STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
BROOKWOOD MEDICAL CENTER OF LAKE ) CITY, INC. d/b/a LAKE CITY )
MEDICAL CENTER, )
)
Petitioner, )
)
vs. ) CASE NO. 81-022
) OFFICE OF COMMUNITY MEDICAL ) FACILITIES, DEPARTMENT OF HEALTH ) AND REHABILITATIVE SERVICES, )
)
Respondent, )
and )
)
LAKE SHORE HOSPITAL, )
)
Intervenor. )
)
RECOMMENDED ORDER
Pursuant to notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, on April
, 1981, in Tallahassee, Florida. Transcripts of the hearing were received on June 3, 1981, and the parties' memoranda and proposed findings and conclusions were received on July 17, 20 and 21, 1981. The issue for determination at the hearing was whether petitioner is entitled to a Certificate of Need to construct and operate a 6-bed intensive/coronary care unit at its facility in Lake City, Columbia County, Florida.
APPEARANCES
For Petitioner: John H. French, Jr.
Messer, Rhodes and Vickers Post Office Box 1876 Tallahassee, Florida 32302
For Respondent: Donna H. Stinson
General Counsel
1323 Winewood Boulevard
Tallahassee, Florida 32301
For Intervenor: Jon C. Moyle and
Thomas A. Sheehan, III
Moyle, Jones and Flannagan, P.A. 707 North Flagler Drive
Post Office Box 3888
West Palm Beach, Florida 33402 INTRODUCTION
By "Petition for Formal Hearing," petitioner originally challenged the denial by the Department of Health and Rehabilitative Services of its application for a Certificate of Need to expand its surgical suite by the addition of one operating room, to establish a 24-hour staffed emergency room and to construct a 6-bed intensive care/coronary care unit. By notice filed at the commencement of the hearing on April 6, 1981, the petitioner dismissed its requests for a second operating room and for a staffed emergency room. The cause thus proceeded to hearing on the sole issue of the petitioner's request for a Certificate of Need to construct and operate the 6-bed intensive care/coronary care unit.
At the hearing, the petitioner presented the testimony of seven witnesses and its Exhibits 1 through 11 were received into evidence. Witnesses testifying on behalf of the petitioner were Kerry G. Teel, petitioner's Regional Director and the Acting Administrator of Lake City Medical Center; Roger J. Marino, Nanjunda Swamy, Barney Vanzant and Richard L. Wright, medical doctors on petitioner's staff; Ronald Elliott, petitioner's Regional Comptroller; and E. R. Woodward, M.D., Chairman of the Department of Surgery at the University of Florida College of Medicine. The respondent Department of Health and Rehabilitative Services presented the testimony of Thomas J. Sanders, Director of Project Review at the North Central Florida Health Planning Council, Inc., and Gary Clarke, the respondent's Assistant Secretary of Health Planning and Development. The respondent's Exhibits 1 through 3 were received into evidence. The intervenor Lake Shore Hospital presented the testimony of James Conn, M.D., a surgeon and consultant to the Department of Health and Rehabilitative Services; Berney McRae, Jr., M.D., the intervenor's Chief of Staff; Don Foreman, a Certified Public Accountant; Jane Cramer, R.N., the Intervenor's Nursing Director; Alyce Caesar, a member of intervenor's Board of Trustees; John Knight, the Intervenor's Director; and Jay Henry Sanders, M.D.; the Director of Medical Affairs at Mt. Sinai Hospital. The intervenor's Exhibits 1 through 6 were received into evidence.
Subsequent to the hearing, the respondent filed a memorandum of law and the petitioner and intervenor filed proposed findings of fact and proposed conclusions of law. To the extent that the parties' proposed findings of fact are not included in this Recommended Order, they are rejected as being either not supported by competent substantial evidence, irrelevant or immaterial to the issues in dispute or as constituting conclusions of law as opposed to findings of fact.
FINDINGS OF FACT
Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found:
The petitioner Brookwood Medical Center of Lake City, Inc., d/b/a Lake City Medical Center (hereinafter referred to as LCMC) is a 75-bed acute care hospital, which presently has 65 medical/surgical beds and 10 alcohol treatment beds. Plans are under way to convert 10 of the medical/surgical beds to a psychiatric unit with 10 beds. LCMC primarily serves Columbia County, a primarily rural community with a population of 34,625, and derives 74 percent of its patients therefrom. The remaining 261 of its admissions come from the surrounding counties of Hamilton, Lafayette and Suwannee. Approximately 60 percent of its patients are sixty years of age or older. The source of reimbursement for the year 1980 was 40 percent Medicare, 8 percent Medicaid, 8 percent indigent or bad debt, and the remaining portion from other third-party
payors. The current occupancy rate at LCMC is approximately 502 or 37.5 patients per day. Seasonal trends cause this figure to vary between 32 and
37.5. The daily census is expected to increase over the next year due to the planned addition of four new programs. These include the ten-bed psychiatric unit for which a Certificate of Need application is pending, an industrial medical and occupational health program which would provide on-site care to employees and their family members, the recruitment of an internist/cardiologist and the recruitment of an ophthalmologist. It is projected that the proposed new psychiatric unit will add eight patients to LCMC's daily census, the industrial health program will add 2.5 patients per day as well as outpatients, and that the internist/cardiologist will generate five patients per day. Psychiatric beds are less likely to generate intensive care patients than medical/surgical beds. It is expected that LCMC's program of expansion will change the mix of the primary and secondary service areas and will increase the average daily census to 42.5 by the end of 1981.
Petitioner presently has a nursing staff of 48 and a medical staff of
Of its medical staff, 13 are listed as active, 4 as courtesy, 4 as consulting and one with temporary privileges. LCMC has one operating room, no emergency room, and no intensive care/cardiac care unit (also referred to as IC/CCU). On an average basis, it is estimated that from ten to twelve surgical procedures per week are performed at LCMC. In 1980, 468 surgical procedures were performed. For the first quarter of 1981, the busiest time of the year,
156 surgical procedures were performed. Petitioner does have a step-down unit or a progressive care unit (also referred to as PCU) with four beds. The current utilization of the PCU is 2.7 patients per day, with a 50 percent medical component and a 50 percent surgical component. If petitioner's application for a Certificate of Need were granted, LCMC's PCU would be converted to an IC/CCU with invasive monitoring capabilities and patients who currently receive treatment in the PCU would be treated in the new IC/CCU. The current patient charge for the PCU is $111.00 per day. LCMC proposes an IC/CCU charge of $250.00 per day.
Petitioner estimates that 8 percent of its patients would need and use an IC/CCU, and that, for the first year of operation, the IC/CCU would have a daily census of 3.5 patients. For the second year of operation, a daily patient census of 4.5 is projected. The projected daily utilization of over 50 percent is not consistent with actual utilization achieved in the IC/CCUs of other hospitals in the area.
The prime concept of an IC/CCU is to provide more intensive nursing care and monitoring capabilities for unstable medical and surgical patients. The majority of admissions to an IC/CCU come from the emergency room and the second largest source is from the operating room after surgery. While some physicians feel that no physician or acute care facility should be without an IC/CCU, that all post-operative patients should be monitored in an ICU and that it is not good practice to transport an unstable patient under any circumstances, others disagree. These physicians, while agreeing that all hospitals need some form of life support capability, feel that for general routine surgery, only a very small percentage of patients are in need of an intensive care unit. It is possible to reduce the need for an intensive care unit by screening patients prior to surgery. A recovery room and/or a progressive care unit can provide the routine noninvasive monitoring and more intensive nursing care and observation needed by many medical and surgical patients. The use of a recovery room for critical care patients does pose serious problems due to the exposure to additional commotion and the potential mixing of well surgical patients with septic unstable patients. It is better
medical practice to have separate personnel for infectious and noninfectious patients. The transfer of an unstable patient to another facility can pose serious risk to the patient.
The intervenor Lake Shore Hospital (also referred to as LSH) is located approximately 1.5 miles from the petitioner. Lake Shore Hospital is a full- service, acute care, public hospital with 128 beds, an emergency room and a 9- bed IC/CCU. LSH has had an IC/CCU since 1970 or 1971. More than 50 percent of its intensive care patients come from its emergency room. Approximately 1600 surgical operations per year are performed at LSH. The IC/CCU at LSH provides basic noninvasive monitoring equipment connected to the patient's bedside and the nurses' stations. It does not presently have Swans-Ganz monitoring equipment, an invasive device which measures a patient's hemodynamics. The wiring and other equipment for two such monitoring capabilities are in place and, with the addition of a module and transducer for each unit, two units can be installed for a cost of approximately $4,400.00. At the present time, no one in Lake City has the extensive training required to utilize the Swans-Ganz monitoring equipment. LSH is in the recruitment process and plans to purchase and install this equipment when a cardiologist or other trained specialist is recruited. The IC/CCU at LSH experiences an occupancy rate of 3.5 patients per day, or 35 percent of its capacity. It has only achieved full capacity on two occasions in the ten years of its existence. Lake Shore Hospital presently charges $275.00 per day for the use of its IC/CCU. If it were to lose one patient per day, LSH would lose approximately $100,000.00 per year in revenue. Such a loss could result in either increased taxes or increased patient charges. In spite of the fact that several major admittors to LCMC and LSH have their offices at LCMC, It was their testimony that were a Certificate of Need granted to LCMC for an IC/CCU, they would continue to admit and refer patients to both facilities.
Lake Shore Hospital has a medical staff of 22 or 23 specialists and nonspecialists. Of this number, all but one are also on the staff of Lake City Medical Center. The PCU at LCMC and the IC/CCU at LSH are presently comparable. While the nursing staff at Lake Shore's IC/CCU is better trained, at least one physician who practices at both hospitals felt that the same level of care could presently be obtained at LCMC's PCU as at LSH's IC/CCU. This is due to the fact that LSH does not now have the invasive monitoring capabilities felt to be essential to an IC/CCU. The traditional difference between a PCU and an IC/CCU is the degree of training of the nursing staff and the sophistication of the equipment.
Underutilization of an IC/CCU can have an adverse effect upon the quality of care provided. One of the most important aspects of an intensive care unit is superior trained personnel. A reduction in patient use obviously reduces the personnel's exposure to complications and skills become dull. Thus, a reduction in patients reduces the quality of care.
There is presently a shortage of nurses in the Lake City area. Lake Shore Hospital presently has 8 nursing vacancies and has been actively recruiting to fill those vacancies. In order to operate its proposed IC/CCU, LCMC would have to employ two full-time equivalent nurses with training in that area.
The petitioner projects the cost of its requested IC/CCU to be
$240,000.00. In 1979, LCMC ran a deficit of $1 million, the sixth largest loss in the State. In 1980, the deficit was $390,000.00. LCMC is presently experiencing a positive cash flow for 1981. It appears that LCMC anticipates
the proposed IC/CCU to be a profit-making venture and projects that, if its presumptions are true with respect to patient use, the project will be financially feasible. At the time of the hearing, negotiations were under way for the sale of petitioner to another entity.
The reviewing Health Systems Agency, the North Central Florida Health Planning Council, Inc. (NCFHPC), unanimously denied the petitioner's request for an IC/CCU at every level of the review process.
The 1981-1985 Health Systems Plan for the NCFHPC contains certain criteria and standards for intensive and coronary care units which should he met within five years of operation. Two of the criteria are that an IC/CCU should have an average annual occupancy rate of 80 percent and that an IC/CCU should be available within one hour's (one-way) travel time of 95 percent of the region's residents. As noted above, LSH is approximately 1.5 miles away from LCMC. Lake City is 45 miles from Gainesville and 65 miles from Jacksonville with interstate highways connecting these cities. With an optimal utilization rate of 80 percent, it is projected that 8.5 IC/CCU beds are needed in the planning area in 1980, and, by 1985, there will be a need for 9 beds. There are presently 15 IC/CCU beds in the Level 2 planning area, which includes Lafayette, Suwannee, Hamilton and Columbia Counties.
Of the licensed 212 acute care medical/surgical hospitals in Florida,
22 or 10 percent do not have intensive or coronary care units. The approximate bed size of most of these facilities is 50.
CONCLUSIONS OF LAW
An application for a Certificate of Need for health care facilities and services must be considered according to the criteria set forth in Section 381.494(6)(c), Florida Statutes, and the counterpartial provisions of Rule 10- 5.11, Florida Administrative Code. The pertinent criteria to be considered in this case, as stipulated by the parties, are the following:
The need for the health care facilities and services and hospices being proposed
in relation to the applicable health systems plan, annual implementation plan, and state health plan adopted pursuant to Title XV
of the Public Health Service Act, except in emergency circumstances which pose a threat to the public health.
The availability, quality of care, effi- ciency, appropriateness, accessibility, extent of utilization, and adequacy of like and exist- ing health care services and hospices in the applicant's health service area.
5. The need in the applicant's health service area for special equipment and services which are not reasonably and economically accessible in adjoining areas.
The availability of resources, including health manpower, management personnel, and funds for capital and operating expenditures,
for project accomplishment and operation; the effects the project will have on clinical needs of health professional training programs in the
service area; the extent to which the services will be accessible to schools for health professions in the service area for training purposes if such services are available in a limited number of facilities; the availability of alternative uses
of such resources for the provision of other health services; and the extent to which the
proposed services will be accessible to all residents of the service area.
The immediate and long-term financial feasibility of the proposal.
11. The probable impact of the proposed project on the costs of providing health services proposed
by the applicant, upon consideration of factors in- cluding, but not limited to, the effects of competition on the supply of health services being proposed and the improvements or innovations in the financing and delivery of health services which foster competition and service to promote quality assurance and cost- effectiveness.
The prime purpose of the Certificate of Need law is to eliminate the unnecessary duplication of existing health services within the boundaries of an acceptable level of quality, accessibility and efficiency of health care. As can be seen from a review of the above criteria, the need for a health service must be looked at on a community-wide basis, rather than an institution-specific basis.
The first criterion contained in Section 381.494(6)(c) 1, Florida Statutes, is the need for the service in relation to the applicable health systems plan. Here, the applicable NCFHPC Health Systems Plan states that an IC/CCU should be available within one hour's driving time of 95 percent of the population and that an optimal occupancy rate of 80 percent should be achieved. Lake Shore Hospital has an IC/CCU just over one mile from the petitioner's facility and its occupancy rate is approximately 35 percent. It is doubtful that LCMC could achieve an occupancy rate of 80 percent when a larger facility, which performs some three to four times more surgeries per year and has an emergency room, has an underutilized IC/CCU after some ten years of operation. According to the respondent's witnesses, the area is already overbedded by six IC/CCU beds up to the year 1985. The proposed project is inconsistent with the applicable health systems plan.
The next two criteria, subparagraphs 2 and 5 of Section 381.494(6)(c), Florida Statutes, address the availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization and adequacy of like and existing services in the area and the need for inaccessible special services. Intensive care services are available at LSH and are currently underutilized. With the exception of the absence of sophisticated invasive monitoring equipment, there has been no suggestion by petitioner that the services provided at LSH are inaccessible, unavailable, inefficient or inadequate. It was established that the lack of invasive monitoring capability at LSH is due to the lack of trained personnel in the area to utilize such equipment. LSH is prepared to install the Swans-Ganz equipment as soon as trained personnel are
recruited. It would appear to be more cost-effective to install the two units at LSH at an expense of $4,400.00 than to construct a new IC/CCU at LCMC at an expense of $240,000.00.
Petitioner contends that an intensive care unit is an integral part of modern medicine and that every acute care hospital, regardless of size, should have an IC/CCU with invasive capabilities. Certainly, the most modern equipment which will provide the most effective patient care is desirable for every health care facility. However, the recognition of health planning laws is that not every piece of sophisticated equipment or technology can be provided by every health care facility. The increased quality of care offered by one facility must be balanced against the adverse impact upon existing facilities and the costs to the community.
The criteria contained in Section 381.494(6)(c) 7 and 8, Florida Statutes, relate to the availability of manpower and funds for the proposed project. With the financial difficulties experienced by petitioner over the past few years, it is somewhat doubtful that adequate funds are available for capital and operating expenditures associated with an IC/CCU at LCMC. The intentions of petitioner to implement new programs and purchase equipment must he viewed in light of the pending negotiations for the sale of petitioner's corporation. It is concluded that petitioner has failed to adequately demonstrate that the proposed project would he financially feasible. The shortage of nurses in the Lake City area may also present a problem with manpower availability for both LCMC and the competing unit at LSH.
The remaining criterion contained in Section 381.494 (6)(c) 11, Florida Statutes, deals with the effect of competition on quality of service and cost-effectiveness. While the proposed charge of LCMC's IC/CCU is $25.00 less per day than that of LSH, it has not been adequately demonstrated that the quality of care to be offered justifies the increase of $139.00 from what is presently being charged in LCMC's progressive care unit. A duplicative IC/CCU at LCMC would not be cost-effective and would increase the cost of patient care in the community. It seems probable that some drain of patients from LSH would occur if LCMC's application were granted. Petitioner has no emergency room, which is the largest source of patients for intensive care. Neither its planned psychiatric unit nor its alcohol treatment beds will generate intensive care patients. Surgery patients can be screened and higher-risk surgery can be performed elsewhere if necessary. An IC/CCU at LCMC would intensify competition for trained nursing staff, would decrease the quality of patient care at LSH and would unnecessarily increase health care costs. Existing services at Lake Shore Hospital provide appropriate, adequate and accessible health care. The only special services needed in the area, the Swans-Ganz equipment, is lacking because of a lack of trained personnel in the area, and petitioner has not demonstrated that it, rather than LSH, will immediately be able to fill that void.
Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that petitioner's application for a Certificate of Need to construct and operate an intensive care/coronary care unit at Lake City Medical Center be DENIED.
Respectfully submitted and entered this 7th day of August, 1981, in Tallahassee, Florida.
DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 7th day of August, 1981.
COPIES FURNISHED:
John H. French, Jr. Messer, Rhodes and Vickers Post Office Box 1876
Tallahassee, Florida 32301
Donna H. Stinson General Counsel Department of HRS
1323 Winewood Boulevard
Tallahassee, Florida 32301
Jon Moyle and Thomas Sheehan, III
Moyle, Jones and Flannagan, P.A. 707 North Flagler Drive
Post Office Box 3888
West Palm Beach, Florida 33402
Honorable Alvin J. Taylor Secretary, Department of HRS 1323 Winewood Boulevard
Tallahassee, Florida 32301
Issue Date | Proceedings |
---|---|
Sep. 22, 1981 | Final Order filed. |
Aug. 07, 1981 | Recommended Order sent out. CASE CLOSED. |
Issue Date | Document | Summary |
---|---|---|
Sep. 18, 1981 | Agency Final Order | |
Aug. 07, 1981 | Recommended Order | Petitioner didn't meet criteria for Certificate of Need (CON) for Intensive Care Unit (ICU)/emergency room addition. There is no need in community, economically not feasible. |