STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BISCAYNE MEDICAL CENTER, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 77-2283

) STATE OF FLORIDA, DEPARTMENT OF ) HEALTH AND REHABILITATIVE )

SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Tallahassee, Florida, before the Division of Administrative Hearings, by its duly designated Hearing Officer, Robert T. Benton, II, on February 6, 1978. The parties were represented by counsel:

APPEARANCES

For Petitioner: Edward R. Rumin, Esquire

Adams and Adams

2870 East Oakland Park Boulevard Fort Lauderdale, Florida 33306

and

Milton E. McKay, Esquire

6502 Powers Ferry Road, Northwest Atlanta, Georgia 30339

For Respondent: Steven W. Huss, Esquire

1323 Winewood Boulevard, Room 309

Tallahassee, Florida 32301

Petitioner, owner of a general, acute care hospital in Dade County; made application for a certificate of need in connection with certain proposed expenditures incident to a plan "to relocate. . .[a] private office [radiotherapy] practice to a hospital setting." Joint exhibit No. 1. After the application was acted on unfavorably, petitioner sought a fair hearing, in accordance with Rule 10-5.12, Florida Administrative Code. The proceedings were transcribed and the transcript was furnished to the Division of Administrative Hearings on March 13, 1978.

FINDINGS OF FACT

1. Rubin Klein, M.D., dispenses radiation therapy treatments at his office in Hollywood, Broward County, Florida, just north of the Dade County line. He uses two cobalt machines for this purpose. Cobalt's radioactivity fades at an approximate rate of one percent per month, and at least one of Dr. Klein's machines has deteriorated to the point that it cannot be used much longer. Dr.

   Klein would like to see the failing machine replaced by a linear accelerator, but he does not want to bear the expense of acquiring a linear accelerator, particularly since his practice fell off sharply two or three years ago with the opening of a radiation therapy department at Hollywood Memorial Hospital.

   
   

2. Dr. Klein has offered to donate his equipment to petitioner, and petitioner proposes to accept Dr. Klein's donation of his better cobalt unit, to bear the expense of moving the cobalt unit, to acquire a linear accelerator, to construct an appropriate facility, and to install the equipment. Petitioner estimates that it would cost approximately eight hundred twenty-three thousand dollars ($823,000.00) to accomplish this. On the other hand, Dr. Klein estimates that it would cost approximately two hundred five thousand dollars ($205,000.00) to acquire a linear accelerator and to install it in his office. Once the physical changes which it proposes have been accomplished, petitioner proposes to hire Dr. Klein's office staff, including a full-time radiation physicist and two radiation therapy technicians.

   
   

3. In August of 1977, petitioner submitted its application for certificate of need, joint exhibit No. 1, receipt of which was acknowledged by Mr. Robert E. Straughn on behalf of the Office of Community Medical Facilities, on August 29, 1977. Joint exhibit No. 2. The staff of the Health Systems Agency of South Florida, Inc. prepared an analysis of petitioner's application, which concluded with a recommendation against approval of the application. Joint exhibit No. 4,

   p. 31. Because of petitioner's proximity to Broward County, the Health Systems Agency of South Florida, Inc. solicited the views of the Health Planning and Development Council for Broward County on petitioner's application, but these views were never made known.

   
   

4. A review committee of the Health Systems Agency of South Florida, Inc. voted against granting petitioner's application. In a memorandum from the review committee's chairperson to the Health Systems Agency's Board of Directors, the committee's reasons were stated as follows:

   
   

   1. Although this is a transfer and upgrade of existing equipment, it still represents excess capacity for the total community.

      
      

   2. The project does not foster cost containment since construction costs represent the expense of building a new unit. (The committee felt that such expense would be asking the community to absorb unnecessary costs.) Joint exhibit No. 7.

      
      

      On October 18, 1977, the Board of Directors of the Health Systems Agency of South Florida, Inc. adopted the staff's analysis and voted to recommend denial of petitioner's application because, inter alia, "[i]t is less costly to maintain the facility in its present location." Joint exhibit No. 8. On November 16, 1977, Mr. Art Forehand wrote petitioner that the Office of Community Medical Facilities had also reviewed the application and had also concluded that it should be denied. Joint exhibit No. 9.

      
      

5. Petitioner's hospital is located in Dade County on Biscayne Boulevard one fifth of a mile south of the Broward County line. Petitioner has six or seven oncologists on its medical staff and 20 percent of its beds are filled by cancer victims, half of whom receive radiation therapy. The demographic data suggest that cancer patients will continue to occupy petitioner's beds in like

   or greater numbers. Seventy-eight percent of petitioner's patients are 65 years old or older, an age group three or four times more vulnerable to cancer than the general population. As things now stand, petitioner's patients must leave the hospital in order to receive radiation therapy. This ordinarily necessitates transportation by ambulance. The cost for such transportation to Dr. Klein's office and back is sixty-five dollars ($65.00). Dr. Klein's office is four and one half miles from petitioner's hospital. Approximately three percent of Dr. Klein's patients are hospitalized at Biscayne Medical Center, Inc., and travel to and from his office by ambulance.

   
   

6. The practice of radiation medicine occurs more and more in hospitals rather than in radiologists' offices, and this trend is generally believed to be desirable. Tumors may be treated surgically or chemically instead of or in addition to being treated with radiation. Physicians sometimes disagree among themselves as to whether surgery, medicine or radiation is indicated in a given case. Petitioner's cancer patients would benefit from examination by a radiation oncologist as well as by other medical specialists. A cancer victim who presents himself at a radiologist's office may not have been examined beforehand by a medical oncologist or by a surgical oncologist; a cancer patient who has been admitted to a hospital is perhaps more likely to be examined by these specialists before a course of treatment is settled on. Chemotherapy and various heat treatments, which are more readily administered in a hospital setting, may enhance the beneficent effects of radiation in some cases. Hospitalization facilitates observation of patients and detection of untoward side effects. In practice, however, nine outpatients for every one inpatient "tends to be the normal spread for a radiation therapy department." (R326)

   
   

7. Radiation emitted from a linear accelerator can be focussed more sharply than radiation emitted from a cobalt unit. For Hodgkin's disease, certain pituitary and other disorders, a linear accelerator is a much better means of treatment than a cobalt unit is. Since radiation tends to destroy human tissue, whether diseased or healthy, the linear accelerator's relative precision can be a significant advantage in a wide range of cases. Treatment takes more time with a cobalt unit, especially one with a failing source of radiation. Dr. Klein estimates he could treat a fifth again as many people in the same time, with a linear accelerator.

   
   

8. What constitutes optimum utilization of radiotherapy equipment is a matter of debate. Dr. Richard Johnson testified that six to seven thousand patients annually constitute "the maximum you can give good treatment," (R153) apparently on the basis of a 35 hour work week. (Rl54) On the other hand, the staff of the Health Systems Agency of South Florida, Inc. used a 48 hour work week in its calculations and concluded that both Dade and Broward County have substantial excess capacity in radiotherapy equipment. Both Dade and Broward Counties do, in fact, have excess capacity in radiotherapy equipment.

   
   

9. On the assumption that Dr. Klein's practice would grow, if removed to petitioner's hospital, and on the assumption that Dr. Klein would charge (in addition to the hospital's charges) twenty dollars per procedure (which he indicated was the very minimum he might charge), Mr. Donald Dahlfues testified that the federal government might be billed less for the same number of treatments if Dr. Klein performed them in petitioner's hospital than if he performed them in his present office.

   
   

10. The foregoing findings of fact should be read in conjunction with the statement required by Stuckey's of Eastman, Georgia v. Department of

    Transportation, 340 So.2d 119 (Fla. 1st DCA 1976), which is attached as an appendix to the recommended order.

    
    

    CONCLUSIONS OF LAW

    
    

11. The criteria against which applications like petitioner's must be judged are set forth in state and federal regulations:

    
    

    1. Whether a proposed project is needed or projected as necessary to meet the needs in the community in terms of health services required: Provided, That projects for highly specialized services which will draw from patient population outside the community will receive appropriate consideration;

    2. Whether a proposed project can be adequately staffed and operated when completed;

    3. Whether a proposed capital expenditure is economically feasible and can be accommodated in the patient charge structure of the health care facility or health maintenance organization without unreasonable increases;

    4. Whether a project will foster cost containment or improved quality of care through improved efficiency and productivity, including promotion of cost-effective factors such as ambulatory care, preventive health care services, home health care, and design and construction economies, or through increased competition between different health services delivery systems. 42 CFR 51.4(1).

    1. The relationship of health services being proposed to the applicable Health Systems Plan, Annual Implementation Plan, and 1977 State Medical Facilities Plan adopted pursuant to section 1513(b)(2), 1513(b)(3), and 1603, respectively, of the Act.

    2. The relationship of health services proposed to the long-range development plan of the person providing or proposing such health services.

    3. The need that the population served or to be served has for such proposed health services.

    4. The availability of alternative, less costly, or more effective methods of providing such proposed health services.

    5. The immediate and long-term financial feasibility of the proposal.

    6. The relationship of the proposed health services to the existing health care system within the proposed service area.

    7. The availability of resources (including health manpower, management personnel, and funds for capital and operating needs) for the provision of the proposed services and the

       availability of alternative uses of such resources for the provision of other health services.

    8. The relationship of the proposed health services to ancillary or support services.

    9. Special needs and circumstances of those entities which provide a substantial portion of their services or resources, or both, to individuals not residing in the health services areas in which the entities are located or in adjacent health service areas. Such entities may include medical and other health professions schools,

    multi-disciplinary clinics, and centers for specialized services such as open heart surgery, radiation therapy, and renal transplantation.

    (12) In the case of a construction project:

    1. The costs and methods of the proposed construction including the costs and methods of energy provision; and

    2. The probable impact of the construction project proposed on the costs of providing health services by the person proposing the project.

    Rule 10-5.11, Florida Administrative Code.

    
    

    Petitioner's proposed project is not "necessary to meet the needs in the community in terms of health services required," 42 CFR 51.4(i)(1)(i), giving appropriate consideration to Broward County's needs. The evidence established that petitioner's proposed project could "be adequately staffed and operated when completed." 42 CFR 51.6(i)(1)(ii). Increased costs to consumers, while not dramatic, would nonetheless be "unreasonable increases," 42 CFR 51.4(i)(1)(iii), in the sense of being unnecessary. Relocating Dr. Klein's practice in petitioner's hospital would not "foster cost containment." 42 CFR 51.4(1)(1)(iv).

    
    

12. With the exception of Rule 10-5.11 Florida Administrative Code, itself, there is no state plan or guideline with respect to radiation therapy services. According to petitioner's application, its own "long range plan is currently being developed." Joint exhibit No. 1, p. 14. At the present time there is no unmet need in Dade or Broward Counties for radiation therapy equipment. The services petitioner proposes could be made available at less cost at Dr. Klein's office. The proposed relocation would, however, have "immediate and long-term financial feasibility." Rule 10-5.11(5), Florida Administrative Code.

    
    

13. Petitioner's proposed services would mesh with "the existing health care system within the proposed service area," Rule 10-5.11(6), Florida Administrative Code, and with "ancillary or support services." Rule 10-5.11(8), Florida Administrative Code. While personnel and other resources would be available for relocation as proposed by petitioner, they are already assembled at much less cost less than five miles from petitioner's hospital.

RECOMMENDATION

Upon consideration of the foregoing, it is RECOMMENDED:

That respondent deny petitioner's application for certificate of need. DONE and ENTERED this 17th day of April, 1978, in Tallahassee, Florida.

ROBERT T. BENTON, II

Hearing Officer

Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 17th day of April, 1978.

APPENDIX

Paragraphs one, two, three, four, five, six, seven, eight, nine, ten, eleven, fourteen, fifteen, and nineteen of petitioner's proposed findings of fact are generally supported by the evidence and have largely been adopted, in substance, insofar as relevant.

Paragraph thirteen of petitioner's proposed findings of fact recites an "optimum accepted utilization rate" which was not established by the evidence.

Paragraph sixteen of petitioner's proposed findings of fact is not supported by the evidence and has not been adopted for that reason. One of petitioner's witnesses indicated that 90 percent of the anticipated use of the equipment would be on an outpatient basis. While another of petitioner's witnesses claimed that hospital bed time would be reduced in some cases, petitioner's administrator is looking to "increased inpatient days as a result of having the equipment" (R43) to help defray the cost of the equipment.

Paragraph seventeen of petitioner's proposed findings of fact states a debatable policy conclusion rather than a fact established by the evidence at the hearing.

Paragraphs eighteen, twenty and twenty-one of petitioner's proposed findings of fact are not supported by the evidence as a whole and have not been adopted for that reason.

Paragraphs one, three, four, five, six, seven, eight, nine, ten, thirteen, fourteen, sixteen, seventeen, eighteen, nineteen and twenty-one of respondent's proposed findings of fact are generally supported by the evidence and have largely been adopted, in substance.

COPIES FURNISHED:

Edward R. Rumin, Esquire Adams and Adams

2870 East Oakland Park Boulevard Fort Lauderdale, Florida 33306

Milton E. McRay, Esquire

6502 Powers Ferry Road, N. W. Atlanta, Georgia 30339

Steven W. Boss, Esquire 1323 Winewood Boulevard

Room 309

Tallahassee, Florida 32301

Docket for Case No: 77-002283

Orders for Case No: 77-002283