 'there are patients in my office, I have to put them somewhere.' Even though I knew it was bad, in January of this year I really had a very large professional and emotional reaction."

Schaffer said the worst part about the lack of beds in January was the tact that there was no particular crisis facing hospitals at the time, the flu season wasn't very bad this past year, the crisis was simply a reaction to the dwindling number of hospitals in the Valley. Should we ever face a serious crisis like another earthquake or a terrorist attack, Schaffer said, we simply won't have the capacity to deal with it.

The costs plaguing hospitals are familiar. After the 1994 earthquake, the state passed laws requiring California hospitals to spend billions of dollars to improve seismic standards. A law passed requiring hospitals to have specific number of nurses for every patient also hit budgets hard by driving up nurse salaries, hospital administrators say. MediCal reimbursement rates that are among the lowest in the state make it impossible for hospitals to cover the state's poorest residents without losing money, administrators claim.

Most hospitals, even the largest ones able to secure good reimbursement rates from private health plans, are forced to turn to capital raising campaigns in order to expand their services or purchase the newest technology. Right now, Providence is relying heavily on charity in order to pay for two expansion projects. Providence is in the early stages of a $33.1 million campaign to pay for a cancer center at St. Joseph's, and Holy Cross is kicking off a $7.5 million campaign to expand its emergency room.