STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MANOR CARE, INC., OF LEE COUNTY, )

)

Petitioner, )

)

vs. ) CASE NO. 87-3511

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

) SISTERS OF BON SECOURS IN THE ) UNITED STATES, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 87-3514

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, ) FLORIDA HEALTH FACILITIES CORP., ) and FLORIDA COUNTRY PLACE, LTD., )

)

Respondent, )

) FLORIDA HEALTH FACILITIES ) CORPORATION/LEE COUNTY, d/b/a ) ) PINES VILLAGE CARE CENTER, )

)

Petitioner, )

)

vs. ) CASE NO. 87-3516

)

DEPARTMENT OF HEALTH AND ) REHABILITATIVE SERVICES, and ) FLORIDA COUNTRY PLACE LIMITED ) PARTNERSHIP, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in this case before Arnold H. Pollock, Hearing Officer, in Tallahassee, Florida on February 1-10, 1988. The issue for consideration was which applicant should be issued a Certificate of Need to construct and operate a 60 bed nursing home in Lee County, Florida.

APPEARANCES

For Petitioner Manor Care: Donna Stinson, Esquire

Moyle, Flanigan, Katz, Fitzgerald and Sheehan

118 North Gadsden Street Tallahassee, Florida 32301

For Petitioner Bon Secours: Byron Mathews, Esquire

Vicki Gordon Kaufman, Esquire

H. Guy Collier, Esquire McDermott, Will & Emery

101 North Monroe Street Tallahassee, Florida 32301

For Petitioner Florida : Robert D. Newell, Jr., Esquire Health Facilities Newell & Stahl, P.A.

102 South Monroe Street Tallahassee, Florida 32301

and

John Stone, Esquire

Neiman, Neiman, Stone & Spellman 1119 High Street

Des Moins, Iowa 50310

For Respondent, DHRS : Richard Patterson, Esquire

2727 Mahan Drive

Tallahassee, Florida 32308 BACKGROUND

Petitioner, Manor Care, Inc., (Lee), (Manor Care), applied for a Certificate of Need, (CON), to construct a 120 bed nursing home in Lee County, Florida, on June 4, 1987. The Department of Health and Rehabilitative Services, (DHRS), denied Manor Care's application and Manor Care, on June 18, 1987, filed a Petition For Formal Administrative Proceeding to contest the denial.

Petitioner, Sisters of Bon Secours in the United States, Inc., (Bon Secours), applied a for a CON to construct a 120 bed nursing facility in Lee County. By letter dated June 8, 1987, DHRS denied the application, and on July 6, 1987, Bon Secours filed its request for formal administrative hearing, contesting the denial of its application and the award of CONs to Florida Heath Facilities Corp., and Florida County Place Limited Partnership.

Petitioner, Florida Health Facilities Corp., (of Lee County), d/b/a Pines Village Care Center, (FHFC), filed an application for a CON to construct a 120 bed nursing home. On June 3, 1987, DHRS denied the application and on July 8, 1987, FHFC filed its Petition for Formal Hearing contesting the denial.

Additional petitions for formal hearing were filed by Unicare Health Facilities of Lee County; Shive Nursing Center, Inc., d/b/a Lymar Nursing Center; Hillhaven, Inc., d/b/a Hillhaven Convalescent Center - Lee County; Health Quest Corporation, (Lee County); and Health Care Retirement Corporation of America, d/b/a Heartland of Lee; to protest DHRS' denial of their respective applications On September 11, 1987, DHRS moved to consolidate these cases for hearing and that request was granted. Prior to hearing, however, all those

listed above voluntarily dismissed their petitions and hearing was held involving only those parties indicated in the style of this case.

At the hearing, Manor Care presented the testimony of John F. Downey, Jr., Director of Purchasing at corporate headquarters; Alexander R. Boyar, a financial analyst with the corporation; Donald P. Reppy, a senior health planner with Manor Care; Linda N. Kinsella, registered social worker and director of the Alzheimer's wing at one of Manor Care's facilities; Jack L. Bowersox, architect; and John D. Lee, III, Manor Care's senior director of operations. Manor Care also introduced Manor Care Exhibits 1 through 3 and 6, the latter a deposition of the testimony of Ms. Liz Dudek, health planner for DHRS.

Bon Secours presented the testimony of Warren R. Slavin, Chief Executive Officer at Bon Secours Hospital; Bishop John J Nevins, Bishop of the Catholic Diocese of Venice; Sister Margaret Rose Whiteneck, President, Bon Secours Hospital Villa Maria Nursing Center; James A. Hotchkiss, Chief Operating Officer at Villa Maria; Charles Short, architect; Curtis R. Jennings, architect; Raul Lujan, a certified public accountant; Nancy Alford Persily, consultant in health care planning and marketing; Pamela J. Isabel, Vice President of Corporate Development at Villa Maria; and Wayne McDaniel, supervisor of the monitoring section in DHRS' Office of Health Services and Facilities. Bon Secours also introduced Bon Secours Exhibits 1, 2, 3c, e, and f, 9a and b, 27, 31, 33, 34c, 43d, 46, 49, 50, and 51.

Petitioner, FHFC, Presented the testimony of David J. Deuschle, administrator of FHFC's Pines Village Nursing Home; Philip J. Ostendorf, architect; Marty B. Clark, President of Village Properties, project sponsor for FHFC's Pines Village Care Center; and Jerry w. Voyna, CPA and comptroller for Village Properties, Inc. FHFC also introduced FHFC's Exhibits 1-13 and 15-18.

A transcript of the hearing was received on March 31, 1988. The parties jointly requested 45 days from receipt of transcript to file Proposed Recommended Orders. Proposed Findings of Fact were filed by all applicant parties and are ruled upon in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. Manor Care, on June 18, 1987, filed with DHRS, its Petition for Formal Administrative Proceeding, to protest the agency's denial of its application for a CON to construct a 120 bed nursing facility in Lee County, Florida for the January, 1990 planning horizon.

   
   

2. On July 6, 1987, Bon Secours filed with DHRS its Petition for Formal Administrative Hearing to protest the agency's denial of its application for a CON to construct a 120 bed nursing facility in Lee County, also for the same planning horizon.

   
   

3. On July 8, 1987, FHFC filed its Petition for Formal Hearing with DHRS contesting the agency's denial of its application for a 120 bed nursing home for the same planning horizon in Lee County.

   
   

4. In that same batching cycle, DHRS also comparatively reviewed the applications of Unicare Health Facilities, Inc., to construct a 60 bed facility; Florida Country Place, to construct a 30 bed facility as a part of a retirement complex; Hillhaven Corporation, to construct a 109 bed community nursing home; Health Quest Corporation to construct a 60 bed facility; and Shive Nursing Center, Inc., to construct a 60 bed facility. DHRS determined there was a need

   in Lee County for the planning horizon in question for an additional 60 beds and thereafter awarded 42 beds to FHFC and 30 beds to Florida Country Place. As of the hearing, DHRS proposes to award a CON for 60 beds to one of the remaining parties.

   
   

   THE PARTIES

   
   

5. Manor Care currently owns and operates nine nursing homes in Florida. Of the presently operating homes, seven are rated superior by the state and the other two are rated as standard. The corporation has a regional office in Winter Park, Florida, headed by a senior regional director under whose supervision, Manor Care has constructed and opened three of the above nine facilities. Each of those three was completed on time and within budget and each holds a superior rating.

   
   

6. The Sisters of Bon Secours in The United States, Inc., a not for profit corporation based in the State of Maryland, is a civil corporation of the religious order of the Sisters of Bon Secours. This order was founded in 1824 for the purpose of promoting a health care ministry under the auspices of the Roman Catholic Church. The order owns the Bon Secours Health System which carries out this health care mission. Bon Secours Health Systems is also a not for profit entity and will operate the Lee County facility if construction is approved.

   
   

7. Bon Secours Health Systems also operates Bon Secours Hospital and Villa Maria Nursing Center in Miami, Florida. As a nonprofit entity, Bon Secours reinvests any excess revenues in its health care delivery system as opposed to returning a profit to private investors. A nonprofit entity does not, however, necessarily mean that a profit is not earned out of operations.

   
   

8. FHFC is a small, family owned corporation which owns and operates nursing homes in Florida, Iowa, and Missouri and, with its related companies, Clark Development, and Village Properties, has been in business since 1967. FHFC currently owns and operates five nursing homes in Florida, none of which have ever been owned or managed by an outside company. Further, neither FHFC nor its related companies have ever sold an issued or approved CON. Pines Village had a conditional rating when opened but is currently rated standard.

   
   

9. Pines Villages currently owned and operated by FHFC, is located on a five acre landscaped site in Lee County. Amenities on the property include a pond and fishing deck for the use of the patients, and the local Boy Scout troop has built a gardening area for the residents. Volunteer and professional staff are provided by FHFC to accompany residents on the grounds. The facility was originally opened as a 78 bed facility and has operated at that level until only recently.

   THE PROPOSALS

   
   

10. The applicants propose the following facilities and costs: FHFC MANOR CARE BON SEC.

    Total Proj. Cost	$866,940	$3,108,500	$ 3,596,700
    New Total GFT	$ 13,420	$ 27,000	$34,000
    GFT/Bed	$ 291.55	$ 450	$ 566.60
    Const. Cost	$697,840	$1,377,000	$ 2,073,700
    Const. Cost/ft2	$ 52.00	$ 51.00	$ 60.99
    Const. Cost/Bed	$ 11,630	$ 22,950	$34,562
    Total Cost/Bed	$ 14,449	$ 51,808	$59,945

    
    

11. Manor Care proposes to finance its project by the issuance of convertible debentures at an estimated interest rate of 12 percent which includes the estimated cost of converting the debentures. In the event that lower interest rates become available, Manor Care will take advantage of them. Bon Secours projects financing by tax exempt bonds at 8 1/2 percent. It has secured similar bond funding in the past and is confident it can secure it here. Florida Health Facilities proposes to utilize a conventional loan at 10 percent interest. There is no reason to believe that such financing is not available.

    
    

12. The applicants propose the following patient charges: FHFC MANOR CARE BON SECOURS

    Private	---	$ 83.98	$85.00
    Semiprivate	$69.00	$ 72.43	$74.00
    Medicaid	$45.34	$ 73.48	---
    Medicare	$62.00	$109.96	---
    VA	$81.00	---	---
    Private-Alz. ---		$ 88.18	---
    Semi-private-Alz.--		$ 78.73	---

    
    

13. Each of the current applicants is highly skeptical of the accuracy of its competitors pro forma cost estimates and thereby concludes the costs and resultant charges proposed are "optimistic," "flawed," "unrealistic," "inaccurate," and "internally inconsistent." Even if these criticisms are true, they apply equally to all applicants, and when evaluating the proposals, allowance is made for proprietary puffing and the recognition that the actuality of the future may vary widely from the recollections of the past and the estimates of the present. Consequently, unless shown to be clearly inaccurate or not capable of belief, the representative of the applicants are accepted here as made.

1. The applicants propose the following commitments to Medicaid patients: FHFC MANOR CARE BON SECOURS

   Medicaid Util. 50 percent	35 percent	33.5 percent
   Medicaid Rate $58.39	$73.48	$85.00 (P)
   		$74.00 (SP)

   
   

2. Current Medicaid utilization at FHFC is 53 percent, a figure which is comparable to other nursing facilities in Lee County. Bon Secours' commitment of 33 1/2 percent is the minimum Medicaid commitment required by the local

   health plan. Manor Care projects a 35 percent utilization and places an upper limit of 45 percent on Medicaid participation overall. Manor Care tends to locate its facilities in more affluent neighborhoods, however and caters to a more upscale patient mix. Medicare projections by the parties are Manor Care, 5 percent; FHFC, 2 percent; and Bon Secours, 19.9 percent. The latter figure, Bon Secours', would appear to be high, however, for the area in question where statistics available indicate Medicare utilization has declined. Medicare is generally a high reimbursement service. All three proposals are consistent with the goals of the State Health Plan which are to develop alternatives to Institutionalization; to insure appropriate long term care services are available; and to insure such services are appropriately utilized. They are also consistent with the local health plans although in all cases, compliance may not be as clearly shown. However, of all applicants, Bon Secours best addressed the question of Medicare provision and the need for rehabilitative and subacute care facilities in the county.

   
   

3. Bon Secours proposes a facility which will emphasize rehabilitative and restorative care under a program known as short term/long term care (stays of 90 days or less). In addition, Bon Secours proposes to also provide long term care of over 90 days when required. Manor Care proposes to offer long term care services and a segregated Alzheimer's Disease unit with 30 of the new beds going to long term care and 30 to the proposed Alzheimer's unit. FHFC intends to add 60 beds to its existing facility in Lee County without an addition in ancillary space. In other words, construction will be limited to that necessary to provide patient rooms, nursing station and baths but not additions to the common areas, the dining area, or the therapy area.

   
   

   QUALITY OF CARE AND STAFFING

   
   

4. Manor Care has a developed, effective quality assurance program. It has identified the nursing home requirements from all states in which it operates and compiled those requirements into a comprehensive manual for internal use which is updated annually. Based on the requirements contained in the manual, an unannounced survey is performed by a team which includes specialists in all areas of nursing home care once a year. If a facility is deficient in any category, a plan of correction and a resurvey are required. In addition, a nurse in Manor Care's regional office acts as a consultant on an ongoing basis to the various nursing homes, and the senior regional director, located in Florida, makes regular visits to all Manor Care homes within the state.

   
   

5. A member of the Clark family, the sole owners of FHFC, visits each of the corporation's facilities at least biweekly making an examination and inspection of the kitchen, the grounds, and the patient rooms. Periodic family dinner nights are held at each of the facilities at which patients and their families have an opportunity to meet with the senior staff of the facility. This gives the staff the opportunity to receive feedback from the residents and their families. In addition, FHFC requires the submission of a quarterly quality assurance questionnaire by its facilities, provides all new administrators two weeks in-house training at an FHFC facility, and provides, a management team to periodically inspect each of the FHFC facilities to insure that the facility is being managed and operated consistent with the corporation's internal quality assurance manual. If a facility is not in

   compliance, the administrator and department heads of that facility are required to prepare a deficiency report and establish a plan for correction of the deficiency. No FHFC facility in Florida has ever had its license downgraded to "conditional" after DHRS inspection.

6. Bon Secours' quality assurance program addresses all quality care concerns. In the operation of the program, each department is involved in quality assessment providing for staff input into the establishment of required standards. Bon Secours' Villa Maria facility currently holds a "superior" license and hopes to acquire that category license for its Lee County facility. Villa Maria is accredited by the Joint Commission on Accreditation of Health Organization and by the Commission of Accreditation on Rehabilitation Facilities. The systems utilized to achieve these accreditations will be utilized in Lee facility. The staffing plan proposed by Bon Secours, if implemented, will provide quality care and professional supervision at all times. Due to its relationship with church affiliated training schools, Bon Secours is more likely to find it easier to recruit health care professionals at the entry level.

   
   

7. Manor Care intends to provide 3 nursing hours per patient day as opposed to 3.5 as proposed by Bon Secours. FHFC's proposal is projected at 2.5. Current staffing at the FHFC facility, however, exceeds DHRS minimum requirements and it is anticipated that projected staffing for the 60 bed addition will also exceed DHRS minimum requirements. FHFC also will have activities staff available to the patients eight hours per day, seven days a week. Emergency transfer assistance and referral agreements are in existence with more than five local hospitals and mutual aid agreements have been negotiated with approximately ten local nursing homes. Contracts for therapeutic services, dental services, podiatry services, medical utilization review, and a registered dietician are in operation. The facility offers a full time social worker holding a Bachelor's degree and has consultant arrangements with an individual with a Master's degree in social work. The full time social worker performs admissions and discharge coordination, assists with patient care and planning, and provides referral to community resources. A physical therapy aide is on the premises seven days a week. Rehabilitation, speech, and occupational therapy services are contracted for on an "as needed" basis. The current level of usage is not high, however, and while both other applicants propose providing the service through either in-house or contract personnel, this is not a major factor. Bon Secours' staff level in all areas appears generous and might result in unnecessary cost levels even though salaries paid are reportedly lower than normal.

   
   

   BUILDING DESIGN AND EQUIPMENT

   
   

8. Manor Care originally proposed a two-story, 120 bed facility. The currently proposed 60 bed design is essentially the first floor of that facility with minor modifications such as the elimination of three-bed rooms. The facility design calls for 27,000 square feet (AS0 square feet per bed) and includes a separate unit for Alzheimer's Disease patients and their activities. The facility, equipped with high quality furnishings and equipment, is designed to provide a homelike atmosphere. Due to its ability to purchase in bulk, Manor Care can provide custom designed fabrics and wall coverings as opposed to stock products, adding a special touch and warmth to the facility's atmosphere. Bon Secours' 34,000 square foot addition, providing 566.6 square feet per bed, is overly large. Its' projected amenities, including a private shower in each patient room, suggest a facility providing first class comfort. There is no separate activities room, however, as the dining room serves that function. Since the dining room is not immediately adjacent to the kitchen, food service may be impacted.

9. FHFC's proposal contemplates a 13,400 square foot, (291.55 square foot/bed), 60 bed addition to its existing facility. Construction would be of noncombustible framing and trusses fabricated from light gauge steel. The proposed 60 bed addition will reproduce one of the existing wings of the current facility and will add a new nursing station at the juncture of the existing facility with the new wing.

   
   

10. The proposed addition meets all DHRS design and construction requirements. The existing dining room, kitchen, and recreational facilities are believed to be sufficient to provide services to the new wing since the original facilities were designed to exceed DHRS requirements and are large enough to accommodate the new patients. Construction as proposed will not violate any travel distance requirements and the outside view from the patient rooms satisfies DHRS' twenty foot setback requirement

    
    

11. The construction costs proposed by FHFC are realistic and appear substantially less than those of the other two applicants. This difference may be attributable to several factors including the excess capacity in ancillary spaces designed and built into the existing facility which do not need duplication in the construction of the new facility. Another basis for difference is the lack of need for site preparation and kitchen equipment for much the same reason.

    
    

12. FHFC's design does not provide private showers in each patient room, as does Bon Secours', but instead calls for a community shower/tub area which provides privacy for a showering patient. The resident will be transported to and from the bathing area fully clothed, and if able to bathe without assistance, will be offered privacy behind a shower curtain while bathing with an aide waiting outside. No more than one patient will be allowed in the bathing area at a time.

    
    

13. All of the exit doors at FHFC's facility are equipped with alarms to indicate opening. Access to the facility cannot be gained through side doors which provide exit in case of emergency. The dining room is adjacent to the kitchen providing for hot food to be served and an ease in substitution in the event the patient changes his or her mind about menu selection. Bon Secours proposes a security guard for its facility. Neither other applicant proposes this nor is it considered needed.

    
    

    SPECIAL PROGRAMS

    
    

14. Manor Care is the only one of the three applicants proposing a unit dedicated to the treatment of Alzheimer's Disease patients. There is no such program currently available in Lee County nor was there much evidence of need for it presented. Manor Care's proposal calls for a separate wing for patients with Alzheimer's Disease or related disorders which account for, arguably, approximately 50 percent of all nursing home admissions. This wing would include a separate lounge and dining room and would be decorated with special colors, lighting, wall covers and other details developed with special consideration for the effect on Alzheimer's Disease patients. Special treatment programs incorporating activities, dietary, and the medical needs of this type of patient would be provided. Patients with Alzheimer's Disease are difficult to care for and hard to place and it has been suggested that in an appropriate type unit, the patient's condition may possibly improve. Manor Care has extensive experience in operating units of this nature with ten currently operating around the country and others in development.

    MISCELLANEOUS

    
    

15. Manor Care provides a chaplaincy program at all its facilities in Florida, to attend to the religious needs of its residents. Bon Secours, a religious organization, would expect to reflect the religious affiliation of the area which may not necessarily be consistent with the Catholicism of the sponsoring order. The majority of patients at Villa Maria, for example, are Jewish. FHFC currently provides, in its facility, for Catholic, Jewish, and multi-denominational Protestant worship on a regular basis, along with Bible study groups and other religiously oriented gatherings.

    
    

16. All three applicants indicate that the programs and proposals offered by its competitors are inadequate and not demonstrably financially feasible. The argument made by each against the submissions of its competitors are, however, not persuasive. Each is a projection of future activity based on

    historical background in an entirely different area. Nonetheless, it should not be forgotten that each, itself, applied for an equivalent facility. There is little substantive difference in the proposals of the three applicants. All would provide quality in facilities that would meet the standards of the department. Each has applied for a facility in which it anticipates providing a service while at the same time, generating an excess of income over expenses.

    In evaluating the three applicants, therefore, while considering the negative comments by one toward the others, one is not necessarily persuaded by the detailed objections and criticisms voiced by each. While Bon Secours proposes joint educational programs with institutions of higher learning, none of these are local but are, instead, for the most part in Miami and Tampa. Use of Lee County facilities by these institutions is not considered likely to be heavy absent implementation of local training programs.

    
    

    CONCLUSIONS OF LAW

    
    

17. The Division of Administrative Hearings has jurisdiction over the parties and subject matter in this case. Section 120.57(1), Florida Statutes.

    
    

18. The parties have agreed that there is a need for 58 additional nursing home beds in Lee County and that a 60 bed nursing home should be approved. Therefore, the issue in this case is not one of need but, rather, which of the three applicants should be awarded the Certificate of Need based on an analysis of their proposals.

    
    

19. Both Manor Care and Bon Secours contend that FHFC's application should be disregarded because it constitutes an impermissible amendment made subsequent to the cutoff date for change. The law is well settled that an amendment which materially changes the scope of a project after a certain point in the proceedings is impermissible, and Rule 10-5.010 (2)(b), F.A.C., prohibits amendments to CON applications after they have been deemed complete by DHRS.

    
    

20. FHFC's original application was for a 120 bed facility and it was this application which was deemed complete by DHRS. Thereafter, when the parties agreed that a 58 bed need existed, FHFC agreed to request only a 60 bed portion of its original application. This constitutes an identifiable portion of the original application and was not an update through addition or change of services, beds, construction, or other concepts not initially reviewed. Instead, only a portion of the original application, without change, is now offered and it does not constitute a permissible amendment. Meridian Inc., d/b/a Meridian Nursing Center Polk vs. Department of Health and Rehabilitative Services, 9 FALR 5095, (F.O. September 3, 1987).

21. Prior to the hearing, the parties agreed and stipulated that the criteria outlined in Sections 381.705 (1)(a), (b), (c), (e), (f), (g), (h), (i), (j), (k), (l), (m), and (n), Florida Statutes, are applicable to these proceedings. Each applicant has the initial burden of proving its entitlement to a CON under the applicable criteria by competent, substantial evidence. Florida Department of Transportation vs. J.W.C. Co., 396 So.2d 778, 787 (Fla. 1st DCA 1981). Since the parties stipulated that the additional nursing home beds are needed in Lee County, Florida during the January, 1990 planning horizon, and that a Certificate of Need for a 60 bed nursing home should be issued, the need criteria need not be discussed here and is considered met, as is called for in Section 381.705(1)(a).

    
    

22. The evidence presented at the hearing demonstrates without question that there is little difference in the availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing health care services in the District as they relate to the applicants. All applicants have an effective quality control program and all are capable of and have demonstrated their ability to provide quality care to their residents. The design of each of the applicants' facilities, differing as they do in detail, are all acceptable and meet DHRS standards and requirements. All provide amenities designed to provide as much a homelike atmosphere as is possible within the parameters of a care facility. All are tastefully done, provide recreational, treatment, and therapy areas, and adequate space for dining and activities. FHFC, however, can provide these at a lower cost than the other applicants because of its already existing structure which contains many of the facilities that would need to be constructed by the other applicants. This is a substantial advantage. It cannot reasonably be said that any one of the three applicants would provide measurably superior care to its residents, however, than the others. All demonstrate a concern and regard for quality of life; all propose an adequate staff; and all propose to meet the physical, spiritual, and emotional needs of the residents within department standards. Consequently, all meet the criteria of Subsection (1)(b) and all applicants own and operate other care facilities in Florida and in other states. All benefit from the economies achieved by joint purchasing power and all have the background and experienced personnel to provide quality care. Bon Secours, however, would seem to have, based on its relationship with the church and the interest of the Diocese personnel, an advantage in being able to build on referral programs already in place. (Section 381.705(1)(e)

    
    

23. In subparagraphs 381.705(1)(f) and (g), the statute refers to the need within the District for special equipment and services not reasonably and economically accessible in adjoining areas, (f), and the need for research and educational facilities, (g). No evidence was presented, except in a general sense, that a need exists in Lee County for special equipment or education or research facilities. It was generally established that Alzheimer's Disease patients benefit by being treated in a dedicated Alzheimer's Disease service, but this can be said equally as well about any other area which contains a large percentage of the elderly. It is, therefore, concluded that in so far as these criteria apply in this case, they are satisfied equally by all applicants, and the proposal for a special Alzheimer's Disease wing, while admirable, is not persuasive. Bon Secours offered evidence to the effect that its facility would be used as a teaching facility for such nurse training programs as exist in the area. There was little evidence, however, as to the degree of educational opportunities and facilities to provide students who would need to utilize this facility in their training.

24. Turning to the issue of availability of resources, including manpower, funds, and the availability and accessibility of the service to all residents, such resources as exist in the district, as they relate to manpower and personnel, would be available to all three applicants equally. None has demonstrated any exceptional ability to recruit personnel or any reputation likely to dissuade personnel from coming on board, and it is recognized that nursing personnel are in short supply in the area. Management personnel, generally sent in from outside the area by the corporate sponsor of the project, also do not denote any special requirement or qualification. Funds will be available in sufficient amount to construct and operate the facility for the first two years for each of the applicants. Though the terms of the financing may differ, the availability is not seriously in question for any one. In that regard, however, since FHFC already has an existing facility and, as indicated previously, the initial cost of the construction of the facility would be less for that applicant by virtue of existing segments, it would again appear FHFC has an edge in this regard. The services provided by any of the three applicants would be available equally to any of the existing or developed schools for the health professions in the District for training purposes and could only have a positive effect on the clinical needs of health professional training programs in the service area. None of the applicants would appear to have demonstrated a greater ability to assist in that regard than the others. There is little doubt that the proposed services would be accessible to all residents of the service district without regard to race, religion, or other categorization regardless of which applicant is approved to provide the service (Section 381.705(1)(h).

    
    

25. With regard to the issue of financial feasibility, based on the evidence presented at the hearing, and discounting the negative arguments by counsel regarding the appropriateness of opposing applicants' proposals, there is little legitimate doubt that the conditions affecting financial feasibility would be equally applied to all applicants. If feasible, and it would appear that a need exists to support 58 beds financially, each applicant is qualified to provide an effective, cost efficient, and profitable operation. Again, however, the existing facilities in FHFC's currently operating home would provide for lower costs than the other applicants since substantial portions of the construction and equipment are already in existence. Consequently, it can be said that FHFC would appear to have the best prospects for immediate, and to a lesser degree, long term, financial feasibility (Section 381.705(1)(i). Section 381.705(1)(k) calls for an analysis of the needs and circumstances of those entities which provide a substantial portion of their services or resources to individuals not residing in the service district. There appears to be no evidence of need in this county for special equipment or services which are not already currently available. The need for nursing home services is evaluated on a county-wide basis and there is no evidence that a substantial portion of the capability offered by a successful applicant here would be provided to residents from outside of Lee County. Consequently, this criterion has little, if any, bearing on evaluation of the three applicants.

    
    

26. Section 381.705(1)(1) relates to the probable impact of the proposed project on the costs of providing health services, the effects of competition on the supply of health service, and those other factors which would tend to foster competition and service and promote quality assurance and cost effectiveness. All three applicants are capable of providing and propose to provide high quality health care. Charges to patients, as proposed by FHFC, would appear to be somewhat lower than those proposed by the other two applicants. It is doubtful, however, that any of the applicants, if successful, would modify its proposed patient charges or its operation so as to seriously and materially

    affect competition in the area. In the event such competition were to be generated, however, it would be, perforce, based on conditions and factors not in evidence at this hearing. With regard to the costs and methods of proposed construction, all three applicants clearly would build a high quality facility. It would appear, however, that FHFC's fire resistant method of construction and its ability to construct an operating facility by adding on to an existing facility, the design for which has been proven effective and acceptable within the State of Florida, is somewhat superior to the proposals of the other competitors (Section 381.705(1)(m)).

    
    

27. Finally to be considered is the proposed provision of health care services to Medicaid patients and to the medically indigent. In considering this factor, a viable consideration is the provider's past history of indigent care. In that regard, Bon Secours has demonstrated a willingness to provide services to the poor and their representation that they will do so in Lee County can be believed. Manor Care has been shown to generally seek its patients among the more affluent private pay patients, but this is not to say they would not honor a Medicaid/indigent commitment as they have indicated they would do.

Based on the evidence offered at hearing, however, it would appear that FHFC offers to provide Medicaid care at a level comparable to that actually being utilized within the county and if an edge is to be awarded, it would, of necessity, appear to go to FHFC.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore:

RECOMMENDED that a Final Order be entered granting Certificate of Need 5030, for 60 community nursing home beds in Lee County, Florida, for the planning horizon of January, 1990, to Florida Health Facilities Corporation/Lee County.

RECOMMENDED this 29th day of June, 1988, at Tallahassee, Florida.

ARNOLD H. POLLOCK

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 29th day of June, 1988.

APPENDIX TO RECOMMENDED ORDER, CASE NOS. 87-3511,3514, & 3516

The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case.

BY MANOR CARE:

1 & 2. Accepted and incorporated herein.

1. Irrelevant.

2. Accepted.

5 & 6. Accepted and incorporated herein.

1. Accepted and incorporated herein except for the last sentence which, as to motive, is not supported by the evidence of record.

2. Accepted and incorporated herein.

9 &1 0. Accepted and incorporated herein except for the last phrase starting, "without analyses... " which was not established.

1. Accepted.

2. Accepted and incorporated herein.

3. Accepted and incorporated herein.

14-17. Accepted and incorporated herein.

18 & 19. Accepted but not probative of any matter in issue. 20-22. Accepted and incorporated herein.

1. Accepted.

2. Accepted

25-27. Accepted except for the characterization of FHFC's figures

28 & 29. Accepted and incorporated herein.

30 & 31. Accepted.

32-34. Accepted and incorporated herein.

35. Rejected as written.

36-40. Accepted in substance and incorporated herein.

41 & 42. Accepted and incorporated herein.

43 Accepted but suggested problems not identified or shown.

1. Accepted.

2. Rejected as not supported by evidence of record.

3. Accepted and incorporated herein.

4. Accepted and incorporated herein.

48 & 49. Accepted.

50. Accepted and incorporated herein.

51-53. Accepted, but descriptive comments are considered opinion rather than fact.

54. Accepted and incorporated herein.

1. & 60. Accepted.

2. & 57. Accepted and incorporated herein.

1. Accepted and incorporated herein except for last phrase of last sentence.

2. Accepted and incorporated herein.

61. Accepted and incorporated herein except for first sentence which is rejected.

BY BON SECOURS:

1-3. Accepted and incorporated herein.

4. Considered as background and not fact.

5 - 8. Accepted and incorporated herein.

9 - 11. Accepted and incorporated herein.

12 - 14. Accepted and incorporated herein.

15. Accepted and incorporated herein.

16 - 20. Accepted and incorporated herein.

21 & 22. Accepted and incorporated herein.

23 & 24. Accepted as opinion and not as fact.

25. Rejected.

26 & 27. Accepted and incorporated herein.

36. Accepted and incorporated herein.

37 - 39. Accepted.

40 - 43. Accepted and incorporated herein.

1. First sentence rejected, second sentence accepted.

2. Accepted.

3. Rejected as not an appropriate Finding of Fact.

47 - 50. Accepted and incorporated herein.

51. Accepted and incorporated herein except for third sentence which is speculation

52 & 53. Accepted.

1. Rejected as an unjustified conclusion.

2. Rejected as not established.

56 & 57. Accepted as to allegations of proposal but conclusions rejected.

58 & 59. Accepted and incorporated herein.

60 & 61. Accepted and incorporated herein.

62 & 63. Rejected as speculation and unjustified conclusion drawn.

64. Accepted.

65 & 66. Accepted and incorporated herein.

67. Rejected as irrelevant without evidence of circumstances.

68 & 69. Accepted and incorporated herein.

70 & 71. Accepted.

1. Accepted and incorporated herein.

2. Budget fact accepted-balance rejected as conclusion.

74 & 75. Accepted and incorporated herein.

76 & 77. Accepted.

78 & 79. Accepted.

80 & 81. Accepted.

1. Accepted.

2. First sentence rejected as opinion-balance accepted.

3. First sentence accepted and incorporated herein second sentence rejected as not being a Finding of Fact third sentence rejected as opinion only.

85 - 87. Accepted and incorporated herein.

88 & 89. Accepted.

1. Accepted as different and pleasing but not necessarily better.

2. Accepted.

3. Rejected as not proven.

4. Accepted.

94 & 95. Accepted as evidence of difference but not necessarily superiority.

1. Accepted.

2. Rejected as not proven.

3. Accepted and incorporated herein.

99 & 100. Accepted.

1. Details accepted Conclusion rejected.

2. Accepted.

3. First sentence accepted but not considered dispositive of any issue second sentence rejected as not proven.

104 & 105. Accepted.

106-108. Accepted as opinion evidence.

109. Accepted. 110-112. Accepted. 113-116. Accepted.

117. Irrelevant. 118-121. Accepted.

122-124. Accepted.

125-128. Accepted.

129. Accepted but discounted.

130 & 131. Accepted and incorporated herein.

1. Rejected.

2. Accepted and incorporated herein.

134-137. Accepted and incorporated herein.

1. Rejected as contra to the evidence.

2. Accepted.

3. First sentence rejected-Second sentence accepted and incorporated herein.

141-143. Accepted.

144-146. Accepted except for the last sentence in the paragraph which is rejected.

147-149. Accepted.

150 & 151. Rejected as irrelevant and not supported by competent evidence. 152-154. Accepted and, except for 154, incorporated herein.

1. Accepted.

2. Accepted and incorporated herein.

3. Rejected as contra to the evidence.

4. Accepted.

BY FHFC:

1 & 2. Accepted and incorporated herein.

3. Accepted and incorporated herein.

4 & 5. Accepted and incorporated herein.

6 & 7. Accepted and incorporated herein.

8. Accepted.

9 - 11. Accepted and incorporated herein.

12 & 13. Accepted.

14 & 15. Accepted.

16. Accepted.

17 & 18. Accepted and incorporated herein.

19. Accepted.

20-22. Accepted.

23-25. Accepted and incorporated herein.

26-28. Rejected as conclusions/opinions and not Findings of Fact.

29 & 30. Accepted but considered more as argument. 31-33. Accepted and, in part, incorporated herein.

1. Accepted.

2. Accepted.

36 & 37. Accepted and incorporated herein. 38-42. Accepted and incorporated herein.

43 & 44. Accepted and incorporated herein.

1. Accepted.

2. Accepted but also considered a comment on the evidence and not necessarily a Finding of Fact

3. Accepted.

48 & 49. Accepted and incorporated herein.

50 & 51. Accepted.

52-54. Accepted and incorporated herein. 55-57. Accepted and incorporated herein.

1. Accepted.

2. Rejected as opinion and not fact.

3. Accepted.

4. Accepted.

5. Accepted and incorporated herein.

6. Accepted.

64 & 65. Accepted and incorporated herein. 66-68. Accepted.

69 & 70. Accepted and incorporated herein.

71. First sentence accepted-second sentence rejected as a recital of the evidence

72 & 73. Accepted and incorporated herein.

COPIES FURNISHED:

Donna Stinson, Esquire

Moyle, Flanigan, Katz, Fitzgerald and Sheehan

118 North Gadsden Street Tallahassee, Florida 32301

Byron Matthews, Esquire

Vicki Gordon Kaufman, Esquire

H. Guy Collier, Esquire McDermott, Will & Emery

1. North Monroe Street Tallahassee, Florida 32301

   
   

   Robert D. Newell, Jr., Esquire Newell & Stahl, P.A.

2. South Monroe Street Tallahassee, Florida 32301

John Stone, Esquire

Neiman, Neiman, Stone & Spellman 1119 High Street

Des Moins, Iowa 50310

Richard Patterson, Esquire 2727 Mahan Drive

Tallahassee, Florida 32308

Docket for Case No: 87-003511

Orders for Case No: 87-003511