vs. ) CASE NO. 84-4031
Respondent. )
This case was heard at final hearing on April 1, 1985, in Rockledge, Florida. At issue is whether the Respondent should issue a certificate of need to the Petitioner for an extracorporeal shock wave lithotripter.
Oertel & Hoffman, P.A.
For Respondent: John M. Carlson, Esquire
Petitioner filed proposed findings of fact and conclusions of law and a memorandum law. Respondent did not. Based upon the evidence heard at the final hearing, the following findings are made.
Wuesthoff Memorial Hospital is located in Rockledge, Brevard County, Florida. It is a non-profit hospital and has been in existence since at least 1941.
Wuesthoff applied for a certificate of need for an extracorporeal shock wave lithotripter on June 14, 1984. There are no extracorporeal shock wave lithotripters in Brevard County, and the only one approved in Florida is at Shands Hospital in Gainesville, Florida. There were no other applications filed during this hatching cycle by any other entity. (T. 167,168.)
At the time of the application, the lithotripter had not been approved by the Food and Drug Administration. The Food and Drug Administration has now given pre-market approval for the Dornier lithotripter, and HRS, in the prehearing stipulation, stipulates that FDA approval presumes that use of the lithotripter is safe and effective. Prehearing stipulation, paragraph (5).
An extracorporeal shock wave lithotripter is a device to fragment kidney stones by shock wave. The patient is immersed in water. A high energy shock wave is generated by discharge of electricity at a point within a convex focusing device. The focal point of the shock wave is aimed to converge on the kidney stone. This aiming is accomplished by x-ray. The shock wave travels harmlessly through flesh (with certain exceptions, such as the lungs), and when it converges upon the kidney stone, the stone breaks into small pieces that can be passed in the urine. In the majority of cases, the patient does not need follow-up surgery. Lithotripsy itself does not require or involve any surgery.
All other methods for removal of kidney stones that cannot naturally be passed require surgical invasion of the body. Direct surgery is the most invasive, requiring a ten inch incision, removal of a rib in some cases, and lengthy hospital and home recovery periods. Other less invasive surgical methods have been perfected in recent years, such as the cystoscopic method and percutaneous surgery, but both still require surgical invasion of the body, with the associated trauma and lengthier recovery periods.
Lithotripsy is expected to cause fewer deaths than other procedures. (T. 120.) The morbidity rate for lithotripsy is similarly expected to be less than surgical methods. Id. The premarket approval of the Dornier lithotripter by the Food and Drug Administration discusses the potential adverse effects of the new device. It would appear that although some adverse effects are known, these adverse affects typically occur to a significantly larger degree during the various forms of surgical intervention. For example, while there is some hematuria caused by the lithotripter, it is less than that with surgery, and clears within 24 hours. Similarly, while the lithotripter involves exposure to x-rays, that exposure is much less than x- ray exposure in percutaneous surgery. (Petitioner's Exhibit 6, p. 8.)
Lithotripsy thus is expected to reduce trauma to patients by avoiding surgery, to reduce the expense and loss associated with lengthy hospital stays and recovery periods, and to reduce the amount of pain experienced with a kidney stone. (T. 119-121, 126-127.) Kidney stone pain is one of the most severe pains suffered by humans. (T. 56.)
Rockledge, Florida, is located on U.S. 1 and is near the Beeline Highway to Orlando, and is also near Interstate 95, which is a major north-south highway. Wuesthoff Memorial Hospital, located in Rockledge, is in health service area District 7. Rockledge is approximately 45 minutes driving time from the Orlando airport. (T. 24.) District 7 includes Brevard, Osceola, Seminole, and Orange counties.
Wuesthoff Memorial Hospital provides most of the services usually provided by an acute care hospital except open heart surgery and burn care. (T. 20.) In recent years, Wuesthoff has tried to place emphasis on certain specialities more than others, and has tried in part to specialize in urology and care associated with kidney stones. (T. 20, 47.) Wuesthoff is currently in
the process of doubling the size of its physical plant, although the construction will only increase its beds from approximately 279 to 313. (T. 25.) As a part of this major construction, the operating room will be doubled in size, and Wuesthoff proposes to locate the lithotripter near the operating room. (T. 26.)
The need for lithotripters in Florida is evidenced by Joint Exhibit A. This document was approved by and prepared in part by Respondent's own witness, Dr. Partick Hunter, who teaches at Shands Hospital. (T. 90.) The exhibit evaluates need on a statewide basis, and the Respondent admitted that HRS evaluates the need for lithotripters on a statewide, rather than District, basis. (T. 147, 171.)
There is no need to discuss any method of determining need contained in Joint Exhibit A except the first method, which shows a clear need for the lithotripter sought in this case and is a reasonable estimate of need. This method uses a rate of 19.25 kidney and ureter stones per 10,000 population. Since this rate is based only on hospital admissions, and does not include outpatients, it may be smaller than the actual rate. (T. 42; Joint Exhibit I,
p. 6.) It is also a conservative rate because it does not attempt to account for increases in rate since 1980. A number of studies indicate that the incidence of kidney stones has increased yearly, (see, e.g., Joint Exhibit G, p. 6), and the rate may be as high as 25.40 per 10,000 in Florida for the current year, 1985. (T. 38; Petitioner's Exhibit 7, Attachment B.)
Dr. Hunter sought to discredit the 19.25 per 10,000 rate, testifying that he had conducted a study finding a rate of 12 per 10,000, and that the Mayo Clinic had conducted a study showing 6 per 10,000. (T. 97.) Other evidence in the record suggests a rate of 10 to 20 per 10,000, (Joint Exhibit E, Table 1), and 14 per 10,000, (Joint Exhibit F, page 2). Joint Exhibit I contains estimates from 2 to 3 percent of the population (200 to 300 per 10,000), 16.8 per 10,000 (based upon 391,000 patients admitted annually to U.S. hospitals with kidney stone diagnosis, assuming U.S. population of 232 million), and 13 per 10,000 in the South, which apparently is the "stone belt" in this country for occurrence of kidney stones. (Joint Exhibit I, pp. 4-8.) Another Mayo Clinic study of males only showed a more current rate of 12 per 10,000. (Joint Exhibit I, p. 6.) It is the conclusion of the Hearing Officer that even if the correct incidence rate were 10 per 10,000, the result would be a need for at least two lithotripters in Florida, and the need for the lithotripter in this case would be proven. Moreover, Dr. Hunter's testimony was not sufficiently elaborate or persuasive for the Hearing Officer to accept the rate of 12 or 6 per 10,000. Given the range of incidence rates discussed above, coupled with the fact that the evidence suggests that rates are increasing and are higher in the southeastern portion of the United States, it is the finding of the Hearing Officer that the rate of 19.25 per 10,000 is reasonable.
Joint Exhibit A, approach 1, next estimates that about 50 percent of patients experiencing a kidney stone will require surgical intervention. Dr. Hunter testified that the number should he 30 to 40 percent. Forty percent appears to be a more appropriate figure. That figure is also contained in Joint Exhibit I, p. 10. Joint Exhibit E, p. 2, uses the 50 percent figure, and Joint Exhibit F, p. 2, uses a 22 percent figure.
Joint Exhibit A, approach 1, then estimates that 33 percent of those persons needing surgical intervention for a kidney stone could properly be treated by lithotripsy. Dr. Hunter testified that some experts feel the number is 15 to 30 percent. (T. 99.) But he also mentioned an expert who thought that
85 percent of the patients needing intervention could be treated by lithotripsy. (T. 88.) He (Dr. Hunter) personally felt that 65 to 75 percent of patients who were candidates for intervention of any kind were candidates for lithotripsy. (T. 88-89.) Joint Exhibit E uses a 33 percent rate. It is the conclusion of the Hearing Officer that a rate of from 33 to 50 percent, as argued by counsel for HRS, (T. 15), is a reasonable rate.
A reasonable projected utilization rate per machine is 1,000 procedures per year. (T. 66; Joint Exhibit A. See also Joint Exhibit F, p. 4;
T. 128-129.) This figure is substantiated by figures of utilization which are both higher and lower. (Joint Exhibit I, p. 30; T. 103, 134.)
Approach 1, Joint Exhibit A, predicts that approximately four lithotripters are needed in Florida in 1984 and 1989, rounding up to the nearest whole number. If the rate of surgical intervention found to be reasonable in paragraph 13 above is used, coupled with the 33 percent rate of suitability for use of the lithotripter, then the predicted need for 1984 is 2.8 lithotripters, and the need for 1989 is 3.1, both of which round to 3. Using the 40 percent surgical intervention rate, but using the 50 percent rate of lithotripter treatment suitability, then the 1984 need is 3.4 (rounds to 3) and the 1989 need is 3.8 (rounds to 4). The most reasonable calculation of need is the last calculation, which shows a need in 1984 for 3 lithotripters, and a need by 1989 for 4 lithotripters. It probable that by 1986, extrapolating between these two benchmarks, that the population of Florida will have increased above the 1984 level to push the needed figure above 3.5, thereby resulting in a need for 4 lithotripters in Florida by 1986.
The lithotripter at Shands is already running at a reasonably full capacity of four patients per day, which is 1040 patients per year for 52 five day weeks. (T. 128-129, 62-63.) This fact alone suggests that Florida needs another lithotripter immediately.
Petitioner also presented evidence relevant both to need and financial feasibility which was limited to District VII. Using the same method as used in approach 1, Joint Exhibit A, about 397 persons in District VII in 1984 would have been suitable for treatment by lithotripsy, and that number was estimated to be 444 by 1989. (Petitioner's Exhibit 7.) These projections do not try to predict the number of patients that might use the Wuesthoff lithotripter from other Districts. (T. 40.) Since the only other lithotripter is at Shands in Gainesville, it is likely that the prediction of about 400 procedures annually is low.
The point where a lithotripter can be expected to break even (resulting in a balance between revenues and expenses and cost) is from 300 to
450 procedures per year, with 400 a good mid-range benchmark. (Joint Exhibit I,
p. 65; Joint Exhibit F, p. 4; Joint Exhibit E, Table 1, fn.2; T. 153.)
A lithotripter would cost about $1.5 to 2.1 million. (T. 26, 136.) The Petitioner has adequate financial resources to either buy the machine or lease it. (T. 51-52.) There does not appear to be any issue of short term financial feasibility in this case. (T. 27-28, 153.)
Since the evidence shows that in District VII alone there is a potential need of about 400 procedures per year, there also does not appear in this case to be any issue of long term financial feasibility. (See the discussion above, paragraphs 17 and 18. See also T. 137-138, 153.)
The Food and Drug Administration has completed its tests for safety and efficacy on the Dornier lithotripter with respect to those patients having the fewest health problems and presenting the fewest risks of complications resulting from the procedure, but the FDA is still studying the possible risks and harm that may occur to higher risk patients. (T. 81.)
At Shands, about 20 percent of the patients treated to date have developed some urinary obstruction from the residual kidney stone fragments. About 10 to 20 percent are ill after the treatment. Some patients have pain and bruises. (T. 82.) Further, about 30 percent of the patients had small blood clots on the kidney following the treatment, and a large percentage had temporary swelling of the kidney, but recovered. The long term harm that nay be caused to the kidney from use of the lithotripter is not known. (T. 60-61.)
Dr. Patrick T. Hunter, who is a clinical instructor in the Department of Urology, Shands Teaching Hospital, University of Florida, gave several reasons for locating a lithotripter at a research hospital. First, this would make available to the patient persons qualified in metabolic evaluation and management, who might help the patient prevent a recurrence of the kidney stones. (T. 83.) Second, having research capabilities would provide long-term follow-up and special studies for problems that cannot now be predicted with the lithotripter treatment. (T. 83- 84.) Third, since complications will arise with some of the lithotripsy patients, there will be a need for extra manpower to provide related services, and a research hospital should have that extra staff available. (T. 104-105.) Finally, Dr. Hunter felt that it was important to locate a lithotripter where urologists were located, and where the urologists have up-to-date skills. (T. 122.)
It takes three to four urologists to run a lithotripter adequately. (T. 103, 105, 76, 62.) Wuesthoff has four urologists on staff currently. (T. 30.) One of these urologists is Dr. Jorge Leal, who is an expert in urology, has joined in numerous articles, and is both chief of surgery at Wuesthoff and an associate professor at Shands, where the only other Florida lithotripter is located. Dr. Leal anticipated that at least three of the Wuesthoff urologists would operate the machine. (T. 62.)
Dr. Leal has not yet been trained to operate a lithotripter, but the record clearly indicates that Wuesthoff is committed to train all staff who would operate the lithotripter, and that such training is available. (T. 28-29, 52, 58, 67-68, 106-111, 152.)
Dr. Leal currently performs percutaneous surgery at Wuesthoff for the removal of kidney stones, and employs other state-of-the-art techniques as well. (T. 48.) His work has already resulted in kidney stone referrals to Wuesthoff from outside the immediate area. (T. 50.)
It appears that HRS in this case seeks to apply an incipient policy that lithotripters be located in major metropolitan areas. (T. 179.) Thomas Porter, certificate of need application review supervisor for the Respondent, testified as to reasons he believed that lithotripters should be located in major urban areas having greater concentrations of population. First, he said HRS wanted to proceed cautiously until the "issues that surround this type of procedure" are eventually answered. (T. 147.) He gave no credible testimony as to what issues these might be. As found in paragraph 3 above, HRS has stipulated that FDA pre-market approval presumes that use of the lithotripter now is safe and effective. The record does contain some evidence that long range issues still need to be studied, that complications can be expected in
some patients who are treated by lithotripsy, and that lithotripsy must cautiously used for higher risk patients. But the record also contains sufficient evidence that Dr. Leal and his staff of urologists, under his direction, are sufficiently skilled in current techniques to properly use the lithotripter, and, additionally, these physicians have access to Shands for consultation for problems that might arises.
Next, Mr. Porter suggested that location of a lithotripter in a major population area will make the machine accessible to more patients, and will lower cost. (T. 147-148.) The Petitioner has adequately shown, without rebuttal, that its location is strategically located and accessible to several major population areas, including Orlando to the west, the southeastern portion of the state, and Jacksonville. The Petitioner's location is connected to these areas by major highways. It should be remembered that the proof of need in this case shows a need for three to four lithotripters in the state, and there 13 only one in Gainesville. Locating a second lithotripter in Brevard County is reasonable way to insure that the second lithotripter covers population areas not covered by the Gainesville machine.
Next, Mr. Porter said that urban areas are suitable for lithotripters due to the existence of professional expertise and teaching and research programs. That may be true, but HRS has not proven on this record that some other part of the state is so much better suited for a lithotripter that a lithotripter should be denied this applicant. Further, HRS has not shown that this applicant will fail to acquire or otherwise consult with needed research or professional experts in the operation of a lithotripter. To the contrary, Dr. Leal's collaboration with Shands, and the existence of up-to-date surgical techniques at Wuesthoff, offers sufficient record assurances that Mr. Porter's concerns will be satisfied at Wuesthoff. Mr. Porter did not present evidence in rebuttal specific to the issue of the competence of Wuesthoff. Indeed, he had no quarrel with the quality of care provided generally by the Petitioner, (T. 149), and stated that he believed that Wuesthoff "is certainly capable of providing the necessary ancillary services and administrative services surrounding this type of procedure. (T. 150.) Mr. Porter further admitted that Wuesthoff had the capability to handle emergency complications arising from use of the lithotripter. (T. 182.) His concern, thus, fails of proof, and is too vague to be used by this Hearing Officer as a reason to deny the Petitioner its application. Finally, since lithotripsy in the majority of cases destroys the kidney stone without invasive surgery and without further complications, there is good reason to believe that lithotripters in the future do not need to be located at major research hospitals, but rather need to be distributed more broadly among hospitals in the state, such hospitals simply need to be current in their ability to perform state-of-the-art surgical techniques to complement lithotripsy. (T. 49-50.)
Mr. Porter's next concern, that a lithotripter be located so that it will enjoy maximum utilization, at about 1,000 procedures annually, appears to be satisfied on this record. To reiterate, there is only one lithotripter in this state, and a need for three or four. Wuesthoff surely will attract patients sufficient to result in it and Shands operating at the 1,000 procedure level. It should be noted that Shands is not in a particularly large local area of population, either, but, like Wuesthoff, is accessible to patients from north and central Florida.
Addressing criterion 11 of the statutory requirements for granting a certificate of need, Mr. Porter testified that several other facilities in the state have from 25 to 30 per cent of their patients from outside the service
district, and thus satisfied this criteria as a better regional service centers for a lithotripter than Wuesthoff, which does not. Standing alone, this criteria and testimony is not a sufficient basis for denial of the certificate of need to Wuesthoff. Reference to other, unnamed facilities, which did not apply for a certificate of need in the same batching cycle as the Petitioner, is not relevant. Counsel for HRS so agreed. (T. 191, 194.)
There is no alternative to lithotripsy. The technique is unique. (T. 150.)
The fact that Wuesthoff is not located in a "major metropolitan area" is not grounds for denial of this certificate of need, standing alone. (T. 181.)
There is no provision in either the local or state health plan related to lithotripters, and there is no rule governing lithotripters. (T. 146, 15.)
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and parties to this proceeding.
The Petitioner has satisfied all relevant criteria required by section 381.494(6)(c), Fla. Stat. (1984), for issuance of a certificate of need for an extracorporeal shock wave lithotripter to be located at its hospital in Rockledge, Florida.
The Respondent has failed to establish and justify its incipient non- rule policy that lithotripters be located only in major metropolitan areas, and only be located near research facilities. See Florida Medical Center v. Department of Health and Rehabilitative Services, 463 So. 2d 380 (Fla. 1st DCA 1985).
Just as it was questionable whether HRS could limit the placement of nuclear magnetic resonance units to research facilities, see Florida Medical Center, supra, 463 So. 2d at 382, it is questionable. Whether HRS in this case can limit the placement of lithotripters to major metropolitan areas located near research centers. The criteria in Section 381.494(6)(c), Fla. Stat. (1984), focus on need, cost, availability of alternative services, financial feasibility (which is governed primarily by need), and like criteria. In section 381.493(2), Fla. Stat. (1984), the Legislature states its intent in enactment of the certificate of need law to assure the best possible service to the community, to define areas of need, to consider alternatives, to eliminate unnecessary duplication, to provide services which are not currently available, and to strengthen competitive forces. Restriction of new and beneficial technology to only a few places in the state, or to research centers only, seems in direct conflict with the statutory criteria and intent because it ignores overall need, availability of resources in the community, and competition. This order, however, does not rest upon a conclusion that the incipient policy is contrary to statute, but rather upon a conclusion that the incipient policy was not justified by record evidence.
Even if the Respondent had proven the justification for applying its incipient non-rule policy in this case to deny the application of this Petitioner, it may be precluded from doing so by failure to mention this issue in the prehearing stipulation. By order dated December 11, 1984, the Hearing Officer required the parties to enter into a prehearing stipulation concisely
identifying each issue of law and fact that remained for determination by the Hearing Officer. In the prehearing stipulation, HRS stated that there were no issues of law to be determined by the Hearing Officer, and agreed that the only issues of fact to be determined were the overall compliance of the application for certificate of need by Petitioner with "the criteria in Chapter 381, Fla.
Stat." Chapter 381 does not contain any criteria limiting lithotripters to major urban areas near research centers. Reliance upon non-rule policy may be an alternative available to administrative agencies in Chapter 120, Fla. Stat. proceedings, but other parties have a right to know what will be litigated.
Non-rule policy, by definition, does not exist in rule or statute. By stipulating that the only issues at stake in this hearing were the explicit criteria of the statute, HRS may have waived its right to rely upon non-rule policy. However, since the non-rule policy was not justified by record evidence during the hearing, the Hearing Officer will not enter a conclusion of law that the Respondent is precluded from proof of non-rule policy. Were the facts otherwise, rather than preclude proof, the Hearing Officer would continue the hearing to afford the Petitioner an adequate time to discover the basis of the non- rule policy, and to prepare evidence in rebuttal.
As stipulated by HRS during the hearing, all testimony concerning the intentions of the Department to issue certificates of need to any applicant for a lithotripter which filed such application in a batching cycle subsequent to that of Wuesthoff is irrelevant as a matter of law.
Even if HRS had not so stipulated, the status of Departmental action on later batched applicants is legally irrelevant to the issue of need and the rights of Petitioner herein. Petitioner was not in competition with any other applicant when it filed its application for a certificate of need. At the time of the final hearing, there was only one approved lithotripter in the State, the one at Shands. The evidence shows a current need for four lithotripters in Florida, and the Petitioner legally has no competitors for one of these. There are no other parties in this case. There were no other applicants in the batch. Comparative review only occurs when mutually exclusive applicants apply in the same batch. Rule 10- 5.08, F.A.C. See Bio-Medical Applications of Clearwater
v. Department of Health and Rehabilitative Services, 370 So. 2d 19 (Fla. 2d DCA 1979).
It is the recommendation of the Hearing Officer that a final order be entered granting the application of Wuesthoff Memorial Hospital for a certificate of need for an extracorporeal shock wave lithotripter.
DONE and ENTERED this 17th day of June, 1985, in Tallahassee, Florida.
WILLIAM C. SHERRILL, JR.
FILED with the Clerk of the Division of Administrative Hearings this 17th day of June, 1985.
Terry Cole, Esquire Oertel & Hoffman, P.A.
John M. Carlson, Esquire Assistant General Counsel Department of Health and
Mr. David H. Pingree, Secretary Department of Health and
