Judges: R. L. CALEEN, JR.
Agency: Agency for Health Care Administration
Latest Update: Jul. 12, 1983
Summary: Whether, under Section 381.494-381.499, Florida Statutes, Humana, Inc., d/b/a Kendall Community Hospital, is entitled to a Certificate of Need to construct a 150-bed acute care hospital in the west Kendall area of south Dade County, Florida.Certificate of Need (CON) for fifty-bed acute care hospital where there were already underutilized hospitals in the area and proposed hospital would hurt the existing hospitals.
82-0071.PDFSTATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
HUMANA INC.,d/b/a ) KENDALL COMMUNITY HOSPITAL, )
)
Petitioner, )
)
vs. ) CASE NO. 82-071
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent, )
and )
) BAPTIST HOSPITAL OF MIAMI, INC., ) and AMERICAN HOSPITAL OF MIAMI, ) INC., d/b/a AMERICAN HOSPITAL, )
)
Intervenors. )
)
RECOMMENDED ORDER
Pursuant to notice, an administrative hearing was held before R. L. Caleen, Jr., Hearing Officer with the Division of Administrative Hearings, from December
7 through 10, 1982, in Tallahassee, and on December 13 and 14, 1982 in Miami, Florida.
APPEARANCES
For Petitioner: John H. French, Esquire
James C. Hauser, Esquire Messer, Rhodes & Vickers
701 Lewis State Bank Building Tallahassee, Florida 32302
For Respondent James M. Barclay, Esquire
DHRS: Office of Community Medical Facilities Department of Health and
Rehabilitative Services 1317 Winewood Boulevard
Building 2, Suite 220
Tallahassee, Florida 32301
For Intervenor Kyle R. Saxon, Esquire Baptist Paige and Catlin
Hospital: 800 Alfred I. DuPont Building
Miami, Florida 33131
For Intervenor Barry G. Craig, Esquire American Michael Cook, Esquire Hospital: Wood, Lucksinger & Epstein
Park Place II, Suite 200 Miami, Florida 33146
ISSUE
Whether, under Section 381.494-381.499, Florida Statutes, Humana, Inc., d/b/a Kendall Community Hospital, is entitled to a Certificate of Need to construct a 150-bed acute care hospital in the west Kendall area of south Dade County, Florida.
INTRODUCTION
On December 30, 1981, Humana, Inc., d/b/a Kendall Community Hospital ("HUMANA") requested a Section 120.57(1) hearing on the Department of Health and Rehabilitative Services' ("DHRS") denial of its application for a Certificate of Need to build a 150-bed hospital in the Kendall area of south Dade County, Florida.
On January 8, 1982, DHRS forwarded this case to the Division of Administrative Hearings for assignment of a hearing officer. Thereafter, Baptist Hospital of Miami, Inc. ("BAPTIST HOSPITAL" or "BAPTIST") and American Hospital of Miami, Inc., d/b/a American Hospital ("AMERICAN HOSPITAL" or "AMERICAN") timely filed petitions to intervene, which were granted. Final hearing was initially set for July, 1982, then, on intervenors motions, reset for December, 1982.
The parties filed a Joint Prehearing Stipulation which identified their respective positions, limited the applicability of specific portions of Section 381.494(6)(c) Florida Statutes (Supp. 1982), and listed admitted facts.
At hearing, various witnesses testified and HUMANA's Exhibit Nos. 1-14, DHRS's Exhibit Nos. 1-2 and 4, AMERICAN HOSPITAL's Exhibit Nos. 1-9, and BAPTIST HOSPITAL's Exhibit Nos. 1-10 were received into evidence.
The transcript of hearing was filed on February 11, 1983. References to the transcript will be indicated as (TR p. ) or (TR-VOL , p. ).
References to the Stipulation will be indicated as (STIP- ). And references to exhibits will be indicated as (Party Ex.- ), with the parties names abbreviated: HUMANA (HU); BAPTIST HOSPITAL (BH); and AMERICAN HOSPITAL (AM).
The parties filed posthearing findings of fact and conclusions of law, with accompanying memoranda, by March 29, 1983.
Based on the evidence presented at hearing, the following facts are determined:
Humana's Proposal
FINDINGS OF FACT I.
BACKGROUND
HUMANA is an investor-owned, multi-institutional hospital system which owns and operates more than 90 hospitals, most of which are medical/surgical facilities. (DHRS Ex.1, p.10).
HUMANA applied for a Certificate of Need from DHRS to construct a 150- bed acute care community hospital in the west Kendall area of south Dade County, Florida. The specific area to be served is bounded on Miller Drive to the north, southwest 177th Avenue to the west, Coral Reef Drive to the south, and Calloway Road to the east.
The proposed 150-bed hospital includes 100 medical/surgical beds, 20 pediatric beds, 20 Level II obstetric beds, 10 intensive care/critical beds, and a Level II nursery in conjunction with the obstetric unit. (TR 277). The proposal includes a 24-hour, physician-staffed emergency room and a "dedicated" outpatient surgery department, with separate recovery room. Surgery suites are specifically designed and reserved only for outpatient surgery, thereby facilitating outpatient scheduling and efficient operations. (TR 279). The outpatient surgery unit is intended to reduce the costs of health care by providing a cost-effective alternative modality of health care delivery. (TR 278). Finally, the proposal contemplates a full-body CT Scanner, digital radiography and general state-of-the-art ancillary equipment. (TR 278).
If built, it would be the westernmost hospital in south Dade County. It is a "community" hospital, designed to provide hospital care to the rapidly growing population of the west Kendall area, but not serve as a major referral center for patients living elsewhere. (DHRS Ex. 1, pp. 32-34; TR 250, 280).
The local health planning agency, then the Health Systems Agency ("HSA") of South Florida, Inc., 1/ reviewed HUMANA's application for a Certificate of Need, along with four other similar applications, and recommended that all five be denied because of asserted inconsistency with the HSA's Health System Plan. ("HSP") 2/ (DHRS Ex. 1, TR 77).
The applications were then submitted to DHRS, the single state agency empowered to issue or deny Certificates of Need. 381.493(3)(a) and 381.494(8), Fla.Stat. (Supp. 1982). DHRS reviewed the HSA recommendation, conducted its own evaluation, and then denied all five applications, including HUMANA's. DHRS concluded:
None of the five proposed projects are in compliance with the adopted Goals, Criteria, Standards and Policies of the Health Systems Agency of South Florida, as stated in the Health Systems Plan (HSP) and Annual Implementation Plan (AIP).
A need to add acute care hospital beds to Dade County does not exist at the present time.
The proposed projects would add to excess capacity and underutilization of hospital beds that now exist in Dade County. There are only five hospitals in Dade County that are at the recommended occupancy level of 80 percent based on licensed beds (none of which are located in South Dade), and the number of beds per 1000 population.
The primary alternative would be not to construct any of the proposed projects.
While all of the proposed projects represent some degree of financial feasibility, none are felt to be cost effective because increased bed capacity would result in costs and revenue higher than those projected for existing "High Cost" hospitals in 1984 as determined by the Hospital Cost Containment Board.
(DHRS Ex. 1, p. 404)
Thereafter, HUMANA timely instituted Section 120.57(1) proceedings challenging DHRS's denial; HUMANA's standing to do so is uncontested.
HUMANA's position, maintained throughout, is that its proposed 150-bed hospital satisfies every legal criterion for the issuance of the applied-for Certificate of Need.
Intervenor Baptist Hospital
Intervenor BAPTIST HOSPITAL will be substantially affected if HUMANA is granted a Certificate of Need. BAPTIST is a fully licensed and accredited 513- bed, general acute care hospital located within HUMANA's proposed service area, at 8900 North Kendall Drive, Miami, Florida. (STIP-para. 8).
If the proposed hospital is built, it would significantly and adversely affect the patient census and revenues of BAPTIST HOSPITAL. (TR 16, VOL 4). In 1982, BAPTIST drew 36.7 percent of its patients from HUMANA's proposed service area. (TR 15, 16, VOL 4). Fifty percent of the residents of the proposed service area (who were admitted to hospitals in Dade County) were admitted to BAPTIST HOSPITAL. (TR-440). It is estimated that BAPTIST would lose 15,047 patient days to the new HUMANA hospital and would experience significant adverse economic impacts. (TR 88-89, VOL 5).
The proposed hospital would also adversely impact BAPTIST's ability to hire and retain nursing and technical personnel. BAPTIST has experienced difficulty in hiring and retaining these personnel. (TR 18, 60-73, VOL 4). Historically, the opening of a new hospital has adversely affected the hiring and retention of such personnel in nearby hospitals. (TR 72-73, VOL 4). Here, approximately 84 percent of BAPTIST's nurses live near HUMANA's proposed cite, thus increasing the likelihood that BAPTIST will be adversely affected in this manner. (TR 135, VOL 5).
BAPTIST opposes the issuance of a Certificate of Need for HUMANA's proposed hospital, and supports DHRS's initial denial.
Intervenor American Hospital
Similarly, intervenor AMERICAN HOSPITAL would be significantly affected if the proposed HUMANA hospital is built. AMERICAN is a fully licensed and accredited 513-bed, general acute care hospital located and operated within HUMANA's proposed service area, at 11750 Bird Road, Miami, Florida, (STIP-para 8). AMERICAN currently draws 41 percent of its patients from HUMANA's proposed service area. The proposed hospital will cause AMERICAN to lose an estimated 5,300 patient days. (TR 76, VOL 5). This translates into an approximate loss of $4.1 million in potential revenues, based upon HUMANA's achieving a 75 percent occupancy rate and 41,000 patient days. (TR 75-76, VOL 5). Such a revenue loss may result in higher costs, which in the health care system, are normally translated into higher patient charges. (TR 86, VOL 5)
HUMANA's proposed hospital would also aggravate AMERICAN's continuing shortage in nursing personnel. (Currently AMERICAN has approximately 50 full- time registered nurse vacancies.) (TR 134, VOL 5). It is reasonable to expect that HUMANA will hire a significant number of its nurses away from nearby hospitals. Over a six-month period, HUMANA's four existing hospitals in south Florida hired 112 registered nurses, 32.1 percent of whom were hired away from other hospitals in the area. (TR 783).
AMERICAN, likewise, opposes the issuance of a Certificate of Need to HUMANA, and supports DHRS's initial denial.
II. STATUTORY CRITERIA FOR
CERTIFICATES OF NEED
Section 381.494(6)(c) and (d), Florida Statutes (Supp. 1982), prescribes standards for evaluating applications for Certificates of Need. Those standards pertinent to HUMANA's application include:
The need for the health care facilities and services . . . being proposed in relation to the applicable district 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, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing health care services . . . in the applicant's health service area.
7. 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.
11. The probable impact of the proposed project on the costs of providing health services proposed by the applicant, upon consideration of factors including, 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.
In considering HUMANA's application, specific consideration must also be given to whether:
. . .less costly, more efficient, or more appropriate alternatives to such inpatient services are . . . available and the development of such alternatives has been studied and found not practicable.
. . . existing inpatient facilities providing inpatient services similar to those proposed are being used in an appropriate and efficient manner.
. . . alternatives to new construction, for example, modernization or sharing arrangements, have been considered and have been implemented to the maximum extent practicable.
. . . patients will experience serious problems in obtaining inpatient care of the type proposed, in the absence of the proposed new service. 381.494(6)(d) Fla.Stat. (Supp. 1982).
The controversy here is whether in 1988 (using a five-year planning horizon) there will be a need for HUMANA's proposed 150-bed hospital in the west Kendall area of south Dade County. DHRS, BAPTIST, and AMERICAN say that there will be no need: that existing hospitals serving the area have excess capacity and are underutilized--and that this condition will persist through 1988. HUMANA contends otherwise. As the applicant for a license, the burden of proving entitlement rests squarely upon HUMANA. 3/
The most accurate and reliable method for determining bed-need in this case, the historical demand-based method, requires the following: (1) identify planning area boundaries; (2) from historical population data, project population for the planning area using the five-year horizon for hospital services; (3) calculate a hospital use rate or the rate at which patients in the service area have used hospitals in terms of patient days per thousand; (4)
project patient days by multiplying the use rate times the area population, and divide by 365 to yield a projected bed need; (5) compare projected bed-need with the licensed bed capacity of area hospitals and, using an appropriate occupancy standard, determine whether there will be an excess or shortage of hospital beds in the proposed planning area. (TR 55, VOL 5).
Selecting a Health Planning Area
The first step in determining whether a new hospital will be needed is selection of the appropriate health planning area. In 1982, the now-defunct HSA of South Florida adopted a Regionalization Plan for south Florida dividing HSA IX, a region, into five districts. (AM Ex. 4). Although not specifically mentioning hospitals, this plan implies that hospital bed-need determinations should be made on a district basis. The Kendall area, extending east and west, generally is denominated as "District D," and is, in turn, subdivided into three subdistricts. "D-1" encompasses Coral Gables and South Miami; "D-2" and "D-3" include Weschester, Kendall, Killian, and the west central Dade areas, the boundaries of which are U.S. 1 and the Palmetto Expressway on the east, Coral Reef Drive and Eureka Drive on the south, conservation area on the west, and the East-West Expressway, and Tamiami Trail on the north. (HU Ex. 4). HUMANA chose "D-2" and "D-3" as the appropriate health care planning area for determining need for its proposed hospital. District "D," however, is a more appropriate and reasonable area to use in determining need for the proposed HUMANA hospital. (TR 203, 258; 145-146, VOL 4; 56-57, VOL 5). The entire area of District "D" may be traversed, by car, in approximately 30 minutes, the roads are adequate, and there are numerous hospitals in the district which are easily accessible to its residents. (TR 57-58, 66, 77-78, VOL 5). Hospitals located in one part of District "D" are readily accessible to patients who reside in other areas of the District. HUMANA's bed-need analysis fails to adequately take into account hospitals within "D-1" or which are outside the District but are readily accessible (within 30-minutes driving time) to the majority of residents in "D- 2" and "D-3." (TR 145-146, VOL 4). Existing hospitals which are readily accessible to residents of a proposed service area cannot be reasonably excluded merely because they are located outside a theoretical boundary line. (TR 145- 146, VOL 4).
A health planning area should be the area where most of the residents seek health care. (TR 615; 78-79, VOL. 5). Hence, a proposed health planning area should be tested against the actual hospital use of its residents and the accessibility of existing hospitals to those residents. The residents of District "D" travel freely within District "D" in seeking hospital care. South Florida Hospital Association Utilization and Patient Origin Program ("HUPOP") data show that approximately 60 percent of the patients residing in subdistricts "D-2" and "D-3" seek inpatient hospital care elsewhere. (TR 72, VOL 5; 616; AM Ex. 7 p. 19). 4/ There is a corresponding inflow of residents from outside "D- 2" and "D-3" who seek hospital care within "D-2" and "D-3". (TR 72, VOL 5). In comparison, approximately 70 percent of the residents of District "D" seek hospital care within the boundaries of the District and--of all the districts within the region-- District "D" has the highest percentage of residents who seek in-district hospital care. (TR 72-73, 79, VOL 5; AM Ex. 7, p. 19). In actual practice, then, the residents of District "D" heed the District boundaries but largely disregard subdistrict "D-2" and "D-3" boundaries.
The residents of "D-2" and "D-3" have ready access to numerous hospitals providing a broad range of medical services. (TR 78, VOL 5). BAPTIST is a large general hospital with tertiary, secondary, and primary care services. With the exceptions of a burn center and a Level III neotology unit, virtually
all health care services are provided. BAPTIST, AMERICAN, Coral Reef, South Miami, and Larkin hospitals provide health care services to residents of "D-2" and "D-3," within a 20-minute travel time. (BH Ex. 10, p. 1-13-19; BH Ex. 5 and 7). The few specialized services not available at these hospitals are provided at Jackson Memorial Hospital, within a 30-minute travel time. (BH Ex. 10, p. 1- 13).
Accessibility of Existing Acute Care Hospitals
Section 381.494(6)(c)(2), Florida Statutes (Supp. 1982), requires examination of the accessibility of existing health care facilities providing similar services to the same health service. The generally accepted standard for determining accessibility, found appropriate here, is whether general hospital beds are available to the service area's population within 30-minutes travel time by automobile, under average traffic conditions and for non- emergency purposes. This standard is used by HSAs and DHRS is used by federal health care planners, and is widely used by professional health care planners. (DHRS Ex. 1; BH Ex. 10, p. 1-10-13; TR 90, 123, 144, 166, 193; 85, 133-134, VOL 4; 58, 77, VOL 5).
Applying this standard, seven hospitals are reasonably accessible to residents of HUMANA's proposed service area: AMERICAN, BAPTIST, Coral Reef Hospital, South Miami Hospital, Larkin Hospital, Doctors' Hospital, and Jackson Memorial Hospital. District "D" contains eleven hospitals, with a total of 2,882 licensed beds. (AM 3, p. 41; 4, p. D-3). Moreover, five of these, AMERICAN, BAPTIST, Coral Reef, Larkin, and South Miami, are even closer, within 20-minutes average travel time. (BH 5, p. 11).
There is no evidence that the residents of "D-2/D-3", or District "D," as a whole, have any difficulty using or gaining access to these hospitals.
Beds are available. The five hospitals closest to HUMANA's proposed service area, AMERICAN, BAPTIST, Coral Reef, South Miami, and Larkin, have a total of 1,825 licensed beds, 326 of which are not in service; of the 1,499 beds in service, 109 are not used. So there are 435 licensed beds, within 20-minutes of "D-2/D-3," not in service or not in use due to lack of demand. (BH Ex.10, p. I- 26, 5, 7, 10, p. I-26-28).
Occupancy Standard for Determining Need
The generally accepted occupancy standard for hospitals, used in deciding if additional beds are needed, is the 80 percent average annual occupancy rate. This standard is included in the 1981 Florida State Health Plan, is used by DHRS and HSAs, and is widely used by professional health care planners. Its use is appropriate here. (AM 135, VOL 2; TR 90-91; 95-97, 118, 132, 140, 165, 172, 313, 469; 141, VOL 4). In application, it means that additional hospitals should not be built until existing hospitals providing acceptable care to the proposed service area are operating at or above an 80 percent occupancy rate--the level at which hospitals, generally, operate most efficiently.
In 1982, none of the eleven hospitals in District "D" met the 80 percent occupancy standard. (DHRS Ex. 1, AM Ex. 3, p. 7). In 1981, the five hospitals closest to HUMANA's proposed site had an average annual occupancy rate of 60.9 percent. (BH Ex. 10, p. I-24). Moreover, this excess is sufficient to meet the future health care needs of residents of "D-2/D-3" and District "D," as a whole. BAPTIST and AMERICAN will not achieve 80 percent occupancy until after
1988; AMERICAN is projected to have an occupancy of only 63.61 percent in 1990. (AM Ex. 3, p. 8; BH Ex. 10, p. 10, I-24).
Availability of Resources to Build and Support Proposed Hospital
Section 381.494(6)(c)(7) also requires consideration of whether there will be available adequate resources to support a new hospital, including manpower and financial resources. The evidence establishes, without contradiction, that HUMANA has sufficient funds to construct and operate its proposed hospital. The projected cost of the hospital, including equipment, is
$29,175,500--70 percent to be funded by debt, the remainder by equity funds. HUMANA has, on hand, approximately $225 million in cash and cash equivalents. (TR 709, HU Ex. 2).
The design of the proposed hospital will be based on HUMANA's "prototype" 150-bed facility, developed from years of experience in hospital design construction, and operation. The design is efficient and economical, and will permit a 50-bed expansion without further construction. (TR 714-716, 720, 719, HU Ex. 9).
The parties agree that HUMANA has the ability to enlist or employ sufficient physicians and management personnel to staff the proposed hospital. (STIP, para. 3). HUMANA also has the ability to hire and retain an adequate nursing and technical staff. It recruits such personnel, routinely, on a national basis and transfers employees within its hospital system. Moreover, it has a mobile nurse corps, a group of nurses which are available on an as-needed basis, to help staff its south Florida hospitals during peak winter months. Historically, HUMANA has successfully recruited and retained nurses in its south Florida hospitals. (TR 772, 776-777, 781-782, 801-802, VOL 4).
Projected Population of Service Area
As already mentioned, under the preferred demand-based bed-need methodology, population is projected over a five-year planning horizon, for hospital facilities. This is because an increase in a service area's population will generate a need for more beds.
The population of the Kendall area of south Dade County has been growing rapidly, and is expected to continue to do so through 1990. This population is younger than the population of Dade County or HSA IX, as a whole. The population projections for District "D" (the appropriate health planning area for the proposed hospital) by age groups are:
District D
| 1987 | 1990 |
Under 15 |
| 92,301 | 96,506 |
15 to 64 |
| 357,567 | 327,652 |
65 and over |
| 52,188 | 55,822 |
TOTAL
(AM 3; TR 59-61, VOL 5; |
488 VOL 3) | 502,056 | 529,980 |
I. Hospital Use Rate |
|
|
|
Under the demand-based methodology, found acceptable here, once the planning area is designated and the population projected over a five-year
planning horizon, a hospital "use rate" is calculated. The "use rate" is the rate at which people use hospitals, expressed in terms of the number of patient days per thousand residents residing in the health service area. This rate can be derived using various factors. Those factors most appropriate for use in this case are "age" and "service-specific" uses. (TR 66 VOL 5; 497-498 VOL 3).
"Age-specific" use rates, reflecting historic hospital use rates by age group, are applied to the projected population to determine total patient days. This factor takes into account the fact that people 65 or older utilize hospitals at a rate three to four times that of people under 65. This is particularly significant here since the Kendall area population is younger than the population of Dade County, HSA IX, or the state, as a whole. (TR 58-59, VOL 5; AM 3, p. 12).
In 1981, the age-specific use rate for HSA IX reflects a use rate of 1,524.6 patient days per thousand population. (AM 3, p. 63).
"Service-specific" use rates are derived from historical use of particular hospital services, such as psychiatry, obstetrics, pediatrics, and medical-surgical. (AM 3, pp. 14-15, 70-72). The 1981 service-specific use rate, covering all services, for HSA IX was 1,524.6 patient days per thousand--a figure equal to the age-specific use rate. (AM 3, p. 14-15, 71).
J. Calculation of Future Bed Need for District "D"
In 1982, there were 2,882 licensed non-federal beds in District "D." Taking into account an 80 percent occupancy rate, and applying the HSA age- specific use rate to the projected population of District "D" yields a need for only 2,282 beds per day in 1987, and 2,419 beds per day in 1990. Hence, there will be an excess of 600 beds in District "D" in 1987; 554 in 1988; and 463 in 1990. (AM 3, p. 41, 69; TR 63, VOL 5). Similarly, applying the HSA IX service- specific use rate to the projected District "D" population results in a bed excess of 232 beds in 1987 and 87 in 1990. (AM 3, p. 74).
Significantly, these projected bed excesses are, if anything, understated. This is because the HSA IX hospital use rate was utilized. Hospital use is greater in HSA IX, with its older population, than in District "D," where the population is younger and less likely to be hospitalized. (TR 61-62, VOL 5).
HUMANA, in its analysis, applied age and service-specific use rates to the projected population of "D-2/D-3," concluding that there would be a need for
238 additional beds in 1988. This conclusion, however, is unconvincing since "D-2/D-3" is unduly restrictive and the 235 unused beds of South Miami and Larkin Hospitals, both located in "D-1," are not fully considered. (DHRS 1, p. 370; AM 3, p. 18). (Both hospitals are within a 20-minute average travel time from selected points in "D-2/D-3.") (TR 544, VOL 3; 612, VOL 4). By failing to properly account for empty beds at nearby hospitals, and by unreasonably limiting its planning area, HUMANA overstates the need for additional hospital beds in District "D."
Moreover, even assuming the propriety of "D-2/ D-3," HUMANA failed to properly take into account the 260 beds of Coral Reef Hospital, a "D-2" hospital. If Coral Reef Hospital beds are correctly included within "D-2/D-3," HUMANA's projected bed-need decreases from 238 to 129 beds in 1988. (TR 80, VOL 5).
Finally, Thomas W. Schultz, HUMANA's health care planning expert, admitted that a figure of 1,038 patient days per thousand patients would be "useful" in establishing bed-need for "D-2/D-3." (TR 501, VOL 3). Applying that use rate, and correctly including Coral Reef Hospital, results in a projected "D-2/D-3" need of 36 additional beds in 1988. (TR 83-84, VOL 5). HUMANA does not propose to construct a 36-bed hospital and such a hospital has not been shown to be feasible.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. 120.57(1), Fla.Stat. (1981).
HUMANA, BAPTIST, and AMERICAN have standing, as parties, because their interests are substantially affected by DHRS action on HUMANA's application. 120.57(1), 120.52(10)(b), Fla.Stat. (1981).
Section 120.57(1) proceedings are de novo--invoked to formulate final agency action, not to review prior action or action taken preliminarily. Florida Department of Transportation v. J.W.C. Co., Inc., 396 So.2d 778 (Fla. 1st DCA 1981). Ordinarily, an applicant has the burden of proving entitlement to a license. Id.
Applications for Certificates of Need are measured by relevant criteria listed in Section 381.494(6)(c), Florida Statutes (Supp. 1982). Additional criteria in Section 381.494(6)(d) apply when, as here, the application involves a capital expenditure for new health care services to inpatients.
Section 381.494 (6)(c): Need for the proposed hospital relative to the applicable district plan, annual implementation plan, and state health plan.
There is not yet an applicable district plan or annual implementation plan, since the newly-created Local Health Council responsible for their development is not yet functional. There is, however, an existing state health plan. This plan contains various standards of measurement, including occupancy and access standards. If these two standards are applied here, the proposed hospital is unnecessary--both now, and through 1988.
Section 381.494(6)(c) 2: Availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization and adequacy of existing hospitals serving the area.
HUMANA has not demonstrated that the existing hospitals serving Districts "D" are currently inadequate or that, by 1988, they will be inadequate to meet the health care needs of the population.
Section 381.494(6)(c) 3: Availability and adequacy of other hospitals in the service area.
HUMANA has not shown that the hospitals serving District "D" are either unavailable or inadequate, or that they will be through 1988. Rather,
the evidence convincingly establishes that, through 1988, and without the construction of a new hospital, existing hospitals will have an adequate number of beds to meet the needs of the population.
D. Section 381.494(6)(c) 7 and 8:
Availability of resources, including manpower and funds to build and operate the proposed hospital, and its financial feasibility.
The evidence demonstrates that HUMANA's resource are adequate to build and operate the proposed hospital, and that it is financially feasible.
Section 381.494(6)(c) 11: Probable impact of proposed hospital on costs of providing health care services.
HUMANA has not shown that construction of the proposed hospital will favorably impact the costs of providing medical care to the population of District "D." Rather the evidence suggests that costs will be higher if the hospital is built, since existing hospitals would continue to operate at less efficient occupancy levels.
Section 381.494(6)(d): Whether less costly alternatives are available; whether existing hospitals are being used appropriately and efficiently; whether alternatives have been considered and implemented to the maximum extent practicable; and whether patients will experience serious problems obtaining inpatient care in the absence of the proposed hospital.
The evidence demonstrates that there are less costly alternatives to the proposed hospital, mainly, more efficient use of existing hospitals serving the area. Existing hospitals have excess capacity, are underutilized, and are operating at less than optimum efficiency. This condition is likely to persist, though becoming less severe, through 1988. Patients do not, and through 1988 will not, experience serious problems in obtaining inpatient care of the type provided by the proposed hospital.
One purpose of the Certificate of Need law is to prevent unnecessary and inefficient duplication of health care services. 381.493(2), Fla.Stat. (Supp. 1982). Simply put, there must be a demonstrated need for a new hospital; it is not enough to show that a proposed hospital will be economically feasible, efficient, and provide quality care to its patients. Here, HUMANA has failed to prove that its proposed hospital is necessary and needed to serve the health care needs of District "D." Rather, the evidence demonstrates that existing hospitals are adequately meeting the medical needs of the area, and will continue to do so through 1988.
Measured by these statutory standards, it is concluded that HUMANA's application must be denied.
The parties' proposed findings of fact have been considered. To the extent they are incorporated herein, they are adopted; otherwise they are rejected as unsupported by the weight of the evidence or unnecessary to resolution of the issues presented.
RECOMMENDATION
Based on the foregoing, it is RECOMMENDED:
That HUMANA's application for a Certificate of Need to construct a hospital in the west Kendall area of Dade County, Florida, be denied.
DONE and ENTERED this 25th day of May, 1983, in Tallahassee, Florida.
R. L. CALEEN, JR. Hearing Officer
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 25th day of May 1983.
ENDNOTES
1/ Health Systems Agencies no longer have health planning functions under
381.493. In 1982, the Legislature amended 381.493, creating, in their stead, Local Health Councils. The Local Health Council with jurisdiction over the south Dade County area has not yet become a functioning entity. 391.493, Fla.Stat. (Supp. 1982).
2/ The same 1982 statutory amendment also eliminated consistency with the applicable HSP as an explicit criterion for evaluating Certificate of Need applications.
3/ See, Florida Department of Transportation v. J.W.C. Co. Inc., 396 So.2d 778 (Fla. 1st DCA 1981).
4/ Although the HUPOP data apparently contains some inaccuracies, the evidence indicates that they are the best available data to demonstrate what is referred to as patient flow for inpatient hospital care, i.e., where patients go for such care in relation to where they reside (TR 94-95, VOL 5). Expert health planning witnesses testifying for each party utilized this data in preparing their reports or testimony.
COPIES FURNISHED:
John H. French, Esquire James C. Hauser, Esquire Messer, Rhodes & Vickers
701 Lewis State Bank Building Tallahassee, Florida 32302
James M. Barclay, Esquire Office of Community Medical
Facilities
Department of Health and Rehabilitative Services
1317 Winewood Boulevard
Building 2, Suite 220
Tallahassee, Florida 32301
Kyle R. Saxon, Esquire Paige and Catlin
800 Alfred I. duPont Building Miami, Florida 33131
Barry G. Craig, Esquire Michael Cook, Esquire Wood, Lucksinger & Epstein Park Place II, Suite 200 Miami, Florida 33146
Alicia Jacobs, Esquire Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32301
David Pingree, Secretary Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32301
Docket for Case No: 82-000071CON
Orders for Case No: 82-000071CON
| Issue Date |
Document |
Summary |
|
Jul. 11, 1983 |
Agency Final Order
|
|
|
May 25, 1983 |
Recommended Order
|
Certificate of Need (CON) for fifty-bed acute care hospital where there were already underutilized hospitals in the area and proposed hospital would hurt the existing hospitals.
|
