Earthquake impact still being felt as new projects start. (Health Care).

THE Northridge earthquake is turning Out to be a big driver of change in the region's hospital industry.

Ground will break next month on a project to transform the downtown campus of Los Angeles Orthopaedic Hospital, which suffered structural damage in the 1994 earthquake.

The 91-year-old non-profit received $32.3 million from the Federal Emergency Management Agency for the $80 million project. The rest is coming from bonds being repaid by a capital campaign.

The transformation will move the hospital's inpatient services to the west side, where it will be housed in a wing of the new Santa Monica-UCLA Medical Center and Orthopaedic Hospital under an agreement the hospital has struck with the university. That facility, another recipient of FEMA funds, is under construction and slated for completion in 2005.

The downtown campus, meanwhile, will be converted into an expanded outpatient clinic, a pediatric dental clinic and a medical magnet high school of the Los Angeles Unified School District.

The project will allow the orthopedic medical center's physical plant to catch up with technological advances and the state of medicine today, in which 60 percent of orthopedic procedures are done on an outpatient basis.

While the project will expand the hospital's services, it is also projected to lower its annual $27 million in operating costs, since its inpatient facility will now be part of a larger hospital.

Other construction projects that have received big federal funding after the earthquake include the new Los Angeles County-USC Medical Center, which received over $400 million in federal funds.