STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
FORT MYERS COMMUNITY HOSPITAL, )
)
Petitioner, )
and )
) DOCTORS' OSTEOPATHIC MEDICAL )
CENTER, Inc. d/b/a GULF ) CASE NO. 84-0840
COAST HOSPITAL, INC., )
)
Intervenor, )
)
vs. )
)
LEE MEMORIAL HOSPITAL and )
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondents. )
)
RECOMMENDED ORDER
This cause was duly noticed and came on for formal hearing before P. Michael Ruff, Hearing Officer, on September 17 through September 19, 1984, in Fort Myers, Florida. The appearances were as follows:
APPEARANCES
For Fort Myers Community E. G. Boone, Esquire Hospital: Peggy Sullivan, Esquire
1001 Avenida del Circo Post Office Box 1596 Venice, Florida 33595
For Doctors' Osteopathic Leonard A. Carson, Esquire Medical Center, Inc.: John Newton, Esquire
Cambridge Centre
253 East Virginia Street Tallahassee, Florida 32301
For Department of Health Douglas Mannheimer, Esquire and Rehabilitative CULPEPPER, TURNER & MANNHEIMER Services: 318 North Calhoun Street
Tallahassee, Florida 32302
For Lee Memorial Ivan Wood, Esquire Hospital: Gary Riebschlager, Esquire
WOOD, LUCKSINGER & EPSTEIN
1221 Lamar, Suite 1400
Houston, Texas 77010
This cause involves an application by Lee Memorial Hospital for a Certificate of Need which will allow Lee Memorial Hospital to relocate 81 medical/surgical beds from its downtown Fort Myers facility (main campus) to a proposed new 100-bed satellite hospital facility in southwest Lee County. The remaining 19 beds of the proposed 100-bed satellite would be newly authorized medical/surgical beds requested in the application at bar. The Certificate of Need (CON) proposed would also allow Lee Memorial Hospital to demolish two wings of its existing hospital which house 201 existing medical/surgical beds and relocate 120 of those beds to a new addition to its hospital main campus. The proposed CON would also authorize renovation of existing hospital bed space in its "West wing" into office space. By its petition for formal hearing, Fort Myers Community Hospital, an existing acute care hospital in Lee County, challenged the issuance of the CON. Doctors' Osteopathic Medical Center, Inc., d/b/a Gulf Coast Hospital, Inc., (Gulf Coast) also was granted intervention in opposition to the Lee Memorial CON application inasmuch as it is an inchoate osteopathic hospital which has a mandate from the First District Court of Appeals to be granted a CON by the Department of Health and Rehabilitative Services (HRS). 1/
In essence, it is the position of Ft. Myers Community Hospital (FMCH) that Lee Memorial's proposed project constitutes a duplication of existing health care services. FMCH maintains that utilization is currently declining and that the addition of new beds and relocation of existing beds to new facilities during a period of declining utilization is poor health planning and contrary to the cost containment policy enunciated in Chapter 381, Florida Statutes. Gulf Coast, in turn, maintains that it has a prior entitlement to locating an acute care hospital facility in the southwest corner of Lee County and that it is poor health planning policy to locate two acute care hospitals within close proximity to each other. Both Lee Memorial Hospital and HRS argue that the existing two wings in the old Lee Memorial facility should be demolished and those 201 beds relocated to both a new addition to the main campus and that 81 of those beds should be moved to the southwest area of Lee County in a new 100-bed satellite facility in order to improve accessibility to health care in Lee County and to promote Lee Memorial Hospital's ability to compete in the provision of health care in Lee County, it being a portion of Lee Memorial's position that it must look to the rapidly developing area of southwest Lee County in order to garner more private paying patients to offset its alleged high percentage of indigent, non-paying patients served at its main campus in downtown Fort Myers
A prehearing stipulation was entered into by all parties and filed with the Hearing Officer, whereby the parties stipulated as follows:
That Section 381.494(6)(c) establishes the criteria which must be considered in evaluation of the application of Lee Memorial for a Certificate of Need (CON). The parties further stipulated that the criteria referenced below are not at issue in this proceeding, except to the extent noted.
Section 381.494(6)(c)(3) concerns provision of quality health care and the parties agree that the Respondent Lee Memorial Hospital is able to provide quality health care.
Concerning Section 381.494(6)(c)(5) the parties agree that Lee Memorial does not propose nor rely upon probable economies and improvements in service that may be derived from the operation of joint, cooperative, or shared
health care resources except to the extent that the project involves a satellite hospital facility. Petitioner and Intervenor still dispute however, whether health care services can be most economically provided the public by constructing the proposed satellite facility and patient tower. They maintain they will not.
The parties agree, for purposes of Section 381.494(6)(c)(6), Florida Statutes, that Lee Memorial is not relying upon and does not propose to provide equipment and services which are not reasonably and economically accessible in adjoining areas except to the extent that Lee Memorial contends that it will provide accessibility to basic equipment and health care services which are not currently available to the satellite facility's proposed service area in the southwest region of Lee County. The Petitioner and Intervenor contend that basic equipment and health care services are already available in the satellite facility's proposed service area in southwest Lee County.
The parties agree that Lee Memorial has proposed no change in the current provision for research and educational facilities in health care district VIII for purposes of Section 381.494(6)(c)(7), Florida Statutes.
The parties stipulate that there are sufficient health manpower and management personnel resources available if the CON is granted and they agree that Lee Memorial, by constructing and operating the facilities and service encompassed by this CON application will have no effect on the clinical needs of health professional training programs in service district VIII. The parties further agree that Lee Memorial will not provide additional training programs to schools for the health professions. The parties dispute all other factors enumerated in Subsection 381.494(6)(c)(8), Florida Statutes, however.
The parties agree that the special needs and circumstances of health maintenance organizations are not at issue in these proceedings. Lee Memorial does not propose to serve special needs and circumstances of health maintenance organizations and therefore Section 381.494(6)(c)(10), Florida Statutes, is not at issue herein.
Inasmuch as the proposed Lee Memorial CON project will not provide the services described in Subsection 381.494(6)(c)(11), Florida Statutes, the parties stipulate that this subsection is not at issue herein.
Inasmuch as Lee Memorial's proposed CON project will not involve the provision of new health care services, the parties stipulate that Section 381.494(6)(d), Florida Statutes, is not at issue in these proceedings.
The parties stipulate that the Lee Memorial array of equipment involved in the proposed CON application is reasonable for the size of the proposed facility.
The cause came on for hearing as noticed and at the hearing the following exhibits were offered by Lee Memorial Hospital and admitted into evidence:
Applicant's
Exhibit No. Description
Exhibit 1 List of Lee Memorial Hospital's Board Members Exhibit 2 Tribook Update of CON Application 2851 Exhibit 3 Mechanical/Electrical Report
Exhibit 4 Construction Cost Summary of Proposed
Satellite
Exhibit 5 Construction Cost Summary of Rehabilitation
of Existing Facility
Exhibit 6 Project Completion Forecast
Exhibit 7 Revised Lee Memorial Income and Expense
Projections
Exhibit 8 Construction Cost Summary of Additions to
Existing Facility
Exhibit 9 Lee Memorial's 1983 Audited Financial
Statement
Exhibit 10 Lee Memorial Hospital's unaudited ten-month
financial statement for FY 1984
Exhibit 11 Letter to Lee Memorial from Richard Meister
of Goldman, Sachs
Exhibit 12 Interrogatories
The following exhibits were offered by the Department of Health and Rehabilitative Services and admitted into evidence:
HRS Exhibit No. Description
Exhibit 1 CON Application of Lee Memorial including
Omissions Responses
Exhibit 2 State Agency Action Report
Exhibit 3 CON No. 2851 issued to Lee Memorial
Exhibit 4 Remainder of HRS correspondence file relating
to HRS Exhibits 1, 2, and 3
The following exhibits were offered by Intervenor Gulf Coast and admitted into evidence:
Gulf Coast
Exhibit No. Description
Exhibit A Rendition of entire Lee Memorial Hospital
Campus
Exhibit B Monthly financial statistical report and
summary of last ten months for Lee Memorial, ending 7/31/84, with attachments
Exhibit C Map from deposition of James Nathan, taken on
8/22/83, previously marked in other proceeding as No. 12
Exhibit D Warranty Deed dated 7/2/84
Exhibit E Table 12, project scope, two pages Exhibit F Memo to Building and Long-Range Planning
Committee, from George Austin, RE: TriBrook Summaries 3/22/83
Exhibit H HRS set of Population Projections for the
years 1980 through 1990
Exhibit I HRS document: Current Acute Care Beds and Projected Need for 1988
Exhibit J Affidavit of Richard Klusman
Exhibit K Deposition of Daniel Edgar
Exhibit L BEBR Bulletin Nos. 68 and 69
Exhibit M Blueprints of Lee Memorial
Exhibit N Acute care bed need rule
Exhibit Q Lee Memorial's operating statement for period
ending June, 1984
Exhibit R Lee Memorial's operating statement for period
ending June, 1983
Exhibit V Need analysis prepared by Alan Zuckerman Exhibit W Resume of Sven Kansman
Exhibit X Map of Lee County for travel time study Exhibit Y Resume of Merrill A. Jones
The following witnesses called by Lee Memorial were declared experts in the fields indicated:
Witnesses Fields of Expertise
James Nathan Hospital Administrator
Michael Carroll Health Planning
Rowland Hand Mechanical Electrical Engineering
Timothy Oosting Architecture
Gary Ehrlich Management
Rufus Harris Accounting and Finance
Gareth Hudson Accounting and Finance
The following witnesses called by Fort Myers Community Hospital were declared experts in the fields indicated:
Witnesses Fields of Expertise
Alan Zuckerman Health Care Planning
Sven Kansman Travel Time Studies
Merrill A. Jones Health Care Construction and
Construction Costs Danny Halvatzis Health care Accounting and
Financial Analysis Herbert Dorsett Hospital Administration
Woodrin Grossman called by Gulf Coast was declared an expert in health care accounting and financial analysis.
Gene Nelson, the only HRS witness called, was declared an expert in Health Care Planning.
At the conclusion of the hearing the parties requested a transcript of the proceedings which was duly filed and they exercised their right to file proposed findings of fact and conclusions of law, concurrently waiving the requirements of Rule 28-5.402, Florida Administrative Code. All proposed findings of fact and conclusions of law, briefs and written arguments of the parties were timely submitted. Additionally, a motion to supplement the record and, alternatively, for official recognition of Hearing Officer Tremor's Recommended Order in Case No. 83-2201 and responses thereto was filed on or before February 14, 1985.
FMCH and Gulf Coast thus seek to have that recommended award of 120 osteopathic beds to Gulf Coast made a part of that record. That motion is denied because the Recommended Order involved does not constitute final agency action which is properly the subject of official recognition and because Lee Memorial has had no opportunity to adduce evidence to meet and oppose the evidentiary impact of the requested addition to the record evidence. The motion to supplement the record and for official recognition came post-hearing, after all parties had ample opportunity to present all available, relevant evidence in support of their various positions and, indeed, the evidence of the movants at hearing presumed,
at least in part, the potential award of 120 beds to Gulf Coast. Thus, the motion is untimely in seeking to reopen the record at this late date to allow presentation of evidence by the parties related to the effect of the 120-bed recommendation in favor of Gulf Coast. See Sections 90.202(5,(11) and (12); 90.203(1) and 120.161, Florida Statutes; Rule 221-6.20, Florida Administrative Code, and Collier Medical Center, Inc. v. HRS, and Naples Community Hospital and Lee Memorial Hospital, 462 So.2d 83 (Fla. App. 1st Dist., 1985). Conversely, on April 1, 1985, Lee Memorial Hospital moved for official recognition of the Final Order of HRS in 83-2201 which awarded 60 beds to Gulf Coast. That final agency action is officially recognizable and the motion was unopposed, thus official recognition is granted. See Section 90.202(5), Florida Statutes. All proposed findings of fact, conclusions of law, and supporting arguments have been considered. To the extent that they are in accordance with the findings, conclusions and views stated herein, they are accepted. To the extent that the proposed findings, conclusions and arguments asserted are inconsistent herewith, they are rejected. Certain proposed findings and conclusions are omitted as not relevant nor as necessary to a proper determination of the material issues presented. To the extent that the testimony of various witnesses is not in accord with the findings herein, it is not credited. See, Sonny's Italian Restaurant v. Department of Business Regulation, 414 So.2d, 1156, 1157 (Fla. 3rd DCA 1982); Sierra Club v. Orlando Utilities Commission, 436 So.2d 383 (Fla. 5th DCA 1983).
The essential issue in this case concerns whether, given the criteria remaining at issue, Lee Memorial Hospital should be granted a CON to relocate 81 medical/surgical beds to its proposed new 100-bed satellite facility, including approval for 19 new beds which is sought by this CON application, as well as whether Lee Memorial should be permitted to design and build new office space and relocate 120 beds to new facilities on its "main campus." Involved in this general issue is the question of whether 19 new beds are needed in Service District VIII; whether the construction and future operation of the project proposed is financially feasible; whether the demolition and construction of new physical facilities at the main campus of Lee Memorial Hospital as well as the construction of the new 100-bed satellite hospital involving 19 new beds and the relocation of 81 beds from the main campus to that satellite hospital is the best solution to the problem of inadequate physical facilities at Lee Memorial's main campus. Those specific criteria enumerated in the above-cited subsection, which remain in dispute, are identified and treated serially below.
FINDINGS OF FACT
By its application for a CON filed with HRS (CON No. 2851) Lee Memorial proposes to construct a satellite hospital in the south Fort Myers area (southwest Lee County) and to add 19 new acute care beds which will be located at the satellite hospital along with the requested 81 beds transferred from the Lee Memorial main campus to that satellite hospital. It also proposes demolition and reconstruction of facilities for 120 of its existing beds at the "main campus." Through construction of the proposed satellite hospital and the reconstruction and renovation of its existing main campus, Lee Memorial proposes to provide more efficient and accessible service and improve its overall utilization rate, as well as to improve existing health care services in its service district, in part by providing sufficient private-paying patients, which will be obtained from the more affluent southwest Lee County area, so as to efficaciously enable Lee Memorial to continue to serve the bulk of Lee County's indigent care patients, for whom it is the principal provider at the present time. Additionally, Lee Memorial proposes to provide more efficient, accessible
health care services to the people in southwest Lee County, and increase the efficient utilization of beds at the main campus both by the demolition of the present antiquated wings with attendant renovations as well as by construction of the satellite hospital.
Mr. Gene Nelson, Administrator of the Office of Community Medical Facilities was accepted as an expert witness in the field of health care planning. He established that the bed need for District VIII, the location of this CON project, is 175 beds. Lee County itself has a bed need of 58 beds including the 19 beds proposed for this satellite hospital, however, the applicant does not propose to limit its service area to Lee County and Lee County patients, which consideration is noteworthy at this juncture since its satellite hospital would be located in southwest Lee County in close proximity to neighboring Collier County. 2/
Southwest Lee County, the area proposed to be served by the satellite hospital and the location of the proposed satellite hospital, is a rapidly growing, urbanizing area characterized by a high percentage of elderly patients. The population is typically more affluent than that of the central Fort Myers' area population which is presently served by Lee Memorial's main facility. This southwest quadrant of Lee County is the most rapidly growing area of the county from a demographic standpoint. The nature and relative affluence of the population in this portion of the county where the satellite hospital would be located will serve to provide a higher percentage of private paying patients in Lee Memorial's patient population mix, such that Lee Memorial, which presently serves the bulk of Lee County's indigent patient population, will be better able to serve increasing numbers of indigent patients by attracting sufficient private paying patients from southwest Lee County so as to cover losses occasioned by indigent patient service. The proposed relocation of beds and addition of 19 new beds at a satellite facility in southwest Lee County will provide more adequate health care services to the people of southwest Lee County and increase the utilization of Lee Memorial's beds in both facilities. The renovation of the facility at the main campus will better and more efficiently provide health care services at that location. The proposed demolition of the existing Cox and Jewitt wings of Lee Memorial's old facility and the redistribution of the 120 beds presently assigned to those wings, and the West wing; to the proposed new "patient tower" will improve the operating efficiency of Lee Memorial's main campus facility.
AVAILABILITY AND ACCESSIBILITY
There is no acute care facility presently located in south Lee County and that population presently falls within the service area of Lee Memorial Hospital as well as Fort Myers Community Hospital, a Petitioner herein. Additionally, Gulf Coast Hospital, as mandated by the District Court of Appeal, is to be issued a CON subject to a determination (on remand) of the appropriate number of beds needed for the osteopathic hospital Gulf Coast proposes to construct. In its recent final order in that case, HRS awarded 60 beds. 3/ In any event, no acute care facility is located in the south or southwest portion of Lee County.
The travel times to the nearest acute care facility, as established by the travel time analysis conducted by Michael Carroll, a Lee County engineer, range from 17 to 55 minutes from various points in south Lee County to the nearest acute care facility. Locating the proposed satellite hospital in the southwest quadrant of Lee County in the so-called "Iona-MacGregor Planning District" will enhance access to health care services to the predominantly
elderly population of that area. Elderly persons, that is persons over 65 years of age, comprise 57 percent of the population of the Iona-MacGregor Planning District, which in turn, constitutes 28.7 percent of the proposed satellite hospital's service area. The proposed satellite hospital will provide access to acute care, in-patient services to a broader percentage of private paying patients. The location of the satellite hospital in the midst of this population which presently must travel 17 to 55 minutes to an acute care facility will enhance availability and accessibility of acute care services to this predominantly elderly population, the elderly being shown to have a higher frequency of need for acute care services per capita.
EXTENT OF UTILIZATION
The utilization rates of acute care beds at Lee Memorial Hospital have historically fluctuated between 55 and 60 percent occupancy for the fiscal years 1980 through June 1983. The anticipated or projected utilization rates of the satellite facility alone, as to its medical/surgical beds, will increase significantly for the fiscal year 1987 and 1988 to a percentage utilization of
82.1 percent and 85.2 percent for those respective years. It is logical to think that such an increase in utilization will occur, however, since the number of beds available at Lee Memorial's main campus would be reduced by 81 with the installation of the satellite hospital, with only 19 new beds being added to make up the 100 beds for the satellite. The reduced number of beds at the main campus will doubtless have some effect in raising utilization rates at the satellite facility and that, coupled with the rapid growth in population and development of southwest Lee County, militates in favor of these utilization rates projected being reasonably accurate. They were unrefuted.
Additionally, utilization rates will be enhanced at Lee Memorial's present facility inasmuch as the proposed project involves reconstruction of the Lee Memorial patient tower and the demolishing and renovation of the Cox, Jewitt and West wings which contain numerous four and six-bed wards. The use of antiquated, larger capacity wards such as those designed for four or six beds hinders the ability of the hospital to flexibly use its bed capacity and as such, lowers the occupancy rate for the hospital. Often patients desire either semi-private or private rooms and if they have any flexibility in the timing of the decision to enter the hospital, will choose to wait until a semi-private or private room is available rather than use a large, open ward. Additionally, wards make flexibility in bed use difficult since some types of patients must be segregated from others and, if four or six of the hospital's beds are committed to one open ward-like room, such segregation of patients is difficult. If only one or two of a particular type patient can be placed together in one ward, often remaining beds therein are unusable, to the hospital's financial detriment. The demolition of the antiquated wings and the concomitant elimination of the four and six-bed wards will enhance the hospital's flexibility in room assignments for patients, thereby enhancing its overall occupancy rate and bed utilization rates.
It was established particularly with Mr. Nelson's expert testimony, that elimination of the large wards along with moving the 81 beds to the more rapidly growing area of the southwest county and out of the principal area in which service by Lee Memorial overlaps with FMCH will actually enhance the utilization rates at both Lee Memorial and FMCH. The lower bed capacity at the Lee Memorial main campus, which is much closer to FMCH's facility than will be Lee's satellite hospital, will ultimately have the effect of increasing utilization and occupancy at FMCH, since there will be fewer beds available at its competitor, Lee Memorial's, main campus in the downtown Fort Myers area.
So, too, the relocation of the 81 beds to the satellite facility will enhance the occupancy rate and financial health of Lee Memorial's main facility since it will have fewer beds to financially support and a higher occupancy rate with a given number of patients.
EFFICIENCY AND IMPROVEMENT IN ADEQUACY OF HEALTH CARE SERVICES AT LEE MEMORIAL
The demolition and renovation at the Lee Memorial main campus combined with the construction of additional floors to the main patient tower will enhance the efficiency of Lee Memorial by centralizing patient rooms in relation to the ancillary services and nursing stations within the hospital. The reconstruction and addition to the patient tower will provide more centralized nursing stations and more utility space closer to the patient rooms themselves, thus serving to enhance the hospital's efficiency of operation.
The demolition of the Cox and Jewitt wings and, renovation of the West wing was shown to be the most reasonable and logical alternative in relation to merely keeping those antiquated structures in service after refurbishment. Those wings were built in 1938 and presently are in a degenerated condition, such that their continued use amounts to the provision of substandard health care services for patients.
Mr. Rowland Hand testified as an expert witness for Lee Memorial in the area of mechanical and electrical engineering. It was thus established that numerous major components of those wings are near the end of their useful life. In the near future, the mechanical and electrical systems of those wings will likely cease to function effectively and the power distribution, emergency power systems and fire alarm systems are presently in a substandard condition. The waste elimination lines, domestic water and chilled water systems, as well as the exhaust air systems presently require expensive, frequent repair work and most of the major mechanical and electrical components in these three wings fail to comply with present municipal and HRS building and mechanical code requirements. The patient rooms and wards in these wings do not each contain a private bathroom in conformity with modern health care practice and requirements, which presents a hardship to patients and constitutes substandard health care. The antiquated four and six bed wards hinder effective bed assignment for patients and render the provision of health care by the hospital, as it relates to these three wings, to be relatively inefficient.
The proposed reconstruction and renovation related to these three wings and the expansion of the central patient tower will greatly improve conditions of health care presently provided. The improvements include larger patient rooms, the elimination of ward spaces, the provision of more centralized, efficient nursing stations, additional and more efficiently usable utility spaces and the provision of private baths for patients.
The only effective way to accomplish such major improvements, given the present land area available on the main hospital site, is to demolish the wings and to rebuild the spaces required for these patient beds remaining at the main campus. These wings contain 201 beds. If the wings are demolished and an attempt is made to rebuild the space for these 201 beds on the same location on the site, the 201 beds would be totally inoperable for a substantial period of time and would totally disrupt operations, since the 201 beds are nearly half of the licensed capacity at the hospital. Such an approach would clearly be totally unfeasible since there is obviously no way the hospital can continue to provide adequate quality health care if nearly half of its beds are taken out of service for many months.
The alternative of performing no renovation or relocation of beds within the same hospital, but rather merely performing a cosmetic refurbishment of the existing wings, (advocated by Mr. Merrill Jones, FMCH's expert in health care construction and construction costs) has only one advantage, that of being a less costly alternative. That cosmetic refurbishment of the existing wings fails to take into account that health care provided in those three wings is already inadequate and Mr. Jones failed to take into account the marked mechanical and electrical deficiencies presently existing in those three wings. Mr. Jones performed no mechanical or electrical inspection nor performed any test or evaluations to determine the adequacy of the present mechanical and electrical systems in the three subject wings. Mr. Jones, in fact, admitted that the cosmetic renovation would not cure the existing mechanical and electrical problems nor cure the problem of inefficiency caused by the use of the antiquated four and six-bed wards which, along with the private and semi- private rooms in those wings, lack the required number of private patient bathrooms. Given the fact that Mr. Jones' testimony was based on a failure to evaluate the present condition of these wings and their various mechanical and electrical systems and given the fact that he acknowledged that the present patient rooms in those wings are too small to comport width modern patient care standards, Mr. Jones' testimony that a cosmetic refurbishment is a less costly and yet feasible alternative to demolition of the wings and addition to the central patient tower must be accorded scant weight in this proceeding.
Mr. Jones' other suggestion that the Cox and Jewitt wings be demolished and a reconstruction of the West wing be accomplished by placing a seven-story tower in its place is a somewhat more attractive alternative. However, Mr. Jones never inspected the structure of the West wing to determine whether the existing pilings will support the weight of any additional vertical floors to be added to that wing so as to convert it into a seven-story tower.
In fact, the existing pilings supporting the West wing of the hospital would not support a seven-story tower placed on top of the existing West wing and therefore such an alternative is clearly not feasible. Even if the West wing were so reconstructed a severe parking problem for the hospital would still exist. Mr. Jones admitted that a parking garage would still have to be constructed, therefore Mr. Jones' proposal which would require the construction of a parking garage to alleviate the hospital's parking problem if the seven- story tower were placed on the West wing, would still come within approximately
$84,000 of the cost of the total Lee Memorial project as proposed. Finally, such a proposal would still only constitute a reconstruction of the Lee Memorial main campus, and would still not address the question of serving the health care needs of the people in the rapidly growing southwest Lee County area who would still have to drive a substantial distance by personal vehicle or emergency vehicle to get to the main campus of Lee Memorial Hospital.
In summary, the alternative proposed by Lee Memorial Hospital consisting of reconstructing space for 120 beds at its main campus and relocating 81 beds to the proposed satellite hospital was shown to be the most efficient alternative. Additionally, the cost of this reconstruction does not substantially exceed the cost of the alternative proposed by FMCH's expert, Mr. Jones. The location of the satellite hospital in southwest Lee County will serve to prevent people having to travel long distances to a downtown hospital and, once there, experiencing overcrowding, inadequate parking and inefficient, substandard health care facilities.
FINANCIAL FEASIBILITY
Mr. Rufus Harris, an accountant and expert in health care industry accounting and finance, testified on behalf of Lee Memorial regarding the financial feasibility of the proposed project. It was thus established that Lee Memorial, for the pertinent fiscal year of 1988, will have $12,156,000 available for debt service and for the following year, 1989, will have $14,495,000 available for debt service. The required debt service for those two fiscal years, if the proposed project is built, will be 2.7 million dollars.
Therefore, the debt coverage ratio is approximately four and one-half times debt service for fiscal year 1988 and 5.4 times actual debt service for fiscal year 1989. It is reasonable and customary in the health care industry and indeed undisputed, that a normal debt coverage ratio is approximately 1.5 times debt service, meaning that funds should be available to a hospital to cover its debt service on an annual basis approximately one and a half times. Thus, even if the utilization rates projected by Lee Memorial are significantly lower in actuality, the hospital's operating ratio will be such that debt service will still be amply covered. The expert testimony of Mr. Harris was substantially unrefuted. Mr. Halvatzis, the expert in health care accounting and financial analysis called by FMCH and Mr. Grossman, a like expert called by Gulf Coast, focused their testimony chiefly on the feared financial detriments to be occasioned to FMCH and Gulf Coast if the application were granted rather than (other than in general, non-specific testimony) directly challenging the showing of financial feasibility accomplished by Mr. Harris.
The projected total excess of gross revenues over expenses for the Lee Memorial Hospital after the proposed satellite and renovations are built and operating, attributable to both the main campus hospital operation and the satellite hospital combined is approximately 4.2 million dollars for the year 1988 and approximately 6.1 million for 1989. The income from the combined operations in turn will be approximately 3.7 million for 1988 and 5.5 million for 1989. Aside from the testimony of Mr. Halvatsis and Mr. Grossman, which generally focused on the predicted adverse financial impact upon FMCH and Gulf Coast by a grant of the application, Mr. Grossman in his testimony, decried the fact that no separate financial feasibility study was performed related solely to the satellite hospital and that the proposed satellite hospital would have an adverse financial impact upon Gulf Coast by lowering its occupancy rates and allegedly causing its costs to increase. These issues are only tangentially related to the question of financial feasibility of the applicant's project itself. In this connection, a separate feasibility study was not performed nor necessary because this proposed project is in large part a relocation of beds to a satellite hospital and the construction of the satellite hospital is part of essentially one project involving its construction and the renovation and relocation of beds at Lee Memorial's main campus. The satellite hospital is not intended, nor will it be, an independent free-standing hospital both from a legal ownership or a financial or operational standpoint. Rather, it is dependent upon the stability and viability of the parent hospital and both facilities as ultimately built and reconstructed will be owned and operated by the same legal entity and their financial and accounting operations will be combined, operating as one unified health care provision system. In short, Mr. Halvatsis and Mr. Grossman presented no testimony to demonstrate the financial inability of the proposed project to survive and to provide quality health care on a more efficient basis than Lee Memorial presently provides. The testimony of Mr. Harris and Mr. Gene Nelson, who established the project to be financially feasible, is accepted as more credible and competent on the issue of financial feasibility. Thus it is found that the proposed project can adequately and more
efficiently provide quality health care than is the present case for Lee Memorial's system from a financial feasibility standpoint.
COMPETITION AND IMPACT UPON EXISTING PROVIDERS
In considering the question of adverse impact upon existing health care facilities and providers, it must be remembered that the construction of the Lee Memorial satellite hospital and the renovation project at the main campus, will result in the addition of only 19 beds to the entire bed count for District VIII while concomitantly, moving 81 of Lee Memorial's existing beds to the satellite facility. Both FMCH and Gulf Coast maintain that the satellite hospital, particularly, will occasion an adverse financial impact upon their facilities and operations resulting in reduced patient census and utilization rates and therefore feared increased costs to patients at their facilities because of the reduced patient volume. FMCH is located in the general downtown area of Fort Myers, a substantial and similar distance from the southwest Lee County area involved with the satellite hospital as the distance to Lee Memorial Hospital. Gulf Coast proposes to construct its osteopathic hospital in the same southwest Lee County vicinity as the proposed Lee Memorial satellite hospital although the site has not been definitely selected nor has construction begun.
Lee Memorial's proposed project will make its health care provision system more efficient and modern, thus enhancing its ability to provide quality health care to patients and to more effectively compete with other health care providers in serving patients by resulting deterrence of increased health care costs. This will be accomplished by replacing many antiquated, outmoded components with modern up-to-date components and plant and by constructing a more modern, free-standing satellite facility near an area where it hopes to gain more private paying patients for the above reasons. Thus, the project is designed to more effectively compete with other health care providers in Lee County and District VIII. 4/
FMCH called two expert witnesses concerning the issue of alleged adverse impact on its operations. Witness Halvatsis opined that FMCH attracted patients from the southwest Lee County area and that FMCH feared lower utilization and loss of patients from that area if the satellite hospital were installed. FMCH failed to show what percentage of its patient base is derived from south Lee County however, but rather offered testimony of a vague, general nature alluding to feared loss of occupancy, and resulting increased costs, if the proposed Lee Memorial satellite is built and operated. Although FMCH complains of lower occupancy rates, it enjoyed a 68 percent occupancy rate at the time of hearing, which is substantially above the break-even point of profitability. Although Mr. Halvatsis maintains that the reduction in occupancy rates is attributable to a lower patient census, he also admitted that FMCH's budgeting problems result from the application of the diagnosis related group payment method that rewards health care facilities who operate efficiently by only paying a scheduled amount of reitribursement per diagnosis which in turn results in lower average patient stays; which tends to reduce occupancy rates. Thus, FMCH did not demonstrate that feared lower occupancy rates will result chiefly from competition with other providers, including Lee Memorial, as opposed to the "drg" method of reimbursement with concomitant shorter patient stays. Indeed, it has been demonstrated that if Lee Memorial is to continue to successfully finance the majority of indigent cases in Lee County which it presently serves, then it must expand to areas of rapid population growth such as southwest Lee County in order to secure more private paying patients to subsidize its indigent load. This can serve to the advantage of FMCH since it may, in large part, relieve FMCH from undertaking a substantial load of
indigent, non-paying cases, such that more of its patient base will be composed of privately paying patients with a concomitant lower rate of bad debt. This consideration, coupled with the fact that no concrete evidence of the percentage of patients for FMCH derived from south or southwest Lee County was presented, renders its expert testimony and evidence concerning feared financial adverse impact by the installation and operation of Lee Memorial's satellite to be largely speculative.
Herbert Dorsett, an administrator of FMCH, testified in general terms concerning feared adverse impact on FMCH as well. No study or other objective measure of adverse impact on the financial operations of FMCH was adduced and the expert testimony adduced by Lee Memorial, as well as that of Gene Nelson, established that the relocation of 81 beds to the satellite hospital may actually enhance utilization at FMCH and not adversely impact that facility. That testimony is more substantial and credible and is accepted over that of Mr. Dorsett and Mr. Halvatsis.
Gulf Coast Hospital will be an osteopathic hospital facility. Dr. Joseph Piccola, an osteopathic physician who is one of the principal organizers of the Gulf Cost Hospital, established himself that osteopathic medicine and practice is fundamentally different in character and philosophy from the practice of allopathic medicine. The applicant's proposed facility will of course, be an allopathic hospital. It is not likely that Gulf Coast Hospital will participate to any significant degree in the allopathic market, especially with regard to southwest Lee County, nor will the proposed satellite facility of Lee Memorial to which Gulf Coast objects, likely participate to any significant degree in serving osteopathic physicians and patients. It is therefore difficult to find that the installation of the proposed satellite facility of Lee Memorial will adversely affect Gulf Coast's osteopathic patient market share. Gulf Coast in contending that an adverse impact on its market share and utilization will occur, does so with general uncorroborated expert testimony with no reference to any market share analyses or other objective indicators of likely adverse impact, because apparently no such studies were performed.
Lee Memorial has four osteopathic doctors who have staff privileges at its hospital, but its osteopathic admissions account for less than two percent of its overall admissions. Specifically, for the ten-month period prior to July 1984, Lee Memorial admitted 222 osteopathic patients out of its total admissions during that time of 16,158. The bulk of the osteopathic patients residing in Lee County are admitted to FMCH when they need hospitalization. The two percent osteopathic admissions rate at Lee Memorial is not expected to increase merely because a satellite hospital will be constructed in southwest Lee County, especially if Gulf Coast's osteopathic hospital is constructed in the same vicinity. In light of this, the assumptions of Mr. Grossman, the expect witness called by Gulf Coast with regard to adverse impact, concerning the number of patients Lee Memorial might draw from Gulf Coast Hospital, are speculative to a great degree. Since the bulk of osteopathic patients in Lee County are presently admitted to FMCH, if any hospital is affected by the installation of Lee's satellite hospital, it would be FMCH that is affected. Since Lee Memorial historically has admitted only two percent of its patients as osteopathic patients, which rate is not likely to increase, it is probable that the installation of the proposed Gulf Coast osteopathic facility will more likely affect osteopathic admissions at FMCH than will the installation of the Lee Memorial satellite. This is so because the majority of Lee County osteopathic physicians presently practice at FMCH. There is a substantial likelihood that many of them will migrate to the osteopathic hospital when it is ultimately
built. That being the case, Gulf Coast Hospital will likely draw the bulk of the osteopathic patients in Lee County and surrounding areas.
In short, although Gulf Coast decries the feared adverse impact of the proposed satellite hospital on its patient admissions and utilization, Dr. Piccola himself acknowledged that osteopathic medicine is fundamentally different from the practice of allopathic medicine and therefore Gulf Coast failed to show that it will be competing for the same patient market or patient base with the Lee Memorial satellite hospital or that the services proposed by Lee Memorial will be substantially duplicative of its operations. It failed to establish that the installation and operation of the satellite hospital will reduce its patient market share and thus decrease its admissions and utilization. Contrarily, it is quite likely that it will garner a substantial number of the osteopathic patients presently enjoyed by FMCH. Be that as it may, since Basic American Medical, Inc., owns 100 percent of FMCH and 80 percent of the stock of Gulf Coast Hospital, any financial problems related to an unequal distribution of the market share or patient admissions between FMCH and Gulf Coast Hospital can be resolved by Basic American Medical, Inc., through its internal management decisions, cost allocations and modes of operation and support of the two hospitals.
COSTS OF PROPOSED-CONSTRUCTION AND ALTERNATIVES
Several construction alternatives referenced above were considered by Lee Memorial in an attempt to most cost-effectively modernize, renovate and render more efficient its facilities and services. If Lee Memorial did nothing in the way of renovation or modernization, the 45-year-old existing wings would quickly reach the end of their useful life inasmuch as continual expensive repairs are already necessary to maintain the present substandard level of operations. Continuing to allocate money for repairs to the mechanical and electrical systems which do not meet current codes as well as repair and replacement of other elements of the facilities and equipment in those wings, is not an efficient use of the hospital's financial resources. The total cost of rehabilitation of the wings would be in excess of seven million dollars. If this approach were taken however, each wing would have to be closed for approximately one year, which would occasion the loss of approximately seven million dollars in revenue per year for a total of approximately two years. Furthermore, if the wings were renovated creating larger patient rooms and eliminating the outmoded ward system, Lee Memorial would lose 45 hospital beds on a permanent basis which would result in a loss in excess of three million dollars per year for the indefinite future or, alternatively, the hospital would have to come back to the Department with an additional Certificate of Need application and proceeding at some later time to attempt to restore those 45 beds. Such an additional step to address the present problem would amount to an undertaking of much greater magnitude legally and financially than the present application to add 19 new beds and relocate 81 beds along with attendant renovation and construction. Moreover, a mere renovation/rehabilitation of the three antiquated wings will not solve the problem of those patient beds being at too great a distance from necessary ancillary services within the hospital, nor will it adequately and properly meet the health service needs of the rapidly urbanizing, populating area of southwest Lee County which service has a direct effect on the hospital's continued financial viability.
In this connection, the cost of constructing a 250-car parking garage, which is one alternative proposed by the Petitioner would be approximately
$1,375,000 which is much more expensive than the demolition of the wings, which will cost approximately $300,000 and would leave room for 244 needed ground
level parking spaces. The entire alternative proposed by FMCH, including conversion of the West wing to a seven-story patient tower, would be only
$84,000 less than the construction costs for the proposed renovation, relocation and construction of the satellite facility. Further, as discussed above, the FMCH proposed alternative did not take into account the fact that the construction of additional floors on the West wing of the hospital is impossible since the existing pilings will not support them.
In short, the proposed construction costs for both the satellite hospital construction and the main campus renovation and reconstruction are reasonable and will render the resulting health care to be provided cost- effectively. The proposal by Lee Memorial presents the most cost effective manner for it to continue to provide the bulk of Lee County's indigent care, to improve bed utilization and to more efficiently serve the needs of the fastest growing sector of the Lee County area. It will allow Lee Memorial to maintain its market share and compete more effectively by having a more modern, efficient facility and, through this competition with other health care providers, ultimately promote the state's policy goal of health care cost deterrence for patients.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Section 120.57(1), Florida Statutes (1983).
In accordance with the prehearing stipulation entered into by all parties and approved by the Hearing Officer, the following legal criteria remain at issue in whole or in part in this proceeding:
Section 381.494, Florida Statutes, provides in part: (6)(c) The department shall determine the
reviewability of applications and shall review
applications for certificate-of-need determina- tions for health care facilities and services, hospices, and health maintenance organizations in context with the following criteria:
The need for health care facilities and services and hospices being proposed in relation to the applicable district plan and state health plan adopted pursuant to Title XV of the Public Health Service Act, except in emergency circum- stances 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 and hospices in the service district of the applicant.
* * *
The availability and adequacy of other health care facilities and services and hospices in the service district of the applicant, such as outpatient care and ambulatory or home care services, which may serve as alternatives for the health care facilities and services to be provided by the applicant.
Probable economies and improvements in service that may be derived from operation of joint, cooperative, or shared health care resources.
* * *
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 pro-
fessional training programs in the service district; the extent to which the services will be accessible to schools for health professions in the service district 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 district.
The immediate and long-term financial feasibility of the proposal.
* * *
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
The costs and methods of the proposed construction, including the costs and methods of energy provision, and the availability of alterna- tive, less costly, or more effective methods of construction. . . .
In consideration of the "acute care rule," 10-5.11(23), Florida Administrative Code, and the evidence adduced at hearing, it has been established, as found above, that there is a need for 175 acute care beds for District VIII. Included in that 175 beds are the 19 beds sought by Lee Memorial in this application, which bed need is calculated based upon these 19 acute care beds and the remaining ones being needed by 1988. Thus, the criteria contained in Section 381.494(6)(c)(1), Florida Statutes, delineated above have been complied with.
The criteria contained in Section 381.494(6)(c)(2), Florida Statutes, have been complied with as shown by the evidence of record and the above Findings of Fact in that the proposed project will increase the efficiency of the Lee Memorial main campus operation by demolishing outmoded facilities and replacing them with more modern, more efficient facilities which will allow the patients at the main campus to better utilize ancillary services located more centrally to the beds of the patients once those facilities are renovated and reconstructed.
Additionally, the proposed project, when completed, will increase the availability and accessibility of acute care health services to the most rapidly growing sector of the Lee County area which will, in turn, serve to increase the utilization rates of Lee Memorial's entire system, and especially its main campus, by alleviating present accessibility and availability problems of patients in the southwest, urbanizing area of Lee County who are presently burdened by excessive travel times to acute care facilities. The utilization of beds at Lee Memorial's main campus has been shown to benefit by the proposed project because 81 of the beds at the main campus will be relocated to the satellite facility thus enhancing utilization rates at the main facility. Availability, quality of care, efficiency, appropriateness and adequacy of health care services to citizens of the applicant's service district will be enhanced by the provision of the modern, more efficient acute care service being placed both in the southwest Lee County area as well as at Lee Memorial's renovated main campus near the center of Fort Myers. The adequate, efficient provision of quality health care for its total system will be enhanced by the ability of Lee Memorial to more cost-effectively care for the bulk of the Lee County area indigent patient population as a result of its being able to expand into the more affluent southwest Lee County patient market area and through the modernization of its main facilities.
The ability of Lee Memorial to expand to a satellite facility in southwest Lee County will also better serve the health care needs of the citizens of southwest Lee County in terms of the accessibility and availability of efficient, adequate quality health care, inasmuch as no acute care facility is presently located in that area, a substantial driving time from the center of Fort Myers. In this regard, it has not been proven that the proposed Gulf Coast Osteopathic facility will serve the same patient base, will compete for the same patients and thus be duplicative of the service to be provided by Lee Memorial (and vice versa). Thus, the criteria embodied in Section 381.494(6)(c)(2) and (4), Florida Statutes, have been complied with by the applicant.
In accordance with the considerations embodied in Section 381.494(6)(c)(5), Florida Statutes, it has been established by the evidence of record and the above Findings of Fact that the proposed project will facilitate improvements in the provision of health care services and will promote the legislative intent of promotion of cost deterrence in the provision of health care services by the operation of joint-cooperative, shared health care resources as that relates to the proposed satellite hospital and the renovated, reconstructed main facility. The two facilities will operate as a combined health care provider system with shared management, administration, ancillary services, costs and the like. In addition, to the extent that criteria (8) remains partially at issue, it has been established that the installation of the proposed service and expansion into southwest Lee County by Lee Memorial will render its proposed services more accessible to all residents of its service district and it has been established, as found above, that alternative uses or methods of provision of health care services by Lee Memorial in relation to the resources (financial and otherwise) committed to this project, will best be provided by installation of the proposed changes to Lee Memorial's physical facility and operations at the main campus and construction of the satellite hospital, rather than the various other alternatives discussed above involving refurbishment or renovations at the main campus only.
The requirements of Section 381.494(6)(c)(9), Florida Statutes, have been complied with inasmuch as it has been demonstrated that the proposed project will be financially feasible, both in the immediate and long-term context. Additionally, it has been established that the competitive effects
caused by the expansion of Lee Memorial into the southwest Lee County area will promote the beneficial effects of competition on the supply and provision of health care services, which will serve to promote assurance of quality provision of health care services to the public. The project as a whole will serve the interests of cost-effectiveness and health care cost increase deterrence in the provision of those services in that Lee Memorial will be better able to compete in the Lee County area health care market by modernizing and rendering its services more cost-effective and efficient at both the main campus and the satellite hospital. These benefits will be accomplished in part from its resultant enhanced ability to cost-effectively provide indigent care through garnering more private paying patients from the growing southwest Lee County district.
It, likewise, has been established that the proposed project constitutes the most cost-effective means of performing the needed modernization and expansion so as to most effectively and economically utilize existing licensed beds and the proposed 19 beds to be added to Lee's inventory. The renovation of the Cox, Jewitt and West wings was shown to be an inefficient means of construction of this project in the context of utilizing its existing bed inventory and such an alternative would have posed a severe hardship upon Lee Memorial in the form of the loss of more than three million dollars per year in revenue since it would result in the permanent loss of 45 beds from the present inventory, the cure for which eventuality would occasion the costly alternative of another Certificate of Need application and facility construction or reconstruction. Additionally, the fact that such an alternative would cause the loss of utilization of approximately 201 beds for as long as two years, with attendant severe revenue losses, renders this alternative unfeasible. In summary, the proposed project has been established to be the least costly, most effective method of construction of the subject renovation and expansion and the requirements of Section 381.494(6)(c)(12) and (13) have thus been complied with. It has therefore been proven that the criteria delineated above which remained at issue after the acceptance of the prehearing stipulation of the parties, have been adequately and sufficiently complied with as shown by the testimony and evidence of record and the above Findings of Fact.
Having considered the foregoing Findings of Fact and Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is, therefore
RECOMMENDED:
That a Final Order be entered by the Department of Health and Rehabilitative Services approving the relocation of 81 beds from Lee Memorial Hospital's main campus to the proposed satellite hospital and that the construction of the proposed satellite hospital be approved with the addition, as well, of 19 new acute care beds to that satellite hospital and that the demolition of the Cox and Jewitt wings and renovation of the West wing of Lee Memorial Hospital, accompanied by the reconstruction of capacity for 120 beds on the Lee Memorial main campus as proposed in the instant application be approved and a Certificate of Need be issued to Lee Memorial Hospital accordingly.
DONE and ENTERED this 26th day of June 1985 in Tallahassee, Florida.
P. MICHAEL RUFF 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 26th day of June 1985.
ENDNOTES
1/ In that connection the case involving Gulf Coast Hospital's application was remanded by the First District Court of Appeal with the mandate that the Department of Health and Rehabilitative Services issue that entity a CON. That cause thus went back to the Hearing Officer involved for hearing solely on the issue of the number of beds which should be authorized to Gulf Coast. HRS has now issued its final order in that case authorizing 60 beds.
2/ In this connection, it must be remembered that there is at present no rule authorizing calculation and allocation of acute care bed need on a subdistrict basis co-extensive with county boundaries or otherwise for District VIII. Thus, the determination of bed need for purposes of this case must be performed using the elements of the computation contained in Rule 10-5.11(23), Florida Administrative Code derived from and applied to District VIII as a whole.
3/ The final status of that case in terms of judicial review of that Final Order is not of record in this proceeding.
4. See Subsection 381.494(6)(c)(12), Florida Statutes.
COPIES FURNISHED:
E. G. Boone, Esquire Peggy Sullivan, Esquire Post Office Box 1596 Venice; Florida 34284
Leonard A. Carson, Esquire John Newton Esquire Cambridge Centre
253 East Virginia Street Tallahassee, Florida 32301
Douglas Mannheimer Esquire CULPEPPER, TURNER and MANNHEIMER
318 North Calhoun Street Tallahassee Florida 32302
Ivan Wood, Esquire
Gary Riebschlager, Esquire WOOD, LUCKSINGER and EPSTEIN
1221 Lamar, Suite 1400
Houston, Texas 77010
David Pingree Secretary Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32301
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES
FORT MYERS COMMUNITY HOSPITAL,
Petitioner,
and
DOCTORS' OSTEOPATHIC MEDICAL CENTER, INC., d/b/a GULF COAST HOSPITAL, INC.,
Intervenor,
vs. CASE NO. 84-0840
CON 2851
LEE MEMORIAL HOSPITAL and DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,
Respondent.
/
FINAL ORDER
This cause came on before me for the purpose of issuing a final agency order. The Hearing Officer assigned by the Division of Administrative Hearings (DOAH) in the above-styled case has submitted a Recommended Order to the Department of Health and Rehabilitative Services (HRS). A copy of that Recommended Order is attached hereto.
Exceptions were filed by Intervenor, Doctors' Osteopathic Medical Center, Inc., d/b/a Gulf Coast Hospital, Inc. (Gulf Coast), and by HRS.
RULING ON EXCEPTIONS
Proper application of the criteria set forth in 381.494(6)(c) for review of certificate of need applications requires an examination of appropriate geographical location of a proposal when there is need in the district. Footnote 2 is a conclusion of law and will be stricken in accordance with HRS exception 1.
HRS exception 2 is also granted. A finding concerning bed need under the acute care rule can impact on many of the statutory criteria found at 381.494(6)(c)(2).
The record will identify exhibits of the parties introduced into evidence in this proceeding. Gulf Coast Hospital's first and second exceptions are denied.
Since Gulf Court has not included a copy of its proposed recommended order, exceptions 3 through 12, 14 through 39, and 45 cannot be addressed.
Findings of fact can only reject or modify findings of fact if it determines from a review of the complete record that the findings of fact were not based upon competent substantial evidence. Gulf Coast has not alleged that a finding of fact is not based upon competent substantial evidence. Gulf Coast Hospital's exception 13 is denied.
Fort Myers has not filed exceptions with HRS. Gulf Coast's exception number 40 is denied.
The Hearing Officer's findings at page 16 of the Recommended Order that Lee Memorial Hospital's existing facilities provide inadequate health care, and at page 24 that the effect of Lee Memorial Hospital's proposed satellite upon Gulf Coast Hospital, Inc. can be cured or alleviated by internal management decisions, are supported by competent substantial evidence. Gulf Coast Hospital's exceptions 41 and 42 are denied.
FINDINGS OF FACT
The Department hereby adopts and incorporates by reference the findings of fact set forth in the Recommended Order, except footnote 2 which is not adopted for the reasons set forth in the ruling on exceptions.
CONCLUSIONS OF LAW
The Department hereby adopts and incorporates by reference the conclusions of law set forth in the Recommended Order, except the first full paragraph at page 27 is modified to read:
In consideration of the "acute care rule," 10-5.11(23), Florida Administrative Code, and the evidence adduced at hearing, it has been established, as found above, that there is a need for 175 acute care beds for District VIII. Included in that 175 beds are the 19 beds sought by Lee Memorial in this application, which bed need is calculated based upon these 19 acute care beds and the remaining ones being needed by 1988. Thus, he criteria contained in Section 381.494(6)(c)(1)(2), Florida Statutes, delineated above have been complied with.
Based upon the foregoing, it is
ADJUDGED that the application of Lee Memorial Hospital for a certificate of need to relocate 81 beds from Lee Memorial's main campus to the proposed satellite hospital, the construction of the proposed satellite, the addition of
19 new acute care beds to be located in the satellite, the demolition of the Cox wing and renovation of the West wing of Lee Memorial Hospital, the reconstruction of capacity for 120 beds on the Lee Memorial Main Campus is approved.
DONE and ORDERED this 18th day of October, 1985, in Tallahassee, Florida.
DAVID H. PINGRE
Secretary
A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF HRS, AND A SECOND COPY, ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES.
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a copy of the foregoing has been sent to the following named people by U.S. Mail, at 3:30 p.m. o'clock, this 23rd day of October, 1985:
COPIES FURNISHED:
E. G. Boone, Esquire Peggy Sullivan, Esquire Post Office Box 1596 Venice, Florida 34284
Leonard A. Carson, Esquire John Newton, Esquire Cambridge Centre
253 East Virginia Street Tallahassee, Florida 32301
Douglas L. Mannheimer, Esquire Culpepper, Turner and Mannheimer
P. O. Drawer 11300 Tallahassee, Florida 32301
Ivan Wood, Esquire
Gary Riebschlager, Esquire Wood, Lucksinger and Epstein 1221 Lamar, Suite 1400
Houston, Texas 77010
P. Michael Ruff, Hearing Officer Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
LESLEY MENDELSON, Agency Clerk Assistant General Counsel Department of Health and
Rehabilitative Services 1323 Winewood Boulevard Building One, Suite 407 Tallahassee, Florida 32301 904/488-2331
| Issue Date | Proceedings |
|---|---|
| Oct. 24, 1985 | Final Order filed. |
| Jun. 26, 1985 | Recommended Order sent out. CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Oct. 18, 1985 | Agency Final Order | |
| Jun. 26, 1985 | Recommended Order | Respondent's proposal for both new and reconstructed acute-care beds meets all applicable requirements of Section 381.494, Florida Statutes, and should be approved. |
