STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
SOUTH DADE OSTEOPATHIC MEDICAL CENTER ) INC., d/b/a SUBURBAN MEDICAL CENTER, )
)
Petitioner, )
)
vs. ) CASE NO. 84-0750
)
THE DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent, )
and )
) BAPTIST HOSPITAL OF MIAMI, INC. ) and AMERICAN HOSPITAL OF MIAMI, INC., ) d/b/a AMERICAN HOSPITAL, )
)
Intervenors. )
)
)
RECOMMENDED ORDER
This case was heard on October 15 through 18, 1984, in Miami, Florida, before William C. Sherrill, Jr., Hearing Officer with the Division of Administrative Hearings. The issue in this case is whether a certificate of need should issue to Petitioner to construct and operate a 100 bed acute care osteopathic hospital in Dade County, Florida.
It is the conclusion of the Hearing Officer that the certificate of need should be denied primarily because of the existence of two underutilized osteopathic hospital in Dade County and the adequacy of these facilities to meet projected needs in the next five years.
The following representatives appeared for the parties: For Petitioner: F. Philip Blank, Esquire
SOUTH DADE OSTEOPATHIC Susan A. Maher, Law Clerk
MEDICALCENTER, d/b/a F. Philip Blank, P.A. SUBURBAN MEDICAL CENTER 241 East Virginia Street
Tallahassee, Florida 32301
For Respondent: John F. Gilroy, Legal Intern DEPARTMENT OF HEALTH AND Culpepper, Turner & Mannheimer REHABILITATIVE SERVICES 318 North Calhoun Street
Tallahassee, Florida 32301
For Intervenors: Kyle R. Saxon, Esquire BAPTIST HOSPITAL OF Paige & Catlin
MIAMI, INC. 169 East Flagler Street, Suite 816 Miami, Florida 33131
AMERICAN HOSPITAL OF Ivan Wood, Esquire
MIAMI, INC., d/b/a Steven T. Mindlin, Esquire AMERICAN HOSPITAL Wood, Lucksinger & Epstein
1501 Venera Avenue, Suite 200
Miami, Florida 33146 INTRODUCTION
On August 10, 1983, Petitioner, SOUTH DADE OSTEOPATHIC MEDICAL CENTER, d/b/a SUBURBAN MEDICAL CENTER (SUBURBAN MEDICAL CENTER), applied to the Respondent, THE DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES (HRS), for a
certificate of need to construct and operate a 150-bed osteopathic teaching hospital. HRS denied the application, and Petitioner timely sought an administrative hearing. Intervenors, two allopathic hospitals located in subdistrict 4 of District XI in Dade County, were permitted to intervene.
At final hearing, Suburban Medical Center presented the testimony of Dr. William J Serow, who was qualified as an expert in the area of demographics, population projections and population planning; Ward Koutnik, who was qualified as an expert in the area of transportation, planning and traffic engineering; Gail Buck, a private health care consultant, who was qualified in the area of certificate of need review and health planning; Dr. Elton Scott, who was qualified as an expert in the area of health care finance and health care economics: and Lloyd Deloney, of Stephens, Inc, who was accepted as an expert in the area of health care financing, financial feasibility, and health care operations. Suburban Medical Center also offered the testimony of Jan Neiman, a taxation attorney who testified with regard to a syndication offering or limited partnership for the proposed project and Bernard Horovitz, who testified regarding the architectural plans and construction costs of the health care project. Additionally, Dr. Arnold Melnick, Dean of the Southeastern College of Osteopathic Medicine and several Dade County osteopathic physicians. Dr. Jules Minkes, Dr. Barnet Alpert, Dr. Ira Hershman, Dr. Nsitibe Nelson Ikpe, Dr.
William Levin, and Dr. Kathleen Tillman, testified in support on the application.
Respondent HRS presented the testimony of Gene Nelson, the Administrator of the Department's Office of Community Medical Facilities as its health care planning and certificate of need expert.
Intervenor, Baptist Hospital, introduced the testimony of Miles Moss, who was qualified as an expert in traffic planning, traffic engineering, traffic times and travel studies; Stuart Eiseman, a CPA with the firm of Deloitte, Haskins, and Sells, who testified regarding accounting, financing and third party reimbursement in the health care industry; Ernest Nott, the chief executive officer of Baptist Hospital; and Christopher David Sims, the director of strategic and internal planning at Baptist Hospital. Intervenor American Hospital presented the testimony of Daniel J. Sullivan, the Vice President of Consulting Services with Amberst Associates, Inc., as its expert in health care planning; and Bobby Meadows, the chief executive officer of American Hospital who was qualified as an expert in hospital administration.
Petitioner, Suburban Medical Center introduced fourteen exhibits into evidence at hearing. Respondent, HRS, submitted two exhibits as evidence at hearing. Baptist submitted one exhibit at hearing, a traffic engineering and travel time study. Intervenors American Hospital, submitted four exhibits at hearing. Objections to these exhibits were resolved at hearing.
Subsequent to the hearing, counsel for each of the parties submitted proposed findings of fact and proposed conclusions of law.
FINDINGS OF FACT
The parties stipulated that s. 381.494(6)(c) 5, 6, 10, and 11, Fla. Stat. (1983) and s. 381.494(6)(d)3 and 5, Fla. Stat. (1983) either were not applicable to, or were satisfied by, Petitioner's application. The statutory criteria remaining in dispute at the final hearing are as follows: s. 381.494(6)(c) 1, 2, 3, 4, 7, 8, 9, 12, and 13; s. 381.494(6)(d) 1, 2, and 4.
SUBURBAN MEDICAL CENTER, INC., the Petitioner in this case, operates an osteopathic primary care facility at the intersection of U.S. Highway 1 and Southwest 97th Avenue in South Dade County, and a satellite primary care facility in Naranja, Florida. Petitioner also has a certificate of need to operate an outpatient surgical clinic at its main facility, and is associated with International Medical Center, a health maintenance organization.
Petitioner has approximately 6 physicians on its staff, and these physicians generate 1 to 3 patients per day needing acute care hospitalization with an average length of stay of about 6 to 7 days.
Intervenor BAPTIST HOSPITAL OF MIAMI, INC., (BAPTIST), is a licensed and accredited 513 bed general acute care hospital located at 8900 North Kendall Drive, Miami, Florida, in subdistrict 4. Intervenor AMERICAN HOSPITAL OF MIAMI, INC., d/b/a AMERICAN HOSPITAL (AMERICAN), is a licensed and accredited 412 bed general acute care hospital located at 11750 Bird Road, Miami, Florida, also in subdistrict 4. Although both intervenors allow osteopathic physicians on their respective staffs, there is insufficient evidence to conclude that either intervenor in whole or in part constitutes an "osteopathic facility" as that term is used in Section 381.494(2), Fla. Stat. There is no evidence that any portion of either intervenor is under the management and control of osteopathic physicians so as to actively further, rather than to merely tolerate, the practice of osteopathic medicine. Both intervenors have allopathic physicians controlling admissions to staff and all important medical departments.
Further, there is no evidence in this record that any other facility in District XI, with the exception of Southeastern Medical Center and Westchester Hospital, meet the definition of "osteopathic facility" contained in the statute as construed above by the Court in Gulf Coast Hospital, Inc. v. DHRS, 424 So. 2d 86 (Fla. 1st DCA 1982).
Southeastern Medical Center is a 224 licensed acute care osteopathic teaching hospital located in North Miami Beach, Florida, close to the Broward County line. Westchester is a 100 licensed acute care osteopathic hospital located approximately at the intersection of Southwest 22nd Street (Coral Way) and the Palmetto Expressway in subdistrict 4, District XI, in Dade County. Pursuant to a settlement agreement with HRS, Westchester has permission to build a new, replacement 125 bed hospital for its current 100 bed facility. This permission is not pursuant to the current certificate of need law, and thus is not regulated by a certificate of need. There is no evidence in the record upon which to conclude that Westchester will exercise its permission, and therefore
the existence of the permission is irrelevant to the determination of bed need for osteopathic facilities. Put another way, absent evidence that Westchester will in fact build a replacement facility, the Hearing Officer cannot conclude that it will, and will not find that Westchester will in the future provide osteopathic patients with a new 125 bed hospital. All calculations of osteopathic bed need on this record will be based upon the facts in the record, which show that Westchester now provides 100 osteopathic beds.
Osteopathic medicine differs from allopathic medicine in several fundamental ways. Osteopathy is holistic, emphasizing treatment of the entire body; allopathic medicine tends to focus upon particular diseased areas of the body. Osteopathic medicine places great emphasis upon the health of the musculoskeletal system as a condition of healing, and employs techniques of manipulation of muscles and joints in the process of therapy for illness. Allopathic medicine does not. Osteopathic physicians tend to be general practitioners, since the emphasis of osteopathy is holistic. Allopathic physicians tend to specialize.
Osteopathic medicine is growing in the United States. About 5 percent of all physicians in the United States are osteopaths. Of these, some 87 percent are general practitioners. Since 1970, the number of osteopathic medical schools has increased from 5 to 15 and these colleges now produce about 2000 graduates per year as compared to only 700 in 1970. Southeastern College of Osteopathic Medicine is affiliated with the Southeastern Medical Center in North Miami Beach, and in a few years will graduate 100 osteopathic physicians annually.
Petitioner, SUBURBAN MEDICAL CENTER, originally sought 150 acute care beds, but amended its petition to 100 beds at the hearing. Petitioner intends to locate its proposed facility in conjunction with its primary care facility located at the intersection of U.S. 1 and Southwest 97th Avenue, commonly called Franjo Road. The facility's proposed location lies within subdistrict 4 of HRS Health Planning District XI. The primary service area for the proposed hospital extends from Southwest 152nd Street into South Dade County and the upper area of North Monroe County. The secondary service area for the proposed facility extends northward from the primary service area to Southwest 88th Street, also known as Kendall Drive, and southward to encompass the upper Keys in North Monroe County. These service areas generally encompass the northern portion of subdistrict 5 and the southern portion of subdistrict 4.
Petitioner sought to demonstrate a need or a new 100 bed osteopathic hospital on the southern boundary between subdistrict 4 and 5 by projecting the need for such beds by means of a formula based upon current data. This primary evidence of need was supplemented with additional need evidence: the need for an osteopathic teaching facility, and the need to provide an osteopathic hospital that is closer to potential patients than Westchester Hospital or Southeastern Medical Center.
As will be discussed more completely ahead in the conclusions of law, there is no specific rule available to calculate osteopathic hospital bed need. Moreover, pursuant to the Gulf Coast case, the need for osteopathic hospital beds must be considered separately from considerations of need for allopathic bed needs. Consequently, the rule applicable for acute care hospital beds is inappropriate for calculating need.
The parties offered a variety of methods to project the future need for osteopathic hospital beds, but none of the methods presented were very satisfactory. Each of these methods will be discussed with respect to the witness who offered the method for consideration.
Petitioner presented calculations of need through the testimony of Ms. Gail Buck, who was accepted as an expert in certificate of need review and health planning. Based upon data contained in the District XI health plan, 3 percent of the physicians in Dade County in 1983 were osteopathic physicians. (169 osteopaths in Dade County in 1983.) From other studies, she testified that the percentage of osteopathic physicians nationally is about 5 percent, and that these physicians have approximately 10 percent of all patients as osteopathic patients. Applying this ratio, she concluded that one could reasonably assume that 6 percent of all patients in Dade are osteopathic patients. From other studies she had read, the number of osteopathic patients hovers around 5-7 percent. One of these studies was a study done by HRS, developed by the Office of Health Planning. Ms. Buck further testified that for acute care hospital bed planning, it was normal to project need five years in the future. She then testified that by 1989, 8,792 acute care beds would be needed in District XI based upon HRS projections. Assuming that 5 percent of these beds were needed for osteopathic patients, by 1989 District XI would need to allocate 440 of these hospital beds to osteopathic patients. Ms. Buck then calculated the net osteopathic bed need by subtracting 224 beds at Southeastern Medical Center, and
100 beds at Westchester, resulting in 116 net beds need. Using a 6 percent rate, the net bed need was 204 beds using the same method.
Ms. Buck further testified that the data as to the number of osteopathic patients using allopathic hospital beds does not exist, but that such patients were not accounted for in the 5 percent estimate above. Ms. Buck stated that since the majority of osteopaths are general or family practitioners and refer their hospital-bound patients to specialists, who in turn admit the patients to hospitals, it is very difficult to obtain data as to actual osteopathic patient need, and that for this reason, the 5 percent method, as well as other methodologies, lacked a firm data base. She said ". . . there's no one methodology that can be considered totally accurate." Ms. Buck chose the
5 percent method because she felt it was based upon more accurate data than other methods.
Ms. Buck did not set forth any underlying data to justify the assumption that osteopathic patients constitute from 5 to 10 percent of all patients. She simply stated that these figures came from various studies.
Other data in the record reveals that at least for District XI, the S to 10 percent standard of need is much too high. In 1982, District XI had 11,052 licensed acute care beds as shown by American Exhibit 1. 324 of these beds, or 2.9 percent, were osteopathic acute care beds. If these beds had been running at 100 percent occupancy, then the data would be at least consistent with Ms. Buck's opinion that the "need" is from 5 to 6 percent of all acute care beds, though this would not necessarily be total proof of the point. But in 1982, these osteopathic beds were on the average only 60 percent occupied, thus indicating that "need" for osteopathic beds in 1982 in the District was only 60 percent of 2.9 percent of all acute care beds, or only 1.7 percent of all acute care beds. The difference between a real figure of 1.7 percent and the 5 to 10 percent range is so great that the conclusion has to be drawn that the 5 to 10 percent figure is inappropriate in this case for District XI.
While Petitioner's need calculation is unreasonably high, the calculations presented by Respondent and Intervenor, AMERICAN HOSPITAL, suffered from unreliability that would tend to underestimate need.
Daniel J. Sullivan was presented as an expert in health planning by AMERICAN HOSPITAL, and was accepted as such. He testified with respect to projections of need, and his testimony formed the basis for introduction into evidence of American Exhibit 1.
Need was first calculated using the rule for acute care hospitals, rule 10-5.11(23), F.A.C. As will be discussed ahead in the conclusions of law, this evidence may be relevant to the issue of the financial feasibility of the proposed project, since an osteopathic hospital must compete for many of the same ill patients as are served by allopathic hospitals; but in accordance with the decision in the Gulf Coast case, the rule cannot be used to project osteopathic need because it impermissibly assumes that allopathic beds will be adequate for osteopathic patients.
Mr. Sullivan criticized the 5 percent methodology presented by Ms. Buck as being overstated. In 1982, the number of patient days in osteopathic hospitals in Florida was 3.6 percent of all the patient days in all hospitals in Florida, and was 2.67 percent in Dade and Monroe Counties. From this he reasoned that 5 percent was too high as a representation of osteopathic patient needs. His reasoning, however, fails to account for the number of patient days of patients in allopathic hospitals admitted to those hospitals by osteopaths who would have been admitted to an osteopathic facility had one been available. Calculation of future osteopathic need based upon osteopathic hospital availability is inherently faulty because it equates supply of facilities with demand of patients.
Three additional methods of projecting acute care osteopathic hospital bed needs were presented by Mr. Sullivan. The first was to project need based upon a projection of the number of patient days that would be generated by the supply of osteopathic physicians in the District. There are 184 currently licensed osteopathic physicians in District XI as shown by the records of the, Florida Board of osteopathic Medical Examiners. Mr. Sullivan then selected the number of osteopathic patient days per osteopathic physician in Florida in 1983 as a basis for determining need. The data came from HRS, and simply reflects patient use of osteopathic hospitals. The method used by HRS to count osteopathic physicians in this data was not explained. The data results in 510 patient days per osteopathic physician which, when multiplied by the number of currently licensed osteopaths in District XI, results in a projection of 93,840 patient days. This number divided by 365 results in 257 beds needed at 100 percent capacity, and 321 beds needed at 80 percent capacity. Since 324 beds already exist, there is no need using this method.
The above method of calculating need is inadequate for two reasons: it fails to account for osteopathic patients in allopathic hospitals and other patients who might want to be treated in an osteopathic hospital but cannot due to lack of facilities, and it fails to consider the number of additional osteopathic physicians who might be attracted to South Dade County if an adequate osteopathic hospital existed there.
Parenthetically, Mr. Sullivan noted that most of the osteopaths in District XI have offices close to Southeastern Medical Center, and concluded from this zip code analysis that there was no need for an osteopathic hospital in South Dade County. The conclusion is untenable. From other testimony it is
clear that all physicians tend to locate their offices near hospitals (just as lawyers tend to locate their offices near the courthouse.) More important, however, there was credible testimony of prior and lingering discriminatory practices against osteopathic physicians who try to practice at allopathic hospitals. A minority profession, under such circumstances, would be expected to locate offices close to a friendly, home osteopathic hospital, and not in areas lacking such a facility. Health planning methods that look for osteopaths in areas lacking osteopathic hospitals put the cart before the horse.
The next need methodology proposed by Mr. Sullivan multiplied the rate of osteopathic patient days per 1,000 of population (based upon osteopathic hospital patient days in 1983 in seven districts) times the District XI projected population in 1989. This method resulted in a net projected osteopathic bed need of 20 beds. Again, the methodology is faulty in that it is based upon the status quo, the current availability of osteopathic hospitals, and fails to account for osteopathic patient needs which the existing stock of osteopathic hospitals may or may not be able to serve.
The final methodology offered by Mr. Sullivan was first to compute the 1982 osteopathic hospital patient days for Dade County as a ratio of population in 1982, and then to extrapolate the expected number of osteopathic hospital patient days in 1989 for the 1989 projected population. This method projects a surplus of 52 osteopathic hospitals beds in Dade County by 1989. Again, the problem with the methodology is that it is based upon the status quo, and would be substantially inaccurate as a projection of need if current need is unmet by existing osteopathic hospitals.
Respondent, HRS, proposed several methods to calculate need through the testimony of Walter Eugene Nelson, administrator of the Office of Community Medical Facilities at HRS, who was accepted as an expert in health care planning and certificate of need review in Florida.
Mr. Nelson first mentioned the 5 percent method which was relied upon by the Petitioner, as described above. Mr. Nelson did not attempt to support this methodology, even though it had been proposed by HRS as a rule, and the record contains no other evidence from HRS to prove that the 5 percent method is reasonable or that it should determine need in this case.
The second method proposed was to estimate the number of osteopaths in Dade County in five years and then to project the number of patient days chat would be generated by this number based upon current use rates for the two osteopathic hospitals in Dade County. This method projects a surplus of 86 osteopathic beds by 1989. This projection is mathematically incorrect. The surplus projected is actually 22. (The error is in the calculation of patient days per osteopath in 1984, Respondent Exhibit 1, which is 439.5 not 353.6, since 59,766 is divided by 136, resulting in 439.5.) Other than this error, the method has more fundamental flaws. First, though it reasonably projects that the 1984 census of osteopaths (136) will grow to a larger number in 1989, it accounts only for growth expected from graduates of Southeastern Medical College. Surely the climate of south Dade County will attract osteopaths from other colleges and other areas of the country, particularly if south Dade County were to have ample osteopathic hospitals. Second, as discussed above, the method fails to count the number of patients in allopathic hospitals who might prefer an osteopathic hospital if additional facilities were available.
In summary, all of the methods of projecting need discussed above have major problems. But the primary evidence of lack of need in this case is a result not of the relatively unsatisfactory methods of predicting the future that have been offered, but the lack of need shown by the recent past use rates at the two osteopathic hospitals in the District.
There are two osteopathic hospitals in District XI discussed above. The occupancy rates at these two osteopathic facilities have been significantly lower than capacity in recent years, and have been very similar to the use rates of allopathic hospitals:
OCCUPANCY RATE | 1981 | 1982 |
All district XI Hospitals | 67.4 percent | 66.6 percent |
Westchester Hospital | 67.8 percent | 65.8 percent |
Southeastern Medical Center | 61.3 percent | 58.4 percent |
This is strong evidence that District XI has had an excess of osteopathic beds in recent years. Moreover, the need for the existing osteopathic beds in 1984 has decreased. In the first six months of 1984, the use rate at Westchester dropped to 46.7 percent and the rate at Southeastern Medical Center dropped to 52.5 percent.
The cause of these lower use rates have been causes that apply equally to osteopathic and allopathic hospitals, thus leading to the conclusion that the lack of need shown by the above data will probably persist for several years into the future. All acute care hospitals have lost patients due to growth of alternatives to in-patient care, such as nursing homes, rehabilitation centers, outpatient surgical centers, and the like. Additionally, medicare policy changes have reduced the length of stay at all acute care hospitals. There is no compelling evidence on this record that osteopathic hospitals will not suffer from diminished need from these market forces in the same way that allopathic hospitals have suffered.
The Petitioner presented some evidence that the lower use rate at Westchester was due not to lack of osteopathic patient demand and need, but rather to poor quality of care at that facility. But the evidence was insufficient to dispel the conclusion that an additional major cause was simple lack of need.
Dr. Jules Gary Minkes testified with respect to the adequacy of Westchester Hospital for osteopathic patients. He said that there have been emergencies where Westchester was too far away to take the patient in the ambulance, and the patient had to be taken to a closer allopathic hospital. He did not testify as to how frequently this had occurred. Further, he testified that the bulk of the area to be his proposed osteopathic hospital was outside the service area of Westchester. Both of these problems, however, are ones that naturally flow from the fact that osteopathic physicians and patients constitute such a small percentage of all patients and physicians. Even if 10 percent of the acute care beds in District XI were osteopathic beds, these beds would be located at only a few hospitals at great distances from many of the osteopathic patients.
Dr. Minkes further testified in a general way that at some time in the middle 1970's, Westchester ". . . did not develop and did not meet the needs of the osteopathic physicians and did not keep up. And there was not a sufficiently integrated cohesive development." In the next sentence he implied that Westchester did not keep its staff, but did not testify to that fact.
Finally, Dr. Minkes testified that physicians that practice at Westchester had made requests to upgrade equipment and take a "more aggressive competitive attitude," but that this had not occurred at Westchester. On cross examination Dr. Minkes again acknowledged that he had "problems gaining access of my patients in our service area to go to Westchester," but he did not state further what those problems were.
Perhaps the strongest evidence of the inadequacy of health care at Westchester came from Dr. Ira Hershman, an osteopathic physician who has practiced in Dade County since 1960. Dr. Hershman's testimony, however, is ultimately as general and nonspecific as the testimony of Dr. Minkes. Dr. Hershman was chief of staff at Westchester a number of years ago, and in the early years osteopathic physicians tried to modernize the facility. Dr. Hershman then testified without explanation or elaboration that in recent years those efforts had "gone by the boards," and he was of the opinion that the current management at Westchester would not support expansion of osteopathic medicine in south Dade County and Monroe County. Dr. Hershman was convinced that no effort now would improve Westchester.
Dr. Hershman primarily admits his patients to Westchester, however, although he used allopathic hospitals occasionally for specialities not found at Westchester. Westchester has six or seven specialists on its staff, but does not have neurology, obstetrics, or psychiatry. Dr. Hershman said that his patients often do not approve of the quality of the facility at Westchester. Westchester, in his opinion, is designed in a "very poor way" and there are many, many inconveniences in there." He stated that Westchester is "very unpleasant for the patient and their families in many ways." He felt that the management of Westchester could have made improvements, but that architecturally "in its very design, it was just not made as a real facility." Dr. Hershman testified that Westchester had problems with equipment, both in terms of modernization and quality, with equipment breaking down. He concluded that "although I can get by with my cases in there on a general primary care level, it is really not an ideal facility. And that is being kind, I suppose."
Dr. Kathleen M. Tillman, an osteopathic physician specializing in internal medicine and practicing in Dade County, testified that she admits patients to both Westchester and Larkin hospitals. She stated that there was a "definite problem" for her patients due to the distance to Westchester Hospital. She said that due to the distance and travel time to Westchester, she had to "almost talk them into going" to Westchester. She said that a lot of her patients were over 65 years of age, and driving was a problem for them, that family visitation at Westchester was a problem due to the distance, and that she planned an office further south, thus increasing the distance in her work to Westchester. Other than driving distance, the only reason Dr. Tillman could think of that her patients did not want to go to Westchester was the physical facility, "the actual looks of the place more than anything, more than the actual health care."
Dr. William Levin is also an osteopathic physician who practices in Dade County. He testified that he had "difficulty" admitting patients to Westchester Hospital. Dr. Levin said that his difficulty is partially caused by the physical plant at Westchester, and partially caused by the location. He felt that the physical plant was a major factor, but that rebuilding the facility would not solve the problem of patient acceptance. Dr. Levin further
testified that for the past 10 years, the chief of staff at Westchester has always been an osteopathic physician. He also testified that he had been the past chairman of general medicine at Westchester, that Westchester had a department of family medicine, and that department heads at Westchester, to the best of his knowledge have always been osteopathic physicians.
Dr. Nsitibe Nelson Ikpe, an osteopathic physician who practices in Dade County, is trying to expand his practice to the southern portion of Dade County. Dr. Ikpe is currently using Westchester Hospital. Dr. Ikpe has not in the last few years had any problem admitting patients to Westchester. Dr. Ikpe conceded that it could "take up to 30 minutes" for a patient to drive from north Monroe County to Westchester, but he did not say it would take more than 30 minutes, and did not testify that this driving time was a problem for him. Dr. Ikpe did not provide any other evidence as to the adequacy of Westchester.
Finally, Dr. Arnold Melnick, Dean of the Southeastern College of Osteopathic Medicine, was offered the opportunity to express an opinion as to the adequacy of Westchester Hospital, and his testimony leads the Hearing Officer to conclude that he found no fault with Westchester, at least as a training facility. Dr. Melnick testified that if the American Osteopathic Association (AOA) approved a hospital, he would have no hesitation to recommend it to his students. He then testified that Westchester was AOA approved for internships. Finally, when asked to express an opinion as to the need for a new osteopathic hospital, assuming Westchester was no longer adequate, Dr. Melnick testified: "Since Westchester is accredited as a training institution by the American Osteopathic Association, I couldn't comment because it contradicts what you're stating."
None of the osteopathic physicians who expressed general dissatisfactions with Westchester supported their conclusions with concrete examples of inadequacies. While the foregoing is evidence that there are problems at Westchester for the physicians who testified, these problems were not proven with sufficient specificity and have not been shown to be such for this Hearing Officer to conclude that Westchester is so inadequate that it should be replaced by the hospital proposed by Petitioner. Nor is the evidence sufficient for the Hearing Officer to conclude that the low use rate at Westchester is due solely to inadequate health care at Westchester. As stated above, the record evidence indicates that the use rate at Westchester is quite similar to the use rates at allopathic hospitals in the District, which is consistent with the conclusion that the lower use rate at Westchester is caused by the same diminished need. Further, the use rate at Westchester is quite similar to the use rate at Southeastern Medical Center. On this record, there is no indication that Southeastern Medical Center is other than an adequate health care facility. The similarity in use rates, therefore, leads one to the conclusion that the use rate at Westchester is driven primarily by the same force that drives the use rate at Southeastern: lack of need or demand by osteopathic patients.
Petitioner also argued need for its proposed hospital because of plans to make the new osteopathic hospital a teaching hospital serving the needs of osteopathic students, interns, and residencies. Dr. Melnick, Dean of the Southeastern College of Osteopathic Medicine, testified with respect to the need for teaching hospitals for these purposes. The Southeastern College of Osteopathic Medicine has been in existence only a few years, and has yet to graduate its first class. The first class will be 40 students, but the fourth
graduating class, and in every year thereafter, will be 100 students. In order to be certified as an osteopathic physician, a graduate of a college of osteopathy must serve an internship in an osteopathic hospital approved by the American Osteopathic Association.
In District XI, Southeastern College of Osteopathic Medicine currently places about 16 of its interns in internships at the Southeastern Medical Center. Westchester is approved by the AOA for from 2 to 5 interns, and currently has one.
Dr. Minkes testified that the proposed new hospital would strive to be approved by the AOA and provide at least 5 osteopathic internship slots, and possibly more based upon outpatient and emergency room use.
Thus, if there were other compelling evidence of need to fill the beds of the proposed 100 bed osteopathic hospital, the above evidence would be some additional evidence of need. By itself, however, the need to provide 5 internships is not sufficient justification for the project, particularly since the internship crisis facing Southeastern College would be ameliorated only in a small way by the availability of 5 intern positions at the proposed hospital. Dr. Melnick testified that in a few years in Florida there would be a shortage of as many as 500 osteopathic internships.
Petitioner further sought to establish a need for its proposed hospital by presenting evidence that Westchester does not have obstetric beds, and the proposed hospital would devote 10 percent of its beds (10 beds) to obstetrics. First, it should be noted that whether or not existing allopathic hospitals provide obstetric services, or whether any such allopathic services are currently running at capacity, is not relevant to this case since allopathic obstetric beds are not an adequate equivalent to osteopathic obstetric beds. Nonetheless, other than the fact that Westchester has no obstetric beds, there is no evidence in the record of the magnitude of need for such beds. Moreover, the proposed hospital will devote only 10 percent of its beds to obstetrics. Even assuming a need have been proved, this is not a sufficient reason to grant a certificate of need for all 100 beds.
As further justification for need, Petitioner presented evidence that osteopaths had been discriminated against in the years before this decade, and that the growth of the profession has thus been retarded by these practices. Petitioner argued that the numbers of osteopathic physicians in District XI was not reflective of actual patient need, and that a new osteopathic hospital would attract more osteopathic physicians. Though not extensive, the evidence of discrimination by allopathic hospitals and physicians through the 1970's was shown by the record. Moreover, there is good reasons in the record to believe that osteopathic physicians will cluster around an osteopathic hospital. Osteopaths currently locate their offices near Southeastern and Westchester. Despite the general truth of the above two principles, however, on the record of this case the operation of these principles does not compel the conclusion that a new osteopathic hospital is needed. If indeed there were continued serious discrimination against osteopaths and their patients, one would expect that the use rates at Westchester and Southeastern would be higher. The relatively low use rates at Westchester and Southeastern lead one to the conclusion that the magnet effect of those hospitals has already pulled all available and interested osteopathic physicians to District XI, and has attracted all those osteopathic
physicians who have been discriminated against. And still, presuming the full operation of both principles, both existing osteopathic hospitals run at about
50 percent capacity. In sum, prior discrimination and the potential of attracting new osteopaths to a new hospital, even if probably true, do not ultimately show a need for a third osteopathic hospital in District XI.
Dr. Melnick testified that about 80 percent of his students at Southeastern College of Osteopathic medicine came from Florida, and estimated that "a good number" would practice in Florida. Dr. Melnick did not provide any data as to the number that might practice in Dade County. Eugene Nelson based his estimates of the number of osteopathic physicians who might stay in Dade County after graduating from Southeastern College of Osteopathic Medicine upon actual experience at the University of Miami College of Medicine, and as such his testimony is based upon better evidence and is accepted over the estimate of Dr. Melnick.
Eugene Nelson mentioned one other methodology for calculating bed need, a methodology which assumes that each osteopathic physician will generate 660 patient days per year. This methodology was used in OMHI-UHSI vs. DHRS, 5 FALR 2294A, the "Wellington" case, and is based upon the use rate at one osteopathic facility in Palm Beach County. It therefore was based upon a sample of data relevant only to that case, a sample size too small to provide a basis for extrapolation to this case.
As will be discussed ahead in the conclusions of law, since osteopathic bed need constitutes at most only 10 percent of all acute care hospital beds, the 30 minute driving standard for urban areas is of little use in this case to determine osteopathic hospital bed need. Many osteopathic patients will always be at some distance from the few osteopathic hospitals if, at best, only 1 out of 10 hospitals is an osteopathic hospital.
Nonetheless, for the record, additional findings will be made with respect to the evidence of driving distances to the two osteopathic hospitals, Westchester and Southeastern.
Southeastern Medical Center is located in the northeastern portion of Dade County and, of the hospitals considered at the hearing, is the furtherest hospital from residents living in subdistricts 4 and 5. Southeastern Medical Center is currently over 30 minutes driving time from all the persons residing in subdistricts 4 and 5, and will continue to be beyond 30 minutes driving time in 1988.
Westchester Hospital is closer to residents in subdistricts 4 and 5. It is located approximately at the intersection of Coral Way and the Palmetto Expressway about 9 miles north northeast of the proposed new osteopathic hospital. Westchester is located in a dense urban area, and consequently the 30 minute driving distance surrounding the hospital consists of a smaller area. In 1984, about 30 to 35 percent of the population in subdistrict 4 resided more than 30 minutes driving time from Westchester, and 100 percent of the population of subdistrict 5. In 1988, about 40 to 45 percent of the population is subdistrict 4 is expected to reside beyond 30 minutes driving time of Westchester, and 100 percent of subdistrict 5.
Baptist Hospital presented travel time evidence that showed 30 minute distances from locations on major roadways to four allopathic hospitals and Westchester Hospital, all located in the south Dade County area. The data provided did not show the percentage of population within 30 minutes driving
time of Westchester Hospital. Moreover, the driving distances tend to overstate the accessibility of the hospitals considered. The data does not account for driving time from residential areas to major roadways, but rather, begins (or ends) at points still on major roadways.
The driving data presented by Petitioner, however, tends to understate the area of accessibility to Westchester Hospital and Southeastern Medical Center. Petitioner's travel times include time to park at the hospital and walk to the entrance. This is an entirely reasonable approach, at least with respect to parking time as discussed above. Rule 10-5.11(23)(i)1, F.A.C., is concerned with "beds" being "accessible within an automobile travel time." A bed is not accessible until one is there, and parking can take a few minutes. However, it is also reasonable for HRS to construe its own rule, for the sake of simplicity, as not counting these periods of travel, and therefore it is the obligation of the Hearing Officer to follow the interpretation of the agency of its own rule, if reasonable. The record does not reflect how much time, on the average, Petitioner's expert added to the driving time for parking and walking, but the amount should not have been more than a few minutes. Petitioner's travel may have also been understated because Petitioner's expert assumed that travel by night would be 10 percent slower. The testimony of intervenor's expert, that night driving should be the same or faster, is accepted as more correct. Petitioner's expert further assumed that driving times in the future would be 10 percent slower. Intervenor's expert presented a contrary view, arguing that it was impossible to predict future traffic demand and traffic improvements but on this point Petitioner's expert's view of the future traffic in south Dade County is accepted as being more accurate.
Since none of the allopathic hospitals represented in any of the travel studies was shown to be an "osteopathic facility" as discussed above, the travel times to these hospitals for this case was irrelevant.
If one were to rely upon the acute care bed rule to project need for osteopathic patients, District XI by 1989 shows a significant maldistribution of beds. Subdistrict 4 will have a net surplus of 1012 beds, while subdistrict 5, the extreme southern portion of Dade County and Monroe County, will have a net need for 533 beds. This is some evidence that were this proposed project to be located in subdistrict 5 it would serve the unmet needs of that district. However, this is not an appropriate conclusion to draw for several reasons. First, the overbedded situation in subdistrict 4 is so extreme that the better policy would be to require patients in subdistrict 5 to travel to hospitals in subdistrict 4, at least until the extreme circumstance in subdistrict 4 is improved. The distances from south Dade County are not that much greater, and the distances from the keys would remain troublesome for any new hospital located in the northern part of subdistrict 5. Moreover, the bulk of the population of subdistrict 5 lives in the northern section immediately adjacent to subdistrict 4. More importantly, however, if the acute care bed rule is inappropriate for projecting osteopathic bed need, it remains inappropriate whether it shows or does not show a need.
The financial feasibility of the proposed project depends primarily upon whether the new hospital will attract and keep an adequate number of patients Petitioner projected that its hospital would be 44 percent occupied in the first month of operation, 65 percent at the end of the first year, and 75 percent at the end of the second year. These projections were not substantiated by Petitioner, and the evidence would indicate that they are overly optimistic. First, the other two osteopathic hospitals are having trouble attracting enough patients to fill 50 percent of their beds, thus suggesting that the new facility
will rely upon a pool of patients that is inadequate to fill two facilities. Second, the record does not contain adequate evidence as to the numbers of osteopathic patients currently treated in allopathic hospitals who would want to switch to the new osteopathic facility. What little evidence there is on that point tends to show that the new osteopathic hospital cannot expect to gain large numbers of osteopathic patients from allopathic hospitals. In 1983, BAPTIST had 18,167 patient admissions. Ernest Nott, Chief Executive Officer at BAPTIST, testified that in the same year, osteopaths admitted only 240 of these patients, or 1.3 percent of all 1983 admissions. (Petitioner submits as a proposed finding that osteopathic physicians admitted 42 patients to AMERICAN HOSPITAL in 1984, and that osteopaths admitted 121 patients during 1984 to BAPTIST HOSPITAL, citing Petitioner's exhibits 12 and 13 as containing that evidence. This proposed finding is rejected because those figures are not contained in those exhibits.) Thus, if the data from BAPTIST is typical, there are very few osteopathic patients in allopathic hospitals available to the new hospital as a future source of income. Finally, the projection that the new osteopathic hospital will be 75 percent occupied by the second year of operation is suspect given the fact that established subdistrict 4 hospitals in two consecutive years (1981 and 1982) operated at only a 63.2 percent occupancy level.
Since the most basic element of financial feasibility, projected patient days, has not been shown on this record, there is no need in this Recommended Order to consider the subsidiary points as to financial feasibility raised by the parties. Thus, no findings have been made with regard to the reasonableness of financing proposals, projected costs and expenses, projected revenues, or the reasonableness of the space study.
Westchester is also in subdistrict 4, the same subdistrict as the proposed hospital, and therefore the fiscal impact upon Westchester would very likely be quite negative. As discussed above, the osteopathic physicians who testified in this case would probably discontinue using Westchester, thus lowering its use rate even below the current 47 percent. The magnitude and precise effect of the impact cannot be ascertained on this record, but a significant negative impact is certain.
The impact of the proposed new osteopathic hospital upon the two intervenors would not be substantial, and would not be a cogent reason to deny this application. Both of these hospitals have continued to be profitable despite lower occupancy levels. In 1982, American had only a 51.4 percent occupancy level, but it ended up with $153.48 excess of patient charges per day over operating expenses per day, which was an excess of 22 percent over the average charge per patient day. Similarly, Baptist was occupied at the level of
66.7 percent in 1982, and it had $93.25 excess of patient charges per day over operating expenses for 1982, a margin of 20 percent. Either hospital could lose a number of patients to the proposed new hospital and not suffer major financial damage. Moreover, if it is true that fewer than 2 percent of the patients at these hospitals are osteopathic patients, even the loss of all of these patients would not cause major economic damage to either intervenor.
The acute care bed need rule, section 10-5.11(23), F.A.C., contains a health care planning standard for general medical and surgical beds: new beds should be authorized when existing beds reach 80 percent of their capacity. (This standard is contained in the formula district bed allocation in subpart (f)3a of the rule.) While the formula used in this rule (which treats osteopathic beds to be adequate alternatives to allopathic beds, and vice versa) is inappropriate as a means to project osteopathic bed need, the 80 percent
planning standard is useful to measure osteopathic bed need based upon utilization of existing osteopathic facilities. The 80 percent standard has applicability to any acute care hospital since it addresses basic efficiencies in operation, and unlike the 30 minute driving standard, is not inapplicable to an osteopathic facility due to some factor unique to the osteopathic circumstance. Further, the 80 percent threshold was supported by other evidence in the record as a suitable standard for measurement of bed need in this case.
First, the 80 percent standard is also used by The Health Council of South Florida, Inc., which is the local health planning agency responsible for the health plan for District XI. The 80 percent standard was used in the District XI health plan adopted in July 1983. Second, the 80 percent standard is a standard that is a generally accepted standard for acute care hospitals contained in national medical planning guidelines.
All of the parties proposed a number of findings concerning the availability of allopathic hospital services in District XI, and in subdistricts
4 and 5 in particular. Since, as discussed above, no party proved that any allopathic hospital had any portion thereof which was in fact so dedicated to osteopathy that it could be called an "osteopathic facility" as defined by the Gulf Coast decision, supra, evidence as to the nature of existing or future allopathic hospital services was deemed to be irrelevant to this case.
Likewise, evidence that osteopathic physicians are admitted to the staff of allopathic hospitals, or admit patients to allopathic hospitals, was also deemed to be irrelevant to this case because the evidence did not show that such osteopathic patients to have been treated in "osteopathic facilities" within such allopathic hospitals.
The fact that some osteopaths may prefer to practice in an allopathic hospital was found to be true, and it was recognized that not all of the osteopathic patients currently served by allopathic hospitals would necessarily be served by the proposed osteopathic hospital. However, the A magnitude of this diminution of osteopathic patient need was not presented in the record, and was not necessary to the ultimate conclusion that no need was shown.
There were a number of other findings of fact proposed by the parties in this case which are not mentioned in the above findings. No separate finding will be made as to these since they were subordinate to the findings made above, were unnecessary in view of findings made above, were cumulative, or were irrelevant.
In summary, there may be a need for additional osteopathic hospital facilities in District XI, but that need was not shown in this case. First, the low utilization of the existing osteopathic hospitals was not adequately explained. And second, there was no reliable data as to the numbers of osteopathic patients who would prefer treatment in an osteopathic hospital but have been diverted to an allopathic hospital due to lack of existing osteopathic facilities.
CONCLUSIONS OF LAW
Need for osteopathic facilities is not to be evaluated based upon the availability of non-osteopathic facilities. Therefore, the availability of allopathic acute care hospital facilities is irrelevant to the determination of need for the proposed osteopathic hospital in this case. Section 381.494(2), Fla. Stat. (1984); Gulf Coast Hospital, Inc., v. DHRS, 424 So. 2d 86 (Fla. 1st DCA 1982).
For this reason, the acute care bed need rule, rule 10-5.11(23), F.A.C., cannot apply to this case because the formula contained in that rule has the mathematical result of assuming that allopathic acute care beds can serve the needs of osteopathic patients.
Subpart (i)1 of the acute care bed need rule provides that acute care hospital beds should be "available and accessible within an automobile travel time of 30 minutes under average travel conditions to at least 90 percent of the population residing in an urban area subdistrict." Osteopathic physicians constitute 5 percent or less of all physicians in Florida. Moreover, osteopathic patients appear to constitute only 10 percent or less of all hospital patients. Consequently, if all the need for osteopathic beds were met, osteopathic facilities would constitute 10 percent or less of all hospital beds in Florida. If only 1 hospital in 10 in Florida is an osteopathic hospital, it naturally follows that such hospitals will be further apart than the remaining 9 allopathic hospitals. Consequently, the 30 minute driving time standard contained in rule 10-5.11(23)(i)1, F.A.C., for urban areas, is of little relevance in determining osteopathic hospital bed need. Osteopathic facilities will always be at, distances greater than 30 minutes driving time from substantial numbers of osteopathic patients.
In determining need for osteopathic "facilities," it is appropriate to consider the adequacy of portions of existing allopathic facilities to the extent that such portions of these allopathic facilities meet the definition of "osteopathic facility" set forth in the Gulf Coast case, supra. However, the availability of staff privileges for osteopathic physicians to practice in an allopathic hospital, ". . . even if it becomes something more than a `token,' is not a substitute for the practice of osteopathy in an osteopathic hospital." Gulf Coast, supra, 424 So. 2d at 92. To qualify as an "osteopathic facility" within an allopathic hospital, there must be evidence that the facility is constructed and maintained for the care and treatment of patients in accordance with the principles of osteopathy, for the teaching and the study of osteopathic medicine, and for the association in practice of doctors of osteopathy, including osteopathic specialists with support from staff personnel suitably trained in the principles and philosophy of osteopathy. Further, "The management and control of the facility so as to actively further all of the above activities rather than to merely tolerate them, must be in the hands of osteopaths or those sympathetic to that school of medicine." 424 So. 2d at 90.
Although there was evidence that doctors of osteopathy were allowed staff privileges at several allopathic hospitals in subdistricts 4 and 5 of District XI, there was no evidence that the control and management of any portion of those facilities was in the hands of osteopaths or those sympathetic to that form of medicine, or that staff was suitably trained in the principles of osteopathy. Thus, other than Westchester Hospital and Southeastern Medical Center, which are osteopathic hospitals, there was no other "osteopathic facility" available for osteopathic patients in District XI.
The following paragraphs will address the criteria contained in Section 381.494(6)(c), Fla. Stat., which are at issue in this case.
Criterion 1, need in relation to the district and state health plans, is largely irrelevant in this case. The only criteria from these plans presented in this case were criteria that related to all acute care beds. One was the goal that all acute care beds must first reach 80 percent occupancy before new beds are approved. The other was a ceiling ratio of beds per 1,000 population. Neither standard can apply in this case as written because both
suffer from the same defect as the acute care bed rule: allopathic beds and osteopathic beds are commingled as if equivalent. However, the 80 percent standard was used to measure the meaning of the low occupancies at Westchester and Southeastern. Since the occupancy levels at the existing osteopathic facilities are substantially below the 80 percent standard, this is a major indication that there is no need for the proposed osteopathic hospital.
Criterion 2, the availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing services in the district, an has not been established by the evidence in this case. Westchester Hospital and Southeastern Medical Center are the only like and existing services in the district, and both are appropriate, adequate, available, and reasonably accessible, given the reality that osteopathic hospitals will inevitably be scattered. Both are underutilized.
Criterion 3, the ability of the applicant to provide quality care, has not been extensively addressed in this order due to the finding of a lack of need.
Criterion 4, the availability and adequacy of other health care facilities, such as allopathic facilities, is irrelevant in this case as discussed above.
Criterion 7, the need for educational and research facilities, has been satisfied in this case but is not of sufficient importance, standing alone, to justify granting the certificate of need.
Criterion 8, the availability of manpower and capital resources, the effects on health professional training programs, accessibility to health professional schools in the district, and accessibility to residents of the service district, has been satisfied in part. The proposed hospital will provide about 5 internships per year and will be reasonably accessible to Southeastern College of Osteopathic Medicine for training purposes. The proposed hospital will be more accessible to residents in south Dade county and Monroe county than either Westchester or Southeastern Medical Center. None of these issues are of sufficient importance to warrant issuance of the certificate of need. No findings have been made as to manpower and capital resources due to the finding of lack of need.
Criterion 9, the immediate and long-term financial feasibility of the project, has not been satisfied due to the finding of a lack of need.
Criterion 12, the probable impact upon the costs of providing health services, has been partially satisfied and particularly unsatisfied. The existing osteopathic hospitals, and particular Westchester, will be significantly harmed by loss of patient's to the new osteopathic hospital, but the intervenor allopathic hospitals will be not be significantly harmed.
Criterion 13, the costs and methods of construction, have not been the basis of findings due to the findings of a lack of need.
The criteria found in Section 381.494(6)(d) 1, 2, and 4 have also been considered. Allopathic services are not appropriate alternatives, but the services of the two existing osteopathic hospitals are appropriate, available, and less costly than a new osteopathic hospital. The existing inpatient osteopathic facilities are being used in a sufficiently appropriate and
efficient manner, although improvements could be made at Westchester. Osteopathic patients will not experience serious problems in obtaining osteopathic hospital services in the absence of the proposed osteopathic hospital.
Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the application of the Petitioner in this case for a certificate of need to establish and operate a 100 bed osteopathic teaching hospital in subdistrict 4, District XI, in Dade County, Florida, be DENIED.
DONE and ENTERED this 15th day of February, 1985, in Tallahassee, Florida.
WILLIAM C. SHERRILL, JR.
Hearing Officer
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 15th day of February, 1985.
COPIES FURNISHED:
F. Philip Blank, Esquire Susan A. Maher, Law Clerk
F. Philip Blank, P.A.
241 East Virginia Street Tallahassee, Florida 32301
John F. Gilroy, Esquire Culpepper, Turner & Mannheimer
318 North Calhoun Street Tallahassee, Florida 32301
Kyle R. Saxon, Esquire Paige & Catlin
169 East Flagler Street Suite 816
Miami, Florida 33131
Ivan Wood, Esquire
Steven T. Mindlin, Esquire Wood, Lucksinger & Epstein 1501 Venera Avenue, Suite 200
Miami, Florida 31146
Mr. David Pingree, Secretary Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32301
| Issue Date | Proceedings |
|---|---|
| Feb. 15, 1985 | Recommended Order sent out. CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Feb. 15, 1985 | Recommended Order | Certificate of Need (CON) for osteopathic beds denied. Existing facilities occupancy levels below standard. No need was shown. Formula comingles allopathic and osteopathic beds. |
