Pollock, a Hearing Officer with the Division of Administrative Hearings in Titusville, Florida during the period August 11-14, 1986, and continuing in Tallahassee, Florida during the period August 18-22, 1986. The issue for consideration at the hearing was which of the several applicants, if any, should be issued a Certificate of Need to construct and operate a 60 bed nursing home in Brevard County, Florida.
For Health Care and Jean Laramore, Esquire Retirement Corp: Kenneth Hoffman, Esquire
325 North Calhoun St. Tallahassee, Florida 32301
For Courtenay Springs: Thomas B. Smith, Esquire
For Manor Care of South Donna H. Stinson, Esquire Brevard County: Moyle, Flanigan, Katz
118 North Gadsden St. Tallahassee, Florida 32301
For Forum Group, Inc.,: Susan G. Tuttle, Esquire
For Meridian, Inc.,: Robert D. Newell, Jr. Esquire
For Department of Health John F. Gilroy, Esquire and Rehabilitative Svs.: Office of General Counsel
The various Petitioners herein, including Florida Living Care, (FLC), Health Care and Retirement Corporation ofI America, (HCR), Manor Care of South Brevard County, (Manor Care), Forum Group, Inc., (Forum), and Meridian Inc., (Meridian), in addition to others who have since voluntarily dismissed their petitions, filed applications with the Department of Health and Rehabilitative Services (DHRS), for Certificates of Need (CON), to operate a set number of nursing home beds in Brevard County, Florida. All applications were denied by the Department when comparatively reviewed in June, 1985. All thereafter filed petitions for a formal administrative hearing to contest these denials and the individual cases were consolidated for hearing.
In addition, Manor Care also challenged the approval by the Department of the approval of CON number 3831 to Sun Bank of Tampa, the financial institution which had taken over ownership of Courtenay Springs, (Courtenay), during the application process for the construction of a set number of nursing home beds in the same area.
There were initially nine separate cases which were consolidated for hearing. However, Wuesthoff Health Services, Inc. and Hillhaven Convalescent Center of Brevard County both voluntarily dismissed their petitions prior to the hearing.
Heritage Springs Convalescent Center did not appear at the hearing and presented no evidence. Meridian Nursing Centers,
Inc. appeared at the hearing and participated to some degree, but toward the latter part of the hearing, counsel advised the Hearing Officer that it was voluntarily dismissing it's petition as well. Consequently, only five applicants remained throughout the entire proceedings.
At the hearing, HCR presented the testimony of Dr. Thomas G. Hoffman, an expert in neurology; Ms. Mary Seijo, an expert in the counseling of Alzheimer's Disease caregivers; Ms. Maya Mell Davis Mosholder, an expert in the care and treatment of Alzheimer's Disease patients; Valis Miller; Milo Bishop, an expert in health planning; Wendell W. Thomas; Dr. David C. Warner, an expert in health planning; Paul E. Seiben, an expert in the field of nursing home planning and development; Phyllis Ripley; Robert Wehner, an expert in nursing home accounting and finances; and Carolyn Lookabill, an expert in the treatment of Alzheimer's disease patients in nursing homes, and introduced HCR Exhibits 1 and 3 through 12.
Manor Care presented the testimony of Craig B. Thornton, an expert in health planning; Diane Jacobson, an expert in nursing home finances; David James Riland; Tal Widdes, an expert in the treatment of Alzheimer's Disease patients in nursing homes; Joyce Casey Smith, an expert in geriatric nursing, nursing administration, and quality assurance in nursing homes; Max Luber, expert in equipment and furniture costs of nursing homes; Richard Brandon, an expert in health care facility construction; and John Lee, expert in nursing home operations, and introduced Manor Care's Exhibits 1 through 9.
FLC presented the testimony of Donald R. Hampton, expert in nursing home design; Steve Clinton Windham, expert in health planning; Robert C. Klettner; Doris Branch expert in nursing home administration; Robert M. Hayden; Kathleen Wingard; Patrick L. Harkins, expert in nursing home development; and Kenneth Connors, Jr., expert in nursing home accounting, and introduced its (PBCC) Exhibits 1 through 16.
Forum Group presented the testimony of Ronald G. Barrett, expert in nursing home development and operations and health planning as related to nursing homes; Eita A. McDonald, expert in the operation and quality assurance of nursing homes; David W. Reynolds, expert in architecture and construction of health care facilities; Lawrence J. Morton, expert in health care finance; and Donald I. Craig, Jr., expert in health planning and nursing home development; and introduced Forum Exhibits 1 through 12.
Courtenay presented the testimony of Bruce W. Smith; Ronald Delgato; Laurel Chadwick; Donald M. Dahlfues, expert in health
care financial feasibility and financial planning; and Phillip W. Rich; and introduced Courtenay Exhibits 1 through 12.
DHRS presented the testimony of Reid Jaffe, expert in health planning and certificate of need review and introduced DHRS Exhibits 1 through 3.
Subsequent to the hearing, the parties submitted proposed Findings of Fact which have been ruled on in the Appendix to this Recommended Order.
All of the applications involved in this matter relate to nursing home beds in the Brevard County subdistrict of HRS District VII and were considered in the January, 1988 planning horizon, the applications having been filed in January, 1985.
The applicants in issue here are:
HCR which has applied for 120 beds;
Manor Care which has applied for 120 beds;
FLC, d/b/a Palm Bay Care Center, (PBCC), which has applied for 60 beds;
Forum which has applied for 120 beds; and
Countenay which has applied for 46 beds.
The applications of the first four applicants listed above were denied. However, on June 24, 1985, Courtenay received CON No. 3831 for a conversion of 36 beds from sheltered status to community nursing home beds and this approval was challenged by Manor Care in addition to its appeal of the denial of its application.
HCR filed an application for a 120 bed nursing home in Brevard County, Florida, in January, 1985. The application was assigned number 3827 by DHRS. The initial application was denied by the agency but at the hearing, HCR filed an updated application without changing the number of beds requested.
HCR proposes to construct a 120 bed nursing home for a total cost of $3,781,000.00. It proposes to provide services presently not provided in the county such as sub-acute care, IV or respiratory therapy, and other high tech services; respite care; and a separate 30 bed Alzheimer's Disease (AD) wing with a special 15 bed "wandering unit". The AD patients included in
this 30 bed wing would be segregated from other patients in the home.
HCR, a wholly owned subsidiary of Owens Illinois, Inc., is fully qualified to construct, develop, and operate a nursing home since it has demonstrated its ability by the development and operation of approximately 100 nursing homes in 20 states.
HCR bases the main portion of its thrust on the provision of services not otherwise provided for within the county with specific emphasis on AD. It points out that the 19851987 State Health Plan recognizes a statewide inadequacy of services for patients with this condition.
AD is defined as a form of dementia that generally afflicts older patients. It is a degenerative disease affecting the brain and the symptoms are categorized in several stages from Stage One, the least serious, to Stage Four, where the patient is totally bedridden and has deteriorated to a level where almost total nursing care is required.
It is in Stage Four and the prior Stage Three that the patient requires almost total and constant supervision to prevent him from injuring himself. Patients in Stages Three and Four do not-sleep well and wander continuously until toward the end they are completely bedridden. Because the appropriate
treatment for AD patients recognizes the special needs of these patients and requires special treatment with specifically trained staff, some authorities feel it is not normally appropriate from a medical or management standpoint to-house AD patients with other nursing home patients. These authorities feel it is more appropriate to house them in a separate wing with special plant design which is staffed with specially trained staff members.
Because of the peculiarities of the disease in question there is, in addition to a direct patient care need, an additional need for respite care. This is care given on a temporary basis to allow the family with whom the patient ordinarily lives some respite
or- relief from the traumatic effect of caring for an AD patient. Further, since patients in Stage Three and beyond cannot be cared for adequately in a day care program, and since they are often violent, specialized facilities and care programs are required and the existing nursing homes in Brevard County do not have the facility or staff to provide appropriate care for AD patients at the present time. Those who urge this position present evidence to show that the need for care capability for Stages Three and Four AD patients is so great that numerous patients in this category are being referred outside Brevard County because of the unavailability of beds for them.
HCR proposes, as was stated above, to provide a special
30 bed AD wing in its facility which will be provided with a "wander guard system", a sensing device which would serve as an alternative to physical restraint or drugs in the management of AD patients. In addition, HCR proposes to provide specially designed furniture with rounded edges in its wing along with carpet, draperies, colors, plumbing fixtures and other physical plant features especially designed for the AD Patient. Clearly HCR can effectively operate and maintain an appropriate facility within the criteria set forth for the operation of nursing homes, and its proposed facility is financially feasible both in the long and short run.
However, the philosophy regarding the need for separation of AD patients from other nursing home patients is not necessarily considered as important by other providers of equal expertise. At PBCC, as will be later seen, AD patients are integrated into the regular nursing home population and the results achieved in that setting have been equally as successful. On balance it would appear to be more a question of style and preference rather than substance. It would be nice to be able to separate AD patients - nice from their standpoint and from the standpoint of the other residents, but it is not necessary. In a situation involving, as here, a limited availability of beds in the pool to be divided, this appears to be a distinction without a real difference and is not of major significance.
HCR has experienced problems in the past in getting its projects under way which, in at least three locations, resulted in issued CON's being withdrawn due to the failure to timely commence construction. In addition, there is some credible evidence that this applicant's anticipated costs are overly optimistic and that its history of construction and sale of facilities in Florida leaves in doubt who the ultimate operator of its facility would be. This is quite different that the situation involved in the Courtenay operation.
Manor Care's initial application was filed in January, 1985 and was denied. At the hearing, Manor Care filed an updated application for a 120 bed facility with alternative date relating to a 60 bed facility. It is the only other applicant proposing a separate AD unit.
Manor Care operates 9 nursing homes in Florida, 5 of which were built and opened within the past 5 years. Four of the facilities are rated superior with an additional superior rating expected.
Manor Care also proposes to serve AD patients in a specially designed AD unit with specially trained staff and specialized equipment, furnishings and decor.
This provider has a fully qualified and developed staff training program and a quality assurance program in which the standards applied exceed federal and state licensure requirements. It's homes are furnished and equipped as much as
possible in a residential mode though the items selected meet the specific standards required for nursing home use.
Manor Care provides a full range of services including skilled nursing care, recreation therapy, social services and the like. Taken together, Manor Care's operation and the projections regarding staffing, salary, costs and occupancy are reasonable and considered financially feasible in both the long and short term.
Palm Bay Care Center (PBCC), an existing 120 bed nursing home located in Palm Bay, Florida, is owned by Palm Bay Care Center, Inc., and managed by FLC. It filed it's application to add 60 beds to its existing facility in January, 1985.
At ,the hearing, PBCC agreed to accept a CON for less than the 60 requested beds if it were found that less than 60 beds were available. If this were the case, PBCC would utilize the remaining beds in conjunction with an adult congregate living facility, (ACLF) planned for the site.
PBCC intermingles AD patients with other nursing home patients and considers that it has had a high degree of success in treating patients in this fashion. Admitting that AD nursing homes. Forum's development has its focal point in retirement living communities which contain on one campus independent living apartments, personal care units, and a nursing home
patients, both categories of patient benefit. Apparently PBCC's operation has satisfied inspection officials because this facility, as one of the 10 facilities managed by FLC, has been rated and is currently rated superior. A superior rating is the highest rating available.
No difficulties are anticipated in providing staffing or equipment and facilities for the PBCC proposal. The majority of the senior overhead staff at the facility have been there since it was opened in February 1984 and if for some reason a personnel shortage shortage should be experienced at PBCC, there are sufficient available personnel at other close-by FLC facilities to fill in until permanent replacements can be found.
PBCC estimates that its cost per bed will be slightly over $23,000.00. This is significantly less than the stated costs for the other four applicants exclusive of Courtney. It operates currently at a profit, some of which may be utilized to offset any start-up deficits if such are encountered. However, PBCC's proposal appears to be financially feasible in both the long and the short term and provision has been made for appropriate financing. In fact, the land for the project has already been purchased and a building permit secured.
There is little likelihood of any disruption, disturbance, or discomfort of or to the current residents by the proposed construction of PBCC's new facility.
Forum filed its application to construct a 120 bed nursing home facility in Brevard County on or before January 15, 1985 and on August 7, 1986, filed a supplemental application which requested a partial approval of 60 out of the 120 originally requested nursing home beds.
Forum is a publicly held health services company which operates 12 retirement centers as well as free standing nursing homes. Forum's development has its focal point in retirement living communities which contain on one campus independent living apartments, personal care units, and a nursing home.
Forum proposes to develop a retirement living center in Brevard County which would consist of at least 120 apartment units for independent living, a 30 bed ACLF, and a 60 bed nursing home component certified for skilled and intermediate care. All components would be physically attached and share some operational functions.
Nursing home residents-would be afforded occupational therapy, speech therapy, physical therapy, IV treatment, and other specialized care activities as a part of their residential life. In addition, Forum will offer community educational opportunities, respite and hospice care, adult day care, meals on wheels, and VA contracts. It proposes to seek Medicaid certification for 42 beds and projects a 52.8% Medicaid utilization. The total project cost is slightly in excess of
2.25 million dollars.
Forum intends to seek the superior rating for this facility it has achieved for other facilities in states with rating systems. To do this and to promote quality of care, Forum employs the best qualified professionals and maintains a thorough quality assurance program. The company has not had a nursing home license denied, revoked, or suspended during the last five
years and appears to be quite capable of providing high quality care.
Through its network of retirement centers and nursing homes, Forum has developed an economy of scale in its centralized operations, management functions, and purchasing. The shared facilities concept provides economy in dietary, administration, and financial accounting operations.
The parent company is capable of providing the funds from its internal resources to fund the construction of the project and to support its start-up operation costs and long term financing is readily available if necessary.
The proposed manpower and equipment utilization tables intended for this facility are appropriate and adequate staffing is available. The company intends to develop cooperative teaching and education programs with local colleges which will provide an appropriate arena for research as well as current material on nursing care developments for staff and professional personnel.
The facility is properly designed and exceeds Florida requirements. The construction costs per bed and equipment costs, while somewhat higher than those of some other applicants, are nonetheless reasonable.
Courtenay's facility, which already exists, consists of an ACLF, villas, and a 120 bed nursing home comprised of 60 licensed community beds and 60 sheltered beds. As to the sheltered beds, there is some substantial evidence to indicate that the licensing official responsible has revoked the certificate for these beds rendering them no longer sheltered.
In fact, the 60 beds that Courtenay seeks to convert were never licensed and there has never been any official proceeding as called for under Section 381.494(c)(m), Florida Statutes, to transfer the existing CON issued to Courtenay.
Construction of this facility was financed by a
$26,500,000.00 bond issue authorized by the County Health Facility Authority. The original owner of the facility and the borrower under the bond issue was Courtenay Springs, Inc. and the Trustee serving in a fiduciary capacity for the bondholders is the Sun Bank. Sun Bank is not the Trustee for Courtenay.
Courtenay Springs, Inc. defaulted on the bonds for a variety of reasons which include cost overruns, design problems, and basically poor business management. As a result the Trustee foreclosed its security interest which resulted in the entry of a judgment of foreclosure. At the subsequent public sale, the
Trustee bid in the facility for $8,250,000.00. The Trustee now owns the facility free and clear of all encumbrances.
The Trustee has taken possession of all the borrowers' rights and assets without liability and has filed to do business with this facility utilizing the fictitious name, Courtenay Springs. At no time did Sun Bank file a new application or amend the existing application to reflect the change of ownership. Sun Bank merely wrote to DHRS indicating that Courtenay Springs was in receivership and asking that the name of the applicant be changed to Sun Bank. DHRS granted the name change and, due possibly to a misunderstanding of the status of the parties, subsequently issued CON 3831 to Sun Bank for the conversion of the 36 beds.
Nonetheless, the Trustee does not anticipate continuing to own and operate the facility. Instead, it intends to sell it for the best possible price in order to minimize bondholder losses. To that end, the Trustee has contracted to sell the facility for $12,150,000.00 and closing was anticipated in September or October, 1986. Closing was not contingent upon the granting of the CON to Courtenay Springs.
The proposed purchaser of the facility is Retirement Housing Foundation (RHF) which currently operates two facilities in Florida. RHF is satisfied that the existing facility is excellent in design and construction and anticipates it can be run on a financially sound basis.
The Sun Bank currently employs Monarch Management and Food Services, Inc. (Monarch) to manage the facility. Monarch manages three other facilities in Florida and has an agreement with RHF to continue present management for a minimum of 30 days after the sale.
The sheltered beds which have been proposed for conversion could be placed on line almost immediately. The current staffing pattern exceeds DHRS standards and no major difficulty in adding additional staff as required is anticipated. The proposed supplies, equipment, and estimated operating costs for the 36 additional beds are considered to be reasonable.
The existing facility presently accepts patient referrals at a rate of between 25 and 40 a month from physicians, other nursing homes, hospitals, and private homes within the area. The existing facility is currently full and there is a waiting list. If the CON is issued to Courtenay Springs, it is estimated the additional beds would be filled within 90 to 120 days.
Courtenay Springs provides a full range of services to sub-acute nursing home patients. It is certified for Medicaid and Medicare but at the time of the hearing, was accommodating no Medicare patients.
Projections of income and expense based on the expanded bed capability were prepared by a certified public accountant and indicate that the facility can be operated on a financially feasible basis. Costs of the facility are in line with competitive and comparable facilities.
NEED FOR NURSING HOME SERVICES
The need for nursing home services is determined by the use of Rule 10-5.11(21)(b), F.A.C. which provides the mathematical formula for the calculation of projected need.
Under the terms of the rule as stated, need for community nursing home services is based on a projection three years into the future from the date of the application and that point three years into the future is designated as the applicant's planning horizon. Since, with the exception of Courtenay Springs, all applicants involved here submitted their applications in January, 1985, the appropriate planning horizon is January, 1988.
While the rule itself is not difficult to understand, some difficulty is encountered when one determines what figures to apply to the various factors contained in the need methodology formula. In applying that formula, the Department interprets the rule as requiring projecting population three years-into the future. It would appear that the Department did not follow its own rule, however, in applying the methodology in this case in that the calculations testified to by its representative, Mr. Reid Jaffe, were based on an 18 month calculation from June, 1986, rather than from January, 1985, to the horizon date of January, 1988. Utilizing that figure, Mr. Jaffe calculated a need for 48 additional beds in Brevard County by January, 1988.
While admitting that his calculation did not conform to DHRS' rule, Mr. Jaffe defends this deviation by asserting that the three year projection and other provisions of the rule should not apply to a de novo hearing. In substance, he contends, new calculations should be made as of the date of the hearing and the three year time period applies only to the initial review of the application. This flies directly in the face of the rule and is a relatively recent policy change for the Department which has, until November, 1985, followed and used the full three year projection at the formal hearing as well.
All three other applicants, save Courtenay, disagree with Mr. Jaffe's interpretation and agreed that the need determination at the formal hearing should be calculated on the basis of the formula as set forth in the rule. This being the case, even the three applicants, Manor Care, HCR, and Forum nonetheless arrived at different need determinations utilizing what they claim was the classic rule formula. Manor Care's projections indicated a need for 161 additional beds HCR's calculations demonstrated a need for 195 additional beds; and Forum Group's calculations indicated a need for somewhere between
202 and 213 additional beds. The best estimates available, then, project a real need of between 195 and 200 additional beds in January, 1988.
There was substantial testimony by health planning experts for the applicants tending to support reliance on the classical application of the three year planning horizon to all phases of the review process. The DHRS rule specifically requires the use of "population projections" three years into the future and contemplates expected changes in the proportion of elderly district residents.
The population figures utilized by the various experts testifying in this case indicated that there will be an increase in the n over 65" population in Brevard County in the coming years. Taken and considered together the expert testimony of both Mr. Jaffe and the applicants' consultants leads to the inescapable conclusion that the approach applied by DHRS was in error and must be amended. Utilizing DHRS' figures results in an artificially low occupancy rate which improperly skewers all subsequent calculations and drives down the anticipated future bed need.
DHRS contends that at the time of the hearing, it had been considering the viability of implementing the Gulf Court decision more restrictively in terms of the data to be considered in an administrative proceeding. Mr. Jaffe indicated that a more literal reading of the provisions of DHRS Rule 10-5.11(21)(b) had been under consideration prior to the hearing. Given the alternatives of either following the rule literally or conducting a "more realistic, de novo type review", DHRS chose to be governed by a "reality" oriented interpretation of the nursing home bed need rule and in doing so, deviated from the terms of its own rule and prior practice. By so doing, it drastically reduced the number of beds shown to be needed and this reduction is not necessarily supported by the realities of the situation notwithstanding DHRS' reality approach to the rule.
ALZHEIMER'S DISEASE AS A SPECIAL NEED FACTOR
Alzheimer's Disease is a common neurological ailment, particularly in Florida, because of the large number of elderly residents. There is no cure for the disease and treatment involves mostly patient management and counseling both of the patient and the patient's family. It is a degenerative disease of the brain which, as has been stated earlier, progresses through basically four stages. It is at Stage Three that the patient requires either constant supervision at home or confinement in a nursing home setting. At Stage Four the patient is bedridden and as such can be treated in a normal nursing home environment.
Most nursing homes accept AD patients and this applies to the Brevard County location as well as throughout the state. The ultimate issue in this regard is whether the care available in the average nursing home, including those proposed by the applicants here is adequate or appropriate or whether specialized facilities such as those proposed by HCR are required.
HCR's supplemental application attempts to have a special degree of care for AD patients recognized as the appropriate standard and since most existing and proposed facilities do not come up to HCR's standard, that applicant contends that the AD patient, is an "underserved group."
The District VII local health plan utilizes the term "underserved group" in the same way as is set out in Rule 10- 5.11(3) and the evidence of record is clear that AD nursing home patients have never been considered within the rule definition of "underserved group" for the purpose of approving nursing home beds based on that category. There is no reasonable basis for concluding that they should be.
In any case, the greater weight of the testimony by those shown best qualified to know, is that there is critical shortage of beds for this type of patient in Brevard County, and the pressure to send patients out of the county, as indicated by HCR's witnesses is exaggerated.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter in this case. Section 120.57(1), Florida Statutes.
DHRS, which has promulgated a valid rule for the determination of bed need in cases such as this, has here attempted to modify the terms of this rule without going through the rulemaking process and without showing any bona fide basis either in fact or by policy for deviating from the rule.
The testimony of Mr. Jaffe established that DHRS' determination of a 48 additional bed need by January 1988 was based upon a flawed application of the nursing home need methodology. While agreeing that the appropriate planning horizon for the applicants in question is three years (January 1988), DHRS fails to utilize the three year projection required by its own rule and instead used only an 18 month projection to make the calculation. Mr. Jaffe admits that his calculation was not in compliance with the provisions of the agency's rule. He contends, however, that the requirement to follow the rule methodology relates only to the "preliminary" approval and that a de novo hearing such as here, permits the utilization of different figures which deviate from the three year standard. This contention is rejected as contrary to both reason and the law.
DHRS Rule 10-5.11(21) was found to be properly utilized at a Section 120.57 proceeding such as this in HCR v. DHRS, 8 FALR 2774, May 1986; a case which involved nursing home bed need applications. The District Court of Appeal in this case rejected any deviation from the application of the DHRS rule methodology.
Other panels have stated: "In interpreting rules, words should be given their plain and ordinary meaning. Gar Con Development v. DER, 468 So.2d 423, (Fla. 1st DCA 1985); Boca Raton Artificial Kidney Center v. DHRS, FALR 3758 (Fla. 1st DCA 1986).
In the Boca Raton case, supra, DHRS had contended that its existing rule was impractical in operation. The Court rejected this contention and held that the rule must be applied as written recognizing that if impractical, it might be amended pursuant to established rule making procedures. The Court clearly held that expedience cannot be permitted to overcome the terms of a rule.
In the instant case, there is nothing unique about the terms of the rule in question and, absent a showing of a bona fide reason to deviate therefrom, which has not been done in this case, the rule as written must be followed.
In evaluating the comparable application for a CON, the agency should utilize the criteria outlined in Section 391.494(6)(c), Florida Statutes, as approximate. Those applicable in this case are: 1, 2, 3, 4, 5, 8, 9, 12, and 13.
The remainder are not. While these criteria must be considered by the evaluator, the weight to be given each is not fixed but must be determined on a case by case basis.
In the instant case, Criteria One deals with the need for the service in relation to the various health plans pertinent to the service. Without question, a need has been shown (Criteria 1).
Criteria Two relates to the availability, quality of care efficiency, etc. of like and existing services in the district. Again, those homes providing the service in the district are qualified but insufficient in number to accommodate the demonstrated bed need. (Criteria 2)
Each of the applicants, including Courtenay or its successor can be expected to provide the appropriate quality of care. (Criteria 3).
The response in regard to Criteria 4, dealing with the availability and adequacy of other health care facilities, services, and hospices in the district has been addressed sufficiently in the discussions relating to Criteria 1 and 2. In addition, however, the greater weight of the evidence shows that as to AD patients, who can be expected to make up a substantial portion of the population to be served, alternative care facilities are generally not appropriate. (Criteria 4)
As to probable economies to be derived from shared, cooperative, or joint resources, the evidence is clear that homes operated in conjunction with ACLF's and other types of residential facilities, such as operated or proposed by Courtenay, Forum, and PBCC, are appropriate and economically sound. (Criteria 5) .
The criteria dealing with availability of resources and the financial feasibility of the projects have been met by all applicants. It would be nonsense to suggest that any of these applicants could not put together a project that is economically sound, well thought out, and well prepared. (Criteria 9)
The nursing homes proposed by all applicants here are totally consistent with the current trend in residential care for older citizens. This concept appears to be economically sound and supported by all levels of government with appropriate supervision. There was no evidence shown here that the projects proposed by any of the applicants would be inappropriate or would in any way serve to improperly or unreasonably increase the costs of health care for the services envisioned in these applications. Save for the particulars, all propose to do basically the same thing at much the same cost. (Criteria 12 and 13)
When the rule methodology outlined in Rule 10-511(21), Florida Administrative Code, is applied, using the appropriate
current data as required by the rule, the resulting computation of need is substantially higher than that reached by DHRS.
Utilizing DHRS' methodology and a three year planning horizon, depending upon the application of the formula by the various experts testifying for the applicants, estimates of projected bed need in January 1988 range from a low of 161 as opined by the expert testifying for Manor Care to a high of between 203 and 213 by the expert testifying for Forum Group. Assuming that the real figure lies somewhere in the middle at 195 to 200, then a substantial pool is available for division among the qualified applicants.
In so doing it is appropriate to look at the track record of the various applicants and show they have conducted their operations in this state, historically. FLC, operating as PBCC has clearly demonstrated its ability to operate a successful nursing home in such a manner as to consistently achieve high ratings. In addition, it owns the land on which it proposes to build its facility and has either already begun or intends to soon begin construction of the facility whether it is given a CON or not. It should, therefore, as an existing provider with a good record, be afforded a proportionate share of the available bed pool.
Courtenay Springs is another existing provider. Much was made of the fact that the proposed conversion of sheltered beds cannot take place because the sheltered beds no longer exist. Much was also made of the fact that there were technical errors in the transfer of the previously awarded CON as it relates to the identity of the true owner of the facility. Neither of these appear to be major problems. The facility here exists, is currently operating at a profit and can realistically be expected to continue to do so in the future, and that which is known about the proposed buyer clearly indicates the likelihood that it is a successful and qualified operator who will continue to operate this high value facility in such a manner as to provide quality care. It too, therefore, should be afforded a portion of the bed pool.
Forum is a qualified operator whose proposed project complies with the state health plan and whose proposed operating plan is also consistent with the local health plan. It is the only one of the applicants which proposes to establish an indigent care fund and its proposal to implement a nursing home operation in with a proposed retirement living community appears to be economically feasible and attractive. Therefore, it should receive a portion of the award.
Manor Care has extensive experience operating nursing homes in Florida with a high degree of qualification. It does, however, appear to direct its programs toward the higher pay patients. Nonetheless, if beds are available, it would appear that Manor Care should be a successful applicant and receive a portion of the available pool.
HCR's record on the other hand points to a different conclusion. This applicant has had a history of difficulty in getting its projects off the ground. Three of its awarded CON's have been revoked for failure to begin construction in a timely fashion. Of the remaining facilities constructed by this applicant, all but one has been sold shortly after completion of construction and of those completed there is a history of cost overruns on more than one occasion. At the present time, this applicant operates only one facility in Florida and that facility was not of its own design and construction. Were there to be an unlimited pool of beds, then perhaps HCR could be given a share thereof, but in a limited pool such as exists here, it would appear that of all the applicants, HCR is the least worthy and in light of the limited number, should not be awarded any beds out of this pool.
