On June 24, 1976, the Health Facilities Committee of the area Health Planning Council, Inc. (HPC) met to consider the petitioner's certificate of need request. By a vote of six to four, with one abstention, a motion to approve the facility failed. On the same date, the Board of Directors of the HPC voted nine to seven, with one abstention, to recommend approval of petitioner's proposal. The Board considered the fact that outpatient surgery departments were being planned for existing hospitals in the area and heard comments from proponents and opponents of the application. The Board further considered the factors supporting approval as set forth in the staff project review. These include:
"1. Such a facility has the potential of lowering to a great extent the
Such a service, both in terms of cost savings and utilization, have been endorsed by the HPC in its document entitled Acute Care General Hospitals,
Long Range Growth Position Statement and Recommendations. In effect, this proposed service will provide a cost effective component to the area's existing health care system;
Based on the manpower requirements, both from the standpoint of parti- cipating physicians and support per- sonnel, there appears to be both sufficient and appropriate manpower available to effectively operate
the proposed services; and
Based on a sample utilization survey, it appears that the proposed ASC will serve a population group large enough
to provide a reasonable utilization level. At the same time, it is
expected that this population group will be basically separate and distinct
from the population group expected to be served by the OSD at the Palm Beach-Martin - County Medical Center." (Exhibit No. 11)
Although Good Samaritan Hospital had been considering doing so since June of 1975, it actually opened its outpatient surgical department in early August of 1976. Being a hospital based facility, no certificate of need was required.
The State Hospital Advisory Committee met on August 10, 1976, to consider petitioner's application. This Committee heard discussion from and directed questions to both the applicant and the intervenor-opponent. Letters from physicians in support of and in opposition to the application were considered. This committee, by a vote of five to zero with one abstention, voted to recommend that the application be denied. (Exhibit 6)
By letter dated August 12, 1976, respondent notified petitioner that its capital expenditure proposal was not favorably considered for the following reasons:
"1. Your proposed ambulatory surgical facility would be a duplication of facilities and services which are available in Good
Samaritan Hospital which is within a block or two of the site of your facility. In addition, St. Nary's Hospital, approximately three (3) miles from your site, has ambulatory surgery capability.
The charges you propose for surgical procedures are comparable to those of
Good Samaritan Hospital, therefore, cost containment is not a real factor in this case.
The fact that Medicaid virtually has eliminated the provision for paying for elective surgery for persons qualifying for care under this program. Under such
restrictions, it appears that your proposed facility would not be necessary in terms
of providing services to such persons.
Petitioner was advised of its right to appeal this decision and petitioner timely requested a hearing on the matter.
At its regular meeting on August 26, 1976, the Board of Directors of the HPC voted, by a vote of twenty-one of the twenty-two Board members present, to support petitioner's appeal.
There are presently some 700 physicians in Palm Beach County. Some 265 of these doctors are on the staff of Good Samaritan Hospital, which is located on the same block as petitioner's proposed facility. Physicians not staffed at Good Samaritan are able to refer their patients for treatment by physicians staffed there. Good Samaritan has no black doctors on its staff, no podiatrists and no osteopaths. The only dentists allowed staffing privileges are those having two years of post graduate training. Good Samaritan, while it does some charity work, does not participate in the Medicare or Medicaid program, nor does it have any contract with the county to provide services for the indigent. It does have an emergency contract with Medicare. The actual amount of charity work performed is somewhat in dispute. While a figure in excess of $900,000.00 was given by the Administrator of Good Samaritan, it appears that a portion of this amount was uncollected bills. Approximately twenty percent of the procedures offered by Good Samaritan in its outpatient surgery department overlap with the procedures proposed to be offered by ASC. The patient costs of these procedures are substantially similar to those proposed by ASC. While the intervenor has had an outpatient clinic for some time now, it first began to offer general anesthetic surgical procedures on an outpatient basis in early August of 1976. Good Samaritan is currently performing about thirty such procedures per month, or six per week. While the intervenor's operating room is equipped to handle dental services under general anesthesia, it does not contain a dental chair.
The evidence regarding other existing ambulatory or outpatient surgical centers or departments in the immediate area of petitioner's proposed facility is somewhat in dispute. While two hospital-based facilities, each twenty miles away, do exist, it is not clear whether St. Mary's Hospital located some three or four miles from petitioner and the intervenor actually has such a separate facility. It is clear that St. Mary's has the capabilities for such a facility.
The Palm Beach County Social Services Department provides services for indigent persons in the county through the use of ad valorem tax monies. About ninety percent of the services performed are in the medical field. During the last fiscal year, the county's hospitalization budget for indigents was approximately $1,790,000.00. Amounts paid from September of 1975 through August of 1976 for short term hospitalizations were in excess of $19,400.00 for a total of 158 hospital days. (Exhibit No. 15) All of such procedures performed might
have been done in an ambulatory facility. Substantially all of the procedures to be offered by ASC are performed for indigents in Palm Beach County if it is deemed necessary for the client. If the patient were able to undergo surgery and go home in the same day, the hospital per diem charge, which averages
$160.00 per day, would be eliminated. The Director of the County Social Services is supporting petitioner's application for the reason that while a similar facility exists nearby -- Good Samaritan Hospital, such facility is not accessible for the indigent client. Dr. C.L. Brumback, Director of the Palm Beach County Health Department, affirmed that procedures to be offered by ASC could be provided to eligible county patients with payment available through the County Social Service Department or the County Health Department. (Exhibit No. 2).
The issue of Medicaid reimbursement to an ambulatory surgical facility was somewhat in dispute during the earlier public hearings on petitioner's application. It appears that such reimbursement is presently limited to those services actually provided by a physician. The legislature decides on the services to be provided by line item appropriations, and presently physician service is a listed item while free standing outpatient clinics are not listed. The Florida Department of Health and Rehabilitative Serviced has expressed an interest in having ambulatory surgical care with adequate regulations and their legislative budget request for next year will reflect this interest. (Exhibit No. 3).
CONCLUSIONS OF LAW
As noted in the Introduction, the parties stipulated and the evidence substantiates that the applicant gave timely notice of its intention to make a capital expenditure and the respondent timely complied with the procedural requirements of federal and state law. The remaining issue is therefore whether petitioner's proposal is consistent with existing plans, standards and criteria developed pursuant to the Public Health Service Act. After considering the relevant oral and documentary evidence adduced at the hearing, the undersigned Hearing Officer concludes that petitioner has demonstrated its proposal's consistency and compliance with existing criteria.
While the evidence shows some duplication in physical facilities existing at Good Samaritan and proposed by petitioner, both of which occupy the same block in West Palm Beach, petitioner has demonstrated that the factors of accessibility and need far outweight the factor of duplication. The fact of similar facilities is countered by the showing of a difference in the population to be served by ASC, a difference in procedures to be offered at ASC and a difference in the practitioners allowed to perform their services at ASC.
As noted in the findings of fact, Good Samaritan does not accept Medicare (except for emergency patients) or Medicaid reimbursement, nor does it operate under any contract with county or state agencies which provide payment for services for indigents. Black persons, whether indigent or not, who are patients of black physicians cannot have services performed by their own doctor at Good Samaritan. Thus, a large segment of the county's population is excluded from using its facilities. On the other hand ASC, should a certificate of need be granted, proposes to admit all patients regardless of the source of their payment and will allow all qualified physicians to practice at the ambulatory surgical care center. While the costs of the procedures offered by both facilities are substantially similar and are substantially less than overnight hospital expenses, the principal of cost containment is important in this case
due to ASC's accessibility to a larger portion of the county population and the difference in procedures to be offered by ASC.
A difference in the physicians able to use the two facilities also detracts from the fact of similarity of existing facilities. On the staff at Good Samaritan, there are no black physicians, no osteopaths, no podiatrists and no dentists with less than two years of postgraduate training. ASC will allow these groups to use its facility if they are otherwise qualified. All this, coupled with the fact that over 400 Palm Beach County physicians do not have staffing privileges at Good Samaritan, renders the factor of accessibility of the ASC facility far stronger than the factor of duplication of nearby physical facilities.
In conclusion, it is found that the proposed Ambulatory Surgical Center of West Palm Beach will foster principles of cost containment through greater assessibility and availability to patients and physicians. If any duplication exists between the facilities at Good Samaritan and ASC, it is not significant in the areas of availability, assessibility, adequacy or need.
