"Substandard" means less than the norm. According to the article, there were insects and rodents at the hospital, which is certainly not acceptable at any medical facility. Therefore, the conditions were substandard.
"Substandard" can also describe something that is less than what a person is accustomed to. For example, for many years I attended a convention in Southport, England, at a Holiday Camp. The first time I went there and checked into my room, I turned on the light switch and nothing happened. I reported it to the management, who asked me "Did you put a coin in the meter?" Meter? What meter? It turns out there was an electricity meter that you had to put coins in if you wanted lights, heat or hot water. Well, in the US such a place would not be able to get a license as a public accommodation (any facility that charges money to house people must provide electricity at no extra cost). So I was not accustomed to such an arrangement, and to me, it was substandard.