on October 20, 1976, in Room 217, Winewood Building One, Tallahassee, Florida. Upon the agreement of the parties, the hearing was officially closed on the date of receipt of the transcript, which occurred on November 15, 1976, and it was further agreed that the hearing officer would submit her Order within thirty days of that date.
For Petitioner: John H. French, Jr.
For Respondent: Eric J. Haugdahl
At the commencement of the hearing, the parties stipulated that each had complied with the procedural requirements of state and federal law and that the only issue in this proceeding is the question of the need for petitioner's proposed facility in the proposed service area.
Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found:
On or about June 16, 1976, petitioner Frederick W. Campbell, M.D., Director of the proposed Kidneycare of Florida, submitted his application to respondent for the issuance of a certificate of need. The applicant proposes to organize as a nonprofit corporation to operate a freestanding hemodialysis
facility to provide maintenance dialysis for patients who qualify for care under the Medicare End-Stage Renal Disease Program. The proposed facility is to be located in north Tampa adjacent to both the College of Medicine of the University of South Florida and the University Community Hospital. The area proposed to be served includes the northern area of Hillsborough County, Pasco County and the western half of Polk County. A capital expenditure in the amount of $220,000.00 is proposed. The facility is to include ten stations or renal dialysis units. Six are to be available for chronic patients on an outpatient basis, two are for limited self care and two are to be used for training for home dialysis patients. In its application, petitioner proposed to operate eight patient stations six days per week on two, four hour shifts per day. The other two stations were proposed to operate on one shift six days a week. An estimated construction and operation time is six to nine months from the date of approval of petitioner's proposal.
The staff of the Florida Gulf Health Systems Agency, Inc. reviewed petitioner's application and recommended approval of the project. The staff found that need for the facility had been established based upon the assumption that two shifts per day or 3.6 patients per machine per week was the optimum for planning purposes. (Exhibit 4).
The Hillsborough Project Review Committee voted five to one to recommend disapproval of the application. This Committee found that only a marginal potential need for additional dialysis service had been demonstrated by the year 1978, and that such need could be met by the present facilities by increasing their operation to three shifts per day. (Exhibit 4).
By a vote of ten to seven, the governing body of the Florida Gulf Health Systems Agency, Inc. recommended to respondent that the application be approved. As a basis for this recommendation, it was found that a three shift operation was not a viable alternative and that there was a definite need based upon a two shift assumption by the year 1978. Accessibility, the offering of a service not presently available (home dialysis), duality of choice and lower costs were also factors supporting the recommendation of approval. (Exhibits 4 and 8).
At some time prior to respondent's letter of denial, respondent sought advice from the Florida Kidney Council and from a review panel of three nephrologists regarding petitioner's application. The response was a unanimous recommendation that the application be approved. (Exhibit 7).
By letter dated September 17, 1976, respondent notified petitioner that the proposal to construct a free standing hemodialysis center had not been favorably considered. Respondent found a lack of demonstrated need in the foreseeable future within the proposed service area. This conclusion was based upon the following assumptions: a current patient load of 151, 44 existing dialysis units having a current potential for treating 198 patients based on a factor of five patients per unit and a utilization rate of ninety percent. The factor of five was derived from the operation of three shifts three days a week and two shifts three days a week. Assuming a three shift operation six days a week, and a ninety percent utilization rate, respondent found an unused current capacity of 87 patients. With such findings, respondent concluded that:
"approval of additional dialysis units would be a duplication of existing, available, and under utilized hemodialysis units which are considered as sufficient in numbers to meet forseeable needs."
In computing these figures, respondent did not take into consideration the projected future growth of the patient population. (Exhibit 1).
In the proposed service area, three dialysis centers presently exist, excluding those at the Veterans Administration Hospital which serve veterans only. The dialysis unit at Tampa General Hospital has received approval to operate 14 stations, but is currently operating only 11. At the time of the hearing on this matter, there were approximately 54 patients being treated in this facility. Tampa General serves as a tertiary treatment center, treating acute as well as chronic patients. Bio-Medical Applications (BMA) of Tampa operates 20 stations and currently serves approximately 94 patients. The BMA facility in St. Petersburg, which opened in mid-September of 1976, operates 12 dialysis stations and has about twenty patients. Ten stations have been approved at Lakeland General Hospital in Polk County; however, such stations have not been placed into operation. An application is pending for six dialysis units in Brooksville, Hernando County. Other than the VA Hospital, none of the existing facilities currently provide training for home dialysis, although the BMA unit in St. Petersburg does anticipate home training capabilities.
The optimum utilization rate for renal dialysis units is ninety percent. A figure less than 100 percent is necessary due to patient complications, scheduling difficulties, staff vacations, breakdown of machinery and the length of dialysis required by each patient. A figure somewhat lower than 90 percent may be applied for hospitals serving acute and emergency patients.
The length of dialysis varies with the patient, as does the number of times per week the patient must dialyze. The average end-stage renal disease patient now dialyzes from four to six hours, three times a week. This is the amount of patient time normally required. The machine time is extended by thirty to sixty minutes to get it ready for operation and then to tear it down again after the patient is dialyzed.
The majority of evidence adduced at the hearing related to the number of patients per week who could be serviced on a single machine. This of course, is dependent upon the number of shifts utilized per day. If two shifts per day were in operation for six days per week, four persons per week could be dialyzed on that machine. A ninety percent utilization rate for that machine renders a figure of 3.6. If three shifts per day were in operation for six days a week, six persons could be dialyzed per week. Assuming a ninety percent utilization rate, a figure of 5.4 ensues.
All but one of the nephrologists who presented their views at the hearing thought that the operation of three shifts per day, in the absence of an absolute need for such operations, was totally unacceptable and incredible. Among their objections to the three shift operations were the following:
inconvenience to those patients assigned to the third shift, though it was admitted that some patients are employed, students or housewives and may prefer an evening shift;
many, if not most, patients do not feel normal or well enough to come out late at night to be dialyzed;
inasmuch as the federal government reimburses 90 percent of the patients on dialysis at a specific rate per dialysis, the patient cost is not affected by the number of times a machine is actually used;
the dialysis machines wear out more rapidly with three, as opposed to two, shifts;
flexibility in patient load and scheduling is hampered;
problems in staffing three shifts per day;
nephrologists do not think it practical to work three shifts a day and therefore if three shifts per day were required in this State,
nephrologists would be discouraged from coming into Florida; and
expansion of kidney care dialysis units would be deterred; and finally
neither the State Kidney Council nor the State Society of Nephrology have endorsed the three shift per day concept.
Tampa General Hospital presently operates its dialysis program on a three shift basis on three days a week, and two shifts the other three days. This renders a 90 percent utilization figure of 4.5 patients per machine. Although problems in staffing have occurred in the past, these problems have been solved. The first shift patient is put on the machine around 7:00 a.m. and the third shift patients come off the machines around 10:00 p.m. Members of the staff then clean up and they are out by 11:00 or 11:15 p.m.
The BMA unit in Tampa also operates three shifts per day, three days a week, with the first shift patients coming in at 6:30 a.m. and the last shift leaving at about 8:00 p.m. No real problems have been experienced in this operation. The BMA unit in St. Petersburg has not yet had the need to operate in three shifts. While the co-director of the dialysis units at both Tampa General and BMA was content to work with three shifts alternating with two every other day, he did not feel it medically or economically desirable to operate three shifts all six days of the week.
The "Analysis of Dialysis Needs - 1974-1979 contained in Appendix D of the Renal Disease Plan for Florida indicates that the annual statewide incidence rate for new end stage renal disease patients requiring dialysis is seventy per million. In South Florida, a higher rate of eighty per million is probable. These figures are somewhat higher than the national average due to a higher than average Florida population over age 65. (Exhibit 16, p. 64). Population figures derived from the University of Florida indicate an estimated 1977 population of the proposed service area of 1,677,700 and for 1978, 1,734,367. Through either successful transplantation or patient mortality, the number of persons requiring dialysis will be reduced by approximately 25 percent in any given year.
CONCLUSIONS OF LAW
As noted in the Introduction, the parties stipulated and the evidence substantiates that both petitioner and respondent timely complied with the procedural requirements of state and federal law. The remaining issue is the need for petitioner's facility in the service area and whether petitioner's facility would create an unnecessary duplication of existing facilities.
All nephrologists who testified at the hearing were in agreement that a three shift operation six days per week, which would service 5.4 persons per machine at a 90 percent utilization rate, would be undesirable from a medical standpoint. The variation in the testimony concerned the appropriateness of a two shift, six days a week operation versus a three shift operation alternating daily with a two shift operation. Applying a utilization rate of 90 percent, the former would give a service rate of 3.6 persons per machine per week, while the latter would yield a figure of 4.5 per week. In order to determine whether a need exists in the proposed service area for additional dialysis facilities, it is necessary to apply these figures to the projected number of patients who will require dialysis.
As of the date of the hearing, the existing number of patients at the three operating dialysis units was 168. Given the estimates that seventy out of 1,000,000 persons each year will require the use of dialysis and that the projected population of the service area for 1977 is 1,667,700, an additional
117 people will be patients for dialysis. Subtracting from this total (168 +
117) the mortality and successful transplantation figure of 25 percent, the total patient services required in 1977 will number 214. The stations presently available from the three existing units total 6. Using the figure of 3.6 as a unit factor (two shifts six days a week at a utilization rate of 90 percent), only 165 patients can be served by the existing 46 stations. Thus, 49 persons (214 - 165) are left with no means of dialysis from the existing facilities in the year 1977. The 4.5 unit factor yields a deficit of 7 and the 5.4 factor yields a surplus of 34 patients. Using the same method to project need for the year 1978 with an estimated population of 1,734,367, the total number of patients requiring service is 251. The 3.6 factor for the 46 machines yields a deficit of 86, the 4.5 a deficit of 44 and the 5.4 a deficit of 3. These figures make it clear that there is a need for new dialysis units in the service area by the year 1978 regardless of the unit or utilization factor considered.
The preponderance of the expert medical testimony presented at the hearing compels the conclusion that the most appropriate unit factor is 3.6 patients per machine per week. The figures cited above illustrate a pronounced need for additional units in the year 1977 if that figure is utilized. Even if the 4.5 figure is used, there will be a need in 1977 when a number of potential new patients is considered. This, coupled with the facts that it will take a minimum of six months to construct and begin operation of the facility and that the applicant intends to offer the service not presently offered in the area, leads the undersigned hearing officer to conclude that the application should be granted without further delay.
