STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
SUBURBAN MEDICAL HOSPITAL, INC., )
)
Petitioner, )
)
vs. ) CASE NO. 89-4445
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent, )
)
and )
) BAPTIST HOSPITAL OF MIAMI, INC., ) and SOUTH MIAMI HOSPITAL, )
)
Intervenors. )
)
RECOMMENDED ORDER
Pursuant to notice, a formal hearing was conducted in this case on January 23-25 and January 29-30, 1990 in Miami, Florida and on February 1-2, 1990, in Tallahassee, Florida , before J. Stephen Menton, a duly designated Hearing Officer of the Division of Administrative Hearings.
APPEARANCES
For Petitioner: Daniel C. Minkes, Esquire Suburban Medical 17615 S.W. 97th Avenue Hospital, Inc. Miami, Florida 33157
Silvio Amico, Esquire 6401 S.W. 87th Avenue Suite 114
Miami, Florida 33173
For Respondent: Thomas R. Cooper, Esquire Department of Edward Labrador, Esquire Health and 2727 Mahan Drive, Suite 103 Rehabilitative Tallahassee, Florida 32308 Services
For Intervenors: Kyle Saxon, Esquire
Baptist Hospital Catlin, Saxon, Tuttle, & Evans of Miami, Inc. 1700 Alfred I. Dupont Building
169 East Flagler Street Miami, Florida 33131
Jay Adams, Esquire 1519 Big Sky Way
Tallahassee, Florida 32301
South Miami Jean Laramore, Esquire Hospital: 7007 McBride Pointe
Tallahassee, Florida 32312 STATEMENT OF THE ISSUE
The issue in this case is whether Suburban Medical Hospital, Inc.'s application for a certificate of need to convert an existing outpatient and ambulatory surgery center to a 36-bed osteopathic hospital should be approved.
PRELIMINARY STATEMENT
On March 30, 1989, Petitioner, Suburban Medical Hospital, Inc. ("Suburban") filed an application with the Respondent, Department of Health and Rehabilitative Services ("HRS"), for a certificate of need ("CON") to convert an existing outpatient and ambulatory surgical center into a 36 bed acute care osteopathic hospital. The application was filed in accordance with the requirements of Section 381.701, et seq., Florida Statutes. The application was assigned CON #5868 by HRS. A supplement to this application (the "Omissions Response") was filed on May 15, 1989 in response to a letter from HRS detailing omissions in the application. (The original application as supplemented will hereinafter be referred to as the "Application".) After review, HRS concluded that Suburban's Application did not sufficiently comply with the statutory and rule standards to warrant the issuance of the CON. HRS advised Suburban of its decision in a letter dated July 14, 1989.
By notice published in the Florida Administrative Weekly dated July 28, 1989, HRS noticed its intent to deny the Application. Suburban timely filed a petition for a formal administrative hearing to contest HRS' decision. The case was referred to the Division of Administrative Hearings which noticed and conducted the hearing. Timely Petitions to Intervene in opposition to the Application were filed by Baptist Hospital of Miami Inc., ("Baptist") and South Miami Hospital ("South Miami"). Upon consideration of the pleadings and after hearing argument of counsel, the petitions of both Baptist and South Miami were granted subject to proof of standing at the hearing.
The Osteopathic Physicians Association of Dade and Monroe Counties, Inc. ("OPA") also filed a Petition to Intervene. OPA sought to intervene in support of the CON Application filed by Suburban. For the reasons set forth in an Order dated January 2, 1990, O.P.A.'s Petition to Intervene was denied. Counsel for OPA subsequently appeared as co-counsel for Suburban at the hearing.
Prior to the final hearing, South Miami and Baptist filed Motions in Limine seeking to exclude the testimony and exhibits prepared by Petitioner's experts Darrell Lumpkin, Paul Eiseman, and Howard Fagin. Those Motions argued that the evidence sought to be excluded related to new and amended tables or information prepared subsequent to the denial of the CON Application by HRS and that this evidence was an untimely and impermissable attempt to supplement and/or amend the Application. Petitioner contended it was not attempting to amend its Application and that the evidence was simply being offered to support the Application. During a preliminary hearing on the Motion in Limine, the Hearing Officer advised the Petitioner that it would not be permitted to amend the Application and the evidence would only be considered to the extent that it
supported the CON Application that had been previously filed. Ruling on the admissability of the evidence was reserved and Petitioner was allowed to present the evidence at the final hearing in accordance with the gualifications set forth during the hearing on the Motion in Limine. During the final hearing, Baptist and South Miami renewed their objections to the evidence as it was proffered. Respondent joined in those objections. The objections and the legal arguments surrounding the admissibility of the evidence are discussed in more detail in the conclusions of law set forth below.
Prior to the commencement of the final hearing, the parties entered into a prehearing stipulation. Pursuant to that stipulation, the parties agreed that Suburban's CON application, Omissions Response and Petition for Formal Administrative Hearing were timely filed. The parties also stipulated that Sections 381.705(1)(d), (j), (k) and 381.705(2)(e) were not at issue in this case and that Section 381.705(1)(f) was not at issue except to the extent that osteopathic hospitals are deemed to provide "special services." The parties agreed that the following statutory provisions remain at issue in this proceeding: Sections 381.705(1)(a), (b), (c), (e), (g), (h), (i),(l), (m), (n), Sections 381.705(2)(a), (b), (c), and (d) and Section 381.713(2).
At the hearing, Petitioner presented the testimony of fourteen witnesses: Dr. Howard Fagin, who was qualified as an expert in health planning, bed need methodology and health economics; John Cosgrove, a state representative; Paul Eiseman, who was qualified as an expert in health care planning and project development and budgeting; Darrell Lumpkin, who was qualified as an expert in health care administration and health care finance; Bernard Horovitz, who was qualified as an expert in architectural design and construction costs; Stanley Kaye, D.O.; Nsibibe Ikpe, D.O.; Claudia Peterson, D.O.; Jules Minkes, D.O.; Melvin Rech, D.O.; Ira Hershman, D.O.; Robert Waskins, D.O.; Karen Kennedy, student body president at the Southeastern College of Osteopathic Medicine; and Arnold Melnick, D.O., the executive vice president and Provost at the Southeastern University of the Health Sciences.
Petitioner offered twenty exhibits into evidence. All of those exhibits were accepted except as noted below. Petitioner's Exhibit 2A was an updated version of Dr. Fagin's analysis using actual 1988 Hospital Cost Containment Board Figures instead of budgeted data. The Respondent and Intervenors objected to this exhibit because it was not part of Dr. Fagin's analysis at the time of his deposition and was not submitted to the Respondent or the Intervenors until the Friday before the commencement of the hearing. After extensive discussion and argument, Petitioner withdrew Exhibit 2A. Petitioner's Exhibits 12, 13 and
were interrogatories and answers to those interrogatories propounded by Petitioner to South Miami, Baptist and HRS respectively. Petitioner's Exhibit
was a copy of the interrogatories (without the answers) propounded by HRS to Suburban. At Petitioner's request, those exhibits have been marked and made a part of the record. The interrogatories (and answers where provided) have been reviewed in the preparation of this Recommended Order. However, as noted during the hearing, the interrogatories and responses thereto are hearsay.
Petitioner's Exhibit 16 was an excerpt from the Health Care Atlas. That exhibit was never properly authenticated or offered into evidence. Petitioner's Exhibit
17 was a copy of an impact analysis prepared by Mr. Cushman, a witness called on behalf of South Miami. The right hand column of that exhibit relates to calculations on updated information that was not submitted as part of this proceeding. Therefore, the right hand column of that exhibit has been disregarded.
At the hearing, ruling on the admissibility of Petitioner's Exhibit 20 was reserved. That exhibit was a May 11, 1989 letter to Dr. Minkes from James F. Perry of Professional Bancorp Mortgage Company indicating an interest in arranging financing for the proposed project. That letter was not included in Petitioner's Application or its Omissions Response. As set forth in the Conclusions of Law below, to the extent that letter seeks to establish an alternative means of financing this project, it is an impermissible attempt to update the Petitioner's Application, and therefore, is rejected. In any event, the Exhibit would not change the conclusions regarding the Petitioner's failure to demonstrate that it has adequate funds available to complete this project.
During the presentation of its case, Petitioner attempted to present testimony from Mr. Eisman regarding certain calculations and updates he made with respect to Table 25 in the Application. While Mr. Eisman was permitted to testify on matters that were not modifications of the Application, objections to some of the proffered testimony were sustained on the grounds that the evidence would constitute an untimely and improper amendment to the Application.
Petitioner was advised that it could submit the testimony through a written proffer at the conclusion of the hearing. No such submittal has been received.
Petitioner's Request For Admissions to HRS and the answers thereto have been filed of record in this proceeding. At Petitioner's request, the responses to the Request For Admissions have been reviewed and considered.
HRS presented the testimony of three witnesses: Linda Quick, Executive Director of the Health Council of South Florida; James Gregory, architectural supervisor for the HRS Office of Plans and Construction, who was accepted as an expert in architecture and architectural plan review of health care facilities; and Elizabeth Dudek, the supervisor of Health Services and Facilities Consultants within HRS' Office of Regulation and Health Facilities. Ms. Dudek was accepted as an expert in health planning and health planning as it relates to the certificate of need review process. At the request of HRS, official recognition has been taken of Rule 10D-28, Florida Administrative Code. A copy of that rule was marked as Respondent's Exhibit 1 at the hearing. HRS did not offer any other exhibits.
Baptist presented the testimony of two witnesses: Maribeth Roussef, a nurse recruiter with Baptist, and Rufus Harris, who was accepted as an expert in health care finance. At the hearing, Petitioner objected to any testimony from Mr. Harris regarding revenues generated by osteopathic physicians on the staff of Baptist and South Miami. Petitioner objected to this testimony on the grounds that, during discovery, it was never revealed that Mr. Harris would be testifying on these issues. Ruling on this objection was reserved pending a review of the deposition testimony. That deposition has been reviewed and the objection is sustained and that portion of the testimony of Mr. Harris has been disregarded. While the questions during the depositions could have been more specific, the answers to interrogatories did not indicate that Mr. Harris would be testifying on this subject matter. In any event, no competent evidence was submitted during the hearing to establish the extent to which admissions to the intervenor hospitals by osteopathic physicians would decrease if this project was approved. Therefore, the testimony was of minimal significance. Baptist offered three exhibits into evidence, all of which were accepted. Petitioner's relevancy objection to Baptist's Exhibit 2 was overruled.
South Miami presented the testimony of three witnesses: Ronald Wise, Director of Human Resources at South Miami, who was accepted as an expert in health care personnel administration and recruitment; Patricia Courso, Medical
Staff Coordinator at South Miami; and Jay Cushman, who was accepted as an expert in health planning, health care financial feasibility and health care methodology. South Miami offered five exhibits into evidence, all of which were accepted except South Miami's Exhibit 2, which was a copy of a portion of the classified ad section of the Miami Herald. That exhibit was not listed on the prehearing stipulation and, therefore, was rejected.
Petitioner presented rebuttal testimony through Dr. Jules G. Minkes and Dr.
Howard Fagin.
A transcript of the proceedings has been filed. Each of the parties has submitted a proposed recommended order. A ruling on each parties' proposed findings of fact is included in the Appendix attached to this Recommended Order.
FINDINGS OF FACT
South Dade Osteopathic Medical Center, Inc., d/b/a Suburban Medical Center is an outpatient office facility in South Dade County, Florida. Suburban Medical Ambulatory Surgical Center (the "Am/Surg Center") is a licensed ambulatory surgical center which is operating out of the same building. (Together these entities will hereinafter be referred to as the "Outpatient Center.") The Outpatient Center currently provides outpatient services including ambulatory surgical, diagnostic, radiologic, and laboratory services.
The existing building which houses the Outpatient Center was completed in approximately 1980. The building has two floors. The AM/Surg surgical center occupies the second floor of the building.
The Outpatient Center currently has approximately 6,000 open patient files and has serviced approximately 12,000 patients since it opened in or about 1980. The license to operate the AM/Surg Center was obtained in approximately 1988. The Outpatient Center operates as an osteopathic facility. However, it does have allopathic physicians on staff.
Dr. Jules G. Minkes is an osteopathic physician who owns and controls the Outpatient Center. Dr. Minkes is also the sole owner of Suburban Medical Hospital, Inc. ("Suburban" or the "Applicant"), the applicant in this case.
On March 29, 1989, Suburban filed an application for a Certificate of Need to convert the existing Outpatient Center into a 36-bed osteopathic acute care hospital. The Application was assigned CON #5868.
The Executive Summary contained in the Application summarizes the project as follows:
The proposal is to convert the 26 ambulatory surgical recovery beds into hospital beds.
The surgi-center and 26 beds are on the second floor of the facility which was constructed in accordance with hospital code specifications. Thus, conversation of the center into a hospital will primarily involve certain struc- tural changes on the first floor of the center to meet code specifications. The project will also require additional construction for ten ICU/CCU beds, a cafeteria, and certain engi-
neering equipment. The Center will continue to offer its current out-patient services.
The evidence at the hearing created some confusion and questions as to the Applicant's intended operation of the proposed project. At the hearing, Dr. Minkes testified that the AM/Surg Center will continue to exist and operate in the same physical structure as the proposed hospital. The plan for continuing the AM/Surg Center is not detailed in the Application. It is not clear where the ambulatory surgical center would be located in the converted facility and what equipment and/or space would be shared. Furthermore, it is not clear to what extent the revenues and expenses for the ambulatory surgical center are included within the projections set forth in the Application. It should be noted that, under existing law, an ambulatory surgical center cannot be part of a hospital. See, Section 395.002(2)(a), Florida Statutes (1989). (This issue is discussed in more detail in the Conclusions of Law below.)
As noted in Gulf Coast Hospital v. Department of Health and Rehabilitative Services, 424 So.2d 86 (Fla. 1st DCA, 1982), osteopathy and allopathy are two primary and separate schools of medicine which differ substantially in philosophy and practice. Doctors of medicine are licensed under Chapter 458, Florida Statutes. Osteopathic physicians are licensed under Chapter 459, Florida Statutes.
The practice of medicine is defined in Section 458.305, Florida Statutes as the "diagnosis, treatment, operation, or prescription for any human disease, pain, injury, deformity, or other physical or mental condition." Allopathy is defined in Webster's Third New International Dictionary as "a system of medical practice that aims to combat disease by use of remedies producing effects different from those produced by the special disease treated."
424 So.2d at 89 n.8.
Section 459.003(3), Florida Statutes, (1989) defines osteopathic medicine as the "diagnosis, treatment, operation, or prescription for any human disease, pain, injury, deformity, or any other physical or mental condition which practice is based in part upon educational standards and requirements which emphasis the importance of the musculoskeletal structure and manipulative therapy in the maintenance and restoration of health." 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. As explained by Dr. Minkes, osteopathic medicine is a distinct school of practice that embodies a philosophy based on a holistic approach that integrates the biomechanical and structural aspects of the body's function in all aspects of the functioning of the body. Dr. Minkes testified that it is his intention to seek accreditation for the proposed facility from the American Osteopathic Association and to operate the proposed hospital as an osteopathic hospital.
Suburban intends to locate its proposed facility in conjunction with the existing Outpatient Center at the intersection of U.S. 1 and S.W. 97th Avenue. This location lies within Subdistrict 4 of HRS Health Planning District XI near the dividing line between Subdistricts 4 and 5.
Baptist and South Miami are general acute care hospitals located in southern Dade County, Florida.
The primary service area proposed by Suburban overlaps the primary service areas of Baptist and South Miami. Suburban's proposed service area is
"bounded by S.W. 88th Street (Kendall Drive) and Homestead, Florida City and the upper Keys on the north and south; Biscayne Bay and the Everglades on the east and west: Subdistrict 4 from Kendall Drive south, subdistrict 5a, northern subdistrict 5(b)."
There is an existing osteopathic hospital in District XI. That hospital, Westchester General Hospital ("Westchester"), is also located in Subdistrict 4. Currently, Westchester is licensed for 100 beds. It is an approved osteopathic teaching hospital and intern training hospital.
Until 1989, there was another osteopathic hospital located in District
XI. Southeastern Medical Center ("Southeastern") was a 224 bed facility that was approved for delicensure by HRS as of May 9, 1989. Southeastern was located in North Miami Beach Florida, close to the Broward County line.
In 1983, South Dade Osteopathic Medical Center, Inc., one of the corporations owned and controlled by Dr. Jules Minkes, filed a Certificate of Need Application for a 150 bed osteopathic teaching hospital at the same site as the current Suburban proposal. The prior application was subsequently amended to 100 beds. After HRS denied that prior application, a hearing was held leading to the entry of a Final Order dated October 11, 1985 denying the application. See, South Dade Osteopathic Medical Center, Inc., d/b/a Suburban Medical Center vs. DHRS, 7 FALR 5686. (This case will hereinafter be referred to as the "South Dade" case.)
In denying the prior application for a 100-bed osteopathic hospital, the Hearing Officer in the South Dade case noted the existence of the two osteopathic facilities in the district (Westchester and Southeastern) and found their occupancy rates had been significantly lower than capacity in the immediate years preceeding that application. He also noted that those occupancy rates were very similar to the occupancy rates for allopathic hospitals in the area. In 1981, the occupancy for all acute care hospitals in District XI was
67.4 percent. The occupancy rate for Westchester was 67.8 percent and Southeastern's occupancy rate was 61.3. In 1982, the overall occupancy for all District XI hospitals was 66.6 percent, Westchester's occupancy dropped to 65.8 percent and Southeastern's occupancy rate dropped to 58.4 percent. The Hearing Officer in the South Dade case noted that, in 1984, the occupancy rate for osteopathic beds had decreased even further. Based upon this evidence, the Hearing Officer found that there was an excess number of osteopathic beds in District XI in the years preceding that hearing.
In the Recommended Order denying South Dade's application, the Hearing Officer noted:
...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 inpatient 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...7 FALR at 5698.
The South Dade Recommended Order predicted that the lack of need for new acute care facilities of any affiliation was destined to continue for several years into the future. That prediction has proven to be correct. The evidence in this proceeding demonstrated that many of the same forces that caused reduced occupancy at both allopathic and osteopathic hospitals in 1984 continue to influence occupancy at both allopathic and osteopathic facilities.
Without question, the overall occupancy rates and number of patient days in District XI acute care facilities has been declining significantly since 1984. The average annual occupancy rate for all acute care facilities in District XI was approximately 51 percent in 1988. The occupancy in Dade County alone was approximately 47 percent. These figures are well below the 80 percent efficiency standard established by HRS for an acute care facility. This decline can be attributed to a number a factors including the development of diagnostic related groups ("DRG's") for Medicare reimbursement.
Osteopathic facilities have not been immune to this decline. Indeed, since 1984, the occupancy for the two existing osteopathic facilities in District XI decreased at a significantly greater rate than occupancy in allopathic facilities. In 1984, Westchester's occupancy was 46.7 percent. Westchester's average occupancy in 1987 was approximately 30.5 percent. By the end of the calendar year 1988, that occupancy had declined to 27 percent. Similarly, Southeastern Medical Center experienced declining occupancies from 1984 until its closure. Occupancy at Southeastern in 1984 was approximately 60 percent. Southeastern's average utilization rate for 1988 was only 20.3 percent. These trends are consistent with the statewide occupancy of osteopathic facilities which has been dropping at a rate equal to, if not greater, than, that of allopathic facilities.
Suburban attempted to explain the closure of Southeastern through the testimony of several witnesses who were affiliated with that facility. Petitioner contends that the decline and eventual closing of Southeastern was the result of a conscious decision on the part of the owner of that facility, AMI, to focus its resources and efforts on the development of a nearby allopathic hospital which it also owned.
While management decisions and/or problems may have contributed to the declining occupancy and ultimate closure of Southeastern, it is clear that the facility was also impacted by many of the factors that have contributed to the overall decline in occupancy at acute care facilities throughout the District. Based on the evidence presented at the hearing, it is concluded that there was an excess number of licensed osteopathic beds in the District at least prior to the time of the delicensure of Southeastern. With the delicensure of Southeastern, there are now 100 licensed osteopathic beds in the District, all of which are located at Westchester in the same Subdistrict as the proposed project.
Petitioner presented extensive testimony regarding the perceived inadequacy of Westchester to meet the need for osteopathic services in the District. That testimony indicates that some osteopathic physicians are unhappy with the management philosophy of Westchester and they feel they are unable to provide quality osteopathic care in that facility. Most of the complaints about
the care and treatment at Westchester were voiced by Dr. Minkes and Dr. Hershmann. Both of these physicians are expected to have a significant financial investment in the proposed facility. Several osteopathic physicians who do not have an interest in the proposed project testified that they did not have a problem with the quality of care at Westchester. Thus, while there may be some minor and/or individual problems with Westchester, the evidence was not sufficiently compelling to establish that the occupancy problems at Westchester are due to problems and/or inadequacies that facility. In other words, while some osteopathic physicians may prefer to treat their
patients in a new, more modern facility, Westchester has not been shown to be so inadequate that it should be replaced or supplemented by the proposed project.
The HRS Office of Licensure and Certification has not received any complaints against Westchester regarding the facility's physical plant or quality of care. Furthermore, Westchester's license is in good standing and it is accredited by the JCAH and the AOA.
Petitioner presented hearsay evidence suggesting that a number of the beds at Westchester are not being utilized because of space limitations and that a number of the beds are contained in undesirable four bed rooms. As a result, Petitioner suggests that Westchester's functional bed count should be considered in the neighborhood of 50 rather than 100 beds. If this argument is accepted, Westchester's occupancy rates would not appear nearly as dismal. However, the evidence was insufficient to justify this conclusion.
Westchester is presently licensed for 100 beds and no evidence was presented to establish that the hospital is not trying to fill all those beds.
Petitioner also contends that Westchester has ceased functioning as a distinct osteopathic facility. The evidence was insufficient to support this conclusion. The testimony from several osteopathic physicians indicated that they still admit patients to Westchester.
Similar contentions regarding Westchester were made in the South Dade case. In that earlier proceeding, the Hearing Officer found:
...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.
7 FALR 5702
The evidence in this case was similarly insufficient to attribute the low occupancy at Westchester to other than market forces. While the low occupancy rates at Westchester may be due in part to problems with that facility and reluctance on the part of some osteopathic physicians to utilize that hospital, the evidence indicates that both Southeastern and Westchester have experienced declining enrollments for many of the same reasons that all acute care facilities in District XI have.
The evidence did establish that osteopathic physicians experience some difficulties in practicing osteopathy in allopathic facilities and that the facilities of many allopathic institutions are not conducive to osteopathic treatment. Most physical therapists at allopathic facilities are not trained to provide osteopathic treatment. In addition, few osteopathic specialists have obtained staff privileges at allopathic facilities. On the other hand, it appears that many of the difficulties and barriers that osteopathic physicians have historically experienced are being eroded. Virtually all of the osteopathic physicians who testified had staff privileges at several allopathic facilities and regularly admit patients to those facilities. Several of the osteopathic physicians who testified are practicing in partnership with or in association with allopathic physicians.
Suburban presented the testimony of several osteopathic physicians who testified that additional osteopathic hospitals are needed in the District in order to enhance the survivability of osteopathy as a distinct approach to health care. Such facilities enable osteopathic physicians to learn and practice together and consult with osteopathic specialists in a forum that is supportive of osteopathy.
The evidence established that approval of the proposed facility would, to some degree, enhance the survivability of osteopathy as a distinct and separate alternative treatment mode in the District. However, no evidence was presented to demonstrate that individuals seeking osteopathic care are currently being denied such services.
While a significant number of osteopathic physicians have indicated an intention to use the proposed facility if it is approved (even though many of them do not use the existing osteopathic facility in the District, Westchester,) the evidence was insufficient to establish the need for an additional 36 osteopathic beds in the District. Moreover, as discussed in more detail below, the evidence did not establish that Suburban's Application satisfies the remaining criteria necessary for the issuance of a CON.
Section 381.704(1), Florida Statutes (1989), recognizes that the review of CON applications includes consideration of the state and local Health Plans.
Neither the Local Health Plan nor the State Health Plan specifically address osteopathic facilities. Therefore, Petitioner contends that the State
and Local Health Plans are largely irrelevant to this case. This legal argument is addressed in the Conclusions of Law below.
The Local Health Plan for District XI is prepared by the Health Council of South Florida. Linda Quick, Executive Director of the Health Council of South Florida testified that the Health Council does not support the construction of any new hospitals in the District. The Health Council opposes the construction of any new hospitals regardless of whether they are osteopathic or allopathic.
The Health Council has prepared a booklet entitled District XI CON Allocation Factors Report for 1989. That booklet does not contain any CON allocation factors for osteopathic facilities.
There are approximately thirty-two acute care facilities in the District. Utilizing the state's bed need methodology, the Health Council has concluded that there are nearly two thousand too many acute care hospital beds in the District through 1993. This determination does not differentiate between osteopathic and allopathic acute care beds.
Because of the existing excess number of beds in the District, Linda Quick emphasized the need to fully explore alternatives to the construction of a new acute care facility. Such alternatives could include the acquisition of an existing facility, establishing a working relationship with an existing provider, increasing utilization at Westchester or arranging a joint venture with a licensed hospital. The Petitioner's failure to fully explore these alternatives weighs against approval of Suburban's Application.
The purpose of the Local Health Plan is to describe the existing health care system, the existing population and its health status. The Plan also establishes goals and objectives for the growth, development and change of the local health system. The Local Health Plan sets forth general criteria and policies regarding health planning for services to individuals within the area. One of those goals is for the District to have a licensed bed capacity of no more than five beds per one thousand population by 1993. The State Health Plan calls for an even lower ratio. Currently, the ratio of acute care beds to the population is well in excess of five per one thousand. Approval of Suburban's Application would increase the number of acute care beds and, therefore, would be contrary to this goal of the Local Health Plan. However, it should be noted that this goal does not differentiate between osteopathic and allopathic acute care beds.
Another pertinent goal of the Local Health Plan for District XI is to make services in the community geographically and financially accessible to all segments of the resident population. Because the proposed facility is located in the same Subdistrict as Westchester, it does not appear that the proposed project would significantly improve geographic accessibility to osteopathic services. Similarly, because of the large number of hospitals in the District, it does not appear that this proposed project would measurably improve the accessibility to acute care services.
Section 381.705, Florida Statutes, sets forth the specific criteria to be considered in the review of a CON application. The first criteria to be considered under Section 381.705(1)(a) is the need for the proposed project in relation to the State and Local Health Plans.
In assessing need, it is necessary to also consider the provisions of Section 381.713(2), Florida Statutes which provides that the need for an osteopathic hospital "shall be determined on the basis of the need for and availability of osteopathic services and osteopathic acute care hospitals in the District..."
The Application cites the First District Court of Appeal's decision in Gulf Coast Hospital v. Department of Health and Rehabilitative Services, 424 So.2d 86, for the assumption that approximately ten percent of the population of the United States prefers to be treated by osteopathic physicians. Based upon this assumption and the most recent population estimate for Dade County (1.829 million as of 1987), Petitioner suggests in its Application that there should actually be 750 osteopathic beds in Dade County. No evidence was presented to support the assumption that ten percent of the population in the District prefers to be treated by osteopathic physicians. Indeed, the evidence of occupancy at osteopathic facilities in Dade County indicates that the ten percent assumption is vastly overstated.
In 1985, only 2.4 percent of the total patient days for all hospitals in District XI were in osteopathic facilities. In 1986, that number decreased to 2.1 percent and in 1987 it decreased to 1.8 percent. These rates coincide with the declining occupancy rates at the existing osteopathic facilities in the District during this period. These facts indicate that the assumption that ten percent of the patients prefer osteopathic facilities is not accurate, at least in District XI.
HRS has not adopted a rule or an official methodology to calculate osteopathic bed need. The need methodology set forth in Rule 10-5.011(1)(m) for calculating acute care bed need is not applicable to osteopathic facilities.
The Application does not present any methodology to demonstrate osteopathic need in the District.
At the hearing in this case, Suburban attempted to demonstrate the need for additional osteopathic beds in Dade and Monroe counties through the testimony of Dr. Howard Fagin, who was accepted as an expert in health planning, bed need methodology development and health economics.
Dr. Fagin presented several calculations of "need" which Petitioner contends support the conclusion of need set forth in the Application. None of Dr. Fagin's calculations were included in the Application.
Dr. Fagin's calculations used current hospital and physician utilization data and, by applying certain assumptions, attempt to project osteopathic need and/or demand in the District for five years into the future. In other words, Dr. Fagin attempted to develope a methodology specifically geared to calculate osteopathic need over a five-year planning horizon.
Dr. Fagin set forth five different approaches for calculating osteopathic need. Most of these approaches had been considered and rejected by HRS in connection with other applications for osteopathic facilities. Intervenors and Respondent have painstakingly pointed out the deficiencies in Dr. Fagin's testimony. While their criticisms have merit, the shortcomings in the methodologies submitted by Dr. Fagin must be considered in the context of Section 381.713(2), Florida Statutes, and the lack of an approved and/or workable methodology for determining osteopathic need. It does not appear that there is a reasonably identifiable osteopathic unit of service for planning
purposes. It is extremely difficult, if not impossible, to measure osteopathic need in accordance with the usual "normative" methodologies used to determine need for discreet services. However, the burden is on the Applicant to overcome these obstacles and present persuasive evidence of the need for the proposed project. Insufficient evidence was presented to accomplish this task.
Intervenors and Respondents suggest that only those patients who receive osteopathic manipulative therapy during their stay in the hospital should be considered in determining "osteopathic patient days." They contend that such manipulative therapy is the only specific procedure measurable and monitored as distinctly osteopathic. The Hospital Cost Containment Board's data indicates that only two percent of the patients discharged from "osteopathic" hospitals received osteopathic manipulative therapy during their hospital stay. However, the evidence established that osteopathic care includes more than manipulative therapy. Thus, utilizing this unit of measure would significantly understate osteopathic need.
All of the projections prepared by Dr. Fagin rely upon an assumption that "osteopathic patient days" are an identifiable unit of service which can be distinguished from allopathic patient days. There are several problems with this assumption. Dr. Fagin obtained the number of "osteopathic patient days" by simply taking the number of days in osteopathic designated facilities. However, not all patient days in an osteopathic hospital are "osteopathic patient days." There are clearly a number of allopathic physicians who admit and treat patients in osteopathic facilities. Indeed, at some osteopathic facilities, allopathic physicians constitute a majority of the staff. While Dr. Fagin contends that the number of allopathic admissions to osteopathic hospitals is a "wash" with the number of osteopathic admissions to allopathic hospitals, no evidence was presented to support this assumption.
Patient days is a generally recognized unit of service for inpatient care and acute care beds. Typically, patient days are broken down into discreet units of service, i.e., obstetrical, psychiatric, pediatric, etc., relating to the underlying epidemiology of the population. Osteopathy is an approach to the practice of medicine rather than a specific clinical service. Osteopathy can not be measured in the same manner as a clinical service. Mixed staff hospitals and the inability to isolate a discreet unit of measurement such as an osteopathic patient day make it virtually impossible to quantify need for an osteopathic facility utilizing a traditional "normative" approach to planning. A "normative" approach provides a projection based on an estimate of the number of units of service or resources that should be in place. It is based on a number of unit of services related to an underlying need of the population.
Dr. Fagin's forecast of "osteopathic patient days" includes the "need" for osteopathic beds to provide patient services in several specialized areas of care which will not be offered in the proposed project. For example, the proposed project will not offer obstetrics, psychiatry, pediatrics, tertiary care services, or cardiac catheterization. "Osteopathic patient days" as utilized by Dr. Fagin includes all of these services because he did not isolate those services that will be offered by the proposed facility.
At best, Dr. Fagin's calculations show how many beds would be utilized at an osteopathic hospital if it achieved the average utilization of other osteopathic facilities. There was no showing that the average utilization at other osteopathic hospitals is appropriate or reflective of need. Thus, these methodologies do not measure need or demand for osteopathic services in the true sense of the word.
In making his calculations, Dr. Fagin relied upon population figures published by the Executive Office of the Governor on May 15, 1989. The Intervenors and Respondent objected to the testimony and contended that only the population projections which had been released at the time the Application was filed could be used in connection with this Application. The earlier projection figures were released on January 1, 1989. These objections are discussed in more detail in the Conclusions of Law below. The evidence indicates that there would be no material changes in Dr. Fagin's conclusions regardless of whether the January 1st or May 15th projections are used. From 1980-1989, District XI experienced a population growth of approximately 14.6 percent and from 1990 through 1994 the projected increase is 22.1 percent. Thus, the population in the District is growing significantly. There is less than a one percent difference in the January and May population projections.
In addition to the general limitations set forth above, there are several specific flaws contained in certain of the calculations performed by Dr. Fagin.
The first methodology employed by Dr. Fagin was referred to as Florida Osteopathic Utilization Based Bed Need. This methodology divided the 1988 Florida population by the number of "osteopathic patient days" in the state that year to obtain a rate of 31.62 patient days per one thousand population. "Osteopathic patient days" was determined from the Florida Health Care Cost Containment Board, 1988 Hospital Budget Data. The rate of 31.62 osteopathic patient days was then multiplied by the projected 1994 District XI population, resulting in a projection of 65,192 osteopathic patient days in District XI in 1994. The projected number of osteopathic beds needed in District XI to accommodate these patient days was accomplished by dividing the projected patient days by 365 to arrive at an average daily census of 179. The average daily census was then divided by the HRS standard of eighty percent occupancy for efficient operations, resulting in a projected need of 223 osteopathic beds in District XI in 1994. Subtracting the 100 licensed beds at Westchester, this methodology results in a projected need of 123 additional osteopathic beds by the year 1994.
This first methodology suffers from the deficiencies noted in Findings of Fact 53-58 above. In addition, the state wide total of osteopathic patient days for purposes of this first methodology was obtained from fourteen "osteopathic" hospitals. However, the evidence raises serious doubt as to the reliability of this data. At least one of those hospitals is no longer osteopathic and another one of the hospitals includes a utilization rate of ninety-five percent for a service (psychiatric) which will not be offered by the proposed facility.
The next methodology submitted by Dr. Fagin was entitled Florida Osteopathic Physician Based Bed Need. This method calculated patient days per osteopathic physician in the State of Florida by dividing the 1988 "osteopathic patient days" by the number of osteopathic physicians in 1989. Patient days per osteopathic physician was then multiplied by the projected number of osteopathic physicians in District XI in 1994 to arrive at a projection of 66,544 osteopathic patient days in District XI in 1994. The projected patient days were then divided by 365 to arrive at an average daily census of 182. Applying the occupancy standard of eighty percent, this method projects 228 osteopathic beds will be needed in District XI in 1994. Again, subtracting the beds at Westchester, Dr. Fagin concludes that there is a net bed need of 128 beds. In addition to the overall problems noted above with respect to identification of
"osteopathic patient days," this calculation includes an overly optimistic assumption of the number of osteopathic physicians that can be expected in District XI.
In making this calculation, Dr. Fagin assumed a thirty percent increase in the number of osteopathic physicians in District XI from 1989 to 1994. This assumption is predicated on an expectation that a large number of graduates from Southeastern College of Osteopathic Medicine ("SECOM") would remain in the area and there would also be an influx of practicing osteopaths moving into the area. Dr. Fagin based his assumption, in part, on data provided by the Florida Health Care Atlas which showed that there were 198 osteopathic physicians in District XI in 1986, 180 in 1987, and 256 in 1989. Dr. Fagin attributes the apparent increase in osteopathic physicians in the District from 1987 to 1989 on the influx of the first graduating class from the SECOM in 1988. However, the 1986 and 1987 data reflected only active osteopathic physicians whereas the 1989 data reflected all licensed osteopaths. In other words, the 1986 and 1987 data did not include retired and inactive physicians whereas the 1989 data did. No reliable evidence was presented to compare the number of active osteopathic physicians to any year subsequent to 1987. Furthermore, SECOM's first graduating class actually occurred in 1985, not 1988. Additional classes also graduated in 1986 and 1987. Therefore, Dr. Fagin's assumption that SECOM graduates will increase the ranks of osteopathic physicians in the district is not necessarily correct. In addition, these projections assume new physicians in the area will be as productive as established physicians, which is unlikely to be the case. In sum, Dr. Fagin's assumptions as to the expected growth and the number of osteopathic physicians in District XI during the next five years is predicated on several erroneous assumptions.
The next methodology presented by Dr. Fagin was entitled District XI Osteopathic Utilization Based Bed Need. Dr. Fagin projected a minimum and maximum number of expected osteopathic patient days in 1994 in the District based upon the actual utilization of existing osteopathic facilities in the District (Westchester and Southeastern) in 1986 and 1987. He calculated the number of "osteopathic patient days" in the District in those years and divided it into the District population to obtain rates of 24.67 and 19.72 patient days per one thousand population. These rates were multiplied by the projected District population in 1994, then divided by 365 and achieved an average daily census of between 139 and 111. Applying the eighty percent occupancy standard, Dr. Fagin calculated that there would be a need in District XI for between 174 and 139 osteopathic beds. After subtracting the existing beds at Westchester, he calculated the net bed need in 1994 to be between 74 and 39 beds. In addition to suffering from the general defects noted above, this approach is unnecessarily narrow. This methodology does not include any years prior to 1986 because Dr. Fagin did not feel that DRG's fully impacted on occupancy rates prior to that time. Dr. Fagin eliminated any years after 1987 on the grounds that the impending closure of Southeastern introduced too many variables into the equation. By eliminating all other years, this methodology provides a limited view of actual utilization and ignores the continuing decline in the utilization rate of osteopathic facilities in the District dating back to the 1970's.
Dr. Fagin's next methodology was entitled Osteopathic Physician Based Bed Need. The "osteopathic patient days" from the existing facilities in District XI in 1986 and 1987 were divided by the number of osteopathic physicians in the District. The patient days per physician were then multiplied by the projected number of osteopathic physicians in the District in 1994 to arrive at an estimate of maximum and minimum patient days in 1994. Dividing by
365, an average daily census of between 210 and 188 was projected. Applying the eighty percent occupancy standard, Dr. Fagin concluded there would be a need for between 263 and 235 osteopathic beds in District XI in 1994. After the 100 beds at Westchester were subtracted, a net need of 163 and 135 beds was calculated.
This methodology suffers from the same deficiencies as those noted in Findings of Fact 53 through 59 and 63 through 65 above.
Dr. Fagin's final projections were based on the relationship of the overall bed need in District XI to Osteopathic Bed Need. In 1986, osteopathic facilities in the District accounted for 2.1 percent of the total patient days. This figure was 1.8 percent in 1987. Applying these percentages to HRS' projected total bed need for the District in 1994, Dr. Fagin concluded that a minimum of 159 to 137 osteopathic beds were needed. After subtracting the beds at Westchester, he calculated a net need of between 59 and 37 beds. This approach suffers from the deficiencies noted in Findings of Fact 55 through 59 above. In addition, it does not account for the continuing decline in occupancy at osteopathic facilities in the District.
Suburban's Application includes over 2,000 signatures from members of the community indicating their support for the proposed project. Those petitions do not specifically indicate support for an osteopathic facility. Instead, the petitions include the following statement: "I support the establishment of Suburban Medical Hospital in the Perrine/Cutler Ridge area."
It is clear from the evidence that the desire of osteopathic physicians to have a new facility in the area and the reputation of Dr. Minkes will attract a number of admissions to the proposed project. Suburban presented extensive testimony from osteopathic physicians regarding their interest in the project and their intent to refer patients to the proposed facility if it is built. Physician referral plays a large role in determining where a patient is admitted. Thus, it does appear that the proposed project can be expected to achieve a higher occupancy rate than Westchester or other acute care facilities in the area. However, this expected occupancy does not in and of itself establish need.
The second review criteria set forth in Section 381.705(1), deals with the availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing health care services in the district. For purposes of reviewing applications for osteopathic acute care facilities, HRS has interpreted "like and existing health care services" to include all acute care facilities irrespective of their orientation towards osteopathic or allopathic care. In evaluating this criteria, the goals of the local Health Plan are pertinent.
One of the goals set forth in the local Health Plan is an access standard that an acute care hospital should be available to all residents of the District within 30 minutes average driving time. The Plan does not set forth a goal for access to osteopathic facilities. The existing hospitals in the District are sufficient to satisfy this criteria without the need to add another hospital.
In accordance with the State Health Plan, HRS has concluded that the efficient level of utilization for acute care services is eighty percent occupancy. The utilization rate for osteopathic beds in Dade County is twenty- seven percent. Thus, the effective utilization standard is not met regardless of whether it is applied to all acute care hospitals or only osteopathic hospitals.
Section 381.705(1)(c), Florida Statutes, requires a consideration of the Applicant's ability to provide quality care. HRS did not dispute Suburban's ability to provide quality osteopathic medical care. The Intervenors and Respondents have questioned whether quality care could be provided in the project as it is currently planned since the physical layout of the proposed facility does not meet hospital code requirements. Those deficiencies are discussed in more detail in Findings of Fact 97 through 101 below. Certainly, if those deficiencies are not corrected, the quality of care could be affected.
Although the parties stipulated that Section 381.705(1)(e), Florida Statutes, remained at issue in this proceeding, no evidence was presented with respect to this criteria. Suburban's Application does not involve joint, cooperative, or shared health care resources and, therefore, there are no probable economies or improvements in service that may be derrived from its proposal.
Section 381.705(1)(g), Florida Statutes, requires a consideration of the need for research and educational facilities. The existing Outpatient Center currently provides externship training for SECOM students. While the proposed facility may provide some additional training opportunities for osteopathic students, the evidence did not demonstrate that any such additional benefits would be significant.
Section 381.705(h) requires a consideration of the availability of resources, including health manpower, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation. It also requires a consideration of the effects the project will have on clinical needs of health professional training programs in the District and the extent to which the services will be accessible to schools for health professions in the service district for training purposes if such services are available in a limited number of facilities. Finally, this Section requires a consideration of the availability of alternative uses of the resources for the
provision of other health services and the extent to which the proposed services will be accessible to all residents of the District. The evidence indicates that there is a current shortage in the District of nurses and skilled hospital personnel, such as physical therapists, laboratory technicians, radiation therapy technicians, respiratory therapists and pharmacists. This shortage of available health care personnel is ongoing and long standing. While a number of existing employees of the Outpatient Center have indicated a willingness to become employees of the proposed project at the salary stated in the Application, they constitute only 35% of the projected staff for the proposed project. It does not appear that any of the existing staff are required to work weekends and nights on a regular basis. Such positions are likely to be the most difficult to fill. Petitioner has not demonstrated an ability to recruit and hire the additional skilled staff necessary to run a hospital on a full-time basis. Approval of this project is likely to exacerbate the existing shortage.
It is also not clear from the Application whether Suburban intends to hire a hospital administrator. No such position is reflected on the tables in the Application setting forth "manpower requirements."
The evidence presented at the hearing was very sketchy as to the availability of funds for capital and operating expenditures. Suburban's audited financial statements only show $10,000.00 cash on hand, all of which was donated by Dr. Minkes. Thus, Suburban has virtually no capital resources except
to the extent that it might be able to borrow funds for capital expenditures and operating expenses.
The Applicant does not own the property on which the proposed project will be located. No evidence was presented to establish the basis upon which the proposed project will be occupying the land and existing facility. The existing Outpatient Center and the land on which it is located is owned by Dr. Minkes and subject to a first mortgage of 1.5 million dollars. Monthly interest payments on this mortgage currently run between $25,000 and $35,000. The proposed project budget does not provide for the payoff of this mortgage.
Dr. Minkes contended that the interest/amortization figures on the long-term feasibility table contained in the Application included the funds necessary to service the underlying mortgage on the property. However, no specific breakdown of this figure was provided. Furthermore, no clear explanation was given as to the basis upon which the proposed hospital would occupy the land and existing facility. Thus, it is not clear whether the existing mortgage would be paid off, some lease arrangement would be entered into between Suburban and Dr. Minkes as owner of the property, or whether some other arrangement would be made.
It is not clear from the initial Application whether Suburban intends to finance 100% of this project. Lending institutions typically are not willing to assume all of the risk for a proposed project and, therefore, will usually only lend between 60 to 70% of the project cost. While the Applicant suggests that private investors may participate in the financing of the project, the only evidence introduced to support this contention was the testimony of Dr. Minkes that he had talked with various osteopathic physicians who had indicated an interest in participating as private investors and the testimony of Dr. Hershman who indicated that he was willing to commit $100,000.00 to the project. These statements do not provide a sufficient basis to conclude that Suburban has the resources available to meet the initial capital expenditures for this project. Dr. Minkes suggested that one possible way to raise funds for the project would be through a limited partnership offering or a private placement. However, the estimated project costs in the Application does not provide for the cost of registering a limited partnership or otherwise raising money through private investment.
As part of its Application, Suburban submitted a letter from a real estate investment banking firm, Sonnenblick-Goldman Southeast Corp., indicating an "interest in exploring arranging financing" for 4.1 million dollars for the proposed project. At the hearing, Petitioner also proffered another "letter of interest" from James F. Perry of Professional Bancorp Mortgage indicating an interest in processing a loan application for the project. This letter was not part of the Application and does not provide any additional proof that the resources are available to complete this project. Both letters merely reflect an interest in seeking a loan on behalf of Suburban. Neither of these letters establishes that Suburban has secured sufficient funds to finance the proposed capital expenditure.
The Application indicates that the proposed facility would treat all patients requiring medical care regardless of ability to pay and would implement payment schedules based on the patient's ability. The Application contains a projected distribution of fifty percent Medicare patients, ten percent Medicaid patients, and three percent indigent. However, no competent evidence was presented to support the reasonableness of this projected patient mix.
The issues related to training are discussed in Findings of Fact 75 above.
Section 381.705(1)(j), Florida Statutes, requires a consideration of the immediate and long-term financial feasibility of the proposal. As set forth in Findings of Fact 76 through 82 above, Petitioner has not demonstrated that it has the resources available to complete the project. Therefore, there are significant questions regarding the short-term feasibility of the project. In addition, as set forth in Findings of Fact 91 through 101, below, there are significant questions as to whether the project can be completed within the budgeted cost of $4,085,780 and still meet hospital code requirements.
The long term financial feasibility and the pro forma projections contained in the Application were not verified by any direct testimony at the final hearing. Suburban's financial feasibility expert, Mr. Darrell Lumpkin, did not prepare the pro formas contained in the Application. Mr. Lumpkin was not hired by Suburban until several months after the Application was filed and shortly before the hearing in this cause. Suburban conceded that Mr. Lumpkin did not base his financial feasibility analysis on the Application filed by Suburban and that he would not testify regarding the figures contained in the Application. Mr. Lumpkin prepared a feasibility study generally applicable to any 36-bed proprietary hospital in the State. His study utilizes occupancy rates of 50% for year one and 60% for year two. In presenting his testimony concerning operating expenses, Mr. Lumpkin looked only to the average charges, average deductions from revenue, average contractual allowances, etc., from all proprietary hospitals in Florida. He did not adjust these average figures to reflect the payor mix anticipated at Suburban or to compensate for the small size of Suburban. He was provided with occupancy figures and salary costs to use in making his projections. However, the reasonableness of these figures was never established.
While Petitioner contended that Mr. Lumpkin's study confirmed the reasonableness of the pro formas contained in the Application, there were several significant differences between Mr. Lumpkin's study and the information contained in the Application. For example, the Application assumes a first year occupancy of 38%; Mr. Lumpkin's study assumes a first year occupancy of 50%. Furthermore, Mr. Lumpkin's first year revenue projections and average daily charges were significantly higher than the figures contained in the Application. The reasonableness of the figures used by Mr. Lumpkin are also questionable. He used HCCB data which contained consolidated information from all proprietary hospitals rather than utilizing information that was more closely tailored to the proposed project. In determining revenue deductions, he utilized statewide averages which contain many variables. In sum, Mr. Lumpkin's study is of minimal help in evaluating the financial feasibility of this project.
The evidence did not establish the reasonableness of the income and expense projections contained in the Application. Moreover, there are several areas where the Application omits or understates expected operating costs. For example, the benefits to be provided to employees, as stated in the pro forma projections, are only 8% of salaries. This percentage would be insufficient to cover the cost of the statutorily mandated benefits of Social Security and unemployment insurance. Furthermore, this benefit level would not cover Workers' Compensation, health insurance, disability insurance, retirement benefits or life insurance. While Suburban suggested that some or all these costs were built into the salary figures rather then the benefit numbers, no specific evidence was presented to support or explain this position.
The Application assumes that financing can be obtained at a 10% interest rate. However, the evidence suggests that, at the time the Application was filed and as of the date of the hearing, this rate was probably overly optimistic. It is possible, indeed likely, that Suburban will have to borrow money at a rate in excess of 10%. Therefore, the monthly principal and interest payments may be higher than allotted.
The evidence was unclear as to exactly what equipment would be purchased and/or leased for the Project. The Application contains no provision for the purchase of anything other than medical equipment. While a $600,000 contingency is provided, it does not appear that serious consideration has been given to the expected costs for day-to-day items such as furniture, televisions for patient rooms, and similar such items. In addition, it was unclear as to exactly what medical equipment would be required, whether it would be purchased or leased, what equipment in the existing Outpatient Center could be utilized, and whether there would be costs associated with such utilization. Much of the existing equipment serves as security for indebtedness of the Outpatient Center.
The Application does not provide for the cost of security or a dietician, both of which are required at an acute care hospital.
In sum, Suburban has not proven that the costs set forth in the Application are a reliable estimate of the costs that will necessarily be incurred to open the proposed hospital.
The Application provides for ten ICU beds and 26 acute care beds. This bed configuration makes it unlikely that the facility will be able to achieve the utilization rate set forth in the Application. Thus, it is not clear that the projected revenues are reasonable.
Section 381.705(1)(l), Florida Statutes, requires a consideration of the "probable impact of the proposed project on the cost of providing health services proposed by the Applicant, ... including... the effects of competition on the supply of health services being proposed and the improvements or innovations in the financing and delivery of health services which foster competition and service to promote quality assurance and cost-effectiveness."
It is not clear whether osteopathic health services should be distinguished from allopathic health services in applying this criteria. No evidence was presented as to the probable impact of the proposed project on the cost of providing osteopathic services. Suburban contends that it will be offering health care services at lower cost than allopathic facilities in the area and, therefore, will have a positive effect on the cost of health care in the area and enhance competition to the benefit of health care consumers. To support this contention, Suburban argues that its per diem charges will be less than the Intervenors' and other allopathic facilities per diem charges. However, as indicated above, the evidence was insufficient to establish the reasonableness of the projected costs set forth in the Application. Furthermore, Suburban will not be providing some of the more costly services provided by larger hospitals. Suburban did not present any evidence comparing its charges with facilities providing similar services and/or with small hospitals. A comparison of Suburban's proposed patient charges with the average charges of larger hospitals does not reflect whether Suburban will be a cost-effective provider of acute care services. Finally, the proposed project may somewhat increase the demand for nurses and other skilled health care personnel which could exacerbate existing shortages in the District and lead to higher costs.
Section 381.705(1)(m), Florida Statutes, requires a consideration of the costs and methods of the proposed construction. Suburban is proposing to convert an existing outpatient center to an acute care hospital. The Application projects a total project cost of $4,085,780. The total construction costs are estimated at $2,173,600. This sum includes a construction contingency of $190,000. In addition, the total project costs include a working capital reserve of $600,000.
Schematic plans of the proposed project to 1/16th inch scale are required to be submitted with the CON Application. The Application is also required to contain certain tables that indicate the functional spaces, square footage per space, and construction cost per square foot for various areas. HRS conducts an architectural review of the submitted plans to determine whether the state requirements for the planned facility can be met.
The physical plant requirements for general hospitals in this state are set forth in Rule 10D-28.081, Florida Administrative Code. As noted below, the plans submitted by Suburban fell short of these requirements in many areas.
The evidence demonstrates that the proposed project could not be licensed without significant modifications to the submitted architectural plans. Such modifications will necessarily impact upon the cost of the project and, unless rectified, may also impact upon the quality of care rendered in the new facility. The uncertainty surrounding the changes needed to the architectural plans weighs heavily against approving the Application.
When the existing building was constructed, Suburban attempted to build it to the then-existing hospital codes. Many aspects of those code requirements have changed and several aspects of the building do not meet the new standards. While Suburban has suggested that, because there is an existing building in place, it may not have to meet all of the current standards, no persuasive evidence or legal precedent was presented to indicate that HRS can or will waive those standards.
Bernard Horovitz, the architect who prepared the plans for Petitioner, testified that the plans submitted were conceptual in nature and were not intended as final plans to be held to code standards. According to Mr. Horovitz, the development and refinement of the plans is an ongoing process with HRS that continues even after a Certificate of Need is issued. While Mr. Horovitz felt that the project could be completed in accordance with the applicable code requirements at a price that was not significantly different than the cost estimate set forth in the initial Application, the extent of the deficiencies detailed below raises considerable doubt as to this conclusion.
During the review of Suburban's plans, James Gregory, the HRS Architectural Supervisor for the Office of Plans and Construction, discovered that certain essential functions were missing or not indicated in the plans. Some of the omissions and/or deficiencies in the plans submitted with the Application were as follows:
Emergency room- The plans indicate that the emergency room is to be constructed in the area of the existing outpatient clinic. The evidence was unclear as to how or whether the outpatient clinic would continue to operate. Moreover, while the Application indicates that the facility would be operating an emergency room on a 24 hour basis, Dr. Minkes' testimony at the hearing raised some question as to whether the proposed hospital would have a fully- staffed emergency room. In any event, the plans provide no clear layout as to
how the emergency room and out-patient clinic would be mixed. The plans contain no emergency grade level entrance for ambulance entry, parking or emergency room entry as required by Rule 10D-28.081(12), Florida Administrative Code. There was no reception and control area for the emergency room shown on the plans.
Such a reception and control area is required by Rule 10D-28.081.(12)(b). Mr. Gregory testified that during his review he scaled the plans and discovered that the examination and treatment rooms were not large enough to meet the 100 square foot requirement set forth in Rule 10D-28.081(12)(e). Furthermore, Suburban's plans show a corridor running through the emergency room contrary to Rule 10D- 28.081(12)(m). While the cost estimates in the Application indicate extensive remodeling will be done in the area of the outpatient clinic, it is not clear that the remodeling could be completed and the emergency room brought up to code standards within the costs allocated. Furthermore, the evidence was unclear as to the Applicant's intentions with respect to jointly operating an emergency room and an outpatient clinic.
Dietary and Dining Facilities - While the Application indicates the conversion of the existing building will include a cafeteria, the evidence at the hearing indicates that a final decision has not been made as to whether Suburban will operate a cafeteria for employees and visitors. In any event, the plans provide for only 720 square feet for the hospital's dietary and dining facilities. This area is too small to meet the functional requirements of Rule 10D-28.081(21).
Storage Areas - Suburban's plans only allocate 1,260 square feet for general stores and central service areas. Rule 10D-28.081(25) requires the general storage area of a hospital to contain 20 square feet of storage per patient. In order to meet the general stores requirement, Suburban will only have 540 square feet of storage for central services. This remaining storage area would have to include a decontamination receiving room, a clean workroom to clean medical supplies used in the hospital, storage for clean medical supplies, storage for equipment used in delivery of patient care and a storage room for distribution carts. Furthermore, the plans did not provide for a body holding room as required by Rule 10D-28.081(19)(f). It is unlikely that all of these functions could be fit in the allocated area.
Operating rooms - Rule 10D-28.081(10) sets forth a minimum size requirement of 360 square feet for operating rooms. The surgery rooms reflected on the plans do not meet this requirement. Moreover, the surgical area set forth in the plans contains only 75% of the required functions specified in the rule. The area lacked a storage room for splint and traction equipment and a sink for plaster work as required by Rule 10D-28.081(10)(b) if orthopedic surgery is to be performed. The proposed recovery room did not provide for an isolation room with an anteroom for infected patients, a medication administrative station, a supervisor's office, a nurses station, two scrub stations for each operating room, an equipment storage room of at least 100 square feet, a soiled workroom for the exclusive use of the operating staff, a storage room, an out-patient change area, (which is required if out-patient surgery is to be provided,) a stretcher alcove and a storage area for portable
x-ray equipment as required under Rule 10D-28.081(10)(d) and (e).
ICU/CCU - The ICU area was only generally laid out on the plans and there was no indication where the isolation room, emergency cardio-pulmonary resuscitation cart storage, soiled utility room, clean linen storage, equipment storage, staff toilets, staff lounge, waiting room, conference room, and nurses station would be located within this unit. All of these functions are required by Rule 10D-28.081(6). The ICU area functions cannot be shared with the general medical/surgical and nurses stations. The proposed ICU area does not appear to
be large enough to accommodate the proposed ten ICU beds. This lack of space exists whether the rooms are arranged in a corridor or suite arrangement. The area where the ICU is proposed to be located has only one means of exit/access. Therefore, the ICU units will have to be set up in corridor system rather than a suite arrangement. Such an arrangement will reduce the usable square footage by approximately 800 feet. The loss of this 800 square feet further exacerbates the problem of lack of area.
Nursing Care Unit - The nursing care unit shown on the plans does not have enough area to include all of the required functions set forth in Rule 10D- 28.081(5). Among the functions required to be located in the nursing care unit are a medication room of at least 50 square feet, a workroom and a storage room of at least 60 square feet, an equipment storage room and an alcove for stretchers.
The plans submitted by Suburban failed to appropriately represent that the proposed project would meet the minimum standards set forth in Chapter 10D-28, Florida Administrative Code. While Suburban contends that the plans were not intended to be final and many of the issues could be addressed with HRS during the licensure process, the extent of the deficiencies raises serious questions as to whether this project could be completed within the budget set forth in the Application. A major redesign of the project will be necessary in order for it to meet code requirements. Suburban's contentions that these modifications could be made within the existing budget (including contingencies) and/or that waivers of certain elements could be obtained during the licensure process were not supported by persuasive evidence.
Section 381.705(1)(n) requires a consideration of the applicant's past and proposed provision of health care services to Medicaid patients and the medically indigent. As indicated above, no competent evidence was presented to establish the reasonableness of the patient mix set forth in the Application. Since Suburban has not begun operations, it has no historical record regarding provision of services to Medicaid and indigent patients. Dr. Minkes testified that the existing Outpatient Center treats all patients regardless of ability to pay and that the proposed project will operate on a similar basis. The existing Outpatient Center has entered into a contract with the State of Florida to provide primary care to Medicaid patients on a prepaid basis. Dr. Minkes anticipates that the proposed project would be used to provide hospital care to a large portion of the patients who enroll in the program. If that contract is implemented, the proposed project should provide some increased access for Medicaid patients.
Section 381.705(2)(a) requires a consideration of the availability of less costly, more efficient or more appropriate alternatives to the proposal. Alternatives to new construction include purchasing an existing acute care hospital, working in conjunction with an existing acute care hospital in a joint venture or shared facility arrangement or increasing the utilization of Westchester. All of these alternatives could further the osteopathic presence in the District and Subdistrict without the need for additional construction and the addition of new acute care beds. While Dr. Minkes indicated that he did not feel any of these alternatives were viable, it does not appear that any serious efforts were undertaken to explore these alternatives.
Section 381.705(2)(b) requires a consideration of the utilization of existing facilities providing inpatient service similar to those proposed. As set forth in Findings of Fact 14 through 19 above, Westchester, which is located in the same subdistrict as the proposed facility, has been operating at
approximately 27% occupancy. This occupancy level has been steadily decreasing for several years. It must be anticipated that the approval of this Application would further deteriorate the efficient use of Westchester.
For purposes of this Section, HRS interprets "similar services" to osteopathic acute care bed applications to include allopathic facilities which provide osteopathic services within the service area. If this interpretation is accepted, it is clear that there is a great excess of acute care beds in the District and the addition of the proposed beds would only diminish the potential for their efficient use of the existing beds.
Section 381.705(2)(d) requires a consideration of whether patients will experience problems in obtaining inpatient care of the type proposed in the absence of the proposed new service. While there are only one hundred licensed osteopathic beds in the District, the evidence did not indicate that any individuals seeking osteopathic care were being denied such services.
Section 381.705(2)(c) Florida Statutes, requires that, in the case of new construction, alternatives to new construction such as modernization or sharing arrangements, be considered and implemented to the maximum extent possible. As set forth in Findings of Fact 41 and 104 above, the evidence did not indicate that the modernization of Westchester or shared arrangements with other facilities have been fully explored.
Baptist and South Miami are general acute care hospitals located in South Dade County. The primary service area for the proposed project overlaps the primary service areas of Baptist and South Miami. The evidence indicated that both intervenors are likely to loose some admissions and will probably experience some difficulties in obtaining skilled staff if this Application is approved.
Both of the intervenor hospitals have a substantial number of vacant positions for which Suburban would be competing. If the Application is approved, Suburban will be seeking to fill its skilled staff positions from an already limited pool. One expected result would be an increase in salary structure for both Baptist and South Miami.
Petitioner challenged the accuracy of the zip code analysis prepared by Mr. Cushman which attempted to estimate the number of lost admissions that each of the Intervenors could expect. While the zip code analysis does have many flaws, the evidence was sufficient to establish that both South Miami and Baptist will loose some admissions if the proposed facility is opened.
Established programs at Baptist and South Miami could be substantially affected by the increase in salaries and lost admissions that are likely to occur if the proposal project is approved.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Section 120.57(1), Florida Statutes (1989); Section 381.709(5), Florida Statutes (1989); and Rule 10-5.012, Florida Administrative Code.
Standing to intervene in an administrative proceeding challenging the denial of a certificate of need is governed by Section 381.709(5)(b), Florida Statutes, which provides that existing health care facilities may intervene in
such an administrative hearing upon a showing that an established program would be substantially affected. Both Intervenors have demonstrated that their substantial interests may be adversely affected and, therefore, both South Miami and Baptist have standing to intervene in this proceeding.
Pursuant to Section 381.704(1), Florida Statutes (1989), HRS is designated as the "single state agency to issue, revoke or deny certificates of need in accordance with the district plans, the statewide health plan, and present and future federal and state statutes."
An applicant bears the burden of proving it meets the statutory and rule criteria for the issuance of, and is entitled to, a certificate of need. Boca Raton Artificial Kidney Center v. Department of Health and Rehabilitative Services, 475 So.2d 260 (Fla. 1st DCA 1985); Florida Department of Transportation v. J. W. C. Co., Inc., 396 So.2d 778 (Fla. 1st DCA 1981).
"Certificates of need for osteopathic hospitals are subject to the same myriad of requirements ... which pertain to other facilities regulated by HRS." Gulf Coast Hospital, Inc. v. Department of Health and Rehabilitative Services, 424 So.2d 86, 91 (Fla. 1st DCA 1982).
In evaluating applications for a CON, consideration must be given to all criteria contained in Section 381.705, Florida Statutes. Department of Health and Rehabilitative Services v. Johnson & Johnson Home Health Care, Inc.,
447 So.2d 361 (Fla. 1st DCA 1984); Collier Medical Center v. Department of Health and Rehabilitative Services, 462 So.2d 83 (Fla. 1st DCA 1985) (decided under prior statute). "No single criteria is necessarily determinative." Southeastern Medical Center, supra, 8 F.A.L.R. at 5716. Instead, the purpose of Section 381.705, Florida Statutes (1989) is to provide a "balanced consideration of all relevant criteria." North Ridge General Hospital, Inc. v. NME Hospitals, Inc., 478 So.2d 1138 (Fla. 1st DCA 1985).
The appropriate weight to be given to each individual criterion contained in the statute regarding CON applications is not fixed, but rather must vary on a case-by-case basis, depending on the facts in each case.
Id. at 1339.
HRS has the authority to establish rules governing the processing of certificate of need applications, including the number and time of amendments to such applications. Section 381.704(4), Florida Statutes (1989); See, McDonald
v. Department of Banking and Finance, 346 So.2d 569 (Fla. 1st DCA 1977). The rules applicable to this case are set forth in Rule 10-5, et. seq., Florida Administrative Code.
As a preliminary matter to resolving this case, it is first necessary to dispose of the issues raised in the Intervenors' Motion in Limine and the objections raised by Intervenors and Respondent to the testimony of Petitioner's expert witnesses.
During a prehearing conference on the Motion in Limine, Petitioner was cautioned that the Application could not be amended for purposes of the Section 120.57 hearing and that Petitioner was obligated to prove the Application that had been filed with HRS. At the hearing, Intervenors renewed their objections to the testimony of Petitioner's experts, again contending that
Petitioner was impermissibly attempting to amend its Application. Respondent joined in these objections. In response, Petitioner contended that it would prove its Application and that the "independent" evidence of some of its experts merely confirmed and/or supported the information contained in its Application. Based on these representations, Petitioner was permitted to present the contested evidence.
Rule 10-5.010(2)(b), Florida Administrative Code, provides:
Subsequent to an application being deemed complete by the Office of Regulation and Health Facilities, no further application information or amendment will be accepted by the department.
Rule 10-5.010(2)(b) has been interpreted by HRS to prohibit the submission of additional information over which the applicant has control. Manor Care, Inc. v. Department of Health and Rehabilitative Services, 558 So.2d
26 (Fla. 1st DCA 1989). Lee County Board of County Commissioners v. Department of Health and Rehabilitative Services, 11 F.A.L.R. 6692 (Fla. Dept. of HRS 1989); Charter Medical Orange County, Inc. v. Department of Health and Rehabilitative Services, 11 F.A.L.R. 1087 (Fla. Dept. of HRS 1989). However, applications can be amended to reflect changed circumstances outside the applicant's control, such as interest rate changes. Hialeah Hospital v. Department of Health and Rehabilitative Services, 9 F.A.L.R. 2363, 2366 (Fla. Dept. of HRS 1987); Charter Medical, supra, at 1148.
Whether post-application information constitutes an amendment to an application or merely provides further amplification of matters already in the application is a source of continuing controversy in CON proceedings. The court in Manor Care, supra, recognized that "minor refinements to an application have been allowed" where they are recognized by HRS as being within the general scope of the application. Likewise, in Gulf Court Nursing Center v. DHRS, 483 So.2d 700 (Fla. 1st DCA 1986), the court did not prohibit the presentation of updated current information. Thus, while HRS argues that additional information can only be submitted to reflect changed circumstances outside the applicant's control, there are circumstances where additional information has been accepted even when it did not fall in such a category. See, Health Care and Retirement Corporation v. DHRS, 516 So.2d 292 (Fla. 1st DCA 1987).
After reviewing all the evidence, it appears that all three of Suburban's expert witnesses were hired after HRS made its initial decision to deny Suburban's Application for a certificate of need. None of Suburban's experts specifically addressed the tables and pro formas contained within the submitted Application. For example, Dr. Fagin testified that he had conducted an independent study of need. His study did not directly address any methodologies or assumptions contained within the original Application. In fact, Dr. Fagin admitted that he had not attempted to gather the information and assumptions used by Price Waterhouse in preparing the original tables included in the Application. Thus, Petitioner never presented HRS with a specific need methodology until the hearing in this case. Similarly, Suburban stipulated that Mr. Lumpkin's testimony was not directly tied to the pro formas in the Application. Both Mr. Lumpkin and Mr. Eiseman admitted that their testimony was not directly related to the Application and that they had engaged in a new undertaking not tied to the Application.
Suburban argued that the need methodologies presented by Dr. Fagin were admissible because the delicensure of Southeastern Medical Center on May 9, 1989 reduced the osteopathic bed count in the District by 224 beds. Suburban contends that it is entitled to update its Application to address facts extrinsic to the Application such as this change in bed inventory. However, this argument misses the point. The testimony of Dr. Fagin introduces an entirely new methodology that was never presented in the Application. His testimony was not directly related to any changes in need that resulted from the closure of Southeastern. Nonetheless, for the reasons set forth below, the objections to the testimony are overruled.
Since this case does not involve a comparative review between competing facilities, Suburban has not obtained a competitive advantage by withholding information until the hearing. Furthermore, as part of the discovery process leading up to this Section 120.57 formal hearing, all of the parties were afforded an opportunity to discover the need methodologies and formulas advanced at the final hearing well in advance of the hearing.
At the hearing, Petitioner deliberately tailored the presentation of its evidence at the hearing in this case in a manner that avoided any significant change to the Application. By framing the presentation in this manner, the proffered evidence does not constitute an improper amendment to the Application.
HRS contends that it asked Suburban to provide specific information regarding assumptions and methodologies during the omissions process. However, the Omissions Report was not introduced into evidence and it is not clear exactly what was requested. The Omissions Response submitted by Suburban did not address these issues in detail.
HRS has articulated some valid concerns that justify limiting the ability of an applicant to provide supplemental information subsequent to the issuance of a State Agency Action Report. Respondent argues that to allow subsequent amendments, could result in the "potential for endless changes to applications" during Section 120.57 hearings and would render the State Agency Action Report meaningless. However, an applicant can not be required to set forth in its application every piece of evidence, testimony, or argument upon which it intends to rely at hearing. Sarasota County Public Hospital v. DHRS and Venice Hospital, 11 F.A.L.R. 6248, 6277 (1989). In view of all the circumstances in this case, it is concluded that the evidence submitted at hearing by Petitioner's experts should be accepted.
Respondent's objection to the testimony of Dr. Fagin on the grounds that he utilized May, 1989 population projections instead of January, 1989 population projections is overruled. The case cited by Respondent, Meridian, Inc. v. Department of Health and Rehabilitative Services, 548 So.2d 1169 (Fla. 1st DCA 1989), deals with comparative review based upon a fixed need pool of beds set at the time of the initial application. In such an instance, the need for certainty with respect to the population figures that are used is much more compelling than in the instant case where no fixed need pool is published.
Even if the evidence that was objected to is accepted, Petitioner has still not carried its burden of proof to establish that it is entitled to the issuance of a CON.
Pursuant to Section 381.704(3), HRS has been directed to establish, by rule, uniform need methodologies for health services and health facilities.
In developing uniform need methodologies, HRS is directed to consider, at a minimum, the demographic characteristics of the population, the health status of the population, service use patterns, the standards and trends, geographic accessibility, and market economics. Rule 10-5.011(1)(m) sets forth HRS' methodology for calculating acute care bed need. HRS has not adopted a rule or official methodology to calculate osteopathic bed need.
Section 381.713(2), Florida Statutes (1989), provides as follows:
OSTEOPATHIC ACUTE CARE HOSPITALS. - When an
application is made for a certificate of need to construct or to expand an osteopathic acute care hospital, the need for such hospital shall be determined on the basis of the need for and availability of osteopathic services and osteopathic acute care hospitals in the district....
In view of this statute, the need for osteopathic facilities should not be evaluated based upon the availability of non-osteopathic facilities. Gulf Coast Hospital, Inc. v. DHRS, 424 So.2d 86 (Fla. 1st DCA 1982); Manasota Osteopathic General Hospital v. DHRS, 523 So.2d 710 (Fla. 1st DCA 1988) (statistics on overbedding at allopathic facilities may not be used to deny a certificate of need for an osteopathic facility.)
The acute care bed need rule, Rule 10-5.11(23), Florida Administrative Code, does not 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.
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 an "osteopathic facility" set forth in Gulf Coast, supra. 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, the teaching and the study of osteopathic medicine, and 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." Gulf Coast, supra, 424 So.2d at 90. Further, "[T]he 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. 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."
The provisions of Section 381.713(2) and the holding of Gulf Coast must be viewed in conjunction with the "myriad of requirements" any hospital has to comply with in order to obtain a certificate of need. Id. at 91.
Section 381.713(2) does not exempt applications for certificates of need for osteopathic acute care hospitals from the review criteria set forth in Section 381.705, Florida Statutes. While Petitioner contends that the Local and State Health Plans are largely irrelevant to the Application because they do not specifically address the need for osteopathic facilities, this contention is
rejected. Section 381.705(1)(a) requires all certificate of need applications to be reviewed in context with the applicable district and state Health Plans. Section 381.713(2) does not supercede this requirement. The introduction of a new osteopathic acute care hospital in District XI is going to impact upon the existing health care system. The Plans set forth several characteristics of the existing health care system that should be considered in reviewing any new addition to that system whether it is allopathic or osteopathic. While the review would be easier if the health Plans specifically addressed osteopathic facilities, there is no statutory or rule requirement that they do so.
Both of the Plans express reasonable health care goals for the improvement of Florida's health care system, including the availability of sufficient services and health care alternatives to benefit the citizen population. Suburban has not shown how its proposal, will meet and/or address the Plans' goals and objectives. The evidence did not establish that the proposed project will improve the quality of health care within District XI. In fact, if approved, it may hinder the quality level of health care services presently delivered in District XI. In sum, there was no evidence presented to indicate that the proposed project would further any of the goals of the Local or State Health Plans.
Even if most of the existing facilities are not osteopathic facilities, the impact of the proposed project on these facilities and the possible alternatives to the existing proposal must all be taken into account. See, Manasota, supra. Allopathic hospitals in District XI are also experiencing lower occupancy. The addition of another 36 acute care beds, albeit osteopathic, to District XI's surplus bed inventory will not lower the costs of health care services and may prevent the attainment of goals which can improve the total operating efficiency of existing area hospitals.
The need justification in the Application consisted of little more than conclusory statements, signed petitions from patients, and letters of support from osteopathic physicians in the area.
Because there is no approved methodology for establishing need for an osteopathic facility, Petitioner had little guidance as to what it was required to include in its Application. In view of the absence of an established need methodology for osteopathic beds, Petitioner has been granted some lee-way in presenting its case in support of the need for the facility at this de novo proceeding.
At the hearing, Suburban presented the testimony of a number of osteopathic physicians who indicated their support for the proposed project. Several of those physicians indicated their intent to admit all or large portions of their patients to the proposed facility. Assuming this testimony to be accurate, it appears that the proposed facility would be able to meet the occupancy projections contained in the pro-formas set forth in the Application. However, meeting these occupancy projections does not establish need nor justify the issuance of the CON.
The low occupancy rates at District XI's two osteopathic facilities in 1988 indicates that there is limited need for osteopathic services in Dade County. Suburban has failed to provide any persuasive explanation for the prolonged decline in utilization of the existing osteopathic facilities in the District.
After reviewing the Application in detail and the testimony presented at the hearing, it is concluded that Petitioner has not presented sufficient evidence to support the need conclusions contained in the Application. Even if Dr. Fagin's testimony is accepted into evidence, there are several significant flaws in his analysis which prevent his conclusions from being persuasive.
While Petitioner has provided impressive evidence of the support for this project by osteopathic physicians in the community, Petitioner has presented no evidence to establish that osteopathic care is unavailable to patients in the District seeking that care.
The evidence was unclear as to the Applicant's intentions regarding the existing AM/Surg Center. The Application seems to indicate that the existing beds in the AM/Surg Center will be converted to hospital beds. However, the testimony at the hearing indicated that the AM/Surg Center would continue to operate as a separate entity.
Section 395.002(2)(a), Florida Statutes (1989), defines an ambulatory surgical center as "a facility the primary purpose of which is to provide elective surgical care, in which the patient is admitted to and discharged from such facility within the same working day, and which is not part of a hospital." (Emphasis added). The term "hospital" is separately defined in Section 395.002(6), Florida Statutes (1989), and includes any establishment that offers certain specified services for use beyond 24 hours. These statutes contemplate that ambulatory surgical centers and hospitals will be distinct, separately licensed entities. See also, Sections 395.003(1)(a) and (2)(a), Florida Statutes (1989). Suburban's plans to operate the licensed AM/Surg Center as a part of a licensed hospital contravenes this policy.
While some hospitals offer outpatient services, they do so as licensed hospitals not as licensed ambulatory surgical centers. Furthermore, if it is Suburban's intent to operate in this manner, that interest is not set forth in the Application nor is it reflected in the pro formas.
In sum, Suburban failed to adequately explain in the Application or at the hearing its intentions regarding the AM/Surg Center and the effect of continued operation or phase out of that Center on a variety of factors including income (reimbursement rates differ for ambulatory surgical centers and hospitals), staffing, and equipment usage.
150 Section 381.705(1)(b), Florida Statutes (1989), provides for the consideration of the
vailability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing health care services and hospitals in the service district of the applicant.
There is no statutory requirement that osteopathic services be considered separately in evaluating this criteria. In this regard, accessibility to acute care services is not a problem in District XI since there is an adequate number of hospitals located in District XI, including Subdistricts 4 and 5 which are Suburban's proposed service areas.
Suburban did not identify any existing problems with respect to the availability of osteopathic services to District XI residents. While some osteopathic physicians testified that they are hampered in providing osteopathic
care in allopathic hospitals, there was no indication that patients seeking osteopathic care have been unable to receive it.
Approval of this project may make it easier for some osteopathic physicians to provide osteopathic care to their patients. So, to that extent, the quality of care may be improved.
The submitted plans did not address or meet many of the hospital standards contained in Florida Administrative Code Rule 10D-28. In view of the deficiencies contained in Suburban's architectural plans, which are discussed in more detail below, there are questions about Suburban's ability to provide quality health care services.
It is anticipated that the proposed project would continue to be used as a externship training hospital for students at the Southeastern College of Osteopathic Medicine. The evidence established that the project could not be used for internships for SECOM graduates. While there are limited district osteopathic facilities available for training osteopathic students and interns, it is questionable how much additional benefit approval of this project would provide because of its size and distance from SECOM. It should be noted that Westchester is a teaching hospital and has an intern training program.
Suburban provided no expert testimony to establish the reasonableness of its proposed staffing pattern. Moreover, there was limited evidence of its ability to attract the staff required for the proposed facility. While some existing staff members have indicated a willingness to stay on board, the proposed project will require additional positions in new areas and twenty-four hour staffing in some positions. It appears that Petitioner has not fully considered these issues.
No direct testimony was presented to explain how the pro formas in the Application were reached. Mr. Eiseman's and Mr. Lumpkin's testimony did not specifically address any financial information contained in the Application. As a result, Suburban failed to prove the reasonableness of many elements of its projections including salaries, supplies and costs per patient day.
Suburban failed to establish both the short and long term feasibility of the proposed facility. While Suburban's occupancy projections appear overstated given the current and historical occupancy rates at osteopathic hospitals in District XI, the strong physician support makes it possible that the occupancy projections can be met. However, it is clear that several cost items were not included in the estimated project costs contained in the Application. Furthermore, the extensive deficiencies in Suburban's architectural plans and the apparent need for additional capital expenditures before the facility can meet licensure requirements make it unclear whether the additional resources to correct these problems will be available to complete the project within the budget set forth in the Application.
It appears that, contrary to statements in its Application, Suburban will not be able to finance 100 percent of its proposed project. Financial institutions will generally only finance 60 to 70 percent of the total project costs. Since Suburban does not own the existing facility, it is not clear what assets could be pledged as security for this indebtedness. Moreover, Suburban did not present any persuasive evidence showing how it would or could privately finance the remaining 1.2 to 1.6 million dollars necessary to effectuate this project. Alternatively, the evidence failed to establish that all necessary
funds could be obtained through a private placement or similar financing arrangement.
This project will undoubtedly have a negative effect on Westchester. Suburban's approval will also reduce the occupancy potential at allopathic facilities within the proposed service area. This potential reduction could affect patient charges, available services and the ability of facilities in the area to maintain qualified staff.
The evidence did not establish less costly and more appropriate alternatives are unavailable to Suburban. For example, improving the use of Westchester or buying an existing facility would appear to be possible options.
Based on the architectural plans submitted with the Application for the proposed project, there is considerable doubt whether the existing facility can be brought up to the minimum standards for hospitals set forth in Florida Administrative Code Rule 10D-28 for a cost within the project budget set forth in the Application. It is clear that many of these issues were not considered when the projected project costs were developed. Suburban's proposed Emergency Department does not meet the required standards of Rule 10D-28.081(12). As a distraction to this particular flaw, Suburban asserts the possibility of maintaining an emergency room less than twenty-four hours a day. However, this position clearly undermines the mandates prescribed by Rule 10D-28.170(1). Furthermore, the proposed dietary and dinning facilities were not large enough to accommodate all the functional requirements set forth in Rule 10D-28.081(21). Similarly, the allotted space for Suburban's general stores and central service areas were not sufficiently large to accommodate all required functions. The proposed surgical facilities were inherently flawed because these areas contained only 75 percent of the required functions called for by Rule 10D- 28.081(10). In addition, Mr. Horovitz admitted that Suburban's proposed critical care and intensive care units did not meet the minimum hospital standards. As proposed, the ICU violates chapter 12-2.5.2 of the NEPA Life Safety Code 101, which requires that inpatient sleeping area suites over a thousand square feet have two exit access doors. Currently, the planned ICU has only one exit/access door.
In sum, Suburban has failed to carry its burden of proof to establish that, on balance, the proposed facility satisfies the applicable review criteria contained in Section 381.705, Florida Statutes (1989). Therefore, Suburban's proposal should be denied.
Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby, recommended that HRS enter a final order denying Suburban Medical Hospital, Inc.'s application for Certificate of Need #5868 to convert an existing outpatient surgery center to an osteopathic acute care hospital by conversion and new construction.
RECOMMENDED in Tallahassee, Leon County, Florida, this 22nd day of March, 1991.
J. STEPHEN MENTON Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 22nd day of March, 1991.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-4445
All four parties have submitted Proposed Recommended Orders. The following constitutes my rulings on the proposed findings of fact submitted by the parties.
The Petitioner's Proposed Findings of Fact
Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order Where Accepted or
Reason for Rejection.
1.-2. Adopted in substance in the Preliminary Statement.
Adopted in substance in Findings of Fact
1 and 3.
Adopted in substance in Findings of Fact 5.
Adopted in substance in Findings of Fact 4 and 10.
Adopted in pertinent part in Findings of Fact 8 and 10.
Adopted in pertinent part in Findings of Fact 8 and 9.
Adopted in substance in Findings of Fact
14 and 15.
Adopted in substance in Findings of Fact 48.
Subordinate to Findings of Fact 50-58.
Subordinate to Findings of Fact 59.
12. Subordinate | to | Findings | of | Fact | 63 | and | 64. |
13. Subordinate | to | Findings | of | Fact | 52 | and | 53. |
14. Subordinate | to | Findings | of | Fact | 61 | and | 62. |
15. Subordinate | to | Findings | of | Fact | 63 | and | 64. |
16. Subordinate | to | Findings | of | Fact | 65. | ||
17. Subordinate | to | Findings | of | Fact | 66. | ||
18. Subordinate | to | Findings | of | Fact | 67. |
Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 58.
Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 53 and 56.
Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 55 and 65.
Subordinate to Findings of Fact 69, 33 and 34.
Rejected as a summary of testimony rather than a finding of fact.
Subordinate to Findings of Fact 68.
Adopted in substance in Findings of Fact
44 and in the Preliminary Statement.
26. Subordinate | to | Findings | of | Fact | 37-42. |
27. Subordinate | to | Findings | of | Fact | 37 and 42. |
28. Subordinate | to | Findings | of | Fact | 37. |
29. Subordinate | to | Findings | of | Fact | 26. |
30. Subordinate | to | Findings | of | Fact | 27. |
31. Subordinate | to | Findings | of | Fact | 24-30. |
32. Subordinate | to | Findings | of | Fact | 24. |
33. Subordinate | to | Findings | of | Fact | 24 and 28. |
Rejected as vague, overbroad and irrelevant.
Subordinate to Findings of Fact 26 and 30.
Adopted in substance in Findings of Fact 15.
Rejected as constituting a summary of testimony rather than a finding of fact because it is irrelevant to the conclusions reached in the Recommended Order.
Subordinate to Findings of Fact 21-23.
Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 21-23.
Rejected as constituting a summary of testimony and legal argument rather than a finding of fact. This subject area is addressed in Findings of Fact 41, 70, 94 and 106.
Subordinate to Findings of Fact 73.
Adopted in substance in Findings of Fact 73.
Subordinate to Findings of Fact 74.
Subordinate to Findings of Fact 75.
Subordinate to Findings of Fact 75.
Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 75.
Subordinate to Findings of Fact 79-81 and 90.
Rejected as irrelevant. This subject matter is addressed in Findings of Fact 76.
Subordinate to Findings of Fact 76.
Subordinate to Findings of Fact 81 and 82.
Rejected as unnecessary and irrelevant.
Subordinate to Findings of Fact 13 and 83.
Rejected as constituting a summary of testimony and legal argument rather than a finding of fact. This subject matter is addressed in Findings of Fact 41, 104 and 108.
Subordinate to Findings of Fact 85.
Subordinate to Findings of Fact 82.
Subordinate to Findings of Fact 86-93.
Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 69 and 93.
Subordinate to Findings of Fact 69 and 93.
Subordinate to Findings of Fact 69 and 93.
Subordinate to Findings of Fact 69 and 93.
Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 69 and 93.
Rejected as constituting a summary of testimony and argument rather than a finding of fact. This subject matter is addressed in Findings of Fact 69 and 73.
Subordinate to Findings of Fact 80 and 89.
Subordinate to Findings of Fact 80.
Subordinate to Findings of Fact 86 and 87.
Subordinate to Findings of Fact 86-93.
Subordinate to Findings of Fact 86-92.
Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 93 and 98-100.
Rejected as constituting a summary of testimony and legal argument rather than a finding of fact. This subject matter is addressed in Finding of Fact
86 and 87.
70-72. Subordinate to Findings of Fact 94 and 105.
70.(sic) Rejected as unnecessary. A related issue is addressed in Findings of Fact 94.
Adopted in substance in Findings of Fact 95.
Subordinate to Findings of Fact 100.
Subordinate to Findings of Fact 100.
Rejected as unnecessary.
Subordinate to Findings of Fact 90.
Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 96-101.
Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 96-101.
Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 100.
Subordinate to Findings of Fact 102.
Subordinate to Findings of Fact 103.
Subordinate to Findings of Fact 104.
See the rulings on proposed findings 29-40 above.
Subordinate to Findings of Fact 108.
Subordinate to Findings of Fact 26 and 27.
Subordinate to Findings of Fact 31.
Suburban has submitted eleven proposed findings with respect to the standing issue. Those proposals are subordinate to Findings of Fact 109-112.
The Respondent's Proposed Findings of Fact Proposed Finding Paragraph Number in the Findings of Fact
of Fact Number in the Recommended Order Where Accepted or Reason for Rejection.
1. Adopted in substance in Findings of Fact 5.
2.-3. Adopted in substance in Findings of Fact 1.
4. Adopted in substance in Findings of Fact 5.
5.-6. Subordinate to Findings of Fact 7.
7.-8. Adopted in substance in Findings of Fact
36 and 42.
Addressed in Findings of Fact 36, 42, 43 and 71.
Adopted in substance in Findings of Fact 42.
Adopted in substance in Findings of Fact 40.
Adopted in substance in Findings of Fact 14.
Adopted in substance in Findings of Fact 21.
Adopted in substance in Findings of Fact
15 and 21.
Subordinate to Findings of Fact 43.
Subordinate to Findings of Fact 71.
Adopted in substance in Findings of Fact 33.
Adopted in substance in Findings of Fact
24 and 25.
Rejected as unnecessary.
Rejected as unnecessary.
Adopted in substance in Findings of Fact 41-43 and 71.
Adopted in substance in Findings of Fact 42.
Adopted in substance in Findings of Fact 72.
24.-25. Adopted in pertinent part in Findings of Fact 21.
Adopted in substance in Findings of Fact
20 and 21.
Adopted in substance in Findings of Fact 20.
28. | Subordinate | to | Findings | of | Fact | 40. |
29. | Subordinate 106. | to | Findings | of | Fact | 105 and |
30. | Subordinate 49. | to | Findings | of | Fact | 46 and |
31. | Subordinate 49. | to | Findings | of | Fact | 46 and |
Adopted in substance in Findings of Fact 50.
Subordinate to Findings of Fact 51.
Subordinate to Findings of Fact 59.
Subordinate to Findings of Fact 53.
Subordinate to Findings of Fact 53.
Subordinate to Findings of Fact 53 and 55.
Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in
Findings of | Fact 8, 10 and | 56. | ||
39. Subordinate | to Findings of | Fact | 58. | |
40. Subordinate | to Findings of | Fact | 62. | |
| to Findings of to Findings of | Fact Fact | 57. 53 and | 57. |
43. Subordinate | to Findings of | Fact | 55. | |
44. Subordinate | to Findings of | Fact | 53-55. | |
45. Subordinate | to Findings of | Fact | 54. | |
46. Subordinate | to Findings of | Fact | 65. | |
| to Findings of to Findings of | Fact Fact | 65. 63 and | 66. |
| to Findings of to Findings of | Fact Fact | 64 and 64. | 66. |
Subordinate to Findings of Fact 55 and 64.
Subordinate to Findings of Fact 67.
Adopted in pertinent part in Findings of Fact 53.
54. Subordinate | to | Findings | of | Fact | 85-93. |
55. Subordinate | to | Findings | of | Fact | 85-93. |
56. Subordinate | to | Findings | of | Fact | 86 and 87. |
57. Subordinate | to | Findings | of | Fact | 87. |
58. Subordinate | to | Findings | of | Fact | 86 and 87. |
59. Subordinate | to | Findings | of | Fact | 87. |
60. Subordinate | to | Findings | of | Fact | 87. |
61. Subordinate | to | Findings | of | Fact | 87. |
Addressed in pertinent part in Findings of Fact 86. This subject matter is also addressed in the Preliminary Statement and the Conclusions of Law.
Subordinate to Findings of Fact 86 and 87. This subject is also addressed in paragraphs 17 of the Conclusions of Law.
Addressed in paragraphs 17 of the Conclusions of Law.
Addressed in pertinent part in Findings of Fact 65.
66. Subordinate | to | Findings | of | Fact | 82. |
67. Subordinate | to | Findings | of | Fact | 81. |
68. Subordinate | to | Findings | of | Fact | 81. |
69. Subordinate | to | Findings | of | Fact | 81. |
70. Subordinate | to | Findings | of | Fact | 78 and 81. |
71. Subordinate | to | Findings | of | Fact | 86-93. |
72. Subordinate | to | Findings | of | Fact | 86-93. |
73.-74. Addressed in pertinent part in Findings of Fact 86 and 88.
Addressed in the Preliminary Statement.
Adopted in substance in Findings of Fact 96.
Adopted in substance in Findings of Fact 96.
Adopted in substance in Findings of Fact 96.
Adopted in substance in Findings of Fact 101.
80.-101. Adopted in substance in Findings of Fact 101.
Subordinate to Findings of Fact 100 and 102.
Subordinate to Findings of Fact 98, 100 and 102.
Rejected as a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 71.
Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 20.
Subordinate to Findings of Fact 42, 43 and 107.
Adopted in substance in Findings of Fact 107.
Subordinate to Findings of Fact 31, 33, 42, 43 and 70-73.
Adopted in substance in Findings of Fact
20 and 21.
Adopted in substance in Findings of Fact 70 and 106.
111. | Subordinate 101. | to | Findings | of | Fact | 73 and 97- |
112. | Subordinate and 108. | to | Findings | of | Fact | 45, 104 |
113. | Subordinate and 108. | to | Findings | of | Fact | 45, 104 |
Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 45, 104 and 108.
Rejected as unnecessary. Furthermore, there is considerable confusion as to how this per diem calculation was made.
116.-117. Subordinate to Findings of Fact 105-106. The Intervenor's Proposed Findings of Fact (Baptist Hospital)
Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order Where Accepted or
Reason for Rejection.
1.-7. Subordinate to Findings of Fact 109-112.
This subject matter is addressed in paragraph 2 of the Conclusions of Law.
8.-14. Subordinate to Findings of Fact 50-67.
Subordinate to Findings of Fact 15 and 17- 23.
Adopted in pertinent part in Findings of Fact 17, 21, 30, 65 and 69.
This proposal consists largely of legal argument and is addressed in the Conclusions of Law. Pertinent portions of the proposal are addressed in Findings of
Fact 14 and 18. Subordinate | 37. to | Findings | of | Fact | 42. |
19. Subordinate and 108. | to | Findings | of | Fact | 41, 104 |
20. Subordinate | to | Findings | of | Fact | 71 and 83. |
21. Subordinate 71-73. | to | Findings | of | Fact | 24-33 and |
22. Subordinate | to | Findings | of | Fact | 71. |
23. Subordinate 71-73. | to | Findings | of | Fact | 37-43 and |
24. Subordinate 72. | to | Findings | of | Fact | 20, 42 and |
25. Much of this proposal consists of legal argument. The pertinent factual provisions are addressed in Findings of Fact 70 and 106.
26. | Subordinate to Findings of Fact 106. | 42 and |
27. | Subordinate to Findings of Fact 105. | 42 and |
28.-29. | The pertinent portions of these | proposals |
are addressed in Findings of Fact 73. The remainder of these proposals are rejected as irrelevant.
Subordinate to Findings of Fact 71.
Adopted in pertinent part in Findings of
Fact 14 and | 75. | |||||
32. | Subordinate | to | Findings | of | Fact | 76. |
33. | Subordinate | to | Findings | of | Fact | 77. |
34. | Subordinate | to | Findings | of | Fact | 78-81. |
35. | Subordinate | to | Findings | of | Fact | 75. |
36. | Subordinate and 108. | to | Findings | of | Fact | 41, 104 |
37. | Subordinate 103. | to | Findings | of | Fact | 83 and |
38. | Subordinate 85. | to | Findings | of | Fact | 76-82 and |
39. | Subordinate | to | Findings | of | Fact | 85-102. |
40. | Subordinate 93. | to | Findings | of | Fact | 86-88 and |
41. | Subordinate | to | Findings | of | Fact | 86-102. |
42. | Subordinate | to | Findings | of | Fact | 94. |
This proposal consists largely of legal argument. Pertinent factual issues are addressed in Findings of Fact 20 and 21,
76 and 94.
Subordinate to Findings of Fact 95-102.
Subordinate to Findings of Fact 83 and 103.
Much of this proposal consists of legal argument and/or speculation. Pertinent factual issues are addressed in Findings of Fact 41, 104 and 108.
Subordinate to Findings of Fact 105 and 106.
Subordinate to Findings of Fact 41, 104 and 108.
Subordinate to Findings of Fact 69.
The Intervenor's Proposed Findings of Fact (South Miami Hospital)
Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order Where Accepted or
Reason for Rejection.
Adopted in substance in Findings of Fact 4.
Adopted in substance in Findings of Fact 5.
Adopted in substance in Findings of Fact 6.
4.-6. Subordinate to Findings of Fact 16-19.
Adopted in substance in Findings of Fact 15, 20 and 21.
The first sentence is adopted in substance in Findings of Fact 48. The remainder is rejected as constituting legal argument.
Adopted in pertinent part in Findings of Fact 49 and 50.
Adopted in substance in Findings of Fact 6.
Subordinate to Findings of Fact 7.
Subordinate to Findings of Fact 101.
Adopted in substance in Findings of Fact 79.
Adopted in substance in Findings of Fact 2.
Adopted in pertinent part in Findings of Fact 101.
Subordinate to Findings of Fact 100.
Included in the Preliminary Statement.
Subordinate to Findings of Fact 73.
Adopted in pertinent part in Findings of Fact 96.
Adopted in substance in Findings of Fact 101.
Subordinate to Findings of Fact 101.
Subordinate to Findings of Fact 98-100.
Subordinate to Findings of Fact 100 and 102.
Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 98-102.
Adopted in substance in Findings of Fact
44 and in the Preliminary Statement.
Adopted in substance in Findings of Fact
44 and 45.
Adopted in substance in Findings of Fact 45.
Adopted in pertinent part in Findings of Fact 48 and 49.
Rejected as irrelevant.
Subordinate to Findings of Fact 70 and 106.
Adopted in pertinent part in Findings of Fact 20 and 21.
Rejected as vague. This subject matter is addressed in Findings of Fact 20 and 21.
Subordinate to Findings of Fact 33 and 35.
Subordinate to Findings of Fact 20, 21 and 42.
Subordinate to Findings of Fact 23 and 30.
Adopted in substance in Findings of 25.
Subordinate to Findings of Fact 24.
Subordinate to Findings of Fact 24 and 30.
Subordinate to Findings of Fact 23.
Subordinate to Findings of Fact 23.
Addressed in pertinent part in Findings of Fact 20 and 21.
42.-43. Rejected as overly broad. This subject
matter is addressed in Findings of Fact 31.
44. | Subordinate | to | Findings | of | Fact | 40 and 42. |
45. | Subordinate | to | Findings | of | Fact | 73. |
46. | Subordinate | to | Findings | of | Fact | 35. |
47.-51. | Subordinate | to | Findings | of | Fact | 49-67. |
52. | Subordinate | to | Findings | of | Fact | 35. |
53.-55. | Subordinate | to | Findings | of | Fact | 109-112. |
56. | Subordinate | to | Findings | of | Fact | 85-93. |
57. | Subordinate | to | Findings | of | Fact | 69. |
58. | Subordinate | to | Findings | of | Fact | 69 and 93. |
Rejected as overly broad. This subject matter is addressed in Findings of Fact 35 and 73-109.
Rejected as unnecessary.
COPIES FURNISHED:
Daniel C. Minkes, Esquire 17615 S.W. 97th Avenue Miami, Florida 33157
Silvio Amico, Esquire 6401 S.W. 87th Avenue Suite 114
Miami, Florida 33173
Thomas R. Cooper, Esquire Edward Labrador, Esquire Suite 103
2727 Mahan Drive
Tallahassee, Florida 32308
Kyle Saxon, Esquire
Catlin, Saxon, Tuttle & Evans 1700 Alfred I. Dupont Building
169 East Flagler Street Miami, Florida 33131
Jay Adams, Esquire 1519 Big Sky Way
Tallahassee, Florida 32301
Jean Laramore, Esquire 7007 McBride Pointe
Tallahassee, Florida 32312
Sam Power, Agency Clerk Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32399-0700
Linda K. Harris
Acting General Counsel Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32399-0700
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS:
All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES
SUBURBAN MEDICAL HOSPITAL, | INC., | ) | |
) | |||
Petitioner, | ) | ||
) | |||
vs. | ) CASE NO.: | 89-4445 | |
) CON NO.: | 5868 | ||
DEPARTMENT OF HEALTH AND | ) | ||
REHABILITATIVE SERVICES, | ) | ||
) | |||
Respondent, | ) |
and )
)
BAPTIST HOSPITAL OF MIAMI, ) INC. and SOUTH MIAMI HOSPITAL, )
)
Intervenors. )
)
FINAL ORDER
This cause came on before me for the purpose of issuing a final agency order. The Hearing Officer assigned by the Division of Administrative Hearing (DOAH) in the above-styled case submitted a Recommended Order to the Department of Health and Rehabilitative Services (HRS). A copy of that Recommended Order is attached hereto.
RULING ON EXCEPTIONS FILED BY SUBURBAN MEDICAL HOSPITAL, INC. (SUBURBAN)
Suburban excepts in whole or in part to findings of fact 7, 11, 17 through 20, 21, 23, 24, 26 through 28, 29, 30, 31, 33, 35, 38, 40 through 41, 42 through
44, 46, 47, 53, 55 through 56, 58, 60, 62 through 67, 68, 69, 70, 72, 73, 75,
76, 77, 78 through 82, 83, 85, 86 through 90, 91, 92, 93, 96 through 102, 103,
104, 105, 106, 107, 108, and 109 through 112.
The Hearing Officer's findings of fact are entitled to the same weight as the verdict of a jury. Gruman vs. State, 379 So2d 1313 (Fla. 2nd DCA 1980).
It is the Hearing Officer's function to resolve conflicts in the evidence, judge the credibility of witnesses, draw permissible inferences from the evidence, and make findings of fact; and the agency may not reject a finding unless there is no competent, substantial evidence from which the finding could reasonably be inferred. Heifetz vs. Department of Business Regulation, 475 So2d 1277 at 1281 (Fla. 1st DCA 1985). The challenged findings are supported by competent, substantial evidence; therefore, the exceptions are denied. The exceptions to the conclusions of law are denied.
RULING ON EXCEPTIONS FILED BY THE DEPARTMENT
Counsel excepts to the Hearing Officer's ruling that the testimony of Dr. Fagin, Mr. Lumpkin, and Mr. Eiseman did not violate the no amendment rule found in Section 10-5.010(2)(b), Florida Administrative Code.
A 120.57 review is not a record review of the kind done by an appeals court; it is an evidentiary hearing. Evidence which explains or corroborates the assertions made in the application is proper so long as the nature and scope of the proposal is not changed. The Hearing Officer's suggestion that the no amendments rule may not apply where there has been no comparative review is rejected. The application subject to review in the 120.57 proceeding is the application submitted for initial review. It is unnecessary to determine whether the challenged testimony goes further than merely explaining or corroborating the application given the Hearing Officer's finding that the evidence is inherently flawed, conflicting, and insufficient to constitute competent, substantial evidence. The error, if any, is harmless.
Regarding Dr. Fagin's use of population projections other than those used in the initial review, the Motions in limine should have been granted. To allow the use of later projections would encourage filing of applications where there is no need based on data available at the time the application is filed. Again, the error is harmless in light of the Hearing Officer's findings.
FINDINGS OF FACT
The department hereby adopts and incorporates by reference the findings of fact set forth in the Recommended Order.
CONCLUSIONS OF LAW
The department hereby adopts and incorporates by reference the conclusions of law set forth in the Recommended Order except as modified in the ruling on the department's exceptions.
Based upon the foregoing, it is
ADJUDGED, that the application of Suburban Medical Hospital, Inc.for certificate of need number 5868 be DENIED.
DONE and ORDERED this 30th day of May, 1991, in Tallahassee, Florida.
Robert B. Williams, Acting Secretary Department of Health and
Rehabilitative Services
by Acting Deputy Secretary for Program
COPIES FURNISHED:
Daniel C. Minkes, Esquire 17615 SW 97th Avenue Miami, FL 33157
Silvio Amico, Esquire 6401 SW 87th Avenue Suite 114
Miami, FL 33173
J. Stephen Menton Hearing Officer
Division of Administrative Hearings 1230 Apalachee Parkway
The DeSoto Building Tallahassee, FL 32399-1550
Thomas R. Copper, Esquire Assistant General Counsel Fort Knox Executive Center 2727 Mahan Drive, Room 103
Tallahassee, FL 32308
Kyle Saxon, Esquire
CATLIN, SAXON, TUTTLE & EVANS
1700 Alfred I. DuPont Building
169 East Flagler Street Miami, FL 33131
Jay Adams, Esquire 1519 Big Sky Way Tallahassee, FL 32301
Jean Laramore, Esquire 7007 McBride Pointe
Tallahassee, FL 32312
Wayne McDaniel
Nell Mitchem (PDRFM) Susan Lincicome (PDRHD)
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a copy of the foregoing was sent to the above named people by U. S. Mail this 3rd day of June, 1991.
R. S. Power, Agency Clerk Assistant General Counsel Department of Health and
Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407 Tallahassee, FL 32399-0700 904/488-2381
A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF HRS, AND A SECOND COPY, ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.
| Issue Date | Proceedings |
|---|---|
| Mar. 22, 1991 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| May 30, 1991 | Agency Final Order | |
| Mar. 22, 1991 | Recommended Order | Application to convert ambulatory surgery center to acute care osteopathic hospital denied; Evidence did not establish financial feasibility; faciltiy didn't meet code |
