STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GATEWAY HOSPITAL CORPORATION ) EAST, d/b/a PEMBROKE PINES )

GENERAL HOSPITAL, )

)

Petitioner, )

)

vs. ) CASE NO. 81-2035

)

DEPARTMENT OF HEALTH AND ) REHABILITATIVE SERVICES, and ) SOUTH BROWARD HOSPITAL DISTRICT, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal administrative hearing was conducted in this matter on November 2, 1981, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Byron B. Mathews, Jr. and

Michael Anthony Miami, Florida

For Respondent: James M. Barclay

Tallahassee, Florida

For Respondent: Loyd M. Starrett, Dania, Florida and Martha B. Sosman

Boston, Massachusetts

The South Broward Hospital District filed an Application for Certificate of Need with the Department of Health and Rehabilitative Services. The application related to a proposed land acquisition. The Department issued a Certificate of Need, and the Petitioner, Getaway Hospital Corporation East, requested the convening of a formal administrative proceeding. On August 17, 1981, the Department filed the matter with the office of the Division of Administrative Hearings and requested that a Hearing Officer be assigned and a hearing scheduled. The hearing was originally scheduled to be conducted on October 19, 1981. Upon motion of the Petitioner, the hearing was continued and rescheduled as set out above.

At the final hearing, the Intervenor, South Broward Hospital District, moved to dismiss the petition on the grounds that Petitioner lacks standing to request a hearing. The motion was denied, and the issues raised carried forward with the case. The Intervenor called the following witnesses: Kenneth B. Cohen, the Intervenor's Assistant Administrator; Terrence T. Stretch, a certified public accountant; and Cecil Neff, Jr., a real estate appraiser. The Department called the following witnesses: Herbert E. Strewn, a medical

facilities consultant employed by the Department; and W. Eugene Nelson, a medical facilities consultant supervisor employed by the Department. The Petitioner called the following witnesses: Robert C. Worth, a Broward County taxpayer who chairs a committee known as the "Hollywood Hills Civic Committee;" Richard J. Mickie, a real estate appraiser; Stephen W. Pike, the Director of Technical Services for the Health Planning Development Council of Broward County, Inc.; Edward Moss, the Petitioner's Associate Administrator; and Tom Konrad, the Administrator of the Department's Office of Community Medical Facilities. Intervenor's Exhibits 1 through 6; Respondents Exhibits 1, 2 and 3;

and Petitioner's Exhibits 3, 4, 5, 7, 8, 9, 11, 13 and 14 were offered into

evidence and received. Petitioner's Exhibits 1, 2, 6, 10, 12 and 15 were offered into evidence and rejected. The parties have submitted post-hearing legal memoranda, which include proposed findings of fact and conclusions of law. The proposed findings and conclusions have been adopted only to the extent that they are explicitly set out below. They have been otherwise rejected as contrary to the evidence, irrelevant to the issues or contrary to the law.

The issues in this proceeding are whether the petitioner has standing to challenge the Certificate of Need application filed by Intervenor, and whether a Certificate of Need should be issued.

FINDINGS OF FACT

1. The Intervenor, South Broward Hospital District, is a public tax- supported hospital district which serves residents of southern Broward County. The District owns and operates Memorial Hospital in Hollywood, Florida, and a walk-in medical center in Pembroke Pines, Florida.

   
   

2. Intervenor filed an application with the Office of Community Medical Facilities of the Department of Health and Rehabilitative Services and with the local health services agency in Broward County for a Certificate of Need to acquire land in southwest Broward County. The Intervenor proposes to spend between $500,000 and $1,000,000 for approximately thirty acres of land in an area bounded by Dykes Road, Sterling Road, Flamingo Road and Hollywood Boulevard. The Broward County health services agency, the Health Planning and Development Council for Broward County, Inc., held a public hearing on the application. Representatives of the Petitioner, Gateway Hospital Corporation East, appeared at the hearing and presented argument in opposition to the application. The health services agency voted to approve the application by a vote of twenty to zero. The Office of Community Medical Facilities reviewed the application and issued its Certificate of Need No. 1623. Gateway Hospital thereafter filed its petition for hearing, and this proceeding ensued.

   
   

3. The Intervenor exists in order to serve health care needs in southern Broward County. Intervenor has a master plan and has adopted ten-year plans. These plans call for the Intervenor to acquire land in southwestern Broward County for the ultimate construction of a new acute care hospital. The southwestern portion of Broward County has been experiencing rapid growth, and rapid growth can reasonably be expected to continue. It is anticipated in Intervenor's plans that there will be a need for a new acute care hospital in that area in the future. Whether a facility is needed now, or will be needed in five years or ten years cannot be determined from the evidence, but it is reasonably anticipated that such a need will exist in the foreseeable future.

   In order to accommodate this future need, Intervenor is seeking to purchase land in the area. Such a purchase at the present time to accommodate a future need offers advantages to Intervenor. The cost of land in southwestern Broward County has increased dramatically, and it is anticipated that property values

   will continue to increase. Land can therefore be purchased more cheaply now than would be possible in the future. Furthermore, larger blocks of land are available now than will be available in the future. By purchasing land now the Intervenor has more options for desirable properties available to it. Thus, the best possible future site location and a cheaper price can be obtained.

   
   

4. Intervenor does intend to ultimately construct a new acute care hospital on the property that it purchases. At the time that the Certificate of Need application was filed, the Intervenor did not have any specific timetable in mind for that construction. Since that date, however, plans have crystallized, and Intervenor has filed a Certificate of Need application to construct such a facility. The application is one of several that have been filed with the Department for similar facilities in Broward County, Florida.

   The applications are being considered by the Department in a "batching cycle" so that mutually exclusive applications can be reviewed in the same proceeding.

   Whether the Intervenor is granted a Certificate of Need to construct a new acute care hospital on the property that it seeks to purchase at this time or not, the property acquisition serves the appropriate long-range plans that have been adopted by Intervenor.

   
   

5. Intervenor has, through its taxing authority, the economic means to purchase the property as it proposes. The Intervenor has recently increased its health care charges; however, this land acquisition would have no effect upon those charges since it would be accomplished through Intervenor's taxing authority rather then from revenues generated by Intervenor's facilities. The amount of money that Intervenor proposes to spend for the property is a reasonable allowance for the purchase of thirty acres of land in the area proposed.

   
   

6. Petitioner operates an acute care hospital in Pembroke Pines, Florida, and provides health care services to residents of southwestern Broward County. Petitioner is a private corporation which operates for profit. If the Intervenor ultimately constructs an acute care hospital on the property that it proposes to purchase, that facility and the Petitioner's facility would serve the same geographic area and would, in all probability, compete for business.

   
   

   CONCLUSIONS OF LAW

   
   

7. In order to make capital expenditures in excess of $150,000, hospitals are required to obtain a Certificate of Need from the Department of Health and Rehabilitative Services, Office of Community Medical Facilities. The Intervenor's proposed purchase of property is a capital expenditure in excess of

   $150,000, and Intervenor is required to obtain a Certificate of Need. Section 381.494(1)(c), Florida Statutes.

   
   

8. Intervenor has established that its proposed land acquisition is consistent with its own long-range plans and is designed to facilitate the meeting of health care needs that may already exist, or will exist in the future in southwestern Broward County. Intervenor has established that it has the financial resources available to accomplish the land acquisition.

   
   

9. Intervenor's application is classified under the Department's rules as a noncompetitive project; and is given expedited treatment under the rules. The acquisition is classified as noncompetitive because it does not effect any Certificate of Need application that might be filed by any other entity. The granting of a Certificate of Need to the Intervenor to purchase the land does not serve to allow the Intervenor to construct the facility which it ultimately

   plans to construct. In order to construct a new acute care hospital on the property which it proposes to acquire, the Intervenor will need to obtain a Certificate of Need specifically for that purpose from the Department. A Certificate of Need to construct such a facility would be classified under the Department's rules as a competitive application and would be considered together with any applications that might be filed by other entities to construct similar facilities. Department of Health and Rehabilitative Services Rule 10-5, Florida Administrative Code.

   
   

10. The Petitioner lacks standing to request a formal hearing with respect to the Intervenor's proposed land acquisition. Since the land acquisition does not operate to allow the Intervenor to construct the facility that it ultimately plans to construct, but rather merely recognizes the need to make land acquisitions based upon reasonably projected needs, the Certificate of Need will not impact Petitioner. It is possible that by acquiring property that could serve as a suitable location for a future facility, the Petitioner will have an advantage in some future Certificate of Need proceeding. Whether a need for such a facility will exist at some future date, whether the land acquired will actually be advantageous for that purpose, and whether some other applicant may submit a superior Application for Certificate of Need are all matters of conjecture. Therefore, whether the Petitioner will be effected by the land acquisition is a matter of conjecture. While Petitioner may have an interest in the acquisition since it operates in competition with the Intervenor, the interest is a speculative, insignificant one. It is not substantial. See: Department of Offender Rehabilitation v. Jerry, 353 So.2d 1230 (1 DCA Fla. 1970).

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is, hereby,

RECOMMENDED:

That a final order be entered by the Office of Community Medical Facilities of the Department of Health and Rehabilitative Services dismissing the petition for hearing filed by Gateway Hospital Corporation East and issuing a Certificate of Need approving the application of South Broward Hospital District to acquire property in southwestern Broward County.

RECOMMENDED this 23rd day of December, 1981, in Tallahassee, Florida.

G. STEVEN PFEIFFER Assistant Director

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 23rd day of December, 1981.

COPIES FURNISHED:

Byron B. Mathews, Jr., Esquire Michael Anthony, Esquire McDermott, Will & Emery

700 Brickell Avenue

Miami, Florida 33131

James M. Barclay, Esquire Department of Health and

Rehabilitative Services 1323 Winewood Boulevard Building Two, Room 220 Tallahassee, Florida 32301

Loyd M. Starrett, Esquire Walden, Walden & McCauley

255 Dania Beech Boulevard Dania, Florida 33004

Martha B. Sosmen, Esquire Foley, Hoag & Eliot

Ten Post Office Square Boston, Massachusetts 02109

Mr. Thomas J. Konrad, Administrator Office of Community Medical Facilities Department of Health and Rehabilitative

Services

1323 Winewood Boulevard Building Two, Room 220 Tallahassee, Florida 32301

Mr. David Pingree, Secretary Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32381

Docket for Case No: 81-002035

Orders for Case No: 81-002035