STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
WELLINGTON REGIONAL MEDICAL ) CENTER, INC., d/b/a WELLINGTON ) REGIONAL MEDICAL CENTER, )
)
Petitioner, )
)
vs. )
)
AGENCY FOR HEALTH CARE ) ADMINISTRATION and BETHESDA ) HEALTHCARE SYSTEM, INC., d/b/a ) WEST BOYNTON COMMUNITY )
HOSPITAL, )
)
Respondents. )
Case No. 05-2352CON
)
JFK MEDICAL CENTER LIMITED ) PARTNERSHIP, d/b/a JFK MEDICAL ) CENTER, )
)
vs. )
)
AGENCY FOR HEALTH CARE ) ADMINISTRATION and BETHESDA ) HEALTHCARE SYSTEM, INC., d/b/a ) WEST BOYNTON COMMUNITY )
HOSPITAL, )
)
Respondents. )
Case No. 05-2594CON
)
TENET HEALTHSYSTEM HOSPITALS, ) INC., d/b/a DELRAY MEDICAL ) CENTER, )
)
vs. )
)
AGENCY FOR HEALTH CARE ) ADMINISTRATION and BETHESDA ) HEALTHCARE SYSTEM, INC., d/b/a ) WEST BOYNTON COMMUNITY )
HOSPITAL, )
)
Respondents. )
Case No. 05-2753CON
)
RECOMMENDED ORDER
Pursuant to notice, the Division of Administrative Hearings, by its designated Administrative Law Judge, David M. Maloney, held a final hearing in the above-styled case on
April 3-7, 10-14, 17-20, 25-28, May 1-5, 8-13, and 15, 2006, in
Tallahassee, Florida.
APPEARANCES
For Wellington Regional Medical Center, Inc., d/b/a Wellington Regional Medical Center:
Robert D. Newell, Jr., Esquire David Terry, Esquire
Newell & Terry, P.A. 817 North Gadsden Street
Tallahassee, Florida 32303-6313
For JFK Medical Center Limited Partnership, d/b/a JFK Medical Center:
Stephen A. Ecenia, Esquire
J. Stephen Menton, Esquire Rutledge, Ecenia, Purnell &
Hoffman, P.A. Post Office Box 551
Tallahassee, Florida 32302-0551
For Tenet Healthsystem Hospitals, Inc., d/b/a Delray Medical Center:
C. Gary Williams, Esquire Dylan Rivers, Esquire Ausley & McMullen
Post Office Box 391 Tallahassee, Florida 32302
For Bethesda Healthcare System, Inc., d/b/a West Boynton Community Hospital and Bethesda Memorial Hospital:
John H. Parker, Esquire David Fenstermacher, Esquire
Parker, Hudson, Rainer & Dobbs, LLP 1500 Marquis Two Tower
285 Peachtree Center Avenue, Northeast Atlanta, Georgia 30303
and
Karen Putnal, Esquire
Parker, Hudson, Rainer & Dobbs, LLP The Perkins House, Suite 200
118 North Gadsden Street Tallahassee, Florida 32301
For Agency for Health Care Administration:
Michael O. Mathis, Esquire Sandra Allen, Esquire
Agency for Health Care Administration Fort Knox Building III, Suite 3431 2727 Mahan Drive
Tallahassee, Florida 32308 STATEMENT OF THE ISSUE
Bethesda Healthcare Systems, Inc., filed Certificate of Need Application No. 9838 with the Agency for Health Care Administration. The application seeks authority to establish an 80-bed acute care satellite hospital in the West Boynton area of south Palm Beach County. The issue in this case is whether the Agency should approve the application.
PRELIMINARY STATEMENT
Bethesda Healthcare System, Inc. ("Bethesda" or the "Bethesda System"), filed CON Application No. 9838 in
March 2005, to establish an 80-bed satellite hospital, in Acute Care Subdistrict 9-5 of Health Service Planning District 9. The proposed site for the hospital is in an unincorporated area of south Palm Beach County referred to in an earlier case as the West Boynton area. Bethesda, accordingly, will call the hospital West Boynton Community Hospital (WBCH). In connection with the project, Bethesda proposes to delicense 80 acute care beds from Bethesda Memorial Hospital ("BMH"), located in the City of Boynton Beach.
Bethesda's application is its second for a satellite hospital in the West Boynton area. Bethesda's previous application (CON 9659) was filed in the same batching cycle with an application (CON 9660) by JFK Medical Center, also for an 80- bed satellite hospital in the West Boynton area. The two applications were denied by Final Order of the Agency on
March 7, 2005, following an administrative hearing at the Division of Administrative Hearings (DOAH). See Wellington Regional Medical Center, Inc., d/b/a Wellington Regional Medical
Center v. AHCA, et al., Case No. 03-2701CON, (DOAH September 29, 2004; AHCA March 7, 2005).
The proceeding involving the two applications that were denied in March of 2005 will be referred-to in this order as "Bethesda I" or as the "Bethesda/JFK Case." This proceeding
(CON 9838) will be referred to in this Recommended Order as Bethesda II.
Bethesda's Omissions Response in Bethesda II was filed on April 20, 2005. On June 17, 2005, AHCA issued a State Agency Action Report (“SAAR”) preliminarily recommending that Bethesda's CON Application No. 9838 be approved.
Subsequently, Wellington Regional Medical Center, Inc., d/b/a Wellington Regional Medical Center ("Wellington" or "WRMC"); JFK Medical Center Limited Partnership, d/b/a JFK Medical Center ("JFK"); and Delray Medical Center, Inc., d/b/a Delray Medical Center ("Delray") filed petitions for a formal administrative hearing in challenge to AHCA's initial decision. The petitions were consolidated. The consolidated cases in Bethesda II proceeded to final hearing in May 2006.
Prior to hearing, Delray moved for a summary recommended order to deny the application. Delray asserted that the application had not alleged a material change in circumstances between Bethesda I and Bethesda II. On that ground, among others, Delray claimed that the doctrine of administrative finality required entry of a summary recommended order of denial. Bethesda responded that, in addition to lapse in time (often enough to defeat application of the doctrine of administrative finality in the CON arena) and a change in the CON Law, the application in Bethesda II is supported by a
"plethora of new facts, changed conditions, and additional submissions." Bethesda's Response to Delray's Motion for Summary Recommended Order, at 13, filed March 20, 2006. Not the least of the new matters detailed by Bethesda were "current and projected population, demographic, utilization, and uncompensated care data regarding the proposed service area [for] Bethesda existing hospitals that is substantially different from the data presented in the 2003 application." Id.
Given that there is no authority in Florida administrative proceedings for a motion for summary recommended order, Delray's motion was treated as a motion for relinquishment of jurisdiction on the basis of the absence of material issues of disputed fact. The motion was denied in light of the allegations made by Bethesda that the petition was supported by new matters.
In another pre-hearing submission, Delray stated that Bethesda should be required to demonstrate a change in circumstances that could support a change in outcome from Bethesda I. In other words, Delray argued that, if during hearing Bethesda failed to show new matters in support of approval, then the doctrine of administrative finality would support entry of an order consistent with the Bethesda I final order. (At hearing, the earlier order was clarified; new matters in support of approval would have to be shown to justify
preclusion of application of the doctrine of administrative finality. See Tr. 8-9.) Upon consideration of the motions, the responses, and the evidence in this proceeding, and the arguments of the parties, all motions to apply administrative finality under Bethesda I to the Bethesda II application are hereby denied.
A Joint Prehearing Stipulation was adopted by all the parties on March 30, 2006, which included the following stipulations (pp. 10-11):
The parties stipulate that a timely and complete letter of intent, CON application, and omissions response were filed by Bethesda and processed by the Agency, leading to a timely preliminary recommendation of the Agency in compliance with technical requirements, including those set forth in Section 408.037, Fla. Stat.; Section 408.039(2)(a), (c), and (d), Fla. Stat.; Section 408.039(3)(a), Fla. Stat.; Section 408.039(4)(b) and (c), Fla. Stat.; and Rule 59C-1.008, F.A.C.
Bethesda Healthcare System, Inc. can build the proposed satellite hospital on the land northeast of the intersection of Boynton Beach Boulevard and State Road 7 (a/k/a Hwy. 441), which it has purchased and currently owns, for the projected total project costs of approximately $82.4 million.
Bethesda can obtain sufficient financing to cover the projected total project costs, including development, construction, equipping, initial capital, and operating expenses for start up of the proposed satellite hospital.
The architectural schematics, project completion schedule, design narratives, and code compliance information set forth in Bethesda's CON application are reasonable.
Consistent with the above stipulations, Schedules 1, 2, 3, 9, and 10 of Bethesda's CON application/Omissions Response are not in dispute, and the information and projections contained therein are adequate and reasonable.
The projected staffing and salaries, other than nursing, set forth in Schedule 6A of Bethesda's CON application are adequate and reasonable, and are not in dispute.
Infection rates at existing hospitals are not in dispute.
The petitions were timely filed.
After the filing of the pre-hearing stipulation, the final hearing was held. The transcript of the final hearing was filed with DOAH on June 19, 2006.
At the final hearing, Bethesda presented the testimony of the following witnesses: Robert Hill, President and Chief Executive Officer ("CEO") of Bethesda Healthcare System, Inc., expert in hospital and health care system administration; Richard Raborn, M.D., president of Bethesda's medical staff, Medical Director of the Caridad Clinic, and an expert in internal medicine; Miguel Lopez-Viego, M.D., expert in general surgery; Nigel Baker, a Battalion Chief of Palm Beach County Fire Rescue; Roger Brito, M.D., expert in medical oncology and hematology; Mark Brody, M.D., expert in neurology;
Sandra Greenberg, president of the Coalition of Boynton West Residential Associations ("COBWRA"); Somnath Nair, M.D., expert in neurological surgery; Valentina Gherghina, M.D., expert in family practice medicine; Michael Kuhse, expert in civil and structural engineering; Sheila Elijah-Barnwell, expert in health care architecture and design; Steven Rooney, M.D., expert in radiology; Geralyn Lunsford, R.N., Bethesda's vice president of Patient Services, expert in nursing and nursing administration; Regina Crafa, Bethesda's vice president of Human Resources, expert in human resources administration; Gerald Rosenberg, Chairman of the Macular Disease Association of Boynton Beach; Christopher Schirmer, M.D., expert in emergency medicine and emergency department management; Claire Arnold, Bethesda's Infection Control and Environmental Regulations Manager, expert in infection control; Joanne Aquilina, Bethesda's Vice President of Finance and Chief Financial Officer ("CFO"), expert in health care finance; Kieran Kilday, expert in land planning and zoning; Michael Carroll, Managing Director at Tribrook Healthcare Consulting ("Tribrook"), expert in health planning and health care finance; James Byrnes, M.D., expert in family medicine; William Cleverley, Ph.D., expert in health care finance;
Robert Rennebaum, expert in civil engineering with a specialty in traffic and traffic engineering; and Jeffrey Gregg, Chief of
AHCA's Bureau of Health Facility Regulation, expert of the CON program for the State of Florida.
Bethesda also presented the deposition testimony of Sheila Berman (Ex. B-48); William Jeffrey Davis, M.D. (Ex. B- 50); Alan Goldberg (Ex. B-51); Jill Gregory (Ex. B-53); Edward Greiner (Ex. B-54); Arthur Grossman (Ex. B-55); Josephine Koch (Ex. B-56); Stephen Krayanek (Ex. B-57);
Bertram Linder (Ex. B-58); Skip Marsh (Ex. B-59); Sonny Nguyen,
(Ex. B-60); Heather Rohan, former CEO of Palms West Hospital (Ex. B-62); Martin Rose (Ex. B-63); Jakob Schaffhauser (Ex. B-64); Leslie Shriberg, Community Relations Coordinator for the Palm Beach County Sheriff's Office (Ex. B-65);
Thomas Davidson (Ex. B-66H); and Charles Posternak, M.D. (Ex. B- 132).
Bethesda Exhibits B-1A through B-1F; B-2A through B-2I; B- 2M through B-2S; B-3A through B-3C; B-4; B-5; B-8A through B-8G; B-9B; B-10; B-11; B-11B; B-12; B-14; B-15J; B-15K; B-15O; B-15P;
B-15-2; B-16A; B-16B; B-16D; B-16I; B-17; B-17-1; B-17-2; B-18;
B-18A through B-18H; B-20A through B-20L; B-20O through B-20Q; B-21; B-22A; B-23A through B-23E; B-24; B-25; B-26A through B-
26E; B-26-1; B-26-2; B-27D; B-28A; B-28B; B-28E; B-28F; B-29; B-
30A through B-30C; B-30E; B-30E.1 through B-30E.3; B-30F.1 through B-30F.3; B-30G.1, B-30G.2; B-30H; B-30I; B-32 through B- 35; B-36A; B-37; B-38A; B-38B; B-39A; B-41; B-42; B-43A through
B-43C; B-43E through B-43G; B-44; B-45A; B-45A.1; B-45B through B-45I; B-46; B-47A; B-47C; B-48; B-50 through B-60; B-62 through B-65; B-65-5; B-66A; B-66H; B-66-5; B-67C; B-67F, B-67H; B-67M;
B-67O; B-67S; B-67-5; B-67-6; B-68B; B-69A; B-71A through B-71C; B-71C.1; B-71D; B-71H; B-71I; B-71M; B-71N; B-71V through B-71X; B-72B through B-72D; B-72-1; B-73A; B-73C through B-73I; B-73L; B-73P through B-73R; B-73-2; B-74A; B-74E; B-74H; B-75E through B-75G; B-79; B-82; B-83; B-86; B-90; B-93; B-95; B-95.1 through B-95.3; B-101; B-103; B-106; B-114; B-127 through B-133; B-135
through B-142; B-144 through B-147; B-148A through B-148E; B- 148G; B-149; B-150; B-154; B-158 through B-161; B-163; and B-166
were received into evidence.
The Agency did not offer any exhibits. Nor did it call any witnesses; it did opt, however, to adopt the testimony of Jeffrey Gregg, Chief of AHCA's Bureau of Health Facility Regulation, as presented by Bethesda.
JFK presented the testimony of the following witnesses at final hearing: Gina Melby, expert in hospital administration; James Jaffe, M.D., expert in interventional neuroradiology; Jay Midwall, M.D., expert in cardiology and interventional cardiology; Alan Pillersdorf, M.D., expert in plastic surgery, general surgery, and hand surgery; James Goldenberg, M.D.,
expert in neurology; Samuel Lederman, M.D., expert in obstetrics and gynecology; Kenneth Scheppke, M.D., expert in emergency
medicine and emergency department administration; Trudy Bromley, expert in healthcare human resources management;
Madeline Christopher, expert in the field of physician recruitment; Darryl Weiner, expert in health care finance and financial feasibility determination; Phillip W. Ludwig, M.D., expert in pulmonary medicine and intensivist medicine; and Ronald Luke, Ph.D., expert in health care planning, health policy, and health economics.
JFK also presented the deposition testimony of
Somnath Nair, M.D. (Ex. JFK-112); Eric Kramer, M.D. (Ex. JFK- 129); Mark Goldstein, M.D. (Ex. JFK-130); Michael Lakow, M.D. (Ex. JFK-131); Santiago Hernandez, M.D. (Ex. JFK-132);
Steven Dutcher, M.D. (Ex. JFK-133); John Levin, D.P.M. (Ex. JFK- 134); Gerardo Aquirre, M.D. (Ex. JFK-135); Malcolm Dorman, M.D. (Exs. JFK-136 & 137); John McHenry, Ph.D. (Ex. JFK-138); and Jeffrey Gregg (Ex. JFK-139).
JFK Exhibits JFK-8, JFK-9; JFK-12A; JFK-12B; JFK-16; JFK- 17; JFK-21; JFK-25; JFK-42; JFK-43; JFK-43A through JFK-43C; JFK-47; JFK-55; JFK-61; JFK-73; JFK-89; JFK-105; JFK-112 through JFK-124; JFK-126; JFK-127; and JFK-129 through JFK-139 were
received into evidence.
Delray presented the testimony of the following witnesses at final hearing: Craig Miller, expert in civil engineering with a specialty in transportation engineering and planning;
Mitch Feldman, expert in hospital administration and health care facility administration; Robert Greene, expert in health care planning; and Patricia Greenberg, expert in health care planning, health care finance, and financial feasibility for health care projects.
Delray's Exhibits D-1; D-3 through D-18; D-20; D-22; D-24; and D-25 were received into evidence.
Wellington Regional presented the testimony of the following witnesses at final hearing: Thomas Davidson, expert in health care planning and health care finance; Kevin DiLallo, expert in hospital administration; and David Soria, M.D., expert in emergency medicine and emergency department management.
Wellington Regional also presented the deposition testimony of Steven Filton (Ex. W-29); David Butz, Ph.D. (Ex. W-30); and Faustino Gonzalez, M.D. (Ex. W-31).
Wellington Regional's Exhibits W-1 through W-4; W-6 through W-15; W-17 through W-26; and W-28 through W-31 were received into evidence.
Official recognition was taken of the Bethesda I recommended and final orders.
Bethesda recalled Sheila Elijah Barnwell, Michael Carroll, and Robert Rennenbaum to present rebuttal testimony. Following the hearing, an Order was entered on July 20, 2006, addressing objections to the depositions offered into evidence.
All parties timely submitted proposed recommended orders in August 2006.
FINDINGS OF FACT
District, Subdistrict, Locations
The site for WBCH (or the "Proposed Hospital") is on the northeast corner of the intersection of Boynton Beach Boulevard and S.R. 7 (a/k/a "U.S. Highway 441"), approximately two miles west of the Florida Turnpike in an unincorporated area of Palm Beach County referred to by Bethesda as the West Boynton area.
District 9, composed of Indian River, Okeechobee, St.
Lucie, Martin, and Palm Beach Counties, is one of 11 health service planning districts in Florida. See § 408.032(5), Fla. Stat.
Subdistrict 9-5 (the "Subdistrict") consists of the southern portion of Palm Beach County as more particularly described by Florida Administrative Code Rule 59C-2.100(3)(i)5. The Subdistrict includes the West Boynton Beach area.
The inhabitable geographic area of the Subdistrict is bordered by Highway 98 on the North, the Atlantic Ocean on the East, the Palm Beach/Broward County Line on the South, and the Loxahatchee National Wildlife Refuge (the "Wildlife Refuge") on the West. It has three major and more or less parallel north- south transportation arteries: 1-95, the easternmost of the
three, close to the state's east coast; Florida's Turnpike, the most central artery; and U.S. Highway 441 (a/k/a State Road 7 or "SR 7"), the westernmost of the three arteries, not far from the Everglades. The Subdistrict is divided roughly in half by Boynton Beach Boulevard, which runs east-west from Route 1 on the east to SR 7 on the west.
The Subdistrict contains six hospitals: West Boca Medical Center, Boca Raton Community Hospital, Delray Medical Center, BMH, JFK Medical Center, and WRMC. Four of the 6 hospitals, JFK, BMH, Delray Medical Center, and Boca Raton Community Hospital, are arrayed north to south in proximity to the I-95 corridor. Two sit east of the corridor, Boca Raton and BMH; the other two are west of the corridor, JFK and Delray. The remaining two hospitals in the Subdistrict, WRMC and West Boca Medical Center are each located along or close to SR 7. The most northerly-situated of the six hospitals, WRMC, is 8.47 miles north of Boynton Beach Boulevard; West Boca Medical Center, the most southerly and at about the same latitude as Boca Raton Community Hospital, is located 12 miles south of the Boulevard.
Of the six Subdistrict hospitals two, Boca Raton Community Hospital and West Boca Medical Center, are not participants in the proceeding. The two are well south of Proposed Hospital's site, at a distance 25% or so farther from
the proposed site than any of the four Subdistrict hospitals that are participating in this proceeding.
If connected on a map by lines drawn from Delray to BMH, then from BMH to JFK, then from JFK to Wellington, the four participant hospitals (the applicant and the three intervenors), are arrayed in a crescent stretching from south to north. The crescent just about parallels the bend along the eastern boundary of the Wildlife Refuge. The southern tip of the crescent is at Delray Medical Center; heading north, BMH, east of the interstate is next. From BMH, the crescent curves westward as it extends north toward JFK. Its northern tip is at WRMC, well west of JFK. The site of the proposed project is not much east of the Wildlife Refuge, and at a point almost centered in relation to the four determinant locations of the crescent. Put another way, as the crow flies, the proposed site is generally equidistant from Delray, BMH, and JFK (11 to 12 miles) and slightly closer to WRMC (roughly 9 miles).
Parties
The Bethesda Healthcare System and its Facilities
Bethesda
Bethesda, a Florida nonprofit corporation, operates a local health care system in an area of south Palm Beach County it refers to as the "Boynton Area" because of its proximity to incorporated Boynton Beach. Its long-standing mission as a
community-based organization is to provide quality health care services to all the patients it serves, regardless of ability to
pay.
Bethesda commits its earnings to operations and to
reinvestment into new and expanded health care services and facilities for the Boynton area community. The Bethesda System includes BMH, Bethesda Health City, Inc., Bethesda Hospital Foundation, Inc., and other affiliated local entities that help advance Bethesda's mission. Bethesda is governed by local board members who are residents of its service area and are actively involved in the community.
Bethesda Memorial Hospital
BMH is a general acute care hospital located in Boynton Beach near the Atlantic coast, east of Interstate 95. Opened in 1959 as the first hospital in south Palm Beach County, BMH was originally established as a public hospital under the ownership and taxpayer support of the Southeastern Palm Beach County Hospital District, a public taxing district entity. In 1984, BMH was re-organized as a private nonprofit hospital under section 501(c)(3) of the Internal Revenue Code. In 1989, a county referendum replaced the hospital tax district with a county-wide healthcare district. BMH, therefore, no longer has any power to levy taxes; it doesn't receive any "tax revenues
that aren't eligible to every other hospital in Palm Beach County from the existing healthcare district." Tr. 77.
BMH currently has 390 licensed beds, including 347 acute care medical-surgical (“med-surg”) beds; a 15-bed Level II and Level III neonatal intensive care unit (“NICU”); and a 28- bed comprehensive medical rehabilitation ("CMR") unit, which opened in October 2005. BMH offers a wide variety of general inpatient med-surg services, an obstetrics ("OB") and perinatal program, and pediatric services. BMH offers numerous specialized adult services such as a comprehensive cancer program; a stroke center; a CMR unit; a comprehensive array of cardiology services, including diagnostic cardiac catheterization; a vascular institute; a full range of orthopedic services; and interventional radiology services, including neuroradiology. BMH also provides a host of hospital outpatient services, and it operates an active emergency department ("ED").
Bethesda has obtained CON approval to establish an interventional cardiology program (e.g., open heart surgery ["OHS"], angioplasty, and stents) at BMH, which is scheduled to open in late 2007. BHS also has CON exemptions to add eight cardiovascular ICU beds in connection with the interventional cardiology program and three NICU Level III beds, which will increase its total licensed capacity to 401 beds.
Bethesda Health City
In mid-1995, Bethesda opened Bethesda Health City, an ambulatory care facility in the West Boynton area, located south of the intersection of Hagen Ranch Road and Boynton Beach Boulevard, just east of the Florida Turnpike (the "Turnpike"). Population growth had begun to expand westward in Palm Beach County. The opening of Bethesda Health City followed Bethesda's perception of a need for health care services in the western unincorporated Boynton area.
At the time Bethesda Health City opened, the surrounding West Boynton area was primarily agricultural. A nearby elementary school that served the children of migrant farmworkers was the only development in the area. Today, the area surrounding Bethesda Health City east of the Turnpike, like much of West Boynton, is undergoing significant commercial and residential development. At the time of hearing, a Super Target Store had just opened on the corner of Boynton Beach Boulevard and Hagen Ranch Road. A medical office building in the vicinity of Bethesda Health City was constructed in the last two or three years which is true of much of the nearby construction. The area is expected to continue to grow at a rapid pace as evidenced by new, large, project approvals that have taken place over the last two to three years, as well.
Bethesda Health City offers certain outpatient services, such as outpatient imaging, radiation therapy, wound care, and physical therapy. Bethesda Health City also is the site of around 20 physicians' offices. All 135,000 square feet of existing space at Bethesda Health City currently is being utilized by Bethesda or is under lease to other health care providers, and Bethesda plans to open an additional 40,000 square feet of space on the remaining available land over the next year.
Bethesda has about a 10% ownership interest in a limited liability company ("LLC") that operates an ambulatory surgery center at Bethesda Health City.
The Proposed West Boynton Community Hospital
With the orientation of the West Boynton Area of south Palm Beach County in mind, Bethesda purchased a site for the Proposed Hospital. The site is large enough to allow for the development of medical offices and ancillary facilities on the campus of WBCH.
If approved and built, WBCH will include 68 med-surg beds and 12 critical care beds, all in private rooms, and an emergency department ("ED") with 12 treatment bays and an additional 6 observation beds. It will have an integrated operating room ("OR") suite for both inpatient and outpatient surgery services. WBCH will provide the same scope of general
medical/surgical inpatient, outpatient, and emergency acute care services that are currently offered at BMH, including stroke, oncology, and related clinical research programs, with the exception of OB and NICU services, diagnostic cardiac catheterization, and radiation therapy.
Bethesda plans to transfer 80 beds from BMH to WBCH. The transfer will enable BMH to convert its semi-private rooms to private rooms. It will not solve BMH's problem with overcrowding in its Emergency Department ("ED") but it will aid in relieving some of the pressure on the Emergency Room ("ER") and staff. The decompression will result from choice exercised by Bethesda emergency patients in the WBCH service area. It is reasonable to assume that those who reside closer to the WBCH ED than other Subdistrict EDs will typically choose WBCH over other facilities for the sake of convenience and in hope of receiving necessary treatment more quickly.
AHCA
The Agency is responsible for the administration of the CON program in Florida, including the evaluation of CON applications. See § 408.034, Fla. Stat. The Agency issued the SAAR in this case. Signed by AHCA's CON Bureau Chief, the SAAR contains the Agency's preliminary decision to approve the application, a decision AHCA has supported throughout the proceeding.
WRMC
Wellington Regional Medical Center is a full service 143-bed acute care hospital (133 acute care and 10 NICU level II beds) located at the intersection of State Road 7 and Forest Hill Boulevard. The Hospital was established in 1986. WRMC has over 470 physicians on its medical staff.
WRMC provides all medical surgical services, including emergency medicine, required of and traditionally associated with a full service acute care hospital. WRMC offers additional specialized programs including obstetrics, NICU level II (with approval for NICU level III), specialized wound care, outpatient diagnostics and a Cancer Center.
The full service Cancer Center at WRMC was established
15 years ago and has evolved to be the technological equivalent of some of the major cancer centers in Florida and nationally. The Center has advanced IRMT linear accelerators that pinpoint different types of cancers and equipment to provide high dose radiation (HDR). The Center provides 3D conformal configuration for tumors and is also installing Brian LAB, an advanced cancer therapy treatment. The Center is available and accessible to patients requiring cancer treatment in all its forms.
The Outpatient Diagnostic Center at WRMC is user friendly. Opened in 2001 at a cost of $4.5 million, the Diagnostic Center is on the hospital campus but physically
separate from the hospital. State of the art diagnostic equipment is tied to a PACS, which lets a patient's physician anywhere in the world view digital images of the patient via the internet. In the filmless environment of PACS, the patient receives a convenient CD ROM of their images.
WRMC has a dedicated wound care program. The medical component consists of physicians and nurses who specialize in the debridement and treatment of difficult to heal wounds. The second component utilizes three hyperbaric chambers, which create atmospheres of 100% pressurized oxygen to expedite the wound healing.
WRMC has a bariatric program for the management of morbid obesity. A specialized component of the program is gastric bypass surgery. The program targets complications that result from morbid obesity, high blood pressure and diabetes.
JFK
JFK Medical Center is an acute care hospital located on Congress Avenue in Palm Beach County. JFK operated as a not- for-profit hospital for almost 30 years before it was acquired by HCA in 1996 for approximately $251 million. The purchase price paid by HCA for JFK was used to pay off the hospital's debt and the remaining approximately $121 million was used to create the Quantum Foundation which funds a variety of health related projects in the area.
In the wake of the acquisition, HCA has invested substantial amounts of money to upgrade JFK. The upgrades include a 40,000 square foot cancer facility, major plant and equipment improvements and significant expansions of the cardiac center. JFK has built three new cardiac catheterization labs, a new recovery area, an electro-physiology lab and two parking garages. JFK added 36 beds in early 2000 through a two story expansion and then completed a $76 million, five-story expansion in 2003 that tripled the size of the emergency room, added new ICUs and added 36 ICU beds. Since the acquisition by HCA, the exterior of the hospital has been upgraded and new equipment, including new chillers and boilers, has been added. The community image of the hospital and the morale of its employees have significantly improved since its acquisition by HCA.
JFK currently has 424 adult acute care beds. JFK is the planning process to add 36 additional beds by building out shelled in space on the fifth floor of the recently constructed patient tower. This build-out will bring JFK's bed compliment up to 460. JFK has the ability to expand further by adding another 36 beds by constructing two floors to the northwest tower which was engineered and built to hold the additional two floors. In sum, JFK has the ability to add 72 beds to its existing campus. After that, JFK could also expand by purchasing property contiguous to its existing parking garage
and moving certain administrative services from the existing hospital space and converting that space to hospital beds.
JFK has received accreditation with commendation by JCAHO.
In order to be a member of the JFK medical staff, a physician must achieve and maintain Board certification in his or her specialty area.
JFK is in the top ten hospitals in the nation for working mothers.
JFK accepts all patients without regard to their ability to pay. In 2005, JFK provided approximately $90 million in uncompensated care.
JFK's focus is primarily on orthopedics, cancer, cardiac services, neurosciences and internal medicine.
JFK, as a complex facility committed to offering high quality services, has kept up with rapid advances in medical technology, particularly in the areas of cardiac and bariatric services. JFK is also a center of medical excellence with high quality services in neurosurgery and multiple areas of general vascular surgery. In order to keep up with the rapid changes in cardiology JFK has made significant investments and commitments. Since 1987, it has installed three cardiovascular laboratories and replaced the equipment in them once. It has developed an
electrophysiological program with two electrophysiological suites.
An active participant in some of the recent, major innovations in cardiac care, JFK's cardiac program has been the busiest in Palm Beach County for many years. It is unique in that all the doctors associated with the cardiac program are hospital-based; none have a private practice. There are three open-heart surgical suites with seven or so cardiovascular surgeons on staff. There are five interventional cardiologists among 30-board certified clinical cardiologists and 5 electrophysiologists. Each has a volume of work that exceeds the average volume of physicians in Palm Beach County.
The success of the cardiac program has enabled JFK to develop a number of other programs that have enhanced the level of sophistication of medical services in South Palm Beach County.
JFK was recently certified as a chest pain center by a national accrediting organization that employs rigorous criteria for certification. In the certification process, emergency management services in Palm Beach County were praised by the organization for bypassing local hospitals to go to JFK as a primary angioplasty site, a practice that is gaining hold in Florida, in general.
JFK has also established a vascular institute which utilizes a team approach with three different disciplines coming together: interventional radiology, cardiology, and vascular surgery. The ability to put together an effective team for this type of sophisticated approach is dependent upon the size of the hospital. JFK is investing in advanced technology in order to enhance its vascular service line. It is building two vascular suites "to do the same kind of stenting and intervention to
. . . patients, but not necessarily in their heart, in the rest of the blood vessels in their body." Tr. 3750.
In addition, at the time of hearing, JFK was in the process of implementing procedures that employ a gamma knife, a highly sophisticated radio-surgical tool for the treatment of brain and spine lesions. The use of a gamma knife under the direction of a neurosurgeons with the assistance of a radiologist or radiation oncologist minimizes the amount of tissue to be removed in lesion surgery. The procedure has multiple benefits including minimization of strokes. Most hospitals do not have access to gamma knives which cost in excess of $4 million.
JFK has made other commitments that will enhance the level of services that are being delivered to residents of Palm Beach County. For example, JFK has made commitments to buy state-of-the-art equipment for performing more complex neuro-
interventional procedures to be conducted by James Jaffe, M.D., an interventional neuro-radiologist who practices at JFK and who is one of the few interventional neuro-radiologists practicing in all of Florida.
JFK is a JCAHO-certified stroke center, having met the rigid qualifications that only a limited number of hospitals nationwide and few hospitals in the Palm Beach area have met. Accredited by JCAHO in January 2006 as a primary stroke center, JFK hopes to become a comprehensive stroke center so designated by the state. To do so will require meeting criteria that JFK does not yet meet. But its intention to meet them is serious. At the time of hearing, JFK had plans to meet with its stroke team to work through the steps required to achieve certification to ensure the critical components necessary for the certification are in place prior to seeking it. Most clearly indicative of the seriousness of its intentions is the presence of Dr. Jaffe in the radiology group on staff to JFK. The full- time presence at a facility of an interventional neuro- radiologist is among the requirements for designation as a comprehensive stroke center by the state.
Delray
The ultimate parent company of Delray is Tenet Healthcare, which owns other hospitals throughout the country. Tr. at 4743.
Tenet owns four acute-care hospitals in Palm Beach County in addition to Delray: West Boca Medical Center, Good Samaritan, St. Mary’s, and Palm Beach Gardens hospitals.
Each hospital is its own corporation and has its own local governing board that, among other things, is responsible for ensuring the quality of care in the hospital, credentialing of all health professionals, and approving appointments to the medical staff, as well as clinical policies, procedures, and protocols for patient care.
Delray is a 403-bed, for-profit hospital in Delray Beach in southern Palm Beach County.
Located in zip code 33484, near the eastern boundary of zip code 33446, one of the six zip codes designated as the service area of the proposed WBCH, Delray is around 2.5 miles south of Atlantic Boulevard.
Delray opened in 1982. It is accredited by JCAHO and recently received accreditation as a stroke center.
Delray provides tertiary-level care. It is also one of the two state and county designated trauma centers in Palm Beach County. St. Mary's (another Tenet hospital), located in West Palm Beach, serves the northern part of the county, and Delray the southern part, from the Broward County line south of Delray to Southern Boulevard north of the hospital.
As a Level II Trauma Center, Delray must meet certain requirements that relate to the efficiency and speed with which advanced trauma care can be delivered to trauma victims. Among these are the ability to have neurosurgeons and orthopedic surgeons available to assist the trauma surgeon within 15 minutes of receiving a call for assistance. The trauma service offered by Delray significantly raises the intensity of the services offered at the hospital.
Delray is located on a “campus” that includes the hospital building, a large outpatient diagnostic center, a wound care center, a trauma aftercare center, a 53-bed inpatient psychiatric facility known as Fair Oaks Pavilion, a CMR facility known as Pinecrest Rehabilitation Hospital, and a nursing home known as Lakeview Care Center.
Delray’s 403 licensed beds include the 53 inpatient psychiatric beds at its in-patient psychiatric facility known as Fair Oaks Pavilion ("Fair Oaks"). The remaining 350 acute care beds consist of 298 medical-surgical beds and 52 critical care beds that are located throughout the hospital in various departments. Specifically, there is a 14-bed trauma ICU, 8-bed neurosurgical ICU, 8-bed coronary care unit (“CCU”), 15-bed surgical ICU, and a 7-bed medical ICU.
All of the ICU beds are private, and Delray has 102 private beds in total. The rest of its beds are semi-private.
Delray recognizes that "[p]atient preferences seem to be moving more toward private rooms," tr. 4760, but the hospital's semi- private rooms have not caused substantial operational difficulties for Delray.
Delray is a highly-utilized facility, as it was at the time of Bethesda I. It recently converted a 42-bed unit to telemetry beds because of the heightened demand for such beds during the peak “season” in South Florida (winter months), and to lessen the instances where patients are held in the ER waiting for a bed. These beds reduce the time between when patients are admitted to the hospital and when they are actually placed in an inpatient bed.
Delray also added 31 acute care med-surg beds (also referred to as "surge ortho," beds at hearing, see tr. 4808), in December 2005 in anticipation of that season’s activity. With the addition of the 31 beds, occupancy rates did not rise during the 2005-2006 winter season.
Although it has the ability to add more beds, Delray has no current plans to do so. It is observing a number of market forces that could reduce the need for Delray beds in the near term, such as the opening of the interventional cardiology and open heart surgery programs at BMH and Boca Raton Community Hospital.
Delray also anticipates, similar to JFK, that its census could be affected should Boca Raton Community Hospital follow through on its announcement that it will build a 500-bed teaching hospital on the campus of Florida Atlantic University. The hospital would add 100 beds to Boca Raton's inventory.
Whatever the effect of these market forces, Delray has the ability to expand further and add more beds. It has a site plan approved by local government for 616 beds on its campus as it did at the time of Bethesda I. The campus includes the hospital building with 350 beds, Fair Oaks and its 53 psychiatric beds and a 90-bed comprehensive medical rehabilitation hospital known as Pinecrest Rehabilitation Hospital for a total of 502 beds. Some beds that did not exist at the time of Bethesda I (although recognized as likely at the time to be added soon) have since been added, such as the 31 med surg beds added in December 2005.
Delray is also completing construction on a new central energy plant, and construction is beginning on a new emergency department that should be completed in a year and a half.
The new emergency department will increase the number of ER treatment rooms at Delray from 24 to 36, and will have 3 distinct trauma rooms in it.
In addition, Delray has recently added two major imaging instruments in its radiology department and a new 64- slice CT scanner, and is planning to add a new MRI unit in an expanded area constructed in conjunction with the new ER.
The radiology department is in the process of implementing the “PACS” system. Instead of film, it uses digital images that can be emailed, remotely accessed and viewed, and electronically stored. This technology allows for more prompt diagnoses by doctors and efficient use of time and space.
Delray has plans for renovations in its pharmacy, remodeling its regency unit, adding electrophysiology to its cardiac services, and some disaster preparedness upgrades such as hurricane windows.
The services provided at Delray include general medical and surgical services, trauma, interventional cardiology, open-heart surgery, in-patient psychiatric services, orthopedics, gastroenterology, urology, neurology and neurosurgery. These services reflect the chronic illnesses and co-morbidities of its predominantly elderly patient population. Because of this patient demographic, Delray does not provide OB services.
Delray has been the only provider of inpatient psychiatric services in south Palm Beach County since
October 2001 when Bethesda Memorial discontinued its program.
Since 1991, Delray has been one of two state- designated Level II trauma centers in Palm Beach County. This designation requires that Delray have a neurosurgeon, trauma surgeon, orthopedic surgeon, anesthesiologist, and other specialists and specialized equipment and facilities available at all times. Being a trauma center also means that Delray has a higher acuity and intensity of patient conditions that often include the most severe injuries that require long recovery times.
Delray receives funding from the Palm Beach County Healthcare District to help offset a portion of the costs associated with providing trauma services. There is a cap to this funding. The cap is generally reached "at about month 9," tr. 4785, so that three months of the year are uncovered by public funding. Approximately $1-million in trauma care provided by Delray, therefore, is not covered by funding from the Healthcare District.
Delray accepts all patients without regard for ability to pay.
Bethesda I: The 2003 Bethesda/JFK CON Applications
In the early part of 2003, Bethesda filed CON Application No. 9659. In the same batching cycle, JFK filed CON Application No. 9660. Each application sought approval to establish a satellite hospital in the West Boynton area.
AHCA issued a SAAR in June of 2003. It preliminarily approved Bethesda's application and denied JFK's.
An administrative hearing on the applications commenced on February 5, 2004.
By Recommended Order dated September 29, 2004, the Administrative Law Judge ("ALJ") recommended denial of both the Bethesda and the JFK applications. A final order denying both applications was issued by AHCA on March 7, 2005 (the "Bethesda I Final Order"). Since the close of final hearing in this case, the final order has been affirmed by the Fourth District Court of Appeal. See Bethesda Healthcare System, Inc. v. Agency for Health Care Administration, 4th DCA Case No. 4D05-1430.
Unlike Bethesda, JFK decided not to re-apply for a CON to authorize a satellite hospital in the West Boynton Area.
JFK's Decision Not to Re-apply
The decision not to re-apply was made by JFK's CEO despite the import of the West Boynton area "market" to JFK. This import is demonstrated, inter alia, by JFK's construction
of an office building in the West Boynton area that includes a wound care center and diabetes center.
The decision of JFK's CEO was supported by several factors. First, JFK accepted the decision in Bethesda I. Second, JFK's CEO concluded that a small community hospital was not the best way to meet the health care needs in the West Boynton area for a number of reasons, among them changes in the CON regulatory arena and advances in the delivery of health care services. Third, JFK established both a hospitalist program and an intensivist program to better ensure prompt and effective care for its patients, strategies that will enhance the quality of health care services in the Subdistrict. These programs are expensive. They represent a direction taken by JFK in the use of its resources for meeting the healthcare needs of its patients different from the direction it pursued in Bethesda I.
With regard to changes in the CON regulatory arena, the ability of existing hospitals to add beds has been deregulated. Furthermore, opening soon in District 9 are three new open heart programs that will significantly affect other existing providers in the district, including JFK and Delray.
As for advances in the delivery of health care services, programs such as the intensivist program provide great benefits to patient care and outcomes. Because there is a specially trained physician present in the ICU 24 hours a day,
delay in evaluation and management of the patient is greatly reduced. Moreover, patients and their families' satisfaction levels improve.
Since starting the intensivist program, the number of cardiac arrests at JFK has been cut in half and the survival rate is up to 70% from 50%. More generally, studies have shown that if a hospital has an intensivist working 24 hours a day, seven days a week, the mortality rate for intensive care unit patients goes down 40%.
The cost to a hospital to implement an intensivist program is very high, but patients get better care and get out of the ICU more quickly. For an intensivist program to be effectively implemented, a hospital needs a significant volume of ICU admissions.
Bethesda II
Bethesda filed CON application 9838 in the first "hospital beds and facilities" batching cycle of 2005.
The acute care bed need rule, Florida Administrative Code Rule 59C-1.038, was repealed effective April 21, 2005. The repeal of the rule took effect subsequent to the filing of Bethesda's application but prior to the issuance of the SAAR by AHCA and initiation of this formal administrative proceeding.
The parties stipulated that the letter of intent, CON application, and omissions response were timely filed by
Bethesda and processed by AHCA in compliance with the statutory technical submittal requirements.
The Omissions Response was filed on April 20, 2005.
Dated and received by the Agency that same day is a letter from counsel for Delray (the "Delray Letter"). Its opening paragraph states, in part, the following:
Even though Bethesda Healthcare System (Bethesda) filed an incomplete "shell" application, it is clear there is no need for a new acute care hospital in Palm Beach County, including the west Boynton Beach area. It is also clear there are no historical or projected access problems in the west Boynton Beach area that have affected or are projected to affect outcomes or quality of life. Moreover, a significant number of additional acute care beds have been approved by your Agency in the past two to three years to serve current and future residents of the proposed service area.
These statements are based on the Final Order by AHCA in Bethesda's March 2003 CON application (#9659) for a similar project (Case No. 03-2701). This Final Order was recently entered on March 7, 2005 and there have been no significant changes of any kind that should change AHCA's position on new hospital construction in the west Boynton area. We therefore urge AHCA to deny Bethesda's application.
Delray Ex. 9, (emphasis supplied).
On June 17, 2005, the Agency issued its State Agency Action Report (the "Bethesda II SAAR"). The Bethesda II SAAR recommended approval of Bethesda's application.
The Bethesda II SAAR on its first page makes reference to the Delray Letter. In doing so, it summarizes the letter's content and specifically refers to the Delray Letter's synopsis of the highlights in the Bethesda I Final Order to support Delray's call for the denial of the application in Bethesda II:
This letter [the Delray letter] references Bethesda's previous attempt to establish a satellite facility in West Boynton (CON #9659) and provides highlights of the Final Order [footnoted reference to DOAH Case No. 03-2701] signed by the Agency Secretary on March 7th, 2005, which details the Agency's ultimate reasoning for denying a Certificate of Need (CON) to construct a Bethesda West facility.
Ex. B-1F, at 1. The Bethesda II SAAR goes on to detail the arguments advanced by Delray for denial of the application as presented in what the Bethesda II SAAR denominates "this opposition letter." See id., at 1-2. Thus the SAAR makes several thing clear about Bethesda I: 1) the drafter of the Bethesda II SAAR was aware of the Bethesda I Final Order, and;
2) Delray's view of the Bethesda I Final Order was considered by AHCA.
The SAAR in Bethesda II does not make any reference to changes in material circumstances that would justify a different outcome from Bethesda I. Nor did staff have a recommendation with regard to the application.
At a meeting to review the SAAR, attended by
Mr. Gregg, with the Secretary of the Agency, Alan Levine, the decision was made to approve the application.
Whatever findings with regard to the intra-agency workings of AHCA that could be drawn from the circumstance of the application's approval, Bethesda is provided the opportunity in this formal administrative proceedings to demonstrate that substantial changes in material circumstances have occurred since Bethesda I.
Bethesda has taken advantage of the opportunity. It has shown or proven substantial changes in material circumstances to have occurred between Bethesda I and this case. Not the least of these is that Florida Administrative Code Rule 59C-1.008(2)(e), applies to this case. It did not apply in Bethesda I. In light of the changes between Bethesda I and this case, the ultimate question remains: what action should be taken on the basis of findings related to CON statutory and rule criteria applicable in the case.
Need under the CON Law In General
Every new hospital project in Florida must be evaluated under the statutory criteria that requires consideration of the need for the proposed project. These
criteria are found in ten subsections in Section 408.035, Florida Statutes.
There are rule criteria as well that must be met or factored into the balancing process that will lead to a decision in this case.
In the wake of the filing of the Bethesda I
application, however, there have been significant changes to the CON Law. They will be referred to in this order as they were in Bethesda I: "the 2004 CON Amendments."
It was concluded in Bethesda I that the 2004 CON Amendments had no impact on either the Bethesda or JFK applications in that case.
Following issuance of the Bethesda I Final Order, however, changes were made to AHCA rules as a result of the 2004 CON Amendments. As concluded in the "Conclusions of Law" section of this order, these changes have an impact on the legal framework in which CON 9838, Bethesda's current application, is to be considered.
The 2004 CON Amendments: the
Impact in Bethesda I, Analysis in Bethesda I and the Impact on Bethesda's Current Application
On June 28, 2004, Governor Jeb Bush signed into law House Bill 329 (the "2004 CON Amendments). The bill made significant changes to the CON law by way of amendments and revisions. The 2004 CON Amendments and their effects on the
Bethesda I application were specifically addressed in Bethesda
I. See Wellington Regional Medical Center, Inc., d/b/a
Wellington Regional Medical Center v. AHCA, Case No. 03-2701 (DOAH September 29, 2004) at 91-94; (AHCA March 11, 2005).
Beginning with paragraph 340 of the Recommended Order, the ALJ conducted a legal analysis that reached the following conclusions: 1.) the 2004 CON Amendments applied to the applications of Bethesda and JFK in Bethesda I; 2.) the 2004 CON Amendment's deregulation of acute care bed additions at existing hospitals had no direct impact on either application in Bethesda
I; 3.) until the Agency amends its need methodology rules to account for the statutory changes made by the 2004 CON Amendments (rule changes not undertaken or effective at the time of the issuance of the Bethesda I recommended order), the rules in existence, whether consistent with the 2004 CON Amendments or not, remained effective and, therefore, applied in Bethesda I; 4.) likewise, the legal impacts of transfers of beds from facilities within the same subdistrict or from a facility in one subdistrict to a facility in another subdistrict continued to have significance; 5.) JFK, therefore, was required to establish "not normal" circumstances to win approval of its application because it proposed the transfer of beds from one subdistrict to another (Subdistrict 9-4 to Subdistrict 9-5); 6.) In contrast, Bethesda was not required to establish "not normal"
circumstances to win approval of its application because its proposed transfer of beds was intra-subdistrict, that is, within Subdistrict 9-5.
The Recommended Order in Bethesda I concluded that JFK had failed to show "not normal" circumstances and therefore its application should be denied. (It was also concluded that JFK otherwise failed to satisfy the statutory and rule criteria for a CON.)
With regard to Bethesda, it was concluded that it failed on balance to satisfy the statutory and rule criteria. Should AHCA or an appellate court disagree and conclude that need for a satellite hospital in the West Boynton area had been proven, the ALJ recommended that Bethesda be approved. The most significant factors in favor of the Bethesda application's superiority over JFK's were "its more reasonable utilization projections, its financial feasibility, its lower costs of construction, its greater integration of administrative services between the satellite and main hospitals, and its more realistic and attainable Medicaid and charity care commitment."
The Recommended Order listed the factors in the balancing process that led to the recommendation that Bethesda's application be denied for failure to satisfy the applicable statutory and rule criteria. Weighing against marginal improvement in access for residents of the West Boynton area so
that the balance was struck in favor of denial of Bethesda's application were "exacerbation of the shortage of specialty physicians for ER call coverage (§408.035(6), Fla. Stat.), the negative impact . . . of Bethesda West on the competitive balance in the West Boynton market (§408.035(9), Fla. Stat.), and the costs associated with the construction of the facility (§408.035(10), Fla. Stat.)."
In its final order, AHCA accepted the recommendation that the applications of both Bethesda and JFK be denied. In doing so, AHCA rejected all of the exceptions filed by the parties, save one. The granted exception was filed by the Agency, itself. The Agency had taken exception to giving weight to the finding that "Bethesda [had] failed to demonstrate that access to acute care services will be materially approved based upon the approval of the [proposed hospital,]" Id., AHCA Final Order at 11. The Agency ruled that "[w]hile a CON applicant is required to demonstrate the extent to which the proposed services will enhance access to health care for the residents of the service district [citation omitted], the CON applicant is not required to show that the granting of its application will materially improve access to health care services." Id., at 12.
In follow-up to the lone granted exception, the Agency substituted a new Conclusion of Law in Bethesda I. It includes the following language: "Bethesda failed to
demonstrate . . . the extent to which the proposed services will enhance access to health care for the residents of the subdistrict." Id. The Agency's Final Order in Bethesda I, therefore, clarifies that a material improvement in access is not necessary for an applicant to receive credit under "access" criteria. An applicant need only show enhancement of access provided it demonstrates the extent to which the proposed services will enhance access to health care for the residents of the subdistrict as called for by Section 408.035(5), Florida Statutes.
As concluded in the section of this order devoted to Conclusions of Law, the legal framework in which this case is decided is different from the Bethesda I legal framework. (This conclusion is enough, on its own, to defeat the applicability of the doctrine of administrative finality urged by Delray.) Florida Administrative Code Rule 59C-1.038(4)(b), in effect at the time of the Bethesda I decision, has been repealed. It provided the formula for calculating acute care bed need based on existing bed inventory and other factors in the Subdistrict as well as subsection (a) of the same rule which provided for approval under "not normal" circumstances.
Since there is no methodology by rule for calculating bed need applicable to this case, this case is subject to Florida Administrative Code Rule 59C-1.008(2)(e) (the "No AHCA
Need Methodology Rule"). The No AHCA Need Methodology Rule was not at issue in Bethesda I.
AHCA's Position as to Need/Access Criteria
The Agency recognizes that the repeal of AHCA's acute care bed need rule in the wake of the 2004 CON Amendments altered the legal framework for acute care hospital projects. Under the 2004 CON Amendments, it is no longer possible to try to predict acute care bed need based on market conditions, utilization, or looking at known and proposed bed additions. The deregulation accomplished by the 2004 CON Amendments makes the situation of hospital acute care bed need in health planning districts in Florida or their subdistricts too fluid. Acute
care bed need is outside the scope of reasonable predictability.
With respect to acute care services, the only reviewable projects remaining are new hospital projects.
A CON advisory group was established by the Legislature in 2004 to consider whether AHCA should adopt a "decision algorithim," or a new rule for acute care projects. After a year of study, the advisory group recommended that AHCA continue with its case-by-case adjudication in the absence of a rule.
In evaluating a proposed site for a new hospital, therefore, AHCA looks at the criteria in the No AHCA Bed Need Methodology Rule starting with local population data, preferably
at the zip code level. AHCA also considers access to emergency services and to basic hospital services. The trend in new hospital projects has been satellite hospitals and small basic hospitals located either in suburban parts of major urban centers, or what Mr. Gregg refers to as "small towns," which are areas of very rapid growth that are more remote from urban centers. AHCA continues to look at occupancy levels of existing hospitals when evaluating a proposed site for a new hospital.
However, AHCA allows applicants to define "need" as provided in rule.
There is no Agency need methodology nor is there any Agency policy upon which to determine need for the hospital services proposed by Bethesda's application.
Beginning with its third sentence, Florida Administrative Code Rule 59C-1.008(2)(e), therefore, governs AHCA in evaluating the arguments for "need" presented by CON applicants for satellite hospital projects since there is no agency need methodology for determining need. The pertinent part of the rule reads:
If an agency need methodology does not exist for the proposed project:
The agency will provide to the applicant, if one exists, any policy upon which to determine need for the proposed beds or service. The applicant is not precluded from using other methodologies to compare and contrast with the agency policy.
If no agency policy exists, the applicant will be responsible for demonstrating need through a needs assessment methodology which must include, at a minimum, consideration of the following topics, except where they are inconsistent with the applicable statutory or rule criteria:
Population demographics and dynamics;
Availability, utilization and quality of like services in the district, subdistrict or both;
Medical treatment trends; and,
Market conditions.
The existence of unmet need will not be based solely on the absence of a health service, health care facility, or beds in the district, subdistrict, region or proposed service area.
Fla. Admin. Code R. 59C-1.008. In considering applications for satellite hospitals, AHCA weighs and balances the criteria in Florida Administrative Code Rule 59C-1.008(2), along with other applicable criteria. With respect to "Medical Treatment Trends," AHCA has identified improved access to emergency services and to basic hospital services as a "medical treatment trend."
AHCA does not require a CON applicant for a satellite hospital to demonstrate that the existing acute care delivery system in the proposed service area is failing in order to obtain approval of the satellite proposal; nor does AHCA currently have a travel time standard with respect to access to
acute care services. On numbers of occasions, AHCA has approved satellite hospital CON applications even when residents of the proposed satellite hospital's proposed service area live within
20 minutes of existing hospitals.
In view of the recent legislative and regulatory changes, AHCA characterizes all arguments for need for new acute care hospitals as "special circumstances." There are no defined "special circumstances" that an applicant must demonstrate for approval. By "special circumstances," AHCA means whatever the information is supplied by the applicant. Typically, an applicant for a new hospital project will emphasize population growth, access to emergency services, and access improvement due to population growth as "special circumstances." See Tr. 3428-
With regard to emergency services in particular, "convenience" is considered a part of access.
AHCA recognizes the significant population growth in West Boynton as a fundamental change that supports Bethesda's newly proposed WBCH. As Mr. Gregg explained, with each passing batch, every passing six months, there is going to be a significant number of people entering south Palm Beach County, and more of these people will reside in the West Boynton area as opposed to the established eastern/coastal areas. The need for hospital services for this growing population becomes more significant with the passing of time. A large and rapidly
growing number of people will derive various benefits from the placement of WBHC in the West Boynton area. For example, for more and more people over time it will be more convenient to access emergency room and certain basic hospital services.
In its SAAR, AHCA recognized that the WBCH service area has a growing population, and, in future years, "access to existing facilities will get slower for more people."
In approving this application, AHCA's focus is on planning for the future. By looking ahead of current need to need in the future AHCA's preliminary approval of WBCH is intended to respond to reasonably projected growth in the West Boynton area and in the Subdistrict.
The proposed location for WBCH is a favorable one in AHCA's view because it is remote enough from existing facilities yet surrounded by a high-growth area. The ultimate judgment made by AHCA is that WBCH will do greater benefit for the people that will receive enhanced access than it will do harm to the existing providers. This judgment is founded on the WBCH's
proposed location.
Location, location, location
Under Bethesda's application, bed inventory in the Subdistrict remains unaffected by WBCH.
Bethesda's opponents make the point that Bethesda can de-license beds at BMH, transfer them to WBCH and then, at will,
increase the inventory at BMH to make up for the transferred beds. With the exception of physical constraints or local regulation constraints to an increase in beds at WBCH, the point of Bethesda's opponents is correct. There is no impediment in CON law at present to an increase at will in BMH's bed inventory.
Bed inventory in Bethesda I with regard to Bethesda's application was not a relevant concern because the proposed project would not increase the inventory of the Subdistrict. The same is true in Bethesda II. In addition, bed inventory in the Subdistrict is not relevant under Bethesda II for another reason. As JFK argued in Bethesda I, "the practical effect of the 'deregulation' of acute care bed additions by the 2004 CON Amendments is that the Agency's subdistrict bed inventories ... become irrelevant." Columbia/JFK Medical Center Limited Partnership, d/b/a JFK Medical Center v. Agency for Health Care Administration, (DOAH September 29, 2004) at 93.
The issue in this CON proceeding then, whether by virtue of the current CON Law or Bethesda's application for intra-subdistrict action, is not how many beds should there be in the Subdistrict. Rather, the issue with regard to beds is where, in the context of need analysis, should the beds be located. This is an issue that is fundamental to all manner of
planning, not just healthcare planning. As one expert health care planner put it at hearing:
[G]eographic access is a foundation of planning, health planning, regional, urban planning, all the same . . . [T]he accent for example in real estate is location, location, location. It's no different here.
Tr. 5132. That bed location rather than bed inventory is a concern in this proceeding does not relieve Bethesda of demonstrating need and otherwise meeting the statutory and rule criteria for its Proposed Hospital.
Notwithstanding the de-regulation of the addition of new beds at existing acute care hospitals, therefore, the opening of a new acute care hospital, whether a satellite hospital or a hospital that adds beds to the health services planning area's inventory, remains subject to CON review under statutory and rule criteria. The approval of a satellite hospital (the re-location of beds in a new hospital facility) must be evaluated under designated CON statutory and rule criteria.
In Bethesda I, the criteria in Florida Administrative Code Rule 59C-1.030(2) were found to be "subsumed in the statutory criteria discussed [in the order] related to the accessibility (or not) of existing acute care services in Subdistrict 9-5 and the need (or not) for new acute care beds in the West Boynton area." Bethesda I Recommended Order, at 88.
The criteria of Florida Code Rule 59C-1.030(2), therefore, will be discussed together with the statutory criteria found in Sections (1), (2) and (5) of Section 408.035, Florida Statutes (the "CON Review Criteria Statute" or the "Statutory Review Criteria.")
Florida Administrative Code Rule 59C-1.030(2)(a) and The Statutory Review Criteria: Subsections (1), (2) and (5).
Florida Administrative Code Rule 59C-1.030 reads in part:
* * *
(2) Health Care Access Criteria
The need that the population served or to be served has for the health . . . services proposed to be offered or changed, and the extent to which all residents of the district, and in particular low income persons, . . . ethnic minorities, . . . other underserved groups and elderly are likely to have access to those services.
The extent to which that need will be met adequately under a proposed . . . relocation of a service . . . and the effect of the proposed change on the ability of members of medically underserved groups which have traditionally experienced difficulties in obtaining equal access to health services to obtain needed health care.
The contribution of the proposed service in meeting the health needs of members of such medically underserved groups, particularly those needs identified in the applicable local health plan and State health plan as deserving of priority.
In determining the extent to which a proposed service will be accessible, the following will be considered:
The extent to which medically underserved individuals currently use the applicant's services, as a proportion of the medically underserved population in the applicant's proposed service area(s), and the extent to which medically underserved individuals are expected to use the proposed services, if approved;
The performance of the applicant in meeting any applicable Federal regulations requiring uncompensated care, community service, or access by minorities and handicapped persons to programs receiving Federal financial assistance, including the existence of any civil rights access complaints against the applicant;
The extent to which Medicare, Medicaid and medically indigent patients are served by the applicant; and
The extent to which the applicant offers a range of means by which a person will have access to its services.
In any case where it is determined that an approved project does not satisfy the criteria specified in paragraphs (a) through
(d) the agency may, if it approves the application, impose the condition that the applicant must take affirmative steps to meet those criteria.
(f) In evaluating the accessibility of a proposed project, the accessibility of the current facility as a whole must be taken into consideration. If the proposed project is disapproved because it fails to meet the need and access criteria specified herein, the Department will so state in its written findings.
The CON Review Criteria Statute provides, in pertinent part:
The need for the health care facilities and health services being proposed.
The availability, quality of care, accessibility, and extent of utilization of existing health care facilities and health services in the service district of the applicant.
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(5) The extent to which the proposed services will enhance access to health care for residents of the service district.
Application of the statutory and rule criteria in this case requires findings of fact to be made with regard to certain health care planning concepts. Among these are "Proposed Service Areas," typically composed of a "Primary Service Area" and a "Secondary Service Area."
The Proposed Service Area Primary Service Area, in General
There are a number of different ways that health care planners can define a hospital's primary service area. One common way is by zip code. Frequently, health care planners
include in a hospital's primary service area zip codes that account for 75% or 80% or so of the origins of patients discharged from the hospital after receiving in-patient acute care.
The primary service areas selected by each of the participants in this proceeding are reasonable.
WBCH'S Primary Service Area
Bethesda proposes to establish WBCH in a rapidly developing unincorporated area of south Palm Beach County known as West Boynton, an area due west of the City of Boynton Beach. The site for the proposed WBCH is on the corner of SR 7 and Boynton Beach Boulevard.
Boynton Beach Boulevard runs from US Highway 1 on the east at a stone's throw from the intracoastal waterway westward to the levee on the eastern boundary of the Wildlife Refuge. It is the main east/west thoroughfare serving the West Boynton area.
The West Boynton area is now generally recognized in the South Palm Beach County community as roughly bounded by Lantana Road on the north; the L-30 canal on the south; the City of Boynton Beach on the east, whose western boundary is between Congress Avenue and Military Trail; and the Wildlife Refuge on the west. Lantana Road is about 4 miles north of Boynton Beach Boulevard; the L-30 canal is 2 1/2 miles south of Boynton Beach
Boulevard. Military Trail is about 5 miles east of the WBCH site.
The primary service area (the "PSA") for the proposed project comprises four zip codes: zip codes 33437 (the home- site zip code), 33436, 33463, and 33467. These four generally equate with the West Boynton Area.
Secondary Service Area
The entire proposed service area consists of six zip codes. WBCH's secondary service area ("SSA") includes zip code 33414 to the north, in the Wellington area, and zip code 33446 to the south, in unincorporated West Delray.
Overlapping PSAs
The four zip codes in the PSA chosen by Bethesda for WBCH are each a part of one or more primary service areas of the four hospitals that are participants in this proceeding.
For example, all four zip codes that make-up the WBCH PSA could be considered as zip codes within BMH's primary service area. Two of the proposed zip codes (33426 and 33427), in fact, are among the top three zip codes (as measured by BMH discharges per zip code in 2004) from which BMH's patient's originate.
The overlapping of the PSA with a BMH primary service area is not of much concern since the beds that will be housed in WBCH originate in BMH.
In contrast to any overlapping between the PSAs of BMH and WBCH, the overlapping of the WBCH PSA with the primary service areas of Bethesda's competitors deserve more detailed discussion.
All four zip codes in the WBCH's PSA and one of the zip codes in the proposed Secondary Service Area are part of WRMC's primary service area. Three of WRMC's top five zip codes (measured by WRMC discharges per zip code in 2004) overlap with two of the primary and one secondary service area zip codes proposed by Bethesda for the new hospital. These three overlapping zip codes alone accounted for over 33% of WRMC's acute care discharges in 2004.
JFK's primary service area overlaps with WBCH's PSA to a significant extent. All four zip codes that make-up WBCH's PSA and one zip code in its secondary service area are in JFK's primary service area. These five zip codes accounted for over 33% of JFK's acute care admissions in 2004. Zip code 33467 is the zip code from which the largest number of JFK's patients originate.
Delray's primary service area significantly overlaps with WBCH's PSA, as well. Three zip codes in the proposed new hospital's PSA (33463, 33436, and 33437) are in Delray's primary service area. These three were the zip codes of origin for over 32% of all acute discharges at Delray in 2004. Two of the zip
codes (33436 and 33437) are among the top three zip codes from which Delray's acute care patients originate.
That residents in the proposed PSA and the secondary service area of WBCH are in the primary service areas of one or more of four existing hospitals is a factor which demonstrates that West Boynton area residents, just as was found in Bethesda
I, are not denied access to basic hospital services including emergency services. But there have been material changes since the Bethesda I proceeding. One set of data points that has changed is population.
Current and Projected Population
As found in Bethesda I, WBCH's Primary Service Area (PSA) has a significant and rapidly growing population. Development and population growth in the western portions of south Palm Beach County have been so rapid in recent years that population forecasts have failed to keep pace with the growth. Not surprisingly, therefore, recent population growth has exceeded the population projections in Bethesda I. For example, based on Claritas population estimates presented at the February 2004 hearing, the Bethesda I Recommended Order found that the 4 zip codes that make-up the WBCH PSA would have a population of 181,000 in 2007. Those projections underestimated the population growth in these four zip codes that roughly comprise the West Boynton area. The most recent Claritas
release projects that the 2005 population in the PSA was 183,395.
The PSA's population is projected to be 188,877 in 2006. If approved and constructed, WBCH will probably not open until 2010 or 2011, when the PSA's population is expected to grow to 216,407 residents according to Claritas projections. Further, projections of Claritas and the University of Florida's Bureau of Economic and Business Research (BEBR) show continued growth to 242,652 residents in 2015, a timing horizon that is reasonable to examine for planning purposes, given the date by when WBCH would be expected to open.
Zip code 33437 in which the WBCH proposed site is located is the largest and fastest-growing area in West Boynton, with 52,455 residents in 2006, and projected populations of 61,146 in 2011, and 69,588 in 2015.
The 2005 Claritas release shows a population of 50,717 in home-site zip code 33437 in 2005, whereas the 2002 Claritas projections presented at the February 2004 Hearing projected a population of less than 50,000 in 2007.
The population projections for the PSA and home-site zip code 33437 for the current planning horizon (2011) far exceed the projections for the planning horizon (2007) set forth in Bethesda's 2003 Application. In that prior application, the 2007 PSA population was projected to be 180,619, and the 2007
population of 33437 was projected to be 41,147. The population of the PSA is now projected to be 216,407 in 2011, and the 2011 population of zip code 33437 is projected to be 61,146.
Wellington is within the proposed service area (the PSA and the Secondary Service Area combined) selected by Bethesda for WBCH. But it is in zip code 33414, part of WBCH's Secondary Service Area. There are no hospitals in the four-zip code PSA selected by Bethesda. Few areas in Florida without a hospital have a population in excess of 60,000 residents, as projected for home-site zip Code 33437 in 2011, much less a population in excess of 200,000, as projected for the WBCH's four zip code PSA. It is not unusual for areas with populations much smaller than those projected for the WBCH PSA to support a substantially larger number of acute care hospital beds in one or more hospitals.
The resident population for WBCH's entire proposed six zip code service area is projected to grow from 258,659 in 2006, to 299,712 in 2011, to 338,569 in 2015, representing a 30.9% growth in population from 2006-2015. The projected rates of population growth to 2010, and also to 2015, in both the PSA and the entire service area surpass the projected population growth rates of Palm Beach County, District 9, and the State of Florida. For the period 2006 to 2015, the expected growth rate is 30.9% for WBCH's proposed service area, while the growth rate
for the same time period for Palm Beach County is expected to be 18.4% and for the State of Florida, 16.0%.
Wellington Regional's home zip code, 33414, a zip code in WBCH's secondary service area, has experienced considerable growth in recent years. The trend is reasonably projected to continue. The population of zip code 33414 is projected to grow from 50,186 in 2005 to 61,828 in 2010, representing a 23.2% growth in population for that five-year period. Indeed, Wellington has been described for the period 2000 to 2010 as "the engine of growth in the western communities." Tr. 5130.
While Wellington's growth is dramatic, the two zip codes in the total service area with the highest number of non- tertiary med-surg discharges are the two western-most zip codes in WBCH's PSA, i.e., 33437 and 33467. The population in each of those PSA zip codes is about the same as the population in zip code 33414, and they are also growing rapidly - - well in excess of the County average. Furthermore, the projected population of the PSA in 2011 (216,407) far exceeds the projected population of zip code 33414 in 2011 (64,156). Unlike zip code 33414, however, the PSA zip codes have no existing hospital.
The health care planners for all parties in this case primarily relied upon population projections from Claritas, Inc., a national demographic data service, for projections at
the zip code level. Claritas is generally viewed as the best source for zip code level analyses, and zip codes are the smallest area from which patient origin and destination data is collected by hospitals and AHCA, therefore making such data useful to health planners. Nonetheless, Claritas projections are based on the most recent decennial U.S. Census, i.e., 2000, and do not take into account data of impending population growth, such as new housing starts. Therefore, Claritas tends to understate population projections in areas such as West Boynton with recent, rapid growth. Moreover, Claritas resident population projections do not account for the many part-time residents, or "snow birds," who relocate to Palm Beach County during the winter "peak season" months. Nor do they account for undocumented immigrants who work in Palm Beach County.
Residential, Commercial
and School Construction and Planned Projects New Construction and Planned Projects
There has been a great deal of construction activity in the last two or three years in terms of new homes, commercial projects, and schools throughout both the West Boynton PSA to be served by Bethesda's proposed WBCH facility and the Wellington area to the north surrounding Wellington Regional. Moreover, there have also been many additional large new residential projects approved and planned in the last two years for
development in both West Boynton and in the West Delray area to the south.
Evidence of the recent construction activity and project plans was presented through the testimony, aerial photos, and charts of Bethesda's land planning expert,
Mr. Kilday; the testimony and exhibits of Bethesda's traffic engineer, Mr. Rennebaum, and of COBWRA's President,
Ms. Greenberg; and the testimony of numerous community residents and physicians who live and work throughout those areas.
For planning purposes, Palm Beach County uses a persons-per-household average of 2.34 persons per unit.
During the February 2004 Hearing in the Bethesda I, Mr. Kilday presented general testimony that there had been many residential project approvals obtained by developers for the West Boynton area west of the Turnpike specifically in an area known as the Agricultural ("Ag") Reserve. Mr. Kilday presented only one exhibit at that prior hearing, which was a high aerial map dated January 5, 2004, prepared by the Palm Beach County Planning, Zoning & Building Division, showing an area west of Jog Road and south of Lantana Road, including the Ag Reserve (the "Ag Reserve Map"). The Ag Reserve Map was prepared on an aerial photo taken in January 2002.
The Ag Reserve is an area west of the Turnpike, bounded by Clint Moore Road on the south and the Loxahatchee
Conservation Area on the west, and with a northern boundary about one mile north of Boynton Beach Boulevard.
Jog Road is about 1 1/2 miles east of the Turnpike, and 3 1/2 miles east of the WBCH site.
Some residential projects south of Boynton Beach Boulevard had been recently approved by the County for development in the Ag Reserve as of the February 2004 hearing. For example, three of the G.L. Homes Canyon projects had "approval" dates of August 27, 2003. At the time Mr. Kilday testified in the February 2004 hearing, however, no homes had been constructed, and the Ag Reserve portion of West Boynton still "looked like an orange grove."
Mr. Kilday did not present testimony in the
February 2004 hearing regarding any specific development in the Wellington or West Delray areas. His focus then was on the Ag Reserve portion of West Boynton. The Ag Reserve Map used in Bethesda I did not go as far north as Wellington.
In this proceeding, (Bethesda II), Mr. Kilday presented three Project Lists for West Boynton, West Delray, and Wellington, which include a count of the number of houses constructed between January 2002, and February 2005, and the number of approved or planned units remaining to be constructed for numerous large residential communities. Mr. Kilday chose January 2002 as the start of the study period because the Ag
Reserve Map was the focal point for the February 2004 hearing, and it could be used to count housetops west of Jog Road, at least in West Boynton and West Delray, as of January 2002.
Mr. Kilday's office already had high-altitude February 2005 aerials of the West Boynton, West Delray, and Wellington areas west of Jog Road available. Thus, he used February 2005 aerials of that entire area for a more recent count of housetops as of that date in order to demonstrate the fast pace of residential construction that had been occurring since the Bethesda I Ag Reserve Map photo was taken. The Project Lists are just a "sample" of projects with which Mr. Kilday had had personal involvement. Many more projects have been approved by the County.
The Project Lists also include numerous large residential projects that were approved by, or planned and presented to, the County subsequent to the February 2004 hearing. As part of the County zoning process, developers must apply for "concurrency," meaning that, "at the time the project is built," there are adequate facilities and infrastructure to support it, as the biggest issue is traffic and roads. Applicants must state the date when their project will be built out. The County will hold an applicant to that date and will include a condition of approval that no building permits will be issued thereafter for the project. The current "assumption" is
that "these roads are all going over capacity," so developers "try to get the longest build out date" they can, which is the "outside date" that "the road is scheduled to fail," meaning it has exceeded the acceptable level of service. For Mr. Kilday's most recent project (Ravello), in process at the time of final hearing, the build out date was February 2009.
Mr. Kilday also presented two composite exhibits (12 photos each) of low altitude "oblique" aerial photos of several of the large residential and commercial projects that are being constructed in the West Boynton area and in Wellington which were taken on October 8, 2005.
The number for each project on Mr. Kilday's Project Lists for West Boynton, West Delray, and Wellington (i.e., Exhibits B-32, B-33, B-34) corresponds to project numbers on the February 2005 high altitude aerials for those three areas (i.e., Exs. B-30E.3, B-30F.3, and B-30G.2), and to the project numbers on the low altitude aerials for West Boynton and Wellington (i.e., Exs. B-30H and B-30I). The Project Lists demonstrate that there was a substantial amount of construction activity in the West Boynton and Wellington areas between January 2002 and February 2005, and also that many large new residential projects have been approved and planned in the last two years in the West Boynton and West Delray areas. Furthermore, as Mr. Kilday pointed out, the February 2005 count of recent new home
construction in the West Boynton and Wellington areas was already out of date. That was supported not only by his testimony regarding the more recent October 2005 aerials, but also by his testimony and the testimony of numerous other witnesses as to additional construction that had occurred as of the April-May 2006 final hearing. That testimony, and evidence regarding some of the newly planned residential and commercial projects and schools in the West Boynton, West Delray, and Wellington areas, are discussed further below.
West Boynton Area
Those familiar with the recent construction activity in the West Boynton area over the last two years describe it as "explosive" and "phenomenal," with large residential and commercial projects being constructed along every major roadway.
All of the many West Boynton projects taken by
Mr. Kilday's firm through the approval process in the last few years have begun construction as soon as they can pull permits. The only issue has been the time it takes to obtain all necessary development permits. At the time of hearing, there had been a significant level of construction of new homes that had not broken ground one year earlier.
Planning for more projects is continuing at an intense pace. Over the past 12 months, Mr. Kilday's firm has had at least one or two West Boynton projects before the Board
of County Commissioners each month for the approval process. Any vacant land in the West Boynton area, including land on Congress Avenue to the east, as well as land west of the Turnpike, is getting serious consideration for development.
The residential projects in West Boynton have tended to be age-restricted communities, although some of the more recent developments such as Canyon Lakes have not been age- restricted.
Construction of major residential communities in the West Boynton area west of the Turnpike began to the north, in the area north of the Ag Reserve up to Lantana Road. Project nos. 1-14 and 30 on Mr. Kilday's West Boynton area Project List are located there, and they have a total of 6,450 approved units. The largest projects in that area, Bellaggio (a/k/a Town Park), Villages of Windsor, Valencia Shores, and Venetian Isles, were approved between 1996 and 2001, but they had had little, if any, construction activity (i.e., 713 units combined) as of the January 2002 photo in the Ag Reserve Map. By February 2005, however, 4,053 units had been constructed in those four projects alone. Furthermore, there is evidence that all of the building permits for Villages of Windsor (679) were issued between 2004 and April 1, 2006, and that 379 of the building permits for Valencia Shores were not issued until 2004 and 2005.
Several community residents who moved into new homes in that northwest portion of West Boynton in 2003 and 2004, testified in depositions that there has been active construction and new development of additional new homes, commercial properties, and public facilities after they arrived. Among these were Mr. Greiner, the 78-year-old president of the Bellaggio (Town Park) Residents' Association, who described in some detail the recent construction activity and new developments in the surrounding area as of the December 19, 2005, date of his deposition. See Ex. B-54 (Greiner Depo.), at 7-10, 18, 49.
In addition to the new town homes and the new residential community identified by Mr. Greiner, which are not on Mr. Kilday's Project List, there is yet another new project in the area on Lantana Road to the east, i.e., Lantana Farms PUD (Project no. 4), which was approved after the February 2004 hearing. Residential development in that area is just now being extended to the western side of State Road 7, past Lantana Road. Construction of the new Super Target center at the intersection of Lantana Road and Hwy. 441, had not commenced in October of 2005. Under construction at the time of Mr. Greiner's deposition, it opened in the two months prior to the final hearing in this case.
The West Boynton residential projects north of the Ag Reserve and south of Hypoluxo Road, including Valencia Shores, Verona Lakes, Melrose Park, Venetian Isles, Savannah Estates, Equus, and Palm Meadows Estates, are within three miles of the WBCH site. There are 3,346 approved units in those projects.
As of February 2005, 2,961 units had already been built in those communities.
In the northern-most Ag Reserve area within one mile north of Boynton Beach Boulevard and within about a mile of the WBCH site, are three large new residential developments. Countryside Meadows, approved in December 2003 for 248 units, had no construction on February 2004, and had only two models as of February 2005. By April 21, 2006, 170 building permits had been issued for that project. Amestoy AGR-PUD (640 homes) was not approved until 2006. It recently received zoning approval and plans to break ground in October. Ravello (192 homes) is going through the approval process now. The total number of approved and planned units in this northern-most Ag Reserve area is 1,082 units.
In the Ag Reserve area south of Boynton Beach Boulevard and west of the Turnpike are numerous large residential communities in several stages of development. That includes G.L. Homes' Canyon Lakes (500 homes), Canyon Isles (500 homes), and Canyon Springs (500 homes) projects, which were
approved for development in August 2003. Also in that same area are several projects including Lyons West AGR-PUD (943 homes), Delray Holdings (282 homes), Canyons Town Center TMD (39 town homes), and TMD Workforce Housing (54 homes), which were just approved in 2005. Another 554 homes are planned for Fogg 5, which is in the process of seeking concurrency.
Thus, there are 3,372 approved and planned residential units in the West Boynton area west of the Turnpike that lies in the Ag Reserve area south of Boynton Beach Boulevard and north of the L-30 canal. All of those projects are within three miles of the WBCH site.
No homes had been constructed in these projects in the Ag Reserve at the time of the February 2004 hearing. The first project to start construction, Canyon Lakes, had no residents when Mr. Rennebaum ran his travel time study from there in April 2005.
Canyon Lakes (Fogg North) has built out rapidly.
There were 297 units built as of February 2005, and by April 21, 2006, a total of 454 building permits had been issued. Canyon Isles (Fogg Central) had no homes as of February 2005; a few as of October 2005; and 432 building permits issued by April 21, 2006. Thirty units remain to be sold. Farther to the south, Canyon Springs (Fogg South) was an undeveloped green field in October 2005. Today, it has its infrastructure and looks like
Canyon Springs looked in October 2005; deposits have been taken on the first homes.
A commercial marketplace with shopping center, grocery store, restaurants, town homes, and workforce housing; a library; and an elementary school are being built near Lyons Road between the Canyon projects and Boynton Beach Boulevard.
Not all the new development is west of the Turnpike.
There has been recent residential and commercial construction activity and development east of the Turnpike and south of Boynton Beach Boulevard, between the Turnpike and Jog Road.
Hagen Assemblage PUD (Valencia Pointe) was approved for 690 homes in 2003. It had no earthwork or units as of February 2005, but had 60-70 units and a main recreation area when Mr. Kilday testified. It has had 190 building permits issued already. Other recent nearby projects include Briella Townhomes (230 homes), approved in October 2004, and Mini- Assemblage PUD (552 homes), approved in 2005, which will be developed next to Bethesda Health City upon relocation of the old Hagen Ranch Elementary school. Tivoli Lakes (324 homes) had no construction as of January 2002. By February 2005, 88 homes had been constructed.
In addition to the burgeoning residential growth surrounding Bethesda Health City, a large Super Target center opened in late 2005, at the intersection of Boynton Beach
Boulevard and Hagen Ranch Road, and a medical office building has recently been built next door. At the time of the
February 2004 hearing, that Super Target and the one on Lantana Road were just seeking approval, and were completely undeveloped as of April 2005.
While Mr. Kilday's testimony primarily focused on new developments in the West Boynton area west of Jog Road, there are also major new developments at the eastern edge of West Boynton, such as the huge new mixed use projects along Congress Avenue, south of JFK. Renaissance Commons (1,561 units) is being constructed on the old Motorola site. Winchester Property (1,040 units) is being developed in a former cow pasture.
Finally, new schools constructed recently in West Boynton already exceed planned capacity; more are under construction; and others are now planned. For example, Park Vista High School, which opened in West Boynton in 2004, was the third largest high school in Florida when it was built. Now, it is at 122% of capacity and relies on portable classrooms. In fact, many of the schools in both West Boynton and Wellington, such as Hagen Ranch Elementary, Palm Beach Central High School, Wellington High School, and Coral Reef, are above capacity due to the rapid population growth.
West Delray Area
In the past two years, the West Delray area has also begun to see ground breaking on huge new residential communities in the Ag Reserve area west of the Turnpike, and active construction of previously approved projects between the Turnpike and Jog Road. Those projects had been held back because of Atlantic Avenue roadway constraints which were just resolved two weeks prior to final hearing with a builder compilation of funding that allows that road to be expanded.
West Delray originally began its expansion, east of the Turnpike, as a retirement-oriented community. The newer projects are a half-and-half mix of retirement and family oriented communities.
Mr. Kilday's Project list for West Delray includes projects west of Jog Road with a total of 6,568 approved units, only 704 of which had been built as of January 2002. Some of the larger projects east of the Turnpike, which had no units as of January 2002, such as Valencia Falls and Valencia VII (Fischera/Valencia Palms), have had heavy construction in the last few years. Valencia Falls (706 homes) was totally built out by February 2005. Valencia VII (Fischera/Valencia Palms), which was one of the projects singled out (along with Fogg North (Canyon Lakes)) by Delray's traffic engineer as purportedly having had no construction according to the County Traffic
Performance Standards, actually had 588 building permits issued in 2004 and 2005. Its 625 approved units are about built out.
East and west of the Turnpike, seven large new residential communities are planned, and six of those obtained approvals in 2004 and 2005, subsequent to the February 24 hearing. The new projects west of the Turnpike include Ascot (380 homes), Ascot East (315 homes); Hyder AGR-PUD (554 homes); Dubois AGR-PUD (554 homes); and Appolonia Farms (609 homes).
The other two new projects, MI Homes (477 homes) and Ansca PUB (329 homes) are just east of the Turnpike on Atlantic Boulevard.
Mr. Kilday's Project List of West Delray projects between the L-30 canal and Clint Moore Road, includes projects west of the Turnpike with a total of 4,074 approved and planned units.
Areas on the west of Palm Beach County are referred to as the "western communities." Among the western communities is the Wellington Area.
Wellington Area
Wellington Regional is located on Hwy. 441 about 4 1/3 miles north of Lantana Road. There is abundant evidence of a "boom" in construction of commercial and residential properties in the last two years in the eastern portions of the Wellington area along the Hwy. 441 corridor between West Boynton and Southern Boulevard, starting around the Lake Worth Road area
to the south, and heading north up past the Wellington Green Mall, the Forest Hill Boulevard intersection, Wellington Regional, and beyond. The newer part of Wellington is filling in easterly, from the older part in the west, to State Road 7, to the Turnpike. A JFK physician who also practices at Wellington Regional and Palms West described Wellington's growth as follows:
There has been a large population expansion there and development expansion . . . .
[T]hat whole 441 corridor a mile on either side I'll say, from the north/south boundary that I gave you has undergone extensive development.
Ex. JFK-134 (Dr. Levin Depo), at 12.
A Bellagio resident, who lives in the West Boynton area just south of Lantana Road, described the development activity northward, as follows:
Going north from us on 441 going up towards Wellington there are any number of developments under construction primarily residential, but there is also some commercial areas there that have started putting up signs for what's coming. Yes.
Yes. That's - - it's amazing to me how much commercial construction is going on going north. At the Lake Worth Road there's already - - on the south side there's a bank, a fast food restaurant and some stores.
On the other side of Lake Worth Road there's a larger commercial area that's got a Publix, a tire store and all kinds of retail shops. On the other side of 441 and Forest Hill there's a very large commercial
development with a Winn Dixie store and many, many restaurants and stores. And as you go north there seems to be no end of stores and commercial going in on both sides of the road.
* * *
That area, that particular intersection [at Wellington Regional] is a major intersection. There are two enormous housing developments directly across the street from it, and the commercial development around the mall is just incredible. . . . They are building, in fact, virtual mini malls right next to them, and it just keeps growing and growing and growing.
Ex. B-54 (Greiner Depo), at 9-10, 25.
Wellington is noted for its organized youth sports leagues and schools, and its polo programs. The real estate projects are marketed to emphasize family-oriented activities. There are many new schools along the Hwy. 441 corridor in the Wellington area.
When WRMC opened in 1986, there was no development in the vicinity around it. Even in 1994, Wellington Regional was still largely surrounded by agricultural fields, commonly referred-to as a cow pasture.
By February 2005, significant development had taken place around Wellington Regional. Wellington Green Mall had been constructed on the south side of Forest Hill Boulevard, west of Hwy. 441. Lake Worth Road was extended farther to the
west, providing access to a whole series of new residential projects located south of Wellington Green Mall. Huge residential communities such as Olympia, Village Walk of Wellington, and Buena Vista (a/k/a Buena Vida) had begun construction on the east side of Hwy. 441, across from Wellington Regional.
Olympia, Buena Vista, and Village Walk of Wellington alone are approved for 4,267 units. Only one model home was constructed in Olympia as of January 2002. By February 2005, a total of 1,329 homes had been constructed in those three projects. However, as of that date, the aerials still show considerable "white sand" and "pods" without rooftops under development in those communities. By October 2005, large portions of those three projects were built out, although there is still significant "white sand" for more homes in Olympia.
Mr. Kilday's Project List includes projects with 8,888 approved units in the Wellington area near Hwy. 441. In January 2002, 1,957 of the approved units had been constructed. By February 2005, 5,747 units had been constructed.
No homes had been built in Palm Beach Plantation (Diamond C Ranch), Victoria Groves, or Black Diamond as of January 2002, and only six had been built in Wellington Edge. Now, however, Palm Beach Plantation has had 536 building permits issued from 2004 through April 21, 2006, and is largely built
out. Victoria Groves (610 homes), Black Diamond (444 homes), and Wellington Edge (494 homes) are now totally built out.
Wellington View, which had 51 homes as of February 2005, has now had 105 building permits issued.
New residential projects are now being approved south from the Wellington Green Mall toward Lake Worth Road. Lanier Property (288 units) and Oakmont Estates (202 units) were approved in 2004, subsequent to the February 2004 hearing. Three new projects with 800 units have just recently, in 2006, been planned on Lake Worth Road, east of Lyons Road, which runs between Hwy. 441 and the Turnpike.
Northwest of Wellington, the Callery-Judge Groves project is being planned for development on a large piece of agricultural land to include 10,000 new homes.
Westward Growth of the Palm Beach County Population
The populations in the areas in the western part of Palm Beach County are growing faster than those elsewhere in the county. For instance, the two western-most zip codes in the PSA, 33437 and 33467, are projected to experience 17.1% and 16.6% population growth, respectively, from 2005 to 2010, as compared to 10.7% and 14.9% growth in the two PSA zip codes to their east, i.e., 33436 and 33463, respectively.
Delray's witness, Mr. Greene, presented data from the Palm Beach County Population Allocation Model, which distributes
county-wide population estimates to smaller traffic analysis zones ("TAZs"). While the TAZ projections for the western-most areas of the County are substantially understated, they still demonstrate an increasing shift in the West Boynton area population base from the more eastern areas to newly developing areas west of the Turnpike. For example, the percentage of the population of zip code 33467 residing west of the Turnpike is projected to grow from 35.4% in 2004, to 38.6% in 2005, to 44.2% in 2010, and to 44.9% in 2011. Likewise, the percentage of the population of zip code 33437 that resides west of the Turnpike is projected to grow from 10.1% in 2004, to 12.4% in 2005, to
21.5% in 2010, and to 23.2% in 2011.
The population growth rate west of the Turnpike is a change from evidence presented in the February 2004 hearing, which supported the finding that 89% of the West Boynton population resided east of the Turnpike. See Columbia/JFK Medical Center vs. AHCA, (DOAH Case No. 03-2829CON),
September 29, 2004, Paragraph No. 105. That finding was based upon the then 2003 TAZ projections. The more recent 2005 TAZ projections now show a much higher percentage than 11% of the population is projected to live west of the Turnpike by 2010 and beyond.
The population growth in the West Boynton and West Delray areas and the shift of the population to areas west of
the Turnpike have been so rapid that they substantially outpace the County's TAZ projections. For example, the County's 2003 TAZ projections, which Delray presented at the prior February 2004 hearing, projected a total 2011 population for zip code 33467 of only 43,261, with 17,384 of those residents projected to be west of the Turnpike. The more current 2005 TAZ projections project a total 2011 population for zip code 33467 of 60,160, with 26,983 of those residents living west of the Turnpike. The 2003 TAZ projections used in the prior case similarly underestimated the 2011 total population of zip code 33437, and the population residing in that zip code west of the Turnpike.
The County's most recent 2005 TAZ population projections, which are stated to be based on development approvals through December 2004 only, still substantially understate the actual population and the approved residential units in the western area of West Boynton and West Delray. For example, the 2005 projections for TAZs 749 and 750, which are west of the Turnpike and cover the area from Boynton Beach Boulevard south to the L-30 canal and west to Lyons Road, show zero population in 2005, and only 2,436 residents by 2010. However, the Canyon Lakes project in TAZ 749 actually had many homes built in 2005, and JFK's Dr. Dorman was already living there. Furthermore, the three Canyon projects, the two TMD
projects, and Fogg 5, which are in TAZs 749 and 750, are planned for 2,147 units, and at a County average of 2.34 persons per household, are likely to have 5,024 residents by 2010. That number more than doubles the TAZ projections. Based on
Mr. Kilday's testimony, there are also more new projects being processed each month.
When you add the most recent TAZ projections for all four TAZs on both sides of Lyons Road between Boynton Beach Boulevard, the Turnpike, the L-30 canal, and Hwy. 441 (i.e., TAZs 748-51), the County is projecting a total population of 3,498 in 2010. Adding the Lyons West AGR-PUD and Delray Holdings projects approved in 2005, west of Lyons Road, to the projects on the east side of Lyons Road, however, there are now 3,372 units planned for TAZs 748-51. Thus, at the County average of 2.34 persons per household, it is likely that there will be 7,890 residents in those projects alone in 2010. The TAZ projections for 2010 are likely to be substantially understated for that area west of the Turnpike.
In addition to the substantial likelihood that the County's TAZ projections substantially underestimate the population in the western portions of the PSA, they do not account for any of the new projects approved since 2004. Even so, a count of the most recent population projections for the TAZs that are within the area from Lantana Road (4 miles north
of the site) south to Atlantic Boulevard (5 miles south of the site), and from those TAZs bordering Jog Road (3 1/2 miles from the site) westward to the Loxahatchee Reservation Area, yields a total population projection of 97,697 residents in 2011, in an area which is well within a five-mile radius of the proposed WBCH site. If the new projects approved in 2005 and 2006, which are not considered in the 2005 County Population Allocation Model, were accounted for, the projection would likely be substantially higher.
Claritas projects a population of only 82,000 in 2010 within 5 miles of the WBCH site. The TAZ population projections, project a population of 97,697 in 2011 in an area with a radius that is less than 5 miles.
Claritas projects a 2010 population of only 10,721 within three miles of the site. There are already a combined total of 7,800 approved and planned residential units within a three-mile radius north and south of the WBCH site, on the west side of the Turnpike alone. At the County average of 2.34 persons per household, those projects yield a likely population of at least 18,252 residents by 2010. Moreover, as the Turnpike is only two miles from the site, a three-mile radius should also count the many thousands of additional residents who live another mile to the east of the Turnpike in the Hagen Ranch Road area. For example TAZs 450, 950, and 955, which are located
along Boynton Beach Boulevard within one mile east of the Turnpike, are projected by the County to have a total population of 4,410 in 2011.
Claritas projects a 2010 population of only 255 residents within one mile of the site. However, there are already 1,082 homes approved and planned within about one mile north and east of the site. At the County average (2.34), it is likely that there will be 2,532 residents in those units in 2010, and that does not account for any units that may be built in the approved projects within one mile on the south side of Boynton Beach Boulevard.
Claritas census tract data projects only 2,100 people by 2010 in Census Tract 77.13, which covers the large West Boynton and West Delray area, west of the Turnpike, extending from Hypoluxo Road, three miles north of Boynton Beach Boulevard, all the way south to Clint Moore Road. There are already a total of 11,784 residential units approved for the West Boynton and West Delray portions of that large west Turnpike area, and there were already thousands more people living there in 2005 than are projected by the Claritas census tract data for 2010. At the County average (2.34), it is likely that there will be around 27,575 residents in the projects that are already planned and approved in Census Tract 77.13 by 2010. More project approvals are likely.
In recognition of the population growth in the West Boynton and Wellington areas, as well as demographics of the area and excessive response times, Palm Beach County Fire Rescue ("PBC Fire Rescue") will locate three of its four planned new stations in those western areas. PBC Fire Rescue also plans to add a new station, Station #30, at the intersection of Pierson Road and Hwy. 441 due to "all the new growth in the Forest Hill Blvd./441 (Olympia development, Mall at Wellington Green, Wellington Hospital area, ect (sic) . . ." Ex. B-83, Gregory Deposition, Ex. 2 to the Deposition, 4th page from the back.
PBC Fire Rescue also plans to add a new Station 48 at the intersection of Hypoluxo Road and Lyons Road due to the "new growth in the Lantana/Hypoluxo/Lyons area and because of response time problems in the Lantana Road area." Id. A new Station 44 at the intersection of Flavor Pict and Jog Roads will be added "because of current response time deficiencies which could not be corrected by [existing stations]." Id.
Access Issues
As found in the Bethesda I Recommended Order, "[i]n the CON context, "access" is typically evaluated from the vantage points of programmatic, financial, cultural, and geographic access." Columbia/JFK Medical Center Limited
Partnership, d/b/a JFK Medical Center vs. AHCA, Case No. 03- 2829CON (DOAH September 29, 2004) at 59.
Bethesda's case is one of enhancement of access which in turn will promote improved quality of care. Both Bethesda and AHCA emphasize planning to curtail future diminution in access to certain hospital-related healthcare services.
As in Bethesda I, the low-income population in the Subdistrict, including the West Boynton area, which has a relatively small portion of residents who are indigent, has access to the hospital services at the hospitals in the Subdistrict.
Bethesda's case that access will be enhanced concerns programmatic access for the elderly, who have special needs apart from the general population, and a blend of cultural access and geographic access.
The proposed satellite hospital will enhance programmatic access in the Subdistrict, according to Bethesda, because it will offer better access to emergency care that is less than adequate for seniors and others because of emergency department over-crowding. Access by the elderly will also be enhanced, according to Bethesda, because of the growing elderly population in the Subdistrict, particularly in the West Boynton area, and their special needs that entail, among others, avoidance of driving longer distances, such as the distance they would have to drive to the existing providers versus a closer WBCH.
Cultural access will be enhanced, according to Bethesda, because Spanish-speaking laborers and migrant workers, many of whom are undocumented, and who have special needs different from the rest of the population, will have better access to some hospital services if WBCH is approved. There is a geographic component to the access issues of Spanish-speaking laborers and migrants too because of their willingness and ability to receive non-hospital health care services in the West Boynton area at a clinic that specializes in providing them with health care.
The SAAR recognized enhancement of access for the Spanish-speaking population and the elderly because of each population's special needs, positions maintained by the Agency at hearing.
The SAAR did not recognize that there were any programmatic access problems. At hearing, however, Mr. Gregg alluded to enhanced access to emergency services as a medical treatment trend that should be considered under the criteria applicable to this proceeding through Florida Administrative Code Rule 59C-1.008(2). Availability of emergency services is an issue of programmatic access.
Programmatic Access: ED Overcrowding
"Programmatic access" refers to the adequacy of the programs and services provided at existing facilities in relation to the specific health care needs of the persons served by those facilities. See Bethesda I, paragraph 219, at 59.
An ED includes all of the organizational and physical infrastructure of a hospital having to do with care in the emergency room.
Lack of adequate ED service constitutes an issue of programmatic access.
Adequate ED service is especially important to the elderly (those aged 65 and over). The elderly (those over the age of 65) seek ED services 1/3 more often than those under the age of 65. The elderly also have need for acute patient services in EDs and after admission to the hospital following ED evaluation and treatment at a much higher rate than the under age 65 population. The elderly present at EDs in need of emergent care (within 15 minutes) much more often than the younger population. Approximately 15% of all ages present at an ED in need of emergent care whereas 24.5% of those between the ages of 65 and 75 years present in need of emergent care and 25.5% of those 75 and older present in need of emergent care.
In Bethesda I, the Recommended Order contains the following finding with regard to programmatic access:
The evidence was not persuasive that there are any programmatic access problems in Subdistrict 9-5 and, in any event, neither of the proposed satellite hospitals would enhance programmatic access in the subdistrict because they will not offer any programs or services that are not already offered at one or more of the tertiary hospitals in the subdistrict that currently serve the West Boynton area.
Bethesda I Recommended Order, paragraph 220 at 59. Overcrowding in the EDs of existing providers, however, was not an issue in Bethesda I. In contrast, Bethesda claims in this proceeding that the special needs of the elderly are not being served adequately because of ED overcrowding. The evidence supports the claim. ED or emergency room overcrowding is a serious issue in the Subdistrict and in the county.
In addition to the new submission of overcrowding, a significant difference from Bethesda I, there is also new information in the literature that relates to emergency room overcrowding.
Emergency health care services are of nation-wide concern. There are particular problems in the State of Florida. A January 2006 report entitled: The National Report Card on the State of Emergency Medicine: Evaluating the Environment of Emergency Care Systems State by State, begins with the observation that "[e]mergency medicine needs to be there 'where you need it, when you need it.'" The National Report Card is
based upon a study by The American College of Emergency Physicians, with data and input from the U.S. Department of Health and Human Services and all 50 states' offices of emergency medicine. The Report includes a section specific to Florida. The principal "Problem" identified in Florida is that "Florida does not have enough emergency facilities for its residents."
Florida's "Problem" is attributable to a large elderly population, the high percentage of hospital admissions in Florida that come through hospital EDs, increasing hospital ED visits, and the lack of an increase in accompanying acute care hospital EDs. The first "Recommendation" as to Florida is that "Florida policymakers need to increase the number of emergency departments and trauma centers."
There have been no new hospital EDs added in 20 years in Palm Beach County, and, in fact, two were closed (i.e., Palm Beach Regional, near JFK, and Everglades Memorial).
National statistics show that only 20.5% of all ED patients wait 4 hours or more in the ED. Moreover, national benchmarks show that 70.4% of ED patients should be seen within
2 hours.
As demonstrated by ED utilization data from BMH, JFK, Delray, and Wellington Regional, there have been substantial
increases in utilization of area hospitals' ED's in the last two years, and excessively long average lengths of ED patient stays.
At BMH, total ED visits increased from 49,985 visits in 2002, to 52,448 visits in 2004, and to an annualized 55,700 visits in 2005, representing 11.6% growth from 2002 to 2005.
At the same time, the average length of stay for patients seen in the ED is steadily increasing. For patients who were treated in the BMH ED and then admitted to the hospital, the average ED length of stay ("LOS"), from triage until transfer to an inpatient bed, was 6.27 hours in FY 2004, and increased to 6.86 hours in FY 2005. The percentage of patients meeting Bethesda's target 180 minutes ED LOS criteria was only 6.6% in FY 2004, and decreased to 5.3% in FY 2005. Moreover, ED patients experience even longer stays during peak season. The average ED LOS of BMH ED patients who were admitted to the hospital was 11.70 hours in January 2005, and 10.63 hours in February 2005. The ED average LOS during those peak months was higher than the ED average LOS during the same months in 2004.
The ED overcrowding problems at BMH are not solely the result of the growing ED volumes. A growing and major cause of the problem is the bottleneck caused by the lack of available inpatient rooms on the "floors," which leads to "holds" and back-ups in the ED. "Holds" are patients who have been seen in the ED and admitted to the hospital, but who must be held in the
ED for some period of time thereafter waiting for an inpatient bed to become available. One major cause of these "holds" at BMH is the frequent lack of availability of the many semi- private inpatient beds, which occurs when a two-bed, semi- private room must be used for only one patient due to infection control/patient isolation issues or gender concerns.
The availability of nursing staff is not a factor that contributes to the back-ups in the BMH ED. BMH's ED has adequate staff and is one of the best staffed areas of the hospital.
In FY 2005, 9,320 patients had to be "held" in the BMH ED while waiting for an inpatient bed to become available, and the average LOS in ED holds was 3.91 hours. During the peak season, both the number of ED holds and the LOS in ED hold increases. In January, February, and March 2005, over 900 patients were placed in ED hold each month, and the average LOS in ED hold was in excess of 4.25 hours.
When BMH's ED Director testified in the February 2004 hearing, he testified that the number of ED holds was 1,600 in FY 2002, and fewer than 1,000 in FY 2003. There were 9,320 ED holds at BMH in FY 2005.
The high number of ED holds, and resulting back-up and crowding in the BMH ED, has an adverse effect on the quality of care provided to ED patients. The overcrowding causes delays
in the diagnosis of, and provision of needed care to, patients who come to the ED. Often patients are forced to wait hours in the triage area before being seen by a physician because other ED areas are filled with patients being held for inpatient beds.
Another adverse consequence of the overcrowded ED is the growing number of patients who either leave the ED without being seen by a clinician or leave the ED against medical advice. In March 2004, 86 patients left the ED without being seen by a clinician, and 88 patients left the ED against medical advice. By March 2005, those numbers had risen to 218 patients who left the ED without being seen by a clinician, and 140 patients who left the ED against medical advice. In early 2006, BMH had days where as many as 30 people left the ED against medical advice because of the tremendous backlog in the ED.
BMH's expansion of its ED in 2003, did not resolve its ED overcrowding problems. At the time of the February 2004 hearing, it was thought that expansion of the ED would help eliminate ED holds. It is now apparent that the ED backlogs are not due to the amount of ED bed space. Simply increasing the number of bays or beds in the ED has not prevented ED overcrowding.
JFK similarly has experienced increases in ED visits, patient LOS in the ED, and ED holds. ED visits at JFK increased from 50,453 in 2002, to 61,033 in 2005, representing a 21%
increase in ED volume. JFK's inpatient admissions through the ED also increased from 19,426 in 2004, to 21,011 in 2005.
The average LOS for all patients seen in the JFK ED, including patients who were discharged as well as patients who were admitted, increased from 297 minutes in 2004, to 317 minutes, or approximately 5 1/4 hours, in 2005. For the peak season months of January, February, and March 2005, the average LOS for all ED patients was 335 minutes, 377 minutes, and 371 minutes, respectively. In comparison, in March 2004, the average LOS was 325 minutes.
The total hours that patients were held in the JFK ED awaiting an inpatient bed has increased dramatically in the last two years. The total holding hours increased from 19,832 in 2004, to approximately 68,000 in 2005. Further, in 2005, JFK had an average of 197 patients per month leave the ED prior to medical screening.
Like the experience at BMH, JFK's ED expansion in 2003, did not resolve its ED overcrowding problems.
Delray also has experienced increasing ED volumes and overcrowded conditions in the last two years. Delray's ED visits increased from 30,894 in 2002, to 39,745 in 2005, representing a 28.6% increase. Delray's inpatient admissions through the ED increased from 11,412 in 2002, to 13,044 in 2004,
to 13,227 in 2005. Over one-third of Delray's ED patients are admitted as inpatients to the hospital.
Delray's growth in ED utilization has outpaced its consultants' projections. In October 2003, National Healthcare Consultants, Inc. ("NHC"), prepared a report assessing Delray's ED needs, which Delray used to justify its recommendation to Tenet that it needed capital funding to renovate and expand its ED. In assessing Delray's ED needs, NHC found it particularly important that Delray's service area has a large elderly population, defined as aged 65 and over, and that the ED is the "front door" to Delray, as nearly two-thirds of Delray's inpatient admissions come through the ED. Based on Delray's historic ED volumes, NHC projected that Delray's inpatient admissions through its ED would total 12,454 in 2004, and 12,823 in 2005. Those October 2003 projections underestimated the increase in demand for Delray's ED services, as reflected by Delray's actual 2004 and 2005 ED admissions in 2005, set forth previously.
Patients admitted to Delray through the ED often experience lengthy stays in the ED. In 2005, the average LOS for admitted patients was 343 minutes, which surpassed Delray's and Tenet's target LOS of 300 minutes. During the peak season months of January, February, and March 2005, the average LOS was
404 minutes, 460 minutes, and 455 minutes, respectively.
One component of the long LOS in the Delray ED is the time patients are held in the ED awaiting an inpatient bed. In its 2003 report, NHC estimated that Delray should anticipate a holding time of 240 minutes in the ED, or approximately 4 hours, for patients admitted to the hospital after the ED is expanded.
The number of Delray ED patients who elected to leave without being seen by a clinician increased from 906 in 2004, to 1,152 in 2005.
Wellington Regional also has experienced a sharp increase in ED volumes in the last two years. ED visits increased from 31,300 in 2002, to 34,960 in 2004 - - an 11.7% increase. Wellington Regional's own projections of future ED utilization predict an even more dramatic increase in the future. As part of its master facility plan, Wellington Regional projects 41,032 ED visits in 2007, and 48,164 ED visits in 2011. Wellington Regional's inpatient admissions through its ED also are steadily increasing, up from 4,483 in 2004, to 5,013 in 2005.
Further, in the last two years, Wellington Regional experienced a substantial increase in the number of lengthy ED patient stays of more than 6 hours. The number of ED patient stays of 6+ hours increased from 279 in January 2003, to 389 in January 2004, to 509 in January 2005. Peak season ED patient stays of 6+ hours increased from 326 in February 2003, to 411 in
February 2004, to 617 in February 2005. A similar trend was seen in March of each of those years.
Thus, in addition to the new claim of ED overcrowding creating an access issue, changes have occurred with regard to emergency room overcrowding since Bethesda I: it has gotten worse.
In Bethesda I, the following was found:
235. The existing hospitals in Subdistrict 9-5 have been able to meet the needs of the subdistrict by incrementally expanding their facilities when the need arises.
Bethesda I Recommended Order at 63. The experiences in the past two years demonstrate that construction of expanded EDs will not prevent ED overcrowding problems at existing hospitals. The finding in paragraph 235 of Bethesda I was valid because ED overcrowding was not at issue there. But the finding cannot be made in this case because existing expanded EDs have not been able to meet the needs of the Subdistrict, particularly the elderly's need to adequate access to emergency services in the hospitals' EDs.
There is other evidence of ED overcrowding in the Subdistrict.
Several of the letters submitted to AHCA by residents, physicians, and community organizations in support of
Bethesda's proposed WBCH complained of problems associated with long wait times in the existing hospitals' EDs.
As part of its grass roots effort to demonstrate that the community needs a new hospital with hospital-based emergency services in West Boynton, COBWRA asked its resident associations' members for evidence of experiences of lengthy wait times at existing hospital emergency departments. The responses recount experiences in the past two years of excessive wait times in the EDs of all of the hospitals participating in this case.
Some of the community respondents volunteered for depositions regarding their experiences with overcrowded EDs. Bethesda introduced the depositions into evidence. Of these nine depositions, one is from the head of a residents' association, which refers to the reports from members of his association with regard to long wait times in the EDs. The other eight all recount delays in treatments after they presented at the ED with various medical conditions requiring medical treatment.
Prompt access to health care is key to effective treatment of any patient but particularly a patient who is elderly. The elderly have health conditions that are more often life threatening than the rest of the population. Specialty needs of the elderly, moreover, are more often emergent or
urgent. And the elderly are more at risk to adverse outcomes caused by delays in receiving health care.
Overcrowded EDs cause delays in diagnosis and in testing that support diagnosis and treatment. Dr. Lopez-Viego testified as to his opinion on the improvement in quality of care that would result if WBCH with its ED becomes a reality:
[I]f you built a 12-room emergency room in the ground floor of an adequate hospital, that would make a big difference. That patient would be seen sooner, would be evaluated sooner, would be operated on sooner, and would probably be discharged sooner and in better condition.
And for those of us who spend our lives running around taking care of the sick patient and answering that kind of a call, which after years can get somewhat tiring, that's where we see the benefit in the hospital out west.
I am sure you all have statistics and numbers and all that. But there is no statistic I think that's more important than the number of pages that I get and when I get them and the number of phone calls that I get and the look of patients and families when they see me and tell me we have been here for 15 hours and nothing has been done, what's going on here.
Clearly the systems are under pressure. The systems are under pressure, the nurses are under pressure, the emergency rooms are under pressure, and the community demands and probably needs better than that.
Tr. 212 (emphasis supplied).
Of the eight elderly emergency room patients mentioned above, however, no clinical evidence was offered of an adverse impact to outcome in any of their specific cases. But their anecdotal experiences supplement the evidence of ED overcrowding in the Subdistrict and additional lengths of stay in the EDs since the data considered in Bethesda I. Dr. Lopez- Viego's opinion based on extensive experience in the Subdistrict as well as the opinions of other clinicians (Dr. Brito and
Dr. Raborn, for example) supports the finding that a significant number of elderly patients in the West Boynton area will enjoy not only enhanced access to Emergency services but better quality of care in WBCH's ED and in other basic acute care services if WBCH becomes a reality.
There is more to the issue, however, as the evidence presented by Wellington, JFK and Delray points out.
First, the distinction must be drawn between WBCH's providing improved quality of care for elderly patients who would be close to emergency care in the West Boynton area and the relief that WBCH would offer to overcrowded EDs in the Subdistrict or Palm Beach County.
Just as expanding existing EDs will not solve the problem, WBCH and its emergency services will not solve ED overcrowding in the Subdistrict or the county.
Emergency room crowding has multiple causes. A major cause, if not the primary cause, is the number of uninsured who use the emergency room for primary care. Few of the elderly population in the West Boynton area, a relatively affluent area and expected to remain so, are uninsured. The vast majority are covered by Medicare. A WBCH ED, therefore, is less likely to have the overcrowding caused by the uninsured who use ED for primary care.
On the other hand, since elderly patients from the West Boynton area are not the cause of ED overcrowding, a WBCH ED is unlikely to solve ED overcrowding in the Subdistrict and the County. A WBCH ED may contribute to a marginal reduction in overcrowding in the short term but it will not stop overcrowding in existing EDs. A WBCH will, however, solve the overcrowding problem encountered by the elderly who reside in the West Boynton area when they seek health care service in an emergency room. For them, WBCH should provide an ED that is not crowded, an enhancement in access that will improve their quality of care.
Another aspect of the emergency room issue is a shortage of certain on-call specialists to serve in Palm Beach County EDs: one of the factors that weighed against approval of Bethesda's application in Bethesda I. Findings of fact related
to the On-Call Specialist Shortage are made below under the section devoted to Subsection (4) of the Statutory Criteria.
Freestanding Clinics
The argument has been made in this case that the way to solve emergency room overcrowding is to provide alternatives to emergency rooms: freestanding clinics where patients with low acuity problems can be seen.
The alternative of freestanding clinics to date do not seem to have solved the problem of ED overcrowding. There are numerous freestanding urgent care centers and community clinics currently in operation in south and central Palm Beach County. Two county health clinics are located near JFK and Delray. Despite the existence of urgent care centers and county health clinics, the ED volumes at BMH, Delray, JFK, and Wellington Regional are heavy and continue to increase.
Hospital-based emergency services are accessible to low income and uninsured patients because federal regulations such as EMTALA require hospitals to triage and stabilize all patients. Urgent care centers are not likely to be able to alleviate the crowding in hospital EDs because urgent care centers demand payment up front, which would be prohibitive to the high number of uninsured patients who access hospital EDs for treatment.
266 Unlike hospital EDs, moreover urgent care centers and primary care clinics are not open 24 hours a day, 7 days a week.
Starting in 1995, Bethesda operated an urgent care center at Bethesda Health City for three to four years. The urgent care center did not off-load any of the patient volume from the BMH ED. The urgent care center never achieved any significant patient volume, despite Bethesda's marketing efforts and offering of extended weekday and Saturday hours.
Cultural Access:
Special Needs of Spanish-speaking Migrants.
The "Summary" section of the SAAR, Section F., pgs.
33-36 summarizes Bethesda's application. Under the heading, "Need," in this section of the SAAR, AHCA lists six bullet points introduced by an italicized statement: "After weighing and balancing all relevant criteria, the following issues are
presented."
One of the six relates to needs of the Hispanic population. It states:
The Hispanic population is projected by the applicant to grow 47 percent in the proposed service area from 2004 - 2009, compared to a projected 18 percent growth of the total population of this area, not including the number of undocumented immigrants, who are likely to be uninsured. The applicant expects the adjacency of the proposed location to the Caridad Health Clinic will increase access to inpatient and emergency services for these and other indigent groups in the service area. It is clear the
applicant expects significant growth within this community that is disproportionately less likely to be insured than the general population.
Ex. B-1F, at 34.
The effect Bethesda expects WBCH to have on the Hispanic population in the District and the Subdistrict, particularly the un-insured segment of this population and its access to emergency room and basic hospital services, was a factor in AHCA's preliminary decision to approve the application. Asked to generally describe the Agency's decision, Mr. Gregg stated in part:
The primary reason for approval of this application was local population growth in the immediate area compared to the surrounding area and the county in general. Included in that population growth were special considerations for the Hispanic population . . . .
The Hispanic population is significant because it's the most likely population to be uninsured. And therefore, any hospital that would have an emergency department would be significantly affected by people who are more likely to be uninsured due to federal EMTALA laws and regulations.
* * *
Because this proposal is located for a suburban area, interior Palm Beach County, which one was undeveloped and now is very rapidly developing, it presents an opportunity for access improvement.
This is specifically oriented toward emergency services and basic hospital
services. And since the current market is one that was traditionally not populated and one that is for the most part gaining in population but currently divided by more than one provider basic acute care services, the impact on any one of them will not be so significant and in our view is outweighed by the chance for access improvement for the people who will live in this immediate area in the future.
Tr. 3444-46, (emphasis supplied.) Mr. Gregg continued:
We also think that this proposed satellite hospital which would be located in a relatively well insured suburban population would support the traditional safety net function of the Bethesda Hospital that currently exists.
Tr. 3447.
"Cultural access" issues refer to the extent to which certain persons cannot or do not gain access to existing healthcare facilities due to cultural factors such as race, ethnicity and national origin. There is no evidence in this case that there is a denial in the Subdistrict of access to healthcare services on the basis of Hispanic culture. Indeed, all of the hospitals in this proceeding provide access at their facilities to the Hispanic population in the Subdistrict. Bethesda's access case with regard to Hispanics, however, is not one of access denial access. Rather, it is based on enhancement of access to hospital services, particularly emergency room services, by patients that receives basic services at a health
care facility close to WBCH's proposed site: the Caridad Clinic.
Caridad Clinic
Caridad Center is located at 8645 West Boynton Beach Boulevard, west of the Turnpike. A charitable health, education, and outreach center sponsored by the Migrant Association of South Florida, its mission is to upgrade the health, education and living standards for the children and families of agricultural workers, laborers, and the underserved. Consistent with its mission, the center's vision is to end the cycle of poverty for the migrant families and others it serves in South Florida. Its clients are mainly the children and families of Hispanic laborers and agricultural workers, most of whom are migrant workers and some of whom are undocumented immigrants.
In support of its mission and vision, the center includes a clinic. The Caridad Clinic offers wide-ranging adult and pediatric medical, dental, and social services to Spanish- speaking medically indigent and migrant populations who are generally underserved in Palm Beach County, because of their status as migrants or their undocumented status. In a typical year, Caridad Clinic provides free, quality medical and dental care for about 7,000 individuals who live and work in Palm Beach County. The services include 1500 to 1800 patient visits each
month to a physician or a physician's assistant for an annual total that exceeds 18,000 patient visits.
Richard B. Raborn, M.D., is an expert in internal medicine and the President of the BMH Medical Staff, a position also referred to as "chief of staff." He has a long-term relationship with the Caridad Clinic. His professional relationship with the clinic began shortly after Hurricane Andrew in 1992 but his personal relationship with the clinic preceded that date. After an interruption in his professional relationship between 1999 and 2002, Dr. Raborn resumed his close professional relationship with the clinic. At the time of hearing, Dr. Raborn was the clinic's volunteer medical director.
Dr. Raborn described the types of patients and services at Caridad Clinic at final hearing:
We have both medical and dental . . . We treat patients, both pregnant women about to give birth . . . up to pediatric, giving full immunization schedules for children going to school and doing some of their school physicals. Also we do some of their chronic care. We have a huge problem with diabetes, hypertension, malnutrition. . . .
[W]e address . . . adults and children.
Tr. 146-7.
Occasionally Caridad patients come from as far away as Polk County. The great bulk of the patients work or reside in Palm Beach County at the time of their visit to Caridad. Dr. Raborn postulated that 90% of them come from within a 15-
mile radius of the center. For the most part, Caridad patients come from wherever inexpensive housing is available in different parts of Palm Beach County. It is unclear from the record, however, where in the County many of them originate and in what precise proportion they come from any one part of the county.
Much of the evidence on the locus of Caridad patients presented by Bethesda's opponents focused on data that showed a larger portion of the Hispanic population to reside east of the Turnpike and closer to existing hospitals rather than the proposed WBCH site. But this data did not include undocumented workers, who make up a substantial part of Caridad's patients, and did not include many migrant workers even if they have appropriate work papers. As further explained by Dr. Raborn, "migrant workers . . . look for shared housing, rental housing, where three or four people can be in an apartment, or where they can put a trailer on property." Tr. 167. While there is a regular population of migrant workers in the Lake Worth area close to I-95 that frequently seek services at the Caridad Clinic, many of the migrants are housed in areas further west. Dr. Raborn observed, "especially when [the migrants] are working on crops . . . you . . . see more trailers . . . out as far as 441." Tr. 166. In short, data of where the patients originated, even if made available to Caridad, would likely be unreliable because of the nature of the patients; migrant
workers are not normally in any one place for any substantial length of time.
As for access by the Hispanic population in general, the evidence demonstrated that existing hospitals have programs and services in place intended to address cultural and language differences between English-speaking and Spanish-speaking populations. Many of these efforts to accommodate speakers of Spanish are required by law. The Caridad Clinic, on the other hand, does not focus so much on the Hispanic population at large in the Subdistrict, however, as it does on the segment of the Spanish-speaking population that, as the name of its sponsor suggests, consists of migrant workers. As one would expect some of these patients are undocumented. With regard to this underserved population, Caridad serves as an appealing alternative because, in the words of Dr. Raborn, "they are welcomed, there is no cast of suspicion on them." Tr. 168. In addition, Caridad will qualify a patient for treatment up to 200% of the federal poverty line. They can be working, therefore, and still receive care.
At BMH inpatient admissions from Caridad Clinic are always accepted. But, however close it relationship with the clinic historically and because of present personnel configurations, Bethesda has no special contractual relationship with Caridad. In addition to Bethesda's support, Delray and JFK
are chief supporters of the clinic and all of the hospitals in Palm Beach County support the clinic to some degree. Still, there are a number of factors that favor the likelihood that the proposed project will increase to access to hospital services, particularly emergency rooms services, for Spanish-speaking migrant workers and undocumented immigrant laborers.
First, the medical staff at BMH have consistently supported Caridad Clinic and its patients in the past. In addition to the extensive experience with Caridad of the Chief of the Medical Staff at BMH, BMH's Medical Director, Dr. Biehl, works as a liaison between Caridad Clinic and the BMH medical staff to coordinate necessary testing and surgical procedures for Caridad Clinic patients.
Two studies published since the February 2004 hearing address the special needs of the Hispanic population in terms of access to health care services, such as cultural issues and language barriers that can impede access to care. Bethesda addresses those special needs and facilitates access to care by providing interpreters for non-English speaking Hispanic patients (as do the existing providers who oppose the application in this proceeding), as well as multi-lingual instructions and educational materials as required by law. The recent studies also found that the Hispanic population is less likely to seek and receive basic health care services. Bethesda
addresses that special need by providing a number of special programs for Caridad Clinic and Hispanic patients, such as adult and pediatric wellness programs, multi-lingual prenatal classes at Caridad Clinic, and a diabetes resource center at Bethesda Health City.
Establishment of the proposed WBCH at its selected site, because of its proximity to the clinic, will assist in addressing the special needs of patients from Caridad Clinic for hospital and emergency services.
Two of the biggest health-related issues for the population served by Caridad Clinic are transportation to Palm Beach County hospitals from the western parts of the County and overcrowded emergency rooms. Once at the Caridad Clinic, patients now must travel significant distances to access an existing hospital. And they may have to travel a significant distance from wherever they reside in the county if they do not go to the clinic first. Complicating their situation is a lack of regular public bus transportation available from the Caridad Clinic or anywhere else in West Boynton to existing hospitals.
Bethesda's proposed WBCH will be approximately 1 1/2 miles from Caridad Clinic. Caridad Clinic will be much closer to WBCH than to any existing hospital, and that adjacency will increase access to emergency room and some in-patient services for those who utilize the Clinic. Bethesda intends to
coordinate services at WBCH with Caridad Clinic and to specially train the WBCH staff with respect to the unique needs of Hispanic immigrant and migrant populations, which will help ensure that high quality of care is provided to Caridad Clinic and its patients.
Bethesda's proposed WBCH is supported by Caridad Clinic. In addition to Dr. Raborn's testimony at final hearing, the previous Medical Director of Caridad Clinic, Michael E. Kasabian, M.D., and the CEO of Caridad Clinic, Mr. Pedro del Sol, submitted letters of support.
For all the factors supporting the likelihood that access to hospital services, particularly emergency room services, will be increased for migrant workers and their families, there is a deficiency of some magnitude in the application's proposal from the perspective of access: access to certain in-patient services.
When asked whether the Caridad Clinic is aimed at handling patients in need of inpatient services, Dr. Raborn candidly answered, "No. The fanciest technology we have are EKGs and a chest x-ray. That's about it." Tr. 161-2.
Patients from Caridad Clinic, of course, require hospital-based testing on occasion (up to 20 times a month). Hospitalizations of Caridad Clinic patients for more serious conditions generate as many as 10 hospital admissions a month.
These admissions from Caridad Clinic fall generally into two categories: surgical cases and cases of labor and delivery or obstetrics (OB). Between the two categories, surgical and labor and delivery, more Caridad patient hospital admissions are for labor and delivery.
The proposed project with its emergency room, as with any emergency room, will provide emergency OB. But WBCH as presently proposed, should it be approved, will not have in- patient OB services. The lack of in-patient OB services when the majority of Caridad patients admitted to hospitals are OB patients diminishes the weight given to the increased access to hospital service that WBCH poses for the Hispanic migrant population in Palm Beach County
Special Needs of the Elderly
It is a common health planning practice to project the need for a new hospital based on the elderly population of the area to be served because the elderly are likely to use hospital services. For purposes of these findings, "elderly" are considered the age cohort 65 years and older.
The Agency considers the "elderly population" growth in the West Boynton area compared to the elderly population growth elsewhere in the Subdistrict and Palm Beach County to be a factor favoring the application because it presents an opportunity for access improvement.
Based on 2005 population estimates, 43.2% of the residents of the WBCH home-site zip code, 33437, are ages 65 or over, and 30.0% of the residents of the four zip code PSA are ages 65 or over. That compares to 22.2% of Palm Beach County residents and 17.7% of Florida residents. The large elderly population in the West Boynton area is projected to continue to grow steadily. The elderly (65+) population of the four zip code PSA is projected to grow from 58,812 in 2006, to 66,143 in 2011, to 74,165 in 2015. Home-site zip code 33437, alone, is projected to have 26,655 elderly residents in 2010.
In contrast to the large elderly population in the West Boynton area, the population of the Wellington area and the "western communities" is much younger. (The "western communities" are generally three development areas in central Palm Beach County. North of the West Boynton area and west of the turnpike, they consist of Wellington and just to its north Royal Palm Beach, as well as an unincorporated area called The Acreage, further north still, consisting of 18,000 vested lots. See tr. 1493.)
The 65+ population in Wellington zip code 33414 was only 4,084 in 2004. It is projected to grow to only 6,175 in 2011. That projected 2011 elderly population in Wellington is slightly more than one-half of the additional growth alone in
the elderly population projected for the WBCH PSA over the period of time 2004-2011.
Given the "much larger" elderly population in West Boynton as compared to Wellington, it is reasonable to expect a proportionately greater need for health care services by West Boynton residents than by Wellington residents.
Numerous age-restricted community associations submitted letters of support for a West Boynton hospital to serve the needs of their elderly residents, and several elderly residents testified on Bethesda's behalf. Among the many supporters of Bethesda's application in the West Boynton area is Sonny Nguyen, M.D., a primary care physician. Dr. Nguyen has an office at Bethesda Health City. More than 50% of his patients are elderly (65+). Many have conditions such as chest pain, pneumonia, or abdominal pain, which require hospitalization. In emergencies, these patients generally prefer to be within 30 minutes driving time of a hospital.
Many other physicians submitted letters of support for the proposed project. Barry M. Schultz, M.D., a Board- certified Geriatrician, wrote, "I feel that a hospital in West Boynton Beach is urgently needed by the ever growing elderly population in Palm Beach County." Ex. B-1D, Omissions Response, Tab D, "Medical Staff Resolution and Letters of Support."
The aging population increases emergency room utilization, inpatient admission rates, and patient length of stay due to the complexity of the health problems of the elderly. Individuals 65+ tend to utilize acute care hospital services at a far higher rate than younger age groups. The national use rate for inpatient hospital services of the 65+ age category is more than four times greater than the use rate for those younger than 65. In Florida, the elderly account for almost 5 times more acute care inpatient days than those younger than 65. Fewer elderly residents will utilize more hospital services than will a larger number of younger residents.
The number of patient days for elderly patients in the WBCH PSA increased from 61,596 in 2003 to 66,070 in 2004.
In addition to the greater demand for inpatient services, the elderly utilize hospital emergency departments (ED) 33% more frequently than those younger than 65. When the elderly do present in an emergency department ("ED"), they are much more likely to be in a compromised state of conditions requiring "Emergent" care, meaning that the patient should be seen by a health care practitioner in less than 15 minutes.
The Center for Disease Control (CDC) classifies ED patients as "Urgent" if the patient should be seen within 15-60 minutes, and as "Semiurgent" if the patient should be seen in 61-120 minutes. "Non-urgent" patients should be seen within two
to 24 hours. A May 26, 2005 CDC report found that nationally, for all ages, 15.2% of ED patients were "Emergent." In contrast, 25% of ED patients age 65 or older were "Emergent." The 2004 version of the same CDC report shows in further detail that for patients 65-75 years old, 81.1% who presented in hospital ED's were either "Emergent," "Urgent," or Semiurgent," meaning they should all be seen within two hours or less. Only 7.2% of elderly ED patients in 2005 were classified as "nonurgent." In short, the elderly are prone to a wide variety of diseases and injuries that require emergency treatment ranging from "Semiurgent" to "Emergent" categorization, often followed by inpatient admission.
Bethesda intends to establish a primary stroke program at WBCH that will be fully integrated with the existing stroke program at BMH. In stroke care, time is of the essence. A West Boynton hospital-based emergency service, with physicians and staff specially trained for the treatment of stroke, will be a benefit to West Boynton residents, and particularly the elderly, who are more susceptible to stroke.
Bethesda's WBCH will offer a focused geriatric program and a full array of hospital-based services for the elderly, in an accessible West Boynton location. Bethesda will provide special staffing for elderly geriatric programs, and the WBCH facility will be specifically designed to enhance
accessibility for elderly patients. Bethesda intends to work with OMEGA of Palm Beach County, an organization that studies the health care needs of the elderly, to determine precisely the geriatric and elderly programs to offer at WBCH. No comparable focused geriatric program currently exists at any Palm Beach County hospital.
The focused geriatric program proposed by Bethesda was not proposed in its prior 2003 Application. Bethesda has developed the focused geriatric program, with the assistance of OMEGA, for the current application.
The availability of accessible hospital services is particularly important for elderly patient populations due to the driving challenges that face the elderly, such as aversions to driving at night or in crowded conditions, confusion, eye- sight related issues, and diminished reaction/response times. It is reasonable to expect that the elderly may have increased difficulty navigating busy or congested roadways or intersections.
Numerous Florida and national studies published since the February 2004 hearing increasingly highlight the driving challenges of the elderly. Those studies demonstrate that the elderly have more traffic accidents, take longer to adjust to lighting changes from day to night, tend to want to drive during limited times of the day and during ideal weather, and drive at
a slower rate. The Florida Department of Elder Affairs reported in a 2004 report that 30% of elderly Florida residents reported limitations to their driving.
A recent article published in Medical Risk Management Advisor (4th Qtr. 2004) sets forth the following "Medical Conditions That May Impair Driving" for the elderly:
Vision: cataracts, diabetic retinopathy, glaucoma, macular degeneration
Cardiovascular: arrhythmias, congestive heart failure, valvular disease
Cerebrovascular: stroke, subarachnoid hemorrhage, syncope
Neurologic: multiple sclerosis, Parkinson's disease
Psychiatric: depression, anxiety disorders, psychotic illness
Metabolic: hypothyroidism, hyperthyroidism, Type I-II diabetes mellitus
Musculoskeletal: arthritis, abnormalities, spinal limitations
Peripheral Vascular: deep vein thrombosis, aneurysm
Respiratory: asthma, chronic obstructive pulmonary disease, sleep apnea
Anesthesia and Surgery: use of general, local, or epidural anesthesia
Renal: chronic renal failure, renal transplant
JFK's witness, Dr. Luke, contended that the elderly do not begin to experience age-related driving problems until age 80, but that is not supported. Numerous studies report that age-related driving problems begin as early as 60.
Dr. Luke's distinction between the "young" or "active" elderly, generally between the ages of 65 and 80, and the "frail" elderly, generally 80 and over, is not, of course, a bright line. Those over the age of 80 may be active and those between the ages of 65 and 80 may be frail. But his distinction between the active elderly and the frail elderly, whatever the appropriate division into cohorts by age, has merit. Housing in the West Boynton area is marketed to an active elderly population. In contrast to the active elderly, the frail elderly are more likely to live with others, in assisted living facilities or in nursing homes. They are not likely to live in the single-family housing units being developed in the West Boynton area. Nor are the frail elderly as likely to drive themselves or be driven by a spouse to the hospital or a hospital ED. The active elderly who live in the West Boynton area are much more likely than the frail elderly to be drivers and to drive themselves or an elderly spouse or family member to the hospital or a hospital ED.
Distance and Travel Time to Existing Hospitals Distances to Existing Hospitals
WBCH will be located at the intersection of State Road 7 and Boynton Beach Boulevard, approximately 2 miles west of the Turnpike, and 11 miles west of BMH.
The closest existing hospital to the WBCH site is Wellington Regional, which is approximately 9 miles away. JFK, Delray, and West Boca are all approximately 12 miles from the WBCH site.
PBC Fire Rescue Station No. 47 is located at the intersection of Boynton Beach Boulevard and the Turnpike in West Boynton. Station No. 47 is approximately 9.8 miles from JFK,
8.5 miles from Delray, 10.9 miles from Wellington Regional, and
10.9 miles from BMH.
In the 1980's HCA, Tenet, and Universal, or their predecessor for-profit companies, established new hospitals in western Palm Beach County that were closer to existing or approved hospitals than the WBCH site is to existing hospitals. Wellington Regional and Palms West were constructed less than 4 miles apart in the "western communities" area. West Boca was constructed in southwest Palm Beach County at a location approximately 8 miles from Delray, and 7 miles from Boca Raton Community Hospital.
Increasing Traffic Congestion Stemming from Population Growth
and New Residential and Commercial Development
There is growing and increasingly unpredictable traffic congestion in the West Boynton area and throughout Palm Beach County, due in large part to the rapid population growth and new development. The major roadways in West Boynton already carry a great deal of traffic. Peak traffic hours bring substantial congestion on the major arterial roadways in West Boynton, notwithstanding the expansion and widening of several roadway segments in the last year. Traffic is further slowed by a plethora of traffic signals, and many new signal installations are planned and funded to keep pace with the rapid residential and commercial development in the area.
Rapid development in the West Boynton area has already placed a strain on the existing roadway system. Although certain segments of some roads in West Boynton have recently undergone expansion, the improvements overall are relatively few. Nearly all of the recently completed and currently funded roadway expansions are associated with large residential developments, with the roads at issue projected to be near capacity at or shortly after completion.
It is reasonable to expect that the substantial increases in traffic volumes combined with the ongoing development and the proliferation of traffic signals on major
arterial roadways throughout the area will result in increased and unpredictable congestion and travel times through and from West Boynton to outlying existing hospitals by 2010 unless roadway improvements are made or other measures are taken to counter traffic problems caused by growth.
Evidence was presented regarding extensive recent and planned residential, commercial, and school development, all of which is accompanied by installation of new traffic signals and increased traffic congestion, along the major east-west and north-south roadways in West Boynton, including State Road 7, Lyons Road, Hagen Ranch Road, Jog Road, Military Trail, West Atlantic Avenue, Boynton Beach Boulevard, and Lantana Road.
Signals are generally recognized as the primary cause of increased delay and lower speeds with respect to travel times. Signal cycle lengths (the length of time it takes for a signal to cycle from green through yellow, red, and back to green) at major intersections in Palm Beach County generally range from 90 seconds at minor intersections to 160 seconds at major intersections. The intersection of Forest Hill Boulevard and State Road 7, one of the busiest in the County, is a very congested intersection with triple left-turn lanes and a signal length of 160 seconds. Many of the signals on Boynton Beach Boulevard are also set at 160 seconds.
Other than on the short segment of Boynton Beach Boulevard immediately approaching the Turnpike ramp at Jog Road, the County has not installed signal progression timing west of the Turnpike. There are no current plans for coordination of traffic signals in West Boynton. But it is likely that many, if not all, of the traffic signal cycle lengths in the West Boynton area will someday be coordinated by the County as traffic becomes more congested unless the County opts to give a roadway a CRALLS designation.
For example, Forest Hill Boulevard has a CRALLS designation from the County. Such a designation indicates the roadway is a constrained facility. (A CRALLS designation is a third option under concurrency requirements, the first two being demonstration of capacity or an ability to increase the capacity to reach the appropriate level of service.)
Consistent with the CRALLS designation, rather than widen the boulevard to six lanes west of State Road 7, the county has chosen to keep Forest Hill Boulevard at four lanes and to suffer the consequences. The consequences include "huge backups," tr. 1703, during the evening peak hour. Another hospital in the central part of the County, JFK, is also located on a very heavily congested roadway with a CRALLS designation, i.e., Congress Avenue.
Several witnesses testified that the drive times from West Boynton locations, such as Bethesda Health City, Caridad Clinic, or residential communities both east and west of the Turnpike, to existing area hospitals often are around 30 minutes now, and on occasion, may be as long as 45 minutes or more, depending upon the time of day and traffic congestion. Even a major corridor like Interstate 95, east of the West Boynton area, can see drive times up to 40 minutes for trips along the adjacent surface roads from BMH to Delray.
The traffic congestion is not limited to the West Boynton area. In 2004 and early 2005 every east/west artery in Palm Beach County was congested. Some of that congestion has been reduced by fly-overs. For example, fly-overs have now been constructed as part of Southern Boulevard over Military Trail, Haverhill Road, Jog Road and State Road 7. These fly-overs have greatly alleviated congestion on Southern Boulevard because the travelers on Southern no longer need to stop at the traffic signals at these intersections.
Traffic congestion is a major concern of the Sheriff's Office because it affects incident response times. A new hospital at the corner of Hwy. 441 and Boynton Beach Boulevard will be easily accessible to many of the new developments in Palm Beach County because traffic flows much faster heading west than heading east. From the standpoint of
the Sheriff's Office, the location of a hospital is a primary concern with regard to transporting patients. Along State Road 7, traffic flows faster south toward the WBCH site than northward for residents in the Lantana Road area because most of the commercial development is northward from there to the Wellington area where traffic is often congested.
Increasing Delays in Accessing Hospital Emergency Services
Traffic congestion and increases in drive times to existing hospitals adversely affects West Boynton patients who seek emergency services. Most individuals, including the elderly, access hospital emergency services in Palm Beach County by private car or some means other than ambulance transport, so traffic delays directly impact those patients' ED access. At JFK, for example, only about 26% of ED patients arrive by ambulance.
PBC Fire Rescue supports the proposed WBCH because of the population growth in the West Boynton area, and the accompanying increasing traffic and congestion it expects.
PBC Fire Rescue Station 47, which is located at the intersection of Boynton Beach Boulevard and the Turnpike and serves the West Boynton area, has experienced a steady increase in call volume in the last two years. Station 47's volume increased from 1,799 incidents for the year ending July 1, 2003, to 2,472 incidents for the year ending July 1, 2005, - - a 37%
increase. Approximately 85% of those calls were medically related. Station 47 had almost 700 patient transports to hospitals for FY 2005, up from only 520 transports for FY 2003.
Currently, there is no hospital located within Station 47's response zone. Station 47 units must travel out of zone and traverse the County to transport patients to existing hospitals, and then return to zone. Such transports not only take a unit out of service, but also increase response times, as surrounding stations must cover the Station 47 response area, all of which is exacerbated by the increasing traffic and congestion. As Chief Baker described, the time it takes to traverse the roadways is extensive in the morning, lunchtime, and during rush hour traffic.
The longest PBC Fire Rescue average hospital transport times are calls originating in zip codes 33437 and 33467, the two western-most zip codes in the WBCH PSA, and those transport times increased from 2004 to 2005.
Another factor that negatively impacts PBC Fire Rescue is the amount of time it takes a unit to turn a patient over to the receiving hospital, known as "turnover time." PBC Fire Rescue must turn a patient over to an ED physician, nurse, or paramedic, and the number one factor that delays such turnovers is bed availability in the ED, accounting for over 90%
of extensive turnover times. The availability of on-call physician specialists does not affect turnover times.
All the EDs in the Boynton and Delray areas are busy.
The EDs are oftentimes backed-up. Turn-over times for PBC Fire and Rescue can take 45 minutes to an hour because of the presence at the hospital of more than one PBC Fire and Rescue ambulances, as well as ambulances from municipal ambulance units and private ambulance companies.
From August 1, 2004, through July 31, 2005, 174 of 696 total transports from Station 47, or approximately 25%, had turnover times greater than PBC Fire Rescue's target of 15 minutes. At Delray, 733 transports, or 17% of the total transports, moreover, had turnover times greater than 20 minutes.
Data from PBC Fire Rescue shows that the cumulative response, travel, and turnover time associated with transporting patients from the West Boynton area to existing hospitals exceeded 30 minutes in 2005, for all 4 WBCH PSA zip codes.
Bethesda's proposed WBCH would be approximately 2.3 miles from Station 47, and would also be in closer proximity than existing hospitals to two new PBC Fire Rescue stations planned for the West Boynton area. For the vast majority of West Boynton area patient transports, PBC Fire Rescue would take the patients to WBCH, consistent with its policy of transporting
patients to the closest hospital. As discussed infra, only in the case of trauma alert patients and patients who are coded as "cardiac alert suspected MI," would PBC Fire Rescue bypass WBCH for another facility. The only other bypass protocol is for "stroke alert," but WBCH is expected to be a primary stroke center.
Patients at BMH, according to patient surveys conducted by Bethesda, show generally show satisfaction with the services and quality of care received at the hospital. But they also show "the trend that patients are dissatisfied with their wait times in the emergency room." Tr. 1160
Bethesda's Travel Study
Bethesda presented a drive time analysis performed by its traffic engineering expert, Mr. Rennebaum. In support of Bethesda's 2003 Application, Mr. Rennebaum had conducted a general analysis of traffic conditions on Boynton Beach Boulevard from State Road 7 easterly to Military Trail. That analysis did not involve actual travel time runs. It was limited to the projection of traffic conditions based on 2003 Palm Beach County traffic counts on a single segment of roadway, i.e., Boynton Beach Boulevard between State Road 7 and Military Trail.
For this application, Mr. Rennebaum assessed travel times based on travel time runs to the closest hospitals along
several roadways, conducted under his direction in April 2005. He also prepared an analysis of future travel conditions, based on the travel time runs, Palm Beach County official traffic counts, and future growth projections, as well as County traffic signal installation reports. Mr. Rennebaum's new analysis also considered various factors that can reasonably be expected to contribute to increased travel time in West Boynton, such as the proliferation of traffic signals on major arterial roadways, burgeoning residential and commercial developments, seasonality, weather, accidents, and elderly driving issues.
Mr. Rennebaum's analysis demonstrated that travel time from a central point in West Boynton to all surrounding hospitals was approaching 30 minutes in April 2005. One year later, in March 2006, the travel time to surrounding hospitals remained near or exceeded 30 minutes, notwithstanding roadway widenings, as more residential and commercial projects had been constructed.
To conduct his travel time study, Mr. Rennebaum identified two alternate routes from the entrance of the Canyon Lakes project, then under development, to the front door entrance of each of the surrounding hospitals, i.e., Delray, JFK, BMH, Wellington Regional, and West Boca. Mr. Rennebaum chose Canyon Lakes because it is a central point in West
Boynton. Further, Canyon Lakes was then the nearest existing residential development to the WBCH site.
The entrance to Canyon Lakes is on Lyons Road, south of Boynton Beach Boulevard. Lyons Road does not extend southward into the West Delray area. Residents of the Canyon projects must head north on Lyons Road to Boynton Beach Boulevard to exit the area, even if they are heading to a hospital to the south, such as Delray or West Boca.
In April 2005, at the time Mr. Rennebaum performed his travel time runs, no one lived in the homes being constructed in Canyon Lakes, and there was no traffic at that time, as compared to the present.
Four runs were conducted on each route during both
A.M. (7:30 or 8:30 start) and P.M. (4:00 or 5:00 start) peak periods to each of the hospitals, for a total of eight runs to each hospital, with the exception of Wellington Regional, for which only one day of data, or four travel runs, could be obtained.
The County's internal traffic performance data collection protocol mandates that travel time measurements be taken during both the A.M. and P.M. peak hours, and that is the standard of practice for general travel time studies in Palm Beach County. It is also well established that travel time runs should be conducted Tuesday through Thursday, avoiding Mondays,
Fridays, weekends, and holidays as not representative of normal traffic conditions.
Mr. Rennebaum employed the "maximum car technique." He directed the drivers in his travel time study to drive with the average flow of traffic, without exceeding the speed limit. That is a reasonable methodology because during peak traffic hours in West Boynton, the major roadways are congested, and drivers likely are not able to exceed the posted speed limits.
The Manual for Uniform Traffic Studies ("MUTS Manual") sets forth detailed requirements for a specific type of travel time study known as a "travel time and delay study." Travel time and delay studies are typically performed by the Florida Department of Transportation, and are used for specific technical purposes, such as signal retiming and to determine the "level of service" on a roadway. The MUTS Manual mandates very specific protocols for conducting "travel time and delay studies," and specifically states that the protocols are not appropriate for application to segments of roadways exceeding 2 miles in length.
Mr. Rennebaum's travel time study was not a "travel time and delay study," and hence application of the MUTS Manual study specifications to Mr. Rennebaum's general travel time study would have been inappropriate.
Mr. Rennebaum's travel time runs started near the entrance to the new Canyon Lakes project. However, an important aspect of many West Boynton area residents' drive times is the length of time that it may take simply to travel through and exit the many large and densely developed residential communities onto a major roadway. The large communities in the Ag Reserve are generally developed at two units per acre, and those to the north are 2 1/2 to 3 units per acre. Several community witnesses testified that it routinely adds up to 5 minutes, and can add up to 8 or 10 minutes to their drive time to exit their community.
Furthermore, the influx of part-time residents during the "peak season" winter months results in heavier traffic and increased travel times.
Palm Beach County calculates growth rates each year based on three years' prior actual traffic count data. Traffic volumes in West Boynton continue to grow, and many segments of the main arterial roadways are projected to continue to experience double-digit growth rates.
Mr. Rennebaum's methodology in obtaining actual drive times to the surrounding hospitals was reasonably based on the standard of practice in Palm Beach County. Mr. Rennebaum reasonably relied on Palm Beach County Traffic Performance Standards, a report published by Palm Beach County reflecting an
inventory of all approved, both un-built and under construction, projects that will impact the area roadways, as well as the County's official record of actual historic growth rates in traffic volumes on the major roadways in West Boynton in projecting future growth and congestion.
The Palm Beach County Traffic Performance Standards, once updated annually, are now updated on a monthly basis just to keep pace with the rapid development in the area.
Historic growth rates in traffic volume on major arterial roadways in West Boynton have ranged from 3.85% compounded annually to as high as 26% compounded.
Taking into account the substantial number of newly constructed and planned residential and commercial developments in the West Boynton area, as well as West Delray and Wellington, and the substantial increase in new and planned traffic signal installations along major arterial roadways, it is reasonable to expect that traffic volume and congestion will substantially increase such that travel times from West Boynton to the closest surrounding hospitals will exceed 30 minutes by 2010.
Moreover, increased congestion on the roadways is likely to have an even greater adverse effect on the ability of elderly drivers to negotiate the roadways.
Travel Time Standards
The Agency has not promulgated a travel time standard by rule. In the Recommended Order in Bethesda I, however, it was found that "[a] reasonable geographic access standard for persons living in an urban area is a drive time of 30 to 40 minutes to an acute care hospital." Id. at 61. This finding was accepted by the Agency in the Bethesda I Final Order.
Despite its acceptance of this standard as a reasonable one in Bethesda I, and despite the conclusion of the traffic time studies by experts who testified in this hearing that drive times to hospitals from the West Boynton area that travel time is generally less than 40 minutes and rarely exceeds
40 minutes, AHCA contended at hearing that geographic access for the elderly remains a factor supporting approval. In explaining its position, AHCA offered that population growth had continued in the interior portion of Palm Beach County, including in the West Boynton area, since Bethesda I. AHCA, moreover, is obligated by its statutory mandate to plan ahead and not wait until drive times to acute care services exceed 30-40 minutes. Thus, it is reasonable to look five to ten years into the future, as the health planning witnesses did with their population projections in this case, to assess the likely traffic congestion and travel time issues. Given the reasonableness of projections of rapid growth in the future,
AHCA believes it is important to plan ahead and get a hospital in a location where it is reasonable to expect that drive times are going to increase.
AHCA has previously approved numerous CON applications for new hospitals even though residents of the proposed service area were well within 30 minutes' travel time of an existing hospital. For example, in the West Kendall cases, AHCA approved, through final order, two proposals for satellite hospitals in southwest Dade County (i.e., HCA West Kendall and Baptist Miami), even though off peak travel time to existing hospitals was only 12 1/2 minutes, increasing to 24 minutes during peak hours. In the Miramar case, discussed infra, AHCA approved by final order a new hospital in southwest Broward County even though most residents of the proposed service area were within 15 minutes or less of an existing acute care provider. In AHCA's SAAR approving Marion Community Hospital's proposal to construct a new 70-bed satellite hospital for HCA's Ocala Regional facility, AHCA found that the driving time to the closest existing hospital was 20 to 30 minutes.
Densely populated areas, as is the case in much of the Subdistrict, are prone to unpredictable transportation problems, such as extraordinary traffic jams at all times of the day, having nothing to do with rush hour, and great
unpredictability of travel times often associated with accidents.
Travel time to a hospital is a particular concern for elderly patients. Many elderly patients have driving difficulties, and the longer they are on the road in an ill condition, the more danger they create for themselves and
others.
The 2004/2005 Hurricanes
The September 2004 hurricanes that hit portions of Palm Beach County (i.e., Jeanne and Frances), and Hurricane Wilma in October 2005, were the first major hurricanes to hit the area in decades. They brought special pressures and unique circumstances to Palm Beach County health care providers that were not realized before those storms, and brought to light the vulnerability of the local health care system in responding to the needs of a large population at times of natural disaster, including the need for accessible emergency care services and the special needs of the elderly population.
The 2004 and 2005 hurricanes that hit parts of Palm Beach County occurred after the February 2004 hearing. Those Category 2 hurricanes led to "surges" in hospital ED utilization throughout Palm Beach County, as accidents and storm-related injuries such as falls from ladders, contusions, sprains, and lacerations increased. Adding to the "patient surge" at
hospital EDs, other health care providers in the County were rendered inoperable for days or weeks (e.g., dialysis clinics, walk-in centers, physicians' offices), and patients of those other providers had no alternative other than hospital EDs. The federal government assisted several hospitals like JFK and Boca Raton Community Hospital by setting up MASH-type ED units.
BMH's ED was overwhelmed with patients for well over a week after the hurricanes.
Several hospitals, such as Wellington Regional, JFK, and certain Tenet hospitals, suffered substantial damage. Tenet's West Boca Hospital sustained significant damage in the aftermath of Hurricane Wilma, and contemplated evacuating its patients. Tenet's Good Samaritan Hospital was evacuated. Due to power outages during Hurricane Wilma, surgeries were performed at JFK without air conditioning, which increases the likelihood of infections. Wellington Regional sustained approximately $6 million in damage from Hurricane Frances in late 2004.
Palm Beach County has not yet encountered a Category
3 hurricane like Hurricane Katrina that hit New Orleans in 2005, which forced the evacuation and closure of several Tenet and Universal hospitals or a Category 5 hurricane like Andrew in Dade County in 1992. It is now recognized by Palm Beach County disaster preparedness planners and key planners around the
nation that more hospital facilities are needed in heavily populated areas to provide "patient surge capacity" and to account for possible closures and evacuations of other area hospitals in the direct path of a hurricane.
The Trauma Agency Director for the Palm Beach County Health Care District, Dr. Davis, testified that with respect to the County's disaster plan for hurricanes, the County needs more "surge capacity." Rather than build a new hospital with a new ED, however, the priority for increasing surge capacity adequately is to expand emergency rooms in existing hospitals and increase hospital bed capacity as part of improving through- put of patients admitted to the hospital from the ER.
While the best way of improving patient surge capacity in the event of a disaster is to improve capacity at existing hospital, WBCH would improve access to ED services for the elderly in the West Boynton Area at a time of patient surges caused by county-wide disasters.
There are other advantages in case of disaster to approval of WBCH. The availability of another Bethesda System hospital, located more inland, will be of great assistance if a major hurricane were to force closure of BMH, which is located close to the Atlantic coast. For example, during the recent hurricanes, patients and staff were evacuated from Tenet's Good Samaritan Hospital, a hospital located close to the Atlantic
coast in West Palm Beach, to another Tenet hospital, St. Mary's, located farther inland. A new Bethesda facility in West Boynton would also facilitate Bethesda's ability to relocate patients and staff to an inland hospital, if necessary.
As the newest hospitals in Palm Beach County are about 20 years old, none has been constructed to comply fully with recent Florida hurricane-resistant building codes. Bethesda's WBCH will be designed and constructed in 100% compliance with all current building codes, and in particular those related to hurricane protection and wind-borne debris
protection.
Community Support
Bethesda's proposed WBCH has received extensive grass roots support from residents, community organizations, and public officials from the West Boynton area, as well as the unanimous support of the County Board of Commissioners for a land use change and for the addition of workforce housing near the WBCH facility.
COBWRA, a not-for-profit organization of 83 residential associations representing 85,000 to 100,000 residents located in the West Boynton area, supports Bethesda's application. COBWRA members are adult, age-restricted communities, meaning that one resident per unit must be age 55
or older, and no residents may be under age 18. Approximately 62% of COBWRA's member residents are seniors.
COBWRA represents the interests of all West Boynton area residents in working to improve and maintain the area's health care facilities, public safety, cultural outlets, traffic flow, educational opportunities, and parks and recreational facilities. It is COBWRA's position that the absence of an acute care hospital with hospital-based emergency services is one of the greatest challenges to the quality of life in the West Boynton community. As the West Boynton area continues to develop rapidly with the increasing traffic volumes, traffic delays are making it increasingly difficult for area residents, many of whom are elderly, to travel out of their community to access hospital and emergency services at distant existing hospitals.
There are 74 COBWRA residential associations which submitted letters of support for the WBCH application. COBWRA's president, Ms. Sandra Greenberg, testified in support of Bethesda's proposed WBCH at the final hearing.
Mr. Gerald Rosenberg, Chairman of the Macular Disease Association of Boynton Beach, a support group for visually impaired individuals, testified in favor of Bethesda's proposed WBCH. As expressed in its April 11, 2005 letter of support, the
Macular Disease Association supports the development of a West Boynton area hospital.
Bethesda's proposed WBCH also is supported by PBC Fire Rescue and the Palm Beach County Sheriff's Office. Battalion Chief Nigel Baker of PBC Fire Rescue, who was the Chief of Battalion 4, which covers the West Boynton area, from 2002 through July 2005, submitted a letter of support and testified on Bethesda's behalf at the final hearing. Palm Beach County Sheriff Ric Bradshaw submitted a letter in support, and Leslie Shriberg, the Community Relations Coordinator of the Palm Beach County Sheriff's Office, testified by deposition in support of Bethesda's application. Neither PBC Fire Rescue nor the Palm Beach County Sheriff's Office offered support for the prior West Boynton hospital applications of Bethesda and JFK.
Dr. Luke, a JFK health planning witness, agreed that community support for Bethesda's proposed WBCH is a factor to be considered, testifying as follows: "The public input is a legitimate part of the [CON] process. I don't think it should ever be the sole determining factor, but I certainly would think that it ought to be weighed in the balance." Tr. 7310.
While the desires of the local community should be considered, as Dr. Luke suggests, most lay persons are not in a position to evaluate how the delivery of medical services will be affected by the construction of a new hospital. Closer
proximity does not necessarily equate to higher quality of medical care. For example, if a patient requires multiple sophisticated medications, ICU care, infectious disease care, cardiology or neurology care, then that patient's care is likely to be better at a larger facility like Delray, BMH or JFK. Furthermore, some patients suffering heart attacks who are not taken by ambulance to the hospital and who were close to a satellite hospital in the West Boynton Area could go the satellite hospital and then require transfer. The time delay could affect the outcome of the patient's treatment. Likewise, patients who suffer strokes and who would benefit from the JFK interventionist program may reach an outcome that is less optimal if they seek treatment at WBCH rather than at JFK.
Private Rooms/Quality of Care
Unlike in February 2004, private patient rooms have now become the standard in construction of new or expanded hospitals. In March 2006, the American Institute of Architects ("AIA") published new guidelines for hospital construction that require all private room construction. Those guidelines are based on recent studies, unavailable at the February 2004 hearing, finding that private patient rooms lead to improved patient quality of care and safety. The new AIA guidelines are being incorporated in Florida's building code and will be the mandate for all new construction by Fall 2006.
BMH, JFK, Wellington Regional, and Palms West all have recently completed or soon will complete construction projects involving all private rooms. Each of those hospitals, however, still has numerous semi-private rooms.
Delray also has numerous semi-private rooms. Only
102 out of 350 beds at Delray are in private rooms. The remaining 70% or so are in semi-private rooms. Unlike other Palm Beach County hospitals, a recent bed addition made by Delray consisted of a majority of beds in semi-private rooms. In the 31-bed addition, only 8 are in private rooms.
Of course, semi-private rooms can usually be converted to private rooms if the census so warrants. But the lack of all private rooms in existing facilities has a negative effect either on quality of patient care or, if converted to private rooms temporarily, then a potential negative effect on utilization. In its CON Application No. 9558, Palms West, an HCA hospital, cited the following as a special circumstance justifying the need for more beds: The medical needs of the patients (isolation, reverse air-flow, privacy, gender, etc.) make it necessary to utilize a semi-private room as a private room thus artificially reducing the number of available beds without changing the licensed capacity or adjusting the occupancy rate to account for the unavailable bed. P. 2 of Ex.
5 to Ex. B-62 (Rohan Depo.) Also see Ex. B-62 at 22-23.
Bethesda proposes that all 80 WBCH beds be in private rooms. Development of WBCH, moreover, will enable Bethesda to convert all of the remaining 67 semi-private rooms at BMH to private rooms.
Utilization, BMH Expansion and Impact of WBCH Extent of utilization
of existing health care facilities and health services.
Each of the parties' hospitals is well utilized.
Utilization is generally at its highest during the peak season months of January through March. In fact, each of the parties has experienced capacity constraints during these peak months recently. The peak season is lengthening. It has begun to stretch into April. Area hospitals are often crowded during weekdays.
Need indicated by capacity constraints during peak months is balanced, however, by a decline in average acute bed occupancy decline in the Subdistrict since 2002. Preceded by an increase of 71.9% to 77.3% (2000 to 2001) and a second increase from 77.3% to 78.2% (2001 to 2002), average acute bed occupancy fell to 75% in 2003 and then fell again in 2004 to 73.8%. Given the increase in population and patient days, the decline in acute bed occupancy from 2002 to 2004 is attributable to an increase in the acute bed inventory of the Subdistrict.
Over the five years of 2000, 2001, 2002, 2003, and 2004, occupancy rates in the District did not perfectly parallel
the rates in the Subdistrict but were similar. They, too, indicate a decline in more recent years. Beginning with an occupancy rate of 63.9% in 2000, the District occupancy rate rose to 67% in 2001, and then fell each successive year, to 66%, 65.5%, and 64.5%. The fall in the rates in the presence of increases in population, demand for acute care hospital services and patient days, just as in the case of the Subdistrict, is due to an increase in acute care bed inventory.
The increase in acute bed inventory has been accompanied by a moderation in the rate of growth in acute patient days in both the District and the Subdistrict. For example, from 2000 to 2001, acute care patient days in the Subdistrict increased by approximately 32,200 patient days. The following year, 2002, the volume of patient days increased by approximately 7,900 patient days from 2001 so that the rate of growth was down considerably. In 2003 the increase over 2002 was 2,929, another drop in the rate of growth of increase in patient days. In 2004 the increase over 2003 was down again, albeit only slightly, to 2,853, a stabilization in the rate of growth.
Observation Days
While occupancy rates and the rate of growth in patient days have declined recently, the activities of short- term acute care hospitals have diversified in recent years. For
example, the hospitals participating in this proceeding now provide many more outpatient services than they did a few years ago. They also have increasing numbers of observation patients.
A change since the February 2004 hearing is the increase in observation patients experienced by all parties. Around July 2004, the Centers for Medicare and Medicaid Services ("CMS") changed the certification and payment requirements for inpatient admissions. As a result, hospitals have seen a dramatic increase in the number of medical observation, or "23- hour," patients, whose conditions do not qualify for inpatient admission, but who are not in a condition to be discharged.
For example, BMH observation patient days increased from 3,759 in FY 2003, to 4,897 in FY 2004, to 5,125 in FY 2005. In April 2005, BMH had an estimated 608 observation patient days, equating to an average of 20 observation patients each day occupying an inpatient bed. With such a high number of observation patients, BMH may have up to as many as 50 inpatient beds tied up at any one time with observation patients.
None of the party hospitals has a separate observation unit, so observation patients typically must be placed in a licensed inpatient bed. However, observation patients are not counted in a hospital's annual acute care occupancy. Accordingly, recent reported trends in acute care
occupancy do not present the complete picture as to the actual utilization of a hospital's licensed beds.
A 75% inpatient occupancy level, therefore, which traditionally was considered optimal occupancy, now may be too high for optimal service and bed availability.
Constraints to BMH Expansion
Bethesda claims that it has capacity constraints at the BMH site that keep it from adding new beds. There is, in fact, no realistic possibility that Bethesda could acquire additional land bordering the existing BMH campus for expansion of that facility. Expansion of the existing boundaries of BMH's campus is not an option either.
Bethesda's claim of inability to expand its facility on site at the existing BMH campus, however, is not as certain.
Subsequent to the denial of its prior application, after Bethesda had argued in Bethesda I that it is not able to expand the BMH site, Bethesda obtained approval to begin a new open heart surgery program. A heart institute is now under construction that will add almost 80,000 square feet to the existing Bethesda campus. The plans for the institute involve adding a couple of stories over the existing hospital and a new four-story wing. Construction drawings for the institute were submitted in November of 2005 after the application in this case which claims inability to expand.
Furthermore, at the hearing in Bethesda I, Bethesda minimized the impact of the proposed transfer of beds on occupancy at the main campus by claiming that it could terminate its existing contracts with Hospice of North Palm Beach and with respiratory services if it needed more beds. These contracts had been entered because of excess capacity at BMH. Patients in those units could be treated, moreover, at long-term acute care hospitals or free-standing hospices.
Bethesda's assertions with regard to the contracts were accepted in Bethesda I. Bethesda has not initiated any efforts since to terminate the contracts. It has not asked its design team to look at design issues for conversion of the hospice or ventilator units into private acute-care beds. Nor has it done any other investigation into converting the beds to alleviate the space constraints it claims.
In Bethesda I, the following finding was made: "Bethesda also presented evidence regarding its inability to add new beds at Bethesda Memorial because of physical and/or cost constraints, but that evidence was not persuasive." Bethesda I Recommended Order, p. 52.
Under the circumstances of this case, that is the evidence presented and the findings of fact of this order, Bethesda's contention of inability to expand on the BMH site is not accepted.
Bethesda's claim of inability to expand stands in stark contrast to the plans of other hospitals that participated in this proceeding.
Each hospital opposing Bethesda's application has found it necessary to add more inpatient beds in recent years. Unlike BMH, each expects to construct even more bed capacity soon. The increases in bed capacity at WRMC, JFK, and Delray have been accompanied with other improvements dictated by health care planning. They show intent to make attempt to meet the health care needs of the Subdistrict's growing population.
WRMC
WRMC has developed a Facility Master Plan, based on projected hospital utilization by department, to guide construction and development of services and to ensure the capacity on its campus to meet the future needs of acute care patients in western Palm Beach County through 2011 and beyond.
Within the past five years, WRMC has built a 30,000 square foot tower in front of and integrated with the main hospital for the purpose of relocating obstetrics and ICU, at a cost of $10m. The new tower contains 18 labor rooms, 10 level II NICU beds and 16 ICU beds, doubling the size of the earlier ICU and tripling the size of the labor and delivery suites. The layout of the new tower allows ample throughput capacity for
patients who need ICU level services and ensures that neonatologists are available 24/7 for OB and the NICU.
In 2000, WRMC purchased and placed in service a new Siemens Primus IRMT linear accelerator in the Cancer Center, at a cost of $2.5m. In 2001, the Outpatient Diagnostic Center was opened at a cost of $4.5m. In 2002, WRMC completed and opened three new operating rooms with associated recovery rooms, a short stay surgical waiting room for family, and a new admitting department, at a cost of $4.5m. In August 2004, WRMC added 22 additional acute care beds to its inventory by converting existing space in the hospital. In 2006, a parking garage was completed at a cost of $4.5m.
During the next three fiscal years and as part of its five-year master plan for expanding WRMC's physical plant and acute care services for the residents of existing and future communities in west central and southern Palm Beach County, WRMC will:
Double the size of the Cancer Center at a cost of $10m, of which $8.5m will be spent in 2006. Commencement of construction is imminent and will be completed in one year. The expanded Center will add a third linear accelerator, a third vault and associated exam rooms.
Upgrade the central plant (equipment which provides air conditioning and emergency power) and classroom space. A third emergency power generator will be added. Classrooms are currently and the new
classrooms will be, available to the public free of charge for healthcare informational seminars and support groups. The project costs of $250k will be incurred and the project will be completed in 2006.
Double the size of the Emergency Department, adding 20 rooms and beds to total 40 E.D. beds. The project includes expansion of the adjacent inpatient imaging department. The total cost will be $16m, of which $6m will be spent in 2006. Construction will commence in June 2006 and take 1 year to complete. The construction will be phased to ensure continued operation of the E.D. during construction.
In 2008, open a 15-bed NICU level III unit in renovated space. The initial development costs budgeted in 2006 are
$100k.
Construct a bed tower with 4 floors. The first floor will accommodate relocated ancillaries and remaining 3 floors will accommodate 40 acute care beds each, for a total of 120 new beds. The tower is designed to add an additional floor which would bring the capacity to 180 beds. The tower will be located to the rear of and integrated with the existing main hospital building and ancillaries, but will not need to duplicate existing ancillaries such as imaging, laboratory, admissions, cafeteria, and other service departments of the hospital. The approved budget is $22m, of which $2.5m will be spent in 2006. Construction is scheduled to commence in June of 2007. The tower is architecturally and functionally complementary to the main hospital and will be joined to the most recently completed front tower by a skybridge.
WRMC, Inc., has sufficient land remaining on its campus for expansion. In September 2004, it annexed its campus
into the Village of Wellington to ensure that it can expand its physical plant and services to meet the future acute care needs of the western Palm Beach communities. The main hospital, parking garage, and Cancer Center occupy only 15 of 56 acres owned by WRMC. Although some medical office buildings also occupy additional space, WRMC has ample room on its campus to expand its hospital. The County has approval authority for traffic impacts but the recent annexation of WRMC's site plan into the Village of Wellington should expedite future land use and building permitting for WRMC's projects.
The Cancer Center and ED expansions have received County traffic concurrency approval. The capital budget total cost of each and all the aforementioned projects have been approved by UHS, Inc., WRMC, Inc.'s parent. Conservatively assuming the new WRMC bed tower will be 120 beds (instead of its potential 180), WRMC will be increasing its capacity overall from 153 to 278 beds, and will be opening a $22m new 120-bed acute care tower in point of time before Bethesda proposed to open an $82m new 80-bed acute care hospital less than 9 miles south of WRMC. Of the two approaches, WRMC's cost effective master planning represents the more appropriate incremental response to community growth in the west Boynton area.
The additional 120 acute care beds which will be added to WRMC will also have less impact on existing nurse and
physician shortages. WRMC already has, for example, an equipped and staffed cafeteria, central plant, laboratory, admissions department, emergency department and all the professional staff in those departments. A new hospital would have to hire the core staff for all those basic and ancillary services (the basic staff necessary whether there is only one or 40 patients in the hospital). The new bed tower at WRMC will not require a duplication of core staffing, but only the incremental professional and service staff for the beds.
JFK
JFK has the ability to expand in order to increase the services it offers and the number and types of patients it can treat. The hospital anticipates adding 36 beds in existing shelled-in space on its fifth floor in 2007. It also has room to add another 36 beds in its northwest tower. The existing hospital building can be expanded vertically in certain areas to accommodate additional beds, and JFK is exploring the possibility of purchasing land adjacent to its campus to the north, which would permit JFK to expand its physical campus further.
Delray
Delray is actively engaged in adding beds and services in its campus. In December 2005, 31 additional beds were added. Delray is adding a new central energy plant
scheduled to be completed in July 2006, at a cost of approximately $1.1m. The energy plant is being added to accommodate expansion of the emergency department scheduled for May 2006 through May 2007; the addition of two major pieces of imaging equipment in the radiology department; a new 64-slice CT scanner; and a new 3.0 TASLA MRI. Additional building construction will also be necessary to house the new MRI, scheduled to come online in early 2007.
Delray's emergency department expansion will increase the number of treatment rooms from 24 to 36, will include three distinct trauma rooms and a fast track area for efficient treatment of lower acuity patients and will have ancillary services in or proximal to the emergency department to achieve a rapid turnaround time with test results for emergency patients. The anticipated cost of the emergency department expansion is
$8.4m.
Other planned improvements at Delray include enhancing the radiology department to include a PACs digital imaging equipment system, which will improve the efficiency of diagnostic imaging, adding electrophysiology to its cardiac department, renovating the hospital pharmacy and installing hurricane windows. Delray typically spends approximately $12m-
$15m per year on expansions and capital improvements.
Delray has the ability to add beds through additional expansion or renovation on its campus. It has no plans at this time, however, to add beds at its facility. After the addition of 31 beds in December 2005, the hospital's occupancy level did not rise. The addition of 100 beds at Boca Community Hospital and the opening in approximately one year of interventional cardiology and open heart surgery programs at both Boca Raton Community Hospital and BMH, will likely reduce census levels at Delray and JFK and create additional capacity at each of those hospitals.
Of Delray's 298 medical/surgical beds, 233 are equipped with telemetry equipment. Forty-two of the telemetry beds are the result of a recent conversion of 42 orthopedic surgery beds to a 42-bed telemetry unit at a cost of approximately $260,000. This conversion was done in part to improve patient flow from the emergency department into inpatient beds.
All indications are that existing hospitals in South Palm Beach County are presently providing access and meeting the acute care needs of residents in the same PSA/SSA which Bethesda proposes to serve with its new hospital. Bethesda's opponents are making appropriate investments to meet the needs of the future population in those PSA/SSAs.
The same conclusions apply when peak seasonal utilization patterns are examined. During peak occupancy, January 1-March 31st for each of the three years 2002-2004 inclusive, the average occupancy of acute care beds declined steadily and flattened in 2005, in both the District and Subdistrict 9-5. The rate of increase in licensed bed capacity is keeping pace and most often exceeds the increase in demand and utilization. When the new beds planned at Delray, JFK, and WRMC are added, it is reasonable to expect that peak season utilization will drop below 80%, a level that is considered manageable and not uncommon for peak season in South Florida.
Impact of Proposed WBCH on Existing Hospitals Positive Impact on BMH
A benefit associated with the development of WBCH will be improved efficiency and quality of care at BMH. The transfer of 80 beds from BMH to WBCH will allow Bethesda to convert BMH's large number of semi-private rooms to private rooms.
Semi-private, two-bed rooms often may be used for only a single patient due to patient isolation/infection control concerns. An analysis of patient isolation days at BMH conducted in 2005, demonstrates that between 15% and 20% of the total patient days at BMH are patients who require isolation due to infection control concerns. Moreover, the number of
isolation days at BMH has been increasing steadily over the last
2 to 3 years. Gender issues also limit the use of semi-private beds.
In addition, BMH's many semi-private rooms have in turn led to bottlenecks in the ED, caused in large part by the inability to get patients who have been admitted through the ED to an inpatient bed.
By redistributing certain patient volumes from BMH to the satellite, BMH will then be able to convert its remaining 67 semi-private rooms to private rooms, thereby eliminating the existing bottlenecks created by semi-private rooms and also improving the quality of care for all patients who otherwise would have been assigned to a semi-private room. Also, the average length of stay for ED patients should be substantially reduced.
Bethesda cannot solve the ED patient backlog problems simply by adding telemetry beds. The problems have continued to escalate even after some telemetry beds were added. The large number of semi-private rooms is the problem.
Impact to Opponents from Loss of Patients in the WBCH Service Area
WBCH will have a minimal impact on Wellington Regional, JFK, and Delray in terms of projected lost patients per day. Delray's analysis showed that of the projected Year 1
average daily census ("ADC") of WBCH of 31.9 inpatients, 17.2 of those patients would be taken from other hospitals. (Ex.
Delray-12 Tab 32). The remainder would be generated by population growth within the WBCH service area or redistributed from BMH, and thus would have no adverse impact. On rebuttal, Mr. Carroll demonstrated that Delray's analysis shows a very minimal loss by each of the opponents of patients from the WBCH service area. Of the 17.2 patients taken from all other hospitals, 10%, or 1.7 patients, are projected to come from outside of the WBCH total service area, leaving only 15.5 patients from within the WBCH service area who would be taken away from existing hospitals. Applying each opponent hospital's existing market share in the WBCH service area to those 15.5 patients, the result is a projected loss to JFK of only 3.8 patients (1.1% of JFK's ADC); a loss to Delray of only 3.1 patients (1.2% of Delray's ADC); and a loss to Wellington Regional of only 1.3 patients (1.4% of Wellington Regional's ADC).
Effect of Population Growth
On rebuttal, Mr. Carroll performed an analysis showing that the projected population growth in each opponent hospital's own service area will generate sufficient additional new patient volume to more than offset any potential impact resulting from the loss of patients from WBCH's service area.
Wellington Regional's PSA, which Mr. Carroll defined as the area from which Wellington Regional draws 75% of its inpatients, consistent with the federal Stark law guidelines for defining a hospital's "geographic area," is projected to have a net resident population growth of 51,259 from 2005 to 2010. Applying the state-wide acute care use rate and Wellington Regional's current market share in its PSA to that additional population growth results in an additional 1,168 patients to Wellington Regional in 2010, which is approximately ten times the 135 patients that Mr. Davidson projected to be lost to WBCH.
JFK's PSA, as defined by JFK's health care consultants, Healthcare Concepts, is projected to have a net resident population growth of 19,560 from 2005 to 2010. Applying the state-wide acute care use rate and JFK's current market share in its PSA to that additional population growth results in an additional 1,136 patients to JFK, which is approximately twice the lost patients calculated by JFK's witness Dr. Luke.
Mr. Weiner's projection of JFK's inpatient occupancy supports Mr. Carroll's conclusion that the growing population in JFK's own service area will offset any potential loss of patients to WBCH. Mr. Weiner projects that JFK's occupancy rate for 460 beds, which includes 36 new beds projected to be opened in 2007, will be 79.32% in 2010 and 80.71% in 2011. In other
words, Mr. Weiner projects that JFK, even after adding more beds, will have a higher occupancy rate after the opening of WBCH than it had in 2005.
Delray's PSA, defined by Delray's own CEO as the area within a five-miles radius of the hospital, is projected to have a net resident population growth of 15,235 from 2005 to 2010. Applying the state-wide acute care use rate and Delray's current market share in its PSA to that additional population growth results in an additional 623 patients to Delray in 2010, which exceeds the number of lost patients calculated by Mr. Greene.
Had Mr. Carroll utilized broader service areas for Wellington Regional, JFK, and Delray in his analysis, such as the ones defined by the opponents' health planning witnesses, the number of additional patients available to those hospitals from their own service areas would have been greater based on population growth in a larger area. Thus, Mr. Carroll's analysis is a conservative approach.
While Mr. Greene projected that incremental growth in the WBCH total service area will generate a need for 71 additional non-tertiary acute care beds, neither he nor
Ms. Greenberg performed an analysis of bed need that would be generated by incremental population growth over the next five years in either BMH's or the opposing parties' service areas, as was performed by Mr. Carroll.
In the Recommended Order in the North Port HMA case (DOAH Case Nos. 04-2723, 04-3027, 04-3417), which was adopted by AHCA, the ALJ found it reasonable to take into account population growth in the existing hospitals' service areas in determining potential adverse impact, and to consider whether new patient volume there would offset any potential adverse impact due to patients lost from the applicant's service area.
Other Issues Related to Adverse Impact Wellington Regional
WBCH will have no material adverse impact on Wellington Regional.
A significant change since the February 2004 hearing has been the operating and financial position of Wellington Regional. At that time, the ALJ found that Wellington Regional was one of the lowest utilized facilities in south Palm Beach County, with an occupancy rate for the year ending June 30, 2002, of 64.27% for 121 beds, and that Wellington Regional had an "accumulated deficit" of $22 million as of 2000. That finding was based upon the Audited Financial Statements of Wellington Regional, as an operating division, which are consistent with its AHCA Actual Reports, and not on the separate Audited Financial Statements of Wellington Regional Medical Center, Inc.
Mr. Davidson presented evidence of rapidly improving conditions at Wellington Regional since the February 2004 hearing, with its occupancy rate increasing from 68.5% in 2002, to 74.7% in 2003, and to 75.9% in 2004. Delray's witness,
Mr. Greene, testified that Wellington Regional's occupancy rate had "grown considerably," even with the addition of 22 beds in 2005.
Bethesda witness William Cleverley, Ph.D., presented an analysis of the trends in the financial operating performance of Wellington Regional that shows vast improvement since the February 2004 hearing. Wellington Regional's accumulated deficit (or equity), based on the Audited Financial Statements for the operating division, improved from a negative $22 million in 2000, as reported in the February 2004 hearing, to a positive
$29 million in 2003, and a positive approximately $32 million in 2004. Wellington Regional's Medicare Cost reports, filed with the federal government, likewise show that Wellington Regional reported substantial positive equity, i.e., no accumulated deficit, in 2003 and 2004.
Moreover, in 2003 and 2004, Wellington Regional's return on equity, i.e., after-tax net income divided by ending equity, which is a primary measure of the financial performance of a hospital, was at a level on average with most investor- owned hospitals, and significantly higher than most not-for-
profit hospitals. Wellington Regional's return on equity in 2003 (14.64%) and 2004 (16.19%) was approximately twice that of Bethesda (7.4%) for those years. In sum, Wellington Regional now has strong financial equity and operating performance.
Wellington Regional has added acute care beds since the February 2004 hearing, and it has plans for another major expansion in the near future. In August 2004, a mere months after the February 2004 Hearing, where Wellington Regional opposed Bethesda's and JFK's proposals for West Boynton area hospitals asserting that no need existed, and prior to Judge Wetherell's September 2004 Recommended Order, Wellington itself sought a CON exemption from AHCA to add 22 acute care beds.
On July 30, 2004, Wellington Regional filed with the Village of Wellington an application for annexation to expand its facility to support an additional 180 patient beds. Part of the justification for Wellington Regional's site plan is as follows:
As illustrated by the conceptual master plan submitted with this application, both the Wellington Regional Hospital and associated medical office space will continue to expand to meet the growing needs of the residents of the Town of Wellington and west central Palm Beach County communities.
Wellington Regional has definite plans to begin construction in 2007, on a new bed tower that will add 120 acute care beds.
Consistent with Wellington Regional's position that it serves west central Palm Beach County, rather than southern areas such as West Boynton, the WBCH home site zip code, 33437, generates only 1.6% of Wellington Regional's adult discharges, and generates the fewest discharges of any of the zip codes included by Mr. Davidson in his expansive Wellington Regional service area.
The financial adverse impact on Wellington Regional from WBCH asserted at hearing is minimal compared to Wellington Regional's 2005 and budgeted 2006 financial operating statistics. Mr. Davidson calculated that Wellington Regional would lose approximately $974,000 in net income in Year 1 due to WBCH, which is minimal compared to Wellington Regional's income from operations of $18.6 million in 2004, $23.5 million in 2005, and budgeted $30.7 million in 2006. Wellington Regional had extremely healthy operating margins of 18.4% in 2004, and 19.5% in 2005.
Moreover, Wellington Regional's parent, Universal, is already committed to fund over $53 million in new projects at Wellington Regional, and has substantial financial resources available to support Wellington Regional, as necessary. Universal's net cash increased from $393 million in 2004, to
$425 million in 2005, to an expected $475 to $500 million in 2006. In addition, in 2005 Universal received approximately
$131 million in after-tax gains from discontinued operations, including the sales of two hospitals.
JFK
WBCH will have minimal adverse impact on JFK. There is no extensive overlap in the area that traditionally is served by JFK and the area that will be served by WBCH. Two of the zip codes in WBCH's PSA, zip codes 33437 (home-site) and 33436, are not included in the JFK primary service area it relies upon for its strategic planning purposes, as reflected in a recent map prepared for it by its regular strategic consultant, Healthcare Concepts. .
JFK's projections of adverse impact are based on a calculation of lost cases performed by Dr. Luke, and an assessment of the financial impact of those lost cases performed by Mr. Weiner. As to the first step, Dr. Luke's calculations were not reliable due to a number of flaws in his analysis that undermine his projections.
JFK's projections of financial adverse impact similarly were not reliable due to a number of flaws in Mr. Weiner's analysis that undermine his projections.
Based on Mr. Weiner's projections, JFK still would have a very strong EBDITA income after the opening of WBCH and the OHS programs at BMH and Boca Raton Community Hospital. Mr. Weiner projected that JFK's 2013 EBDITA would be
$78,532,538. Thus, even if Mr. Weiner's full calculation of impact materialized, JFK's 2013 EBDITA still would be in excess of $53 million.
Furthermore, Mr. Weiner's financial impact analysis did not account for the significant growth in OHS procedures and other cardiovascular volumes anticipated by JFK. JFK has budgeted 828 OHS procedures in 2006, an increase of approximately 120 cases over its 2005 OHS volume. Those additional OHS cases will have a positive contribution of approximately $2.5 million in 2006, increasing each year to approximately $3.24 million in 2013. Adding in the additional contribution margin expected from growth in therapeutic caths, diagnostic caths, and other cardiovascular cases, the additional projected contribution margin based on total cardiovascular volume growth is approximately $17.5 million in 2013, which should be taken into account in determining any adverse impact.
The conclusion that the approval of WBCH, in addition to recently approved OHS programs at BMH and Boca Raton, will "imperil the financial survival or viability of [JFK] going forward," tr. 6113, is not supported by the evidence. JFK's parent, HCA, is experiencing levels of profitability that are significantly above averages for investor-owned hospital companies. It is undisputed that HCA is a very strong, prosperous investor-owned hospital company.
Considering the strong financial health of HCA, it cannot reasonably be concluded that JFK would be in financial peril from the approval of WBCH. In fact, JFK internally reported an operating loss in 2004 after intercompany expenses, yet HCA still charged JFK a management fee of over $21 million, signifying that at the corporate level JFK was not considered to be in financial peril. Moreover, JFK's plan to add 36 new beds in 2007, is inconsistent with any notion that it will be in financial peril in the near future, or that it truly expects to have any excess capacity as a result of the new BMH and Boca
Raton services.
Delray
Bethesda's proposed WBCH will not have a material adverse impact on Delray. Delray's contribution margin financial adverse impact analysis projected that it would have an after-tax loss of income of approximately $1.08 million to
$1.32 million attributable to WBCH. The projected impact is overstated. Even so, the projected loss pales in comparison to Delray's $77,828,436 contribution margin in 2004. If the loss of income materialized, Delray would not be imperiled.
In late 2005, Delray added 31 acute care beds, with full knowledge that the Bethesda and Boca OHS programs had received approval in early 2005, and were coming on line, and also that Bethesda's WBCH has been preliminarily approved by
AHCA. Delray's decision to incur the costs of construction and staffing of the new patient beds indicates that Delray does not truly expect the new projects at other hospitals to leave it with any material excess bed capacity.
Subsection (3)
Subsection (3) of the CON Statutory Review Criteria is: "The ability of the applicant to provide quality of care and the applicant's record of providing quality of care."
Bethesda has a record of providing high quality of care to the patients it serves.
BMH is fully accredited by the Joint Commission on Accreditation of Health Care Organizations ("JCAHO") and it offers a number of high-quality specialty programs at BMH for the benefit of its patients.
Among the high-quality specialty programs at BMH is a stroke program.
Developed as the first JCAHO-certified Primary Stroke Program in Palm Beach County, the program is directed by Mark Brody, M.D., a Board-certified neurologist.
Dr. Brody arrived at BMH approximately nine years ago after serving as Medical Director of the Stroke Investigational Research Program at Scripps Memorial Hospital in San Diego, California. Upon arrival, he immediately began to develop a program at BMH to treat acute stroke.
Today, BMH's Stroke Program is recognized as a "Center of Excellence." It offers treatment protocols based on standards outlined by the National Stroke Association and the Stroke Division of the American Heart Association; full-time ED stroke and neurosurgery coverage and specialized ED protocols to respond quickly to acute stroke; specialized training of nursing staff; preventive stroke education; stroke-specific discharge planning; and extensive stroke-related research and clinical trials.
BMH's Stroke Program under the guidance of Dr. Brody is an excellent program for the assessment, management, and treatment of stroke with tissue plasminogen activator ("TPA"), a drug that removes blood clots from blocked arteries.
With respect to the treatment of acute stroke, administration of TPA is the standard of care and almost always the treatment of choice. TPA must be administered within three hours from the onset of stroke symptoms. Accordingly, time is of the essence. Stroke care must be available around the clock.
BMH recently opened a CMR program which will compliment its stroke program and benefit stroke patients by allowing rehabilitation to take place with personnel who know the original diagnosis and mechanism of the stroke. Such continuity of care has been shown to lead to better outcomes.
BMH also conducts a high quality cancer program. Its Cancer Care Center, accredited by the Commission on Cancer of the American College of Surgeons and by the American College of Radiology for achievement of high practice standards in the Center for Radiation Oncology, provides a full complement of diagnostic and therapeutic services for cancer patients.
Dr. Roger Brito, a Board-certified medical oncologist, hematologist, and cancer blood specialist, worked with BMH to develop its Cancer Care Center into a premier program.
Closely linked to BMH's cancer program is its hematology program. Together, BMH's cancer and hematology programs treat a wide range of patients, including those suffering from solid tumors (e.g., breast cancers, colon cancers, or lung cancers), lymphomas, cancers of the blood and blood disorders, and anemias. The majority of the patients treated in the cancer and hematology programs are geriatric patients.
Key components to BMH's cancer and hematology programs are its extensive research and clinical trials. BMH and its physicians continually search for new or improved treatment protocols to benefit patients in the community.
The Bethesda Vascular Institute utilizes a multi- disciplinary approach to treat a wide range of vascular disorders. Dr. Miguel Lopez-Viego, a Board-certified general
and vascular surgeon, serves as the Medical Director of the Vascular Institute. His group treats a wide range of patients and conditions at BMH, including a variety of cancers, aortic aneurysms, peripheral vascular disease, and basically the full range of surgical issues short of neurosurgery and cardiac surgery.
Bethesda uses state-of-the-art equipment and has introduced some types of advanced equipment into the Subdistrict. For example, BMH's Radiology Department has one of the first Picture Archiving Communication Systems ("PACS") that Siemens installed in the country, and it serves as a "show site" for Siemens PACS. A PACS system captures radiology images digitally and allows those images to be viewed and interpreted at any number of remote terminals or via the internet. BMH's PACS system has dramatically improved efficiency, turnaround times, and quality of care.
Further examples of Bethesda's commitment to providing state-of-the-art equipment are the various radiology and imaging modalities available at BMH and Bethesda Health City, including three 1.5T MRI systems, three multi-slice CT scanners, top-of-the-line ultrasound equipment, and a combination PET/CT scanner.
Ability to Provide Quality of Care at WBCH
The ALJ in Bethesda I made the following finding:
[T]he proposed satellite hospitals [JFK's and Bethesda's] will offer a more narrow range of services than the existing tertiary hospitals presently serving the area. This is significant because the elderly, who make [up] a large portion of the West Boynton area and who are more likely to have co- morbidities or more complex medical needs, are generally better served in a hospital offering tertiary services and more complete care.
Bethesda I Recommended Order at 35, paragraph 221.
Whether elderly or not, patients with co-morbidities or more complex medical needs are generally better served in a hospital offering tertiary services and more complete care. The evidence in this case supports the finding quoted above from Bethesda I to the extent that the elderly, particularly the "frail" elderly, are more likely to have co-morbidities and complex medical needs than the general population.
But the evidence in this case does not support the finding that the elderly as a group are generally better served in hospitals offering tertiary services. To the contrary, the "active" elderly (the pre-dominant demographic group in the population in the West Boynton area) in need of hospital services are not more likely to need tertiary hospital services and the complete care that community hospitals do not offer than they are to need the care available at a community hospital. Like most patients in the general population admitted to acute care hospitals, a sizeable bulk of patients among the active
elderly admitted to hospitals, will not need services beyond proper diagnosis and stabilization. Proper diagnosis and stabilization are functions performed adequately in a community hospital setting.
There are certainly occasions when patients admitted to community hospitals must be transferred to hospitals that provide more complete care. With regard to these patients, however, more often than not transfers take place under conditions that are not emergent, requiring immediate attention and treatment. Community hospitals or a satellite hospital like WBCH can adequately diagnose and stabilize these patients and then transfer them, if necessary, for appropriate services not available at the community hospital.
On the other hand, WBCH will not have the ability to provide quality of care to the patient who presents in emergent need of tertiary services and the complete care not available at a community hospital.
The ability of Bethesda to provide quality of care at WBCH must be considered in relation to prospective patients under two categories: a.) patients in need of emergent care requiring services that would not be offered at WBCH, and b.) other patients.
Emergency Patients In Need of Service Not Offered at WBCH
For patients with complicated problems and complex medical needs who present at WBCH and who would need to be transferred immediately because of the emergency nature of the situation, the delay in care that would be entailed would most often not be in the patient's interest. These patients will be better served where they can receive aggressive state-of-the-art advanced and tertiary treatment at one of the facilities set up to offer such treatment. In the Subdistrict, these include three hospitals operated by three of the parties to this proceeding: JFK, BMH, and Delray.
The primary example of a patient in need of tertiary services and care more complete than what WBCH will offer is a patient who has a cardiac condition that requires emergency angioplasty rather than a scheduled angioplasty.
There have been significant changes recently in the delivery of health care to patients with cardiac conditions. The standard of care has evolved for certain types of heart attacks to be treated with emergency angioplasty, which can only be done at a facility with an open heart program.
Consistent with this evolution, Emergency Medical Services ("EMS") are instructed to bypass the closest hospital for these types of patients in order to deliver them to a cardiac center that can provide appropriate treatment. EMS
patients assessed to potentially need emergency angioplasty, if instructions are followed, will not be taken to WBCH. Those served by EMS, therefore, will not be affected by delay that would be entailed with presenting at WBCH's ER. In other words, WBCH will not be a "trap," as denominated by JFK for patients in need of emergency angioplasty who are transported to the hospital by EMS.
Patients for whom WBCH could be a "trap," are those who are in need of high-level care such as emergency angioplasty and who arrive at WBCH by their own means rather than by ambulance. They are very likely to suffer adverse impacts by the delay in receiving appropriate advanced treatment. The emergency room at WBCH would not have the necessary equipment, technology, experience or subspecialties to treat the patient. Transfer to a more appropriate hospital would most often entail significantly more delay than would the longer drive to that hospital in the first place.
Other Patients
WBCH will afford better quality of care to other patients (those not in emergent need of medical services not offered at WBCH). These patients will include the elderly in West Boynton who do not have co-morbidities or complex medical needs and the undocumented alien population served by the Caridad Clinic not in need of OB services. They will benefit
from one or the other of: a new, focused geriatric program for the elderly at WBCH; from the addition of another ED in south Palm Beach County; and from the likely availability of a new, more accessible primary stroke program in the western part of Palm Beach County.
In addition, there will be improvement in quality of care in the Subdistrict from Bethesda's conversion to all private rooms both at BMH and at WBCH and from the benefits to the entire Bethesda System, its patients, and the West Boynton community of the availability of an additional, newly constructed hospital providing more access and more surge capacity for the public during hurricanes.
It is reasonably expected that the same high quality of patient care as currently provided at BMH will be afforded in the services to be offered at Bethesda's proposed WBCH, which will be staffed by the same medical staff as BMH. Also, a number of nurses, technicians, and therapists who currently work at BMH will be available to staff WBCH, and WBCH will be operated by the same management team, including clinical department managers.
The approval of WBCH will allow Bethesda to extend to the West Boynton population the benefits of BMH's JCAHO- accredited primary stroke program in a more convenient location. BMH's existing stroke program will be integrated into the new
WBCH, with Dr. Brody serving as Medical Director of the program at both locations. Most of the groundwork, such as regulatory work, training, investigational protocols, and staffing resources is in place at BMH, and will be readily transferable to the new WBCH. Bethesda intends to seek JCAHO certification, and the credible evidence shows that WBCH likely will be qualified as a Primary Stroke Center.
The availability of the stroke program at WBCH will enhance access to quality care for West Boynton residents, and particularly the elderly. As previously discussed, time is of the essence in treating acute stroke. A West Boynton area stroke center will improve the chances of a rapid, accurate diagnosis of the mechanism of a West Boynton patient's stroke, and taking urgent appropriate measures, by physicians and staff with expertise in the field, to treat the patient, possibly through the administration of intravenous TPA. A stroke program closer to the center of greater population growth in the West Boynton area will facilitate shorter times for intervention and greater chances for interventional treatment.
There is no such primary stroke program at any of the existing hospitals in the rapidly growing western portions of south and central Palm Beach County.
It also is expected that Bethesda will extend its cancer and hematology programs to WBCH. Dr. Brito testified
that 30% of his current patients are from the West Boynton area, and that the percentage is steadily increasing. Accordingly, locating Bethesda's cancer and hematology programs in the West Boynton area will benefit a significant number of patients.
Cancer patients and patients with advanced blood disorders tend to be elderly. Often elderly patients are hesitant to travel what they perceive as significant distances for regular treatments, which can lead to more acute problems, such as tumor growth, and the necessity for more complex treatments. For such patients who require hospitalization, increased travel times to the hospital can correlate to prolonged hospitalizations or negative outcomes. Therefore, a more accessible WBCH would benefit the elderly who do not have co-morbidities or complex medical needs that require more complete care than will be offered at WBCH.
Extension of Bethesda's cancer program to WBCH, which will be more accessible to West Boynton area cancer patients, will benefit Bethesda's cancer research and clinical trials as it will enable Bethesda to enroll more patients in those trials.
The improvement in quality of care that a satellite hospital in the West Boynton area will provide the bulk of its patients was an argument JFK made in Bethesda I.
JFK's Position in Bethesda I
JFK itself in 2003 applied for a similar bed-size satellite hospital to be located in West Boynton west of the Turnpike, without OHS/interventional cardiology services or specialized neurological services. The HCA/JFK organization and several of its witnesses then expressed the opinion that such a community hospital was needed and would provide quality care.
In terms of resources and scope of services, there is nothing about JFK's prior proposal that is different from Bethesda's current proposal.
In a public hearing before the Treasure Coast Health Council, the Chief Medical Officer at JFK described the reasons he supported a satellite hospital in the West Boynton area. Among his comments were these:
We're told, well, maybe we don't really need a hospital in the West Boynton Beach area because it's really no more than thirty minutes to any of the existing facilities.
I am a middle-aged driver of a sports car. Trust me, when I reach Boynton Beach Boulevard and Jog Road every morning, it takes me more than thirty minutes to drive at sixty miles and [sic] hour, in and out of traffic, just to get to JFK Medical Center.
* * *
I'm also not a 75-year old individual having chest pain on my drive. I'm not somebody who's worried that their spouse, or somebody else they really care about, is very ill and in a hospital . . .
When I moved to Florida, . . . 1991 . . . Boynton Beach Boulevard and Jog Road was where I used to go to buy cherries and tomatoes. I meant, that what it was. There was nothing there. The growth has been absolutely staggering.
So I mean, there is no question in my mind that this is an area with just absolutely mind boggling growth. And as we all know as well, the majority of the residents who live there tend to be elderly.
* * *
[T]he area of medicine that we've made the most progress on [is cardiac.] We now have
... angioplasty . . . there are now new stints [sic] . . . which essentially don't clog again . . . [t]here have been advances in bypass surgery.
* * *
So there have been huge, huge advances.
* * *
[T]hese are dramatic . . . [s]o what do you want? You want a hospital that's going to be near you, that is going to have an area of excellence in the most likely area that you are going to be sick. What is that area? The area is in cardiac disease.
* * *
I think there's absolutely no question the need is there. The population growth is staggering. The majority of the people moving in are already elderly. Elderly people get sick, they need facilities.
You've also heard arguments that these hospitals won't be full-service. But that's okay because you don't need to have every
hospital in South Florida offering heart surgery. What you need is expertise and excellence in the care of these diseases. At least 90 percent of patients coming into hospital with a vascular problem do not require bypass surgery, do not require ablations of abnormal heart rhythms. What they require is proper diagnosis, stabilization, and they'll do fine in a community care setting. That's what they need.
Ex. B-132, Depo. Ex. 1-ID, at 53-56 (emphasis supplied.)
With regard to ER issues, the same witness then explained the importance of accessible community hospitals:
It doesn't matter how many beds we add at JFK Medical Center. There is still going to be 30, 40, 50 patients in the ER. The need is there. The population is getting older. The population is getting sicker. And they require medical services. The most facilitative approach, the best way to deal with this issue, is to have a community hospital that is able to provide primary care for the majority of patients in your community, and then, if you require more expertise or you need the next level of care, an easy way to facilitate that care in a certain institution of excellence.
Ex. B-132, Depo. Ex. 1 p. 58. This testimony is consistent with the testimony of Dr. Lopez-Viega and others that quality of care will improve for a significant number of elderly patients in the West Boynton area because of less delay in diagnosis and treatment, less stress for them and a reduction in the pressure on medical personnel. These include the victims of stroke.
Stroke
The Subdistrict facility of optimum care for stroke is JFK. Its recent development of specialty neuroradiological services and recruitment of Dr. Jaffe, an interventional neuroradiologist, who offers an extremely high level of care to stroke victims not available elsewhere in the Subdistrict, is the high point of its stroke program.
One of only four interventional neuroradiologists in all of southeast Florida, Dr. Jaffe is Board-certified in radiology diagnostics. He also holds a certificate of added qualification in interventional neuroradiology, the minimally invasive treatment of vascular diseases of the central nervous system.
Interventional neuroradiology employs the practice of inserting into an artery delicate tube-like structures (catheters) guided by radiological-type images. These images include ionizing radiation such as fluoroscope, "whether it be ultrasound, CAT scans, [or] MR, in order to guide catheters for therapeutic purposes." Tr. 3675. The field encompasses traditional surgical methods that used to be done via open procedures . . . now done via catheters and via image guidance." Id.
Dr. Jaffe sees patients with acute stroke, bleeding in the brain or a blockage of an artery in the body, or in
Dr. Jaffe's words, "a multitude of patients with different disease processes." Id.
But JFK's pre-eminence in stroke care in the Subdistrict does not reduce the quality of care benefits that Bethesda's WBCH, with its accredited stroke program, will bring to the West Boynton community.
Stroke is the interruption of blood flow to parts of the brain often because of blood clot. It is potentially devastating to the patient.
Administration of Tissue Plasminogen Activator ("TPA"), a medication given by vein which flows through the body to the site of the stroke-causing blood clot with clot- dissolving capability, will be available at WBCH. Capable of being administered in an emergency room where stroke victims often present, it is the standard of care for treating stroke patients.
While TPA has the capacity to reverse the effects of a potentially devastating stroke, it has its limitations. For example, there is usually only a three-hour window during in which administration of TPA can be effective. In contrast, the intra-arterial procedures performed by the interventional neuroradiologist is often effective beyond the three-hour window. In the case of posterior circulation occlusions, the procedure may extend the window of effective treatment up to 12
hours. There is also risk associated with the administration of TPA, mainly that its blood-thinning capability will induce bleeding in the patient that could be serious, even fatal.
There are other limitations. TPA must be administered by a trained subspecialist, usually a neurologist. There are a limited number of trained neurologists practicing in the Subdistrict. But they constitute a multiple of the interventional neuroradiologists: one, in the person of Dr. Jaffe. There are, in fact, only four interventional neuroradiologists in all of Southeast Florida. The three in addition to Dr. Jaffe are one in Miami, one in Hollywood and one who "volleys through hospitals [in] Broward [County.]" Tr. 3677. There are no more than four in the rest of the state: one in Orlando, two in Gainesville and perhaps one in Naples. The implication for patients as the result of the few trained interventional neuroradiologist in the state is that the therapy of interventional neuroradiology is not available to most patients, either at all or in a timely manner.
In addition to the extension of the time-duration window of treatment, the intra-arterial procedures performed by Dr. Jaffe can have tremendous benefits and greater effect than TPA. But the administration of TPA, is a safer and more simple system than the intra-arterial procedure performed by the interventional neuroradiologist. The pressures are different
between the two procedures. An intravenous medication such as TPA allows for diffusion throughout the body to the clot. It is not invasive as is the insertion of catheters guided by radiology to the point of the clot employed by an interventional neuroradiologist.
Like the intra-arterial procedures performed by
Dr. Jaffe, the administration of TPA has a degree of morbidity. It must be administered with great care by appropriately trained personnel. But it can be routinely done in an emergency room or other part of the hospital. In contrast, the intra-arterial procedure performed by the interventional neuroradiologist is a procedure that must be conducted in an operating room by a team of specialists and medical personnel.
In sum, at least at present, the administration of TPA is simpler, much more available and carries fewer risks than the intra-arterial procedures performed by Dr. Jaffe.
JFK: Not a Full Service Provider
While JFK has the pre-eminent program in the Subdistrict it is not a full service provider of hospital services. It routinely must transfer patients to other hospitals or facilities for services or procedures not available at JFK. It does not provide OB, NICU, or specialized pediatric services, and such patients who arrive at JFK's ED must be transferred to another facility. JFK also lacks a CMR program,
so patients, such as stroke patients, who need such rehabilitation services must be transferred to another facility.
JFK does not have a full range of imaging services, as it has closed its PET service and has not yet implemented a PACS system.
Importantly, legislation passed in 2004 prohibiting the establishment of specialty hospitals, indicating the Legislature's preference for general med-surg hospitals over specialty hospitals. JFK's health planning witness conceded that JFK's position that specialty services should be concentrated in a limited number of high volume hospitals would support a preference for specialty hospitals, contrary to the policy inherent in the Legislature's moratorium on specialty hospitals.
Subsection (4)
Subsection 4 of the CON Review Criteria Statutes is "[t]he availability of resources, including health personnel, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation."
§ 408.035(4), Fla. Stat.
Health Personnel Physicians
The proposed WBCH will share the same medical staff that now covers BMH. The BMH medical staff includes more than
500 physicians covering 30 to 40 different subspecialty areas.
Approximately 126 physicians have joined BMH's medical staff since November 2, 2002. Of that number of relocating physicians, 2.5% were actively recruited by Bethesda.
BMH's medical staff will be able to provide physician resources necessary to cover services offered at WBCH. There is a problem in Palm Beach County, however, with a shortage of specialists for ER call. The problem has existed for some time. With regard to the issue, the Bethesda I Recommended Order found the following:
Because of malpractice and other concerns, it is becoming increasingly difficult for hospitals to attract physicians who are willing to take ER calls. The Palm Beach County Medical Society and the CEOs of the existing hospitals in the county met as recently as December 2003 to discuss the problems related to ER call coverage: however, as of the date of the hearing, the problem still existed and was severe.
* * *
The problem of ER call coverage is most significant in specialties such as neurosurgery, hand surgery, urology, OB, and ear/nose/throat. Several of the hospitals in South Palm Beach County, including Wellington and Delray, have begun to pay physicians, and particularly specialty physicians to take ER call.
263. Adding a new hospital in South Palm Beach County will exacerbate this problem in several respects. First, it will add another hospital to the ER call rotations of
the physicians who chose to obtain privileges at the satellite hospital, thereby increasing the prospect of a physician being on call at more than one hospital at the same time. Second, it will make it even more difficult or costly for existing hospitals to obtain call coverage by the specialty physicians that are already in short supply.
Bethesda I Recommended Order, at 69-70.
The efforts of the Palm Beach County Medical Society and hospital CEOs referred-to in the Bethesda I Recommended Order have continued in the interim. In 2004, a study commissioned by the Palm Beach County Medical Society was made public.
The study, entitled, "Specialist On-Call Coverage of Palm Beach County Emergency Departments" (see Dr. Butz depo #2, attached to WRMC Ex. 30), was conducted by MDContent. Among the principals of MDContent is David A. Butz, Ph.D., Co-Director of the Center for Healthcare Economics at the University of Michigan, and an expert economist.
Issues examined by MDContent included "shortages in staffing of on-call schedules in Palm Beach County emergency departments." WRMC Ex. 30, p. 17. The study concluded that there is a severe and growing shortage of physician specialists to take on-call coverage of Palm Beach County emergency departments.
The shortage was determined to be due to a number of factors including high malpractice insurance and exposure to lawsuits. One of the factors causing the shortage is unusual in relation to the nation and the rest of Florida: the aging of the physician population in Palm Beach County and the relatively small percentage of MDs in the county who have received medical degrees since 1990. The report also found that among physicians who responded to surveys analyzed by MDContent un-reimbursed care in the ED is problematic for physicians as malpractice liability.
Three recommendations were made in the report for solving the shortage.
The first was to form a management committee. A management committee has been formed.
The second recommendation was to investigate clinical repercussions of the shortages in on-call specialty care. The management committee took action on this recommendation. Medical specialties were identified in which the shortages were particularly acute: hand surgery, neurosurgery (the two highest priorities) and high risk obstetrics. Orthopedics, ENTs, general surgeons and opthalmologists were added to the list, as well as some sub-specialists like pulmonologists to deal with high-risk ventilator patients.
The third recommendation was for hospitals in the healthcare district to provide compensation for ED on-call coverage.
Implementation of the third recommendation as begun to improve the situation particularly with regard to ED call coverage in neurosurgery.
No hospital in the County had 24/7 neurosurgery call coverage at the time of the February 2004 hearing.
Neurosurgery ED call coverage has improved substantially since the February 2004 hearing, mainly because Palm Beach County hospitals, like Broward hospitals, Dade hospitals, and Orlando hospitals, started to compensate neurosurgeons for providing ED call coverage, either with stipends or through employment arrangements. In at least the case of one neurosurgeon recently recruited, the physician's liability insurance is being covered under the arrangement.
In addition, beginning in the spring of 2004, the Health Care District started subsidizing compensation of neurosurgery call coverage at the trauma hospitals, Delray and St. Mary's, which improved the trauma circumstances in the County.
At the time of the final hearing in this matter, BMH, Delray, and JFK all had 24/7 neurosurgery ED call coverage in place. BMH, with the advice of a national consulting firm,
established, effective April 1, 2006, a comprehensive compensation program for ED call coverage, much like the program at Boca Raton Community Hospital. Bethesda already had 24/7 coverage for most specialties when it implemented the program, and plans for implementation of the program enabled Bethesda immediately to secure 24/7 ED call coverage for neurosurgery.
BMH has added two additional neurosurgeons to its staff, who, together with Dr. Nair, provide full 24/7 coverage for BMH's ED and will also cover the WBCH ED when it opens. The Bethesda compensation program is a "system-wide" program, so there will not be any additional costs for providing ED call coverage for the proposed WBCH.
Delray started paying neurosurgeons for ED call coverage in April 2004, and has had full 24/7 neurosurgery ED coverage every day since August 2004. JFK obtained full neurosurgery ED call coverage in March/April 2005, through neurosurgeons employed by an HCA affiliate, who also now cover Jupiter Medical Center.
Following the success of its compensation program for neurosurgeons, Delray has also put an ED compensation program in place for all but 2 of 17 specialties.
Likewise, JFK provides compensation for ED coverage to a number of physician specialists in addition to neurosurgeons, such as neurologists, cardiac surgeons, OB/GYNs,
and cardiologists, through compensation arrangements, employment arrangements, or exclusive contract arrangements. JFK's CEO testified that JFK serves the public as a good steward by providing compensation to specialists to ensure access to ED care.
The other specialty in Palm Beach County that was found to be most problematic, hand surgery, is currently being addressed by a program developed cooperatively by the ED Management Group, which was formed by County hospitals, the Palm Beach County Medical Society, and the Health Care District.
The MDContent study report assumed that few new physicians were being recruited to Palm Beach County. To the contrary, a substantial number of new physicians, many from outside of the State, have joined the medical staffs of all the party hospitals since the February 2004 hearing.
Evidence was presented at hearing that Palm Beach County does not have significant issues recruiting physicians. Dr. Michael Lakow, a JFK cardiologist, testified that most of the candidates his group interviews are from the Northeast, so Palm Beach County offers a lower cost of living and the benefit of no state income tax. Another recruiting benefit is the Palm Beach County weather, which was a primary reason that Dr. Jaffe, who recently relocated from Pennsylvania, elected to practice at JFK as opposed to a hospital in Mississippi or Georgia.
The availability of a new hospital in the growing, more affluent West Boynton area, moreover, will only improve Bethesda's ability to recruit more physicians into Palm Beach County to join Bethesda's medical staff. The new physicians will not be limited solely to practicing at a safety net hospital located in the east.
The MDContent report found that Palm Beach County suffered from the lack of sufficient residency opportunities, which impacted physician recruitment. Since the report, however, a new medical school has opened in Palm Beach County, at Florida Atlantic University ("FAU"), and local hospitals such as BMH and JFK plan to offer residency positions to FAU students.
The problem of the shortage of on-call specialists, therefore, is now better defined than it was in Bethesda I. Steps, such as providing improved compensation, have been taken by some hospitals, particularly with regard to neurosurgery. Recruiting of physicians has improved in Palm Beach County. These steps are helping to ease the shortage.
The problem is not solved, however, nor will it be in the near term. If the recommendation of MDContent and Dr. Butz are implemented, the shortage of ED on-call physicians in certain specialties will not end in the next five years. In the
long term, however, implementation of the recommendations have the potential to resolve the shortage.
The shortage of on-call physicians in the specialties identified by the management committee, moreover, will not be helped by the addition of WBCH and its ED. While WBCH's ED should be adequately served by on-call specialists through arrangements with BMH, the presence of WBCH's ED will not help the shortage in the Subdistrict or Palm Beach County. As Dr. Butz opined, "the burden on physicians of staffing a 13th emergency department in Palm Beach County [WBCH's] cannot but make the shortage worse." WRMC Ex. 30, p. 45.
AHCA's position with respect to such ED call coverage issues is that specialist on-call availability is not a reason to deny a satellite hospital application. AHCA believes the shortage to be a short-term issue, and expects market forces to correct it, as in the case of the nursing shortage experienced five years ago. The effect of market forces and the implementation of recommendations with potential to solve the shortage remain to be seen, of course. As AHCA maintains, the shortage, as one factor to be weighed in the CON balancing process, is not by itself a reason to deny the application. But the exacerbation of the shortage in the Subdistrict and the County caused by the addition of WBCH is a factor that weighs against approval.
Nurses and Technicians
Notwithstanding a general nursing shortage in past years, Florida is witnessing a downward trend in nurse vacancy rates, as reported in the January 2005 FHA report. According to the FHA report, which JFK's HR witness acknowledged as a resource for determining nursing vacancies statewide, Florida's nurse vacancy rates have decreased from 15.6% in 2001, to 8.2% in 2004.
BMH's nurse vacancy rate for its med-surg, ICU, OR, and ED nursing positions is 9%. BMH's nursing turnover rate is 9.5%, while at the time of its 2003 Application, its nursing turnover rate was 12% to 13%.
BMH has been able to staff adequately all of its beds and services. BMH maintains a higher nurse-to-patient ratio than the opponents' for-profit hospitals, which, in turn, contributes to a higher quality of care. Further, higher nurse- to-patient ratios limit the stress on existing staff, which reduces staff turnover.
Bethesda has not experienced nurses turning down employment due to the housing costs in south Florida. At the request of Palm Beach County, Bethesda will provide affordable work force housing on the campus of WBCH. In addition, affordable work force housing, such as Winsberg Farms, and town homes, such as Briella Town Homes near Bethesda Health City,
currently exist or are being developed in the West Boynton area. JFK likewise is considering a plan to provide affordable housing near the JFK campus.
BMH will be able to provide adequate nursing staff and technicians at WBCH, as set forth in Schedule 6A of its application, in part by relocating some of its existing staff from BMH, thereby reducing the recruiting requirements for the new facility. The salaries projected for the WBCH as shown on Schedule 6A are reasonable.
Despite voicing nurse shortage concerns, all opponents have recently added acute care beds and new or expanded services, and all have been able to add the necessary accompanying staff. Moreover, Wellington Regional and JFK plan to add more beds in the near future, which is inconsistent with their stated concerns regarding staffing difficulties.
JFK claims to have faced difficulties in recruiting and retaining radiology technicians. BMH, however, has not faced any such difficulties, in part because BMH operates an on- campus school for radiology technicians. To encourage students to join its staff, BMH waives tuition for students who agree to work at BMH for one year following graduation. The success of BMH's approach is apparent, as the number of employed radiology technicians at BMH has increased from one in 2003, to 37. From
the 2005 graduating class alone, 4 students took employment at BMH as X-ray technicians and 3 students joined its CT program.
Further enhancing Bethesda's ability to attract and retain radiology technicians is its investment in state-of-the- art radiology equipment, including a PACS system, which JFK does not have. Additionally, Bethesda's radiology group has been much more stable than the JFK group. The new WBCH would have a positive impact on the ability of the radiology group serving Bethesda to recruit new radiologists.
Bethesda also has had success in recruiting therapists, such as those recruited for BMH's new 28-bed CMR unit, which is staffed with 4 physical therapists and 7 occupational therapists, who are in addition to the 33 physical therapists and 18 occupational therapists employed to serve
inpatients at BMH.
Management Personnel
The applicant, Bethesda, holds the license of BMH, and it will also be the license holder of WBCH. The proposed WBCH will be operated as a true satellite facility, with BMH and WBCH having a single set of bylaws, rules and regulations, a single management team, a single, unified medical staff, and a single emergency call schedule. With the corporate management infrastructure to operate the satellite hospital already in place locally, at BMH, the duplication of overhead costs for
executive management, financial, planning, purchasing, and human resources expertise will be avoided.
Bethesda also will be able to avoid duplication of costly IT equipment, computer services, purchasing services, and storage services, which are already available for the proposed WBCH's operations. Further, Bethesda will be able to share and build upon very expensive IT equipment; an existing PACS System; communications equipment; and the like that already exist at BMH and Bethesda Health City, thereby avoiding substantial costs that would otherwise have to be incurred for a new stand-alone
hospital.
Funds for Capital and Operating Expenditures
Bethesda's listing of all capital projects (Schedule 2), availability of sources of funds to fund project expenditures (Schedule 3), and ability to fund capital and operating expenditures are not in dispute. In the Joint Prehearing Stipulation, the parties stipulated as follows: Bethesda can obtain sufficient financing to cover the projected total project costs, including development, construction, equipping, initial capital, and operating expenses for start up of the proposed satellite hospital.
Consistent with the above stipulations, Schedules 1, 2, 3, 9, and 10 of Bethesda's CON application/Omissions Response
are not in dispute, and the information and projections contained therein are adequate and reasonable.
Subsection (6)
Subsection (6) of the CON Review Criteria Statute is: "[t]he immediate and long-term financial feasibility of the proposal." § 408.035(6), Fla. Stat.
The proposed WBCH will be financially feasible in the immediate and long term. The evidence in support of this finding includes (a) the applicant's projected utilization over a four-year "ramp-up" period, which is conservative in light of the utilization that can be expected in a service area with a large, elderly, and rapidly growing population base; (b) the existing draw of patients from the West Boynton area already being experienced by the Bethesda System coupled with established physician referral patterns among Bethesda's medical staff; and (c) reasonable financial forecasts in the application, which were prepared by Tribrook with input from Bethesda's Chief Financial Officer ("CFO").
Projected Utilization
Section 5 of AHCA's CON application form calls for the "Applicant's" projected inpatient utilization in the first two years. As it is the "applicant" here, Bethesda System presented in Section 5 inpatient utilization projections, not only for the WBCH satellite but also for the System as a whole
for the first two years. As shown by the projections for the WBCH satellite, there are 11,853 projected inpatient days in Year 1 and 15,936 projected inpatient days in Year 2, resulting in inpatient occupancy rates of 40.6% and 54.6%, respectively. Those are conservative projections, as AHCA observed in the SAAR, in that Bethesda is already providing more patient days of non-tertiary, non-perinatal services of the nature to be provided at WBCH to residents from the proposed PSA than WBCH is expected to provide in total in Year 2.
The CON application also included utilization projections through Year 4, which are reasonable. As noted in the Schedule 5 Assumptions, details regarding the utilization projections and extending the forecast through Year 4 are set forth in Schedule B Item E of the application. In Year 4, WBCH is reasonably expected to have 21,743 inpatient days for an average daily census of 59.6 patients and an occupancy rate of 74.5.
The utilization projections for WBCH are reasonably and conservatively based on the existing population in the proposed service area as well as projected population growth; the Palm Beach County acute care services use rate for selected discharges of the type to be provided at WBCH; an appropriate projected average length of stay ("ALOS") for the WBCH
satellite; and a conservative market penetration for the demand assessment.
A projected use rate was based on the County use rate for acute care services for non-tertiary inpatient services (i.e., DRG's) of a type appropriate for a general medical/surgical acute care hospital with the range of services expected to be offered at WBCH, as derived from AHCA data. The County use rate for the selected non-tertiary services is 102.3 discharges per thousand population. The adoption of the County use rate is conservative, as the proposed service area use rate is higher, i.e., approximately 110 discharges per thousand.
The use rate adopted for the utilization projections is based upon selected non-tertiary medical/surgical acute care DRG's and excludes inpatient obstetrics (OB) and newborn services; interventional cardiology (e.g., open heart surgery, angioplasty, and stents); diagnostic cardiac catheterization; transplant programs; multi-systems trauma; and inpatient mental health services. The list of non-tertiary inpatient services that will be available at WBCH still includes more than 400 DRG's, and generally is not in dispute.
While OB-related services typically represent the highest number of inpatient discharges from a given service area, they rank substantially lower in terms of actual patient days and also are not a major source of emergency visits.
Multi-systems trauma and interventional cardiology services such as open heart surgery represent a small proportion of total hospital discharges.
It is likely that some of the excluded types of inpatient services will be provided on an emergency basis in WBCH's ED. For example, mental health services (Baker Act) are now provided in substantial volumes in BMH's ED even though BMH does not have an inpatient psychiatric service. Further, like Delray and JFK, WBCH can be expected to provide pediatric services on both an inpatient and emergency basis, even though no dedicated pediatric unit is proposed.
At the time that the 2005 CON application was filed, it was expected that the second year, or planning horizon, would be 2010. Thus, the use rate of 102.3 was applied to the projected service area population for four years of operations beginning in 2009, which yields a total of 29,687 inpatient discharges in the selected DRG's from residents of the proposed service area in 2009, increasing to 32,803 discharges in 2012.
Bethesda reasonably estimated WBCH market penetrations in each of the six service area zip codes. For example, in the early ramp-up years, estimated market shares initially range from an estimate of 13% (Year 1) to 17% (Year 2) to 20% (Year 3) in WBCH's home site zip code of 33437. That is conservative as compared to Wellington Regional's 25% market
share of non-tertiary discharges in its home site zip code of 33414. Lesser market shares were estimated by Bethesda for the satellite in the other four zip codes, including only 2% (33414) and 3% (33446), respectively, in Year 2 in the two secondary service area zip codes. Bethesda's medical staff has not historically developed substantial physician referral patterns from the secondary service area, and its physicians can be expected to have the same referral patterns initially with respect to WBCH.
Hospital market share is a function of several factors including physician referral patterns, site, proximity, services, location of BMH and Bethesda Health City, and location of other hospitals. However, physician referral patterns is a particular key factor in the health planning analysis. As JFK's physician development director acknowledged, physician referral patterns have always been "very important" and are a "major driver" of a hospital's market share in an area.
Combining the estimated market shares for the six zip codes, Bethesda's application conservatively assumed a 7.8% overall market share of the entire proposed service area for WBCH's first year, 10.2% in Year 2, and increasing to 13.0% by Year 4. The projected service area market share is applied to the total projected discharges for each year of operation to get the projected service area discharges for WBCH.
Bethesda then reasonably assumed an "in-migration" factor for WBCH of approximately 10%, representing out-of-area admissions from non-permanent residents or "snowbirds"; admissions from zip codes adjacent to the proposed service area; and all other admissions from throughout the County or elsewhere.
Finally, to determine the number of anticipated inpatient days, Bethesda reasonably assumed a conservative ALOS for WBCH of 4.6 days. The projected ALOS is less than the actual 4.7 ALOS for non-tertiary discharges from WBCH's proposed PSA and from its entire service area. The projected ALOS for WBCH patients is also less than the ALOS of non-tertiary inpatients from both the PSA and the entire service area who are served at BMH, whose medical staff with similar physician referral patterns will staff WBCH. Moreover, WBCH's projected ALOS is lower than the ALOS of 4.9 for non-tertiary services for all inpatients served at BMH. By applying the projected 4.6 ALOS to the projected total discharges each year, Bethesda then arrived at the projected inpatient days set forth in the CON application, which are reasonable inpatient utilization projections.
WBCH's financial forecasts also are built upon projections of revenues for outpatient services such as ED visits, observation visits, outpatient surgery, and imaging
services. Utilization of such hospital outpatient services by patients from the proposed service area has increased substantially in the last two years.
As set forth in Bethesda's CON application and detailed at final hearing, hospital ED visits by residents of the proposed service area are projected at 107,385 in 2009, and to increase to 118,659 by 2012. WBCH's ED market shares are reasonably projected to grow from 11.6% to 18.2% during that four-year period. Hospital market shares are typically somewhat higher for ED than for inpatient services. The projections lead to a reasonable forecast of WBCH ED visits, ranging from 12,421 in Year 1 to 21,583 in Year 4.
Schedule 5 of the CON application also includes projections of inpatient utilization for the System overall, after completion of the satellite project. Total inpatient days are projected for the System at 107,151 in Year 2.
Not all WBCH patients are expected to be new patients for the Bethesda System. The CON application includes a table detailing the impact of redistribution, or "cannibalization," of the satellite on BMH, and the net impact of the redistribution after accounting for annual population growth. The net impact will be a redistribution of 766 patient admissions from the main campus to the satellite in Year 1, and a redistribution of 979 admissions in Year 2. Redistribution of patients from BMH is
expected to end thereafter as the physicians at WBCH establish new referral patterns.
Bethesda's projections of redistribution and overall System utilization, as set forth in the CON application and supported at hearing, are reasonable.
Financial Forecasts
Schedule 7A of the CON application sets forth revenue and payer mix assumptions and projections for the WBCH satellite and for the applicant, i.e., the Bethesda System as a whole, for the first two years of operation as called for in AHCA's CON application forms. The net operating revenue projections from Schedule 7A carry over to Schedule 8A of the CON application, which includes in the right hand column of AHCA's CON application forms revenue, expense, and net income assumptions and projections for the WBCH satellite for the first two years of operation. Furthermore, Bethesda also included in Schedule 8A a Summary Operating Statement and a Sources and Uses of Funds statement in which the applicant extended the financial assumptions to include four years of projected revenues, expenses, net income, and cash flow for the proposed satellite hospital. As shown in Schedule 8A and the Summary Operating Statement, positive net income in the amount of $2,228,882 is forecast for the WBCH satellite in Year 2, and the satellite's net income is projected to increase each year, as utilization
ramps up, to $7,620,912 by Year 4. Further, a positive cash flow of $1,932,062 is forecast for the satellite in Year 2, increasing to $4,804,294 by Year 4. The financial forecasts set forth in the CON application are reasonable and indicate the financial feasibility of the satellite hospital project.
Wellington Regional's financial witness,
Mr. Davidson, has previously testified that a CON applicant which shows a positive net income in the second year or in the early years is financially feasible. Mr. Davidson does not dispute Bethesda's projection of positive net income for WBCH in Year 2 and each year thereafter.
In light of delays occasioned by the pending appeal proceedings, Tribrook performed a sensitivity simulation to test the effect of a one-year delay in project start-up to 2010 under the same financial assumptions that were applied in the CON application, taking into account the most recent utilization data and inflating project costs another year, in order to advise Bethesda management as to the effect of the delay on financial feasibility of the project. The sensitivity analysis indicates that the satellite would still begin generating positive net income and cash flow in the new planning horizon Year 2 (i.e., 2011), and that the satellite's net income would grow each year thereafter. The sensitivity analysis supports the conclusion drawn from the projections in the CON
application, i.e., that the satellite project is financially feasible in the immediate and long term.
Bethesda also demonstrated in Schedule 8A of the CON application that the Bethesda System as a whole generates a net profit in each of the first two years of the satellite's operation after taking into account the full impact of the satellite and the redistribution (i.e., cannibalization) of patients from BMH on revenue, expenses, and income, and the System begins to benefit overall by Year 2. As indicated in the left-hand column (col. 7) in Schedule 8A, the entire System including the satellite project is projected to generate a net profit of $11,480,857 in Year 2, and that takes into account the impact of patients redistributed from BMH to WBCH. In the middle column (col. 9), labeled "Without This Project," the System is projected to generate only $8,536,428 in net profit in Year 2 if the satellite project is not approved.
The financial forecasts were prepared by Mr. Carroll (Tribrook) with the active input of, and review by, Bethesda's CFO, Ms. Aqualina, who opined that the forecasts in Schedules 7A and 8A are reasonable and include accurate financial projections. Bethesda has "strong managers," including the CFO and financial management team. Ms. Aqualina's opinion as to the reasonableness of Schedules 7A and 8A, which contain the financial forecasts for the WBCH satellite project and for its
impact on the System as a whole, adds further credibility to the financial pro formas.
Subsection (7)
Subsection (7) of the CON Statutory Review Criteria is "[t]he extent to which the proposal will foster competition that promotes quality of care and cost effectiveness."
§408.035(7), Fla. Stat.
Competition generally forces hospitals to increase quality to remain viable in a market. It should also force them to operate in a more cost-effective manner.
One way of looking at competition among hospitals is through data that reveals market share. Hospital market share is a measure of hospital usage by residents of an area. It demonstrates "patient destination patterns" (tr. 5298) for hospital services.
The market for acute care hospital services in the PSA and SSA proposed by Bethesda (the "Proposed Service Area") is highly competitive. The four hospitals participating in this proceeding, all separately-owned, are the primary competitors for the inpatient and outpatient markets in the Proposed Service Area.
In the PSA, JFK, BMH and Delray are clear leaders over WRMC. Together the four dominate the PSA. For example, with regard to acute patient days delivered to the residents of
the PSA in 2004, the market share of the four hospitals was nearly 80%.
The four provide ample choice for persons seeking acute care and emergency medical services in the West Boynton Area. At the same time, none of the four competitors has a dominant market share in the four zip codes that comprise the PSA. In other words, the West Boynton area enjoys a competitive balance for hospital services.
The competitive relationship of the four in the PSA was shown to be in balance in Bethesda I on the basis of three years of market share data. The years are 2000 to 2002. The percentages of the PSA discharges attributable to each of the four (their market shares) were illustrated in a table in the Recommended Order:
JFK Bethesda Delray Wellington
2000 | 31.7% | 23.2% | 10.6% | 6.1% |
2001 | 30.1% | 24.0% | 11.2% | 6.9% |
2002 | 28.8% | 23.9% | 11.4% | 7.7% |
Bethesda I, Recommended Order at 32. The annual totals of the percentages of market shares attributable to each hospital were 71.6% (2000), 72.2% (2001) and 71.8% (2002) for an average of the three years at approximately 71.87%. The Recommended Order further found, "the competitive balance that currently exists in the West Boynton market is expected to continue unless something
disrupts that balance, such as the approval of a new hospital in the area." Id., at 32-33. Disruption of this competitive balance and the negative impact of a new Bethesda hospital in the West Boynton area among the factors in Bethesda I that was determined to outweigh any improvement in access to hospital services that residents of the West Boynton area would have enjoyed had Bethesda's application been granted.
Health care markets are dynamic. Dynamics in health care markets make competitive balance difficult to sustain over a lengthy period of time. But data in 2004 not considered in Bethesda I showed the four hospitals to be in the same order with regard to market share in the PSA from highest to lowest (JFK, Bethesda, Delray and WRMC) that the hospitals had been in between 2000 and 2002. Furthermore, the percentages for 2004 of market share in the PSA were within or not much outside the range of market share for the period that indicated competitive balance in Bethesda I, 2000 to 2002: 33.5% for JFK (1.8% higher than its high in 2000), 24.7% for Bethesda (0.7% higher than its high in 2001), 14.1% for Delray (2.7% higher than its high in 2002) and 6.2% for WRMC (0.1% above its low in 2000). The market share for the four hospitals totals 75.8%, nearly 4% higher than the average of the 2000-2002 period but consistent with the higher market share values for JFK, Bethesda and in particular, for Delray. Thus, the competitive balance between
the four hospitals in the PSA found in Bethesda I continued forward as expected at least through 2004.
There are, however, other perspectives from which to examine the state of competition between the four hospitals and the impact that a successful application in this case will have on competition. Among these are market shares with regard to non-tertiary services (all that WBCH intends to offer) in the Proposed Service Area (the PSA and the SSA), a six zip code area rather than just the four zip code area of the PSA; consideration of the effect on competition in the Subdistrict of not just the four hospitals but also their affiliates; the greater leverage in bargaining with employers and managed care contractors possessed by hospitals that, unlike Bethesda, are part of national for-profit hospital chains with multiple hospitals in an area; and, the value of location -- a hospital in the West Boynton area -- that will enhance patient choice and thereby tend to sharpen competition in the Subdistrict, even if it skews the competitive balance in the PSA toward Bethesda.
The dynamic nature of the West Boynton area market for hospital services is indicated by the percent change in market share of non-tertiary discharges in the Proposed Service Area from 2002 to 2004.
The third page of Delray Exhibit 12, which covers five hospitals (Palms West, Boca Raton Community, Good Samaritan, St. Mary's and West Boca) shows these changes.
The most dramatic changes are for WRMC, which had a 23.4% increase in non-tertiary discharges for the six zip Code area and Good Samaritan which had an 18.4% drop. The exhibit reveals changes for the other three hospital participants: a 9.7% percentage decrease for JFK, a 5.8% decrease for BMH and a 7.1% increase for Delray.
In the case of WRMC, found in Bethesda I as the hospital in the Subdistrict most likely to suffer the most from adverse impacts from approval of either the JFK or Bethesda application, its increase was from 6.9% to 8.6%, a mere increase of 1.7% of the total market share. The dramatic appearance of the percentage increase with regard to WRMC was explained as due to "the effect of arithmetic on small numbers." Tr. 5300. Still, with regard to Wellington, it was conceded that its improvement in market share had to be regarded as "fairly significant." Id.
JFK's market share of non-tertiary discharges in the proposed service area declined from 2002 to 2004, primarily in zip codes where WRMC gained. However, JFK's decline was more than offset by the gain at JFK's sister HCA hospital, Palms West, which enjoyed a 13.2% increase in non-tertiary market
share in the same area from 2002 to 2004, ranking second only to Wellington Regional's dramatic gain. Palms West, moreover, expects its market share of its own service area to grow "quite dramatically" over the next few years.
BMH was the only hospital other than JFK whose non- tertiary market share of the proposed service area declined from 2002 to 2004. BMH's market share also dropped in the proposed PSA from 2003 to 2004.
JFK still had the highest non-tertiary market share (24.9%) of any hospital in the proposed service area for the 12- month period ended March 31, 2005, and the combined non-tertiary market shares of HCA-affiliated hospitals is, of course, even higher (34.2%). Also, JFK's 33.55% market share of non-tertiary patient days in the WBCH PSA in 2004 remains the highest of any individual hospital for the proposed PSA. BMH ranked second at 25.04% of PSA patient days.
WRMC's percentage increase coupled with the other changes in market shares exhibited by Delray Exhibit 12 do little to disturb the competitive balance among the Subdistrict's three leading hospitals, JFK, BMH and Delray. But the market should continue to exhibit its dynamism. WRMC and Palms West, "up and comers," tr. 5302, are expected to increase their gains shown by the 2002-2004 data.
Furthermore, whether Bethesda's application is approved or not, competition will increase in the area because of the addition of new open heart programs in the Subdistrict at BMH and Boca Raton Community, a new comprehensive rehab program and an improved stroke program at Bethesda.
Competition is generally understood by healthcare planners to be more effective in improving quality of care than it is in holding down costs and improving cost-effectiveness. Nonetheless, improving cost-effectiveness is a goal in which competition has a role.
Bethesda is the only party without a hospital in the rapidly growing western portion of Palm Beach County and therefore is unable to compete as effectively when it comes to price with the hospital systems that have a presence in the western portion of the County. All existing hospitals in western Palm Beach County, with the exception of the remote, impoverished area served by Glades General, are owned by national for-profit hospital chains, i.e., HCA (Palms West), Universal (WRMC), and Tenet (West Boca). Thus, employers and managed care companies cannot currently offer any employees and policyholders who live in western parts of the county with the choice of a geographically accessible hospital operated by the Bethesda System or any other community not-for-profit system.
The HCA and Tenet systems, which own JFK and Delray, respectively, are in particularly strong positions to bargain for high prices and rates with large employers and managed care companies because of their ownership of multiple hospitals located throughout Palm Beach County and south Florida, which assures access for more employees and policyholders, wherever they reside. HCA has three Palm Beach County hospitals and 13 South Florida acute care hospitals in its Florida East Division. Tenet has five Palm Beach County acute care hospitals and 14 hospitals in the south Florida region. Those for-profit systems currently enjoy dominant market shares, both on a county-wide basis and in the proposed WBCH service area. Tenet and HCA- affiliated hospitals have market shares of 36.5% and 25.4%, respectively, of all hospital inpatient discharges reported for residents of Palm Beach County, while Bethesda's county-wide market share is only 10.7%.
The concentration of multiple affiliated hospitals in the same geographic region enjoyed by Tenet and HCA is desirable for hospitals and hospital business organizations from several perspectives. It is of assistance in contracting with managed care payers. See Ex. B-73P at 5-6, where Tenet states in a recent Form 10-K filing with the Securities and Exchange Commission ("SEC") that "[s]trong concentrations of hospital beds within geographic areas help us contract more successfully
with managed care payers." It reduces management, marketing and other expenses. It aids, moreover, in efficient utilization of resources. Consistent with the position of its parent organization, Delray stated in a 1998 CON application that
Tenet Healthcare Corporation (Tenet) provides a broad range of support services in the areas of administration, clinical support, purchasing, data processing, and a variety of other activities. Tenet is continuously evaluating means of improving the efficiency of its facilities in a specific geographic area through the sharing of resources. For example, Broward and Palm Beach hospitals are served by a centralized business office that reduces the total overhead expenses of the participating hospitals. Tenet is also developing managed care systems that will link its hospitals together in south Florida.
Ex. B-75F, at 78. The CEO's of Tenet's 14 hospitals in south Florida meet regularly at its Fort Lauderdale office to discuss issues such as managed care contracting, and a Tenet employee of the regional Tenet office is the chief negotiator on managed care contracts for all of those hospitals, including Delray.
Similarly, an individual in HCA's Florida East Division supervises a team of people who negotiate all the managed care agreements for all 13 HCA hospitals in southeast Florida. When it comes to managed care contracting that affects JFK, JFK's CEO and CFO(just as the other HCA hospital CEOs and CFOs in the region) work through HCA's managed care support personnel in the HCA divisional office in Broward County.
The advantageous bargaining strength of HCA and Tenet is reflected in high charge structures at JFK and Delray.
Lower charges and managed care rates benefit self-pay patients, insured patients whose co-pays are based on a percentage of charges, insured patients who must pay deductibles before payment is made by the insurer, and employers and employees who pay insurance premiums. Conversely, disproportionately high charges lead to high Medicare "outlier" payments by the federal government (and taxpayers) to hospitals with high charges, such as Delray, because Medicare outliers are measured by charges.
The proposed satellite hospital will give consumers in West Boynton "a new choice of location." If the proposed satellite's market share exceeds Bethesda's current share of the service area, as it should, competing hospitals will have to either increase quality and services and/or decrease prices in order to overcome the advantage gained by location. The most likely outcome will be an increase in quality of care.
Subsection (8)
Subsection (8) of the CON Review Criteria Statute is, "[the costs and methods of the proposed construction, including the costs and methods of energy provision and the availability of alternative, less costly, or more effective methods of construction." § 408.035(8), Fla. Stat.
In the Joint Prehearing Stipulation, the parties stipulated as follows:
Bethesda Healthcare System, Inc. can build the proposed satellite hospital on the land northeast of the intersection of Boynton Beach Boulevard and State Road 7 (a/k/a Hwy. 441), which it has purchased and currently owns, for the projected total project costs of approximately $82.4 million.
The architectural schematics, project completion schedule, design narratives, and code compliance information set forth in Bethesda's CON application are reasonable.
Consistent with the above stipulations, Schedules 1, 2, 3, 9, and 10 of Bethesda's CON application/Omissions Response are not in dispute, and the information and projections contained therein are adequate and reasonable.
Subsection (9)
Subsection (9) of the CON Review Criteria Statute is "[t]he applicant's past and proposed provision of health care services to Medicaid patients and the medically indigent."
§ 408.035(9), Fla. Stat.
Bethesda has a "track record" of providing substantial services to Medicaid patients and the medically indigent. BMH's Medicaid and charity care percentages exceed the averages for both the Subdistrict and the District as a whole.
About 10.9% of documented Palm Beach County residents live below the federal poverty level. In the Subdistrict, however, 13.7% of documented residents east of Military Trail have incomes below the federal poverty level, while only 6.2% of those to the west fall in that category.
In Palm Beach County, 16.8% of documented residents live in households with annual incomes below $20,000, and another 17.1% of the households have incomes below $35,000.
Bethesda has traditionally been the key provider of services to the Medicaid and medically indigent population of south Palm Beach County in part because of its location. The percentages of low income households in BMH's eastern core service area are substantially higher than the County averages. BMH's "core service area" is defined for this purpose to be its primary service area zip codes other than the more western zip codes of 33436, 33437, and 33463. In contrast, the percentages of low income households in WBCH's service area are substantially lower than the County averages.
Individuals with annual family income levels below
$35,000 are much more likely to be uninsured, and the level of uninsured population is especially high as family income levels drop to $20,000 or less. The disproportionately higher level of uninsured families in BMH's eastern core service area impacts
the utilization of that hospital by the uninsured and their needs for safety net hospital services.
Comparisons with the other hospitals in the Subdistrict reveals the extent of Bethesda's service to Medicaid patients and the medically indigent.
Bethesda serves significantly more Medicaid patients than any other hospital in the Subdistrict, including area facilities with higher bed counts. Bethesda has clearly demonstrated a commitment toward serving lower income people including Medicaid, and AHCA looks favorably on such a demonstrated commitment. In fact, AHCA has followed a policy of giving significant weight to an applicant's historical provision of high volumes of Medicaid and indigent patients.
BMH accounted for 45.4% of all Medicaid inpatient admissions in the Subdistrict from 1999 to 2004. JFK accounted for 20.1% of Subdistrict Medicaid admissions, even though it is a larger hospital than BMH. The other parties, WRMC (12.0%) and Delray (3.9%), accounted for less.
Bethesda's Medicaid admissions continue to increase. During the two-year period after the filing of the 2003 Bethesda application i.e., from 2002 to 2004, Medicaid/Medicaid HMO admissions increased from 19.1% to 24.2% of Bethesda's total inpatient admissions. Further, Bethesda is the only party whose total number of Medicaid admissions was higher in 2005 than in
2002, except for Delray, and Bethesda still serves more than five times as many Medicaid inpatients as Delray, whose Medicaid utilization remains the lowest in the Subdistrict. JFK's Medicaid admissions declined substantially from 2002 to 2005, and Wellington Regional's Medicaid volume was flat.
BMH's Medicaid admissions include OB patients. The applicable statutory review criterion does not distinguish between types of Medicaid patients. While "moms and babies" may be the more common type of Medicaid patient, the greater Medicaid spending is associated with the patients who are highly disabled, extremely ill, frail and elderly, and/or medically complex. Despite the fact that a majority of BMH's Medicaid inpatients are OB patients, a majority of the inpatients in beds at BMH on any given day are the more costly medical-surgical and ICU patients. The ALOS for the latter types of patients is much longer than for OB patients.
BMH serves almost four times as many non-OB, non- newborn Medicaid inpatients as Wellington Regional. Excluding perinatal cases, JFK ranks second to BMH in terms of Medicaid utilization. However, BMH still provides 63% more care to non- perinatal patients than does JFK.
BMH also provides a substantial and rapidly increasing amount of charity care. BMH's internal hospital guidelines for classifying and documenting indigent patients as
"charity care" patients are the same guidelines that are required in AHCA's Florida Hospital Uniform Reporting System Manual ("FHURS Manual"), pursuant to Florida Administrative Code Rule 59E-5.101(5), to be used for classifying and reporting care to "medically indigent patients" as "charity care" or "uncompensated charity care."
In 2002, BMH's charity care amounted to about $16.2 million, which equated to 2.9% of BMH's total patient revenues. The total amounts and relative percentages of charity care at BMH have grown each year thereafter, to about $21.5 million (3.1%) in 2003; $27.8 million (3.7%) in 2004; and $32.7 million (3.9%) in 2005. Thus, BMH's charity care has increased substantially since the 2003 Bethesda application was filed. It has increased about 100% since 2002, and about 50% in the last two years.
Prior to its reorganization from tax district hospital to private not-for-profit status in 1984, Bethesda received substantial tax subsidies to support the provision of indigent care. However, since the Palm Beach County Health Care District ("Health Care District") was formed in 1988, the only compensation received by Bethesda has been relatively minimal fee-for-service reimbursement for certain qualified Health Care District patients. Health Care District payments amounted to
$2.4 million in FY 2003, and declined to less than $2.0 million
in FY 2004 and FY 2005. Further, Bethesda returns $1.0 million of those payments each year pursuant to a settlement agreement with the Health Care District related to litigation regarding Bethesda's ownership. On the other hand, the creation of the Health Care District allows all hospitals to be reimbursed through and indigent care subsidy for care to patients who meet the District's indigency standards. The subsidy helps to ensure that indigent patients are able to receive medical care from any hospital in the county. To that end, the Health Care District and its subsidies provide a county-wide "safety net" for indigent patients.
Still, BMH provides more charity care than any other hospital in the Subdistrict. During 1999 through 2004, BMH provided 42% of the total charity care reported by the six hospitals in the Subdistrict.
WRMC reported $3.3 million in charity care in 2004, 1.0% of its total patient revenues. It provided $2.5 million in 2005. JFK's charity care amount of $11.7 million in 2004 represented 0.9% of its total patient revenues of about $1.25 billion.
Delray ranks second in reported charity care among Subdistrict hospitals. Charity care, moreover, is a statistic based on "charges" pursuant to the FHURS Manual. A comparison of charity care reported by one hospital whose charge structure
is substantially higher than another's will not present an "apples-to-apples" comparison. When compared with a hospital with substantially lower charges, a hospital with high charges, such as Delray (relative to BMH's charges) will appear to be providing more charity care than it is in relation to the lower charge hospital.
BMH is one of few Florida hospitals exempt from Medicaid inpatient cost limits because it qualifies as an "11% provider" of Medicaid and charity under a state designation.
JFK does not qualify. BMH also now qualifies as a Medicare Disproportionate Share Hospital. To qualify, more than 15.0% of inpatient days must be for Medicaid patients or documented low income citizens who qualify for Supplemental Security Income (SSI). BMH's Medicare inpatient disproportionate share percentage has increased since 2003, when it was 12.85%.
Bethesda included a condition in its application that it will provide a minimum of 5.0% of patient days at the WBCH satellite to Medicare/Medicaid HMO and charity care patients, although it projects that utilization of the satellite by such patients will actually be higher. Medicaid and charity care utilization is projected to be lower at the satellite than at BMH due to demographics, but BMH is expected to continue to have high Medicaid and charity care utilization.
The project will provide a more favorable payor mix for SBHD that, in turn, will enhance its ability to continue to fulfill its historic commitment to provision of care to the indigent within the South Broward Hospital District.
AHCA recognized such a finding to weigh in favor of approving a project proposed by an applicant. Columbia Hospital
Corp. of South Broward, d/b/a Westside Regional Medical Center v. AHCA and South Broward Hospital District, d/b/a Memorial Hospital Miramar, DOAH Case Nos. 01-2891 et al., Recommended Order p. 66 (July 3, 2002), AHCA Final Order (Sept. 30, 2002) (Ex. B-74E).
On the other hand, a similar argument made in Bethesda I was described as an institution-specific justification and given no weight by the ALJ or AHCA toward approval of the application.
Bethesda makes the argument that it "needs" WBCH in order to remain financially viable. The evidence, however, is not persuasive that Bethesda's long-term financial viability is at risk or even that Bethesda is at risk of losing market share in the West Boynton area if its application is not approved.
Bethesda's "Spin-down Analysis" makes the case for its need for WBCH to continue its service of Medicaid patients and the indigent at its present rate. It does not, however, include consideration of Bethesda's comprehensive medical
rehabilitation program and the approval of its new open heart surgery program. Both these programs have low Medicaid utilization. They will alter Bethesda's payor mix significantly toward the upside. The Spin Down Analysis is flawed.
There are other bases for concluding that Bethesda did not make its case with regard to the need for WBCH in order for Bethesda to change its payor mix and be able to continue its high service of Medicaid and indigent patients. The Spin Down Analysis is at odds with Schedule 8 in the application. Neither Bethesda's CEO or CFO has informed its board or financial institutions that lend to it of the bleak financial projections provided in the analysis. Bethesda made the same type of argument in Bethesda I, yet its financial performance in recent years has been solid.
Subsection (10)
Subsection (10) of the CON Review Criteria Statute (relating to nursing home beds) is not at issue in this proceeding.
CONCLUSIONS OF LAW
Jurisdiction
The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of these proceedings. §§ 120.569, 120.57(1), and 120.60(5), Fla. Stat.
Burden of Proof and Standing
Bethesda has the burden to prove by a preponderance of the evidence that its CON application should be approved.
See, e.g., Boca Raton Artificial Kidney Center, Inc. v. Dept. of Health and Rehabilitative Servs., 475 So. 2d 260, 263 (Fla. 1st DCA 1985); § 120.57(1)(j), Fla. Stat.
The Agency's preliminary decisions on CON Application 9838 and its findings in the SAAR are not entitled to a presumption of correctness in this de novo proceeding. See generally Dept. of Transportation v. J.W.C. Co., Inc., 396 So.
2d 778, 787 (Fla. 1st DCA 1981). The Agency's construction and interpretation of its rules and the statutes that it is charged to implement, however, are entitled to deference. See, e.g., State Contracting & Engineering Corp., v. Dept. of
Transportation, 709 So. 2d 607, 610 (Fla. 1st DCA 1998);
§ 120.57(1)(l), Fla. Stat.
The decision of whether to approve a CON application must be based on a balanced consideration of all statutory and rule criteria. Department of Health and Rehabilitative Services v. Johnson & Johnson Home Healthcare, Inc., 477 So. 2d 261 (Fla. 1st DCA 1984); Balsam v. Department of Health and Rehabilitative Services, 486 So. 2d 1341 (Fla. 1st DCA 1988). The weight to be given to each criterion is not fixed, but depends on the facts and circumstances of each case. Collier Medical Center, Inc. v.
Department of Health and Rehabilitative Services, 462 So. 2d 83 (Fla. 1st DCA 1985).
Each of the parties has the requisite standing to participate in this proceeding pursuant to Section 408.039(5)(c), Florida Statutes.
Administrative Finality
Delray (joined by JFK) continues to assert that Bethesda's application should be dismissed in the wake of Bethesda I through application of the doctrine of administrative finality (administrative res judicata). See Proposed
Recommended Order by Delray Medical Center at 137-141 and Columbia/JFK Medical Center Limited Partnership d/b/a JFK Medical Center's Proposed Recommended Order at 125-130. In essence, the argument is that the applications in the two cases are not materially different and the Bethesda II application is not supported by substantial changes in material circumstances or new submissions that could not have been submitted in Bethesda I. Furthermore, since the filing of the motion to apply administrative finality, Bethesda I has been affirmed on appeal. Bethesda Healthcare System, Inc. v. Agency for Health Care Administration, 945 So. 2d 574 (Fla. 4th DCA 2006).
Res judicata applies in administrative proceedings.
Wager v. City of Green Cove Springs, 261 So. 2d 827 (Fla. 1972); accord, Thomson v. Dept. of Environmental Protection, 511 So. 2d
989 (Fla. 1987). Unlike courts comfortable with res judicata where law is applied to past facts that remain static, however, agencies work with fluid facts and shifting policies. The Florida Supreme Court in Thomson, therefore, surmised that this may be the reason the doctrine is applied with caution in administrative cases. The Court enunciated the proper rule when a previous application has been denied by an administrative agency: "[R]es judicata will apply only if the second application is not supported by new facts, changed conditions or additional submissions by the applicant." See Thomson at 991.
Accord, City of Miami Beach v. Prevatt, 97 So. 2d 473 (Fla. 1957); Universal Construction Co. v. City of Ft. Lauderdale, 68 So. 2d 366 (Fla. 1953); see also McCaw Communications of Florida, Inc. v. Clark, 679 So. 2d 1177 (Fla. 1996).
Scarcely two years ago, AHCA entered a Final Order denying Bethesda's application for an 80-bed satellite hospital in the West Boynton area. In doing so, it rejected the Conclusion of Law in paragraph 376 of the Bethesda I Recommended Order and substituted a new conclusion of law it found to be more reasonable than the one rejected. The new conclusion of law determined that Bethesda failed on balance to satisfy the applicable statutory and rule criteria. Bethesda had demonstrated financial feasibility and past and proposed provision of health care services to Medicaid and the medically
indigent but otherwise AHCA determined Bethesda to have failed to demonstrate need for its proposed hospital and to meet the other criteria. See Bethesda I Final Order at 12.
As Bethesda points out, (consistent with the recognition by the Florida Supreme Court in Thomson of the ever- changing nature of facts under consideration in administrative decisions), relevant facts and circumstances pertaining to the applicable review criteria in CON cases are necessarily affected by the passage of time. Lapse of time alone between batching cycles, therefore, can create a sufficiently different set of circumstances that preclude the application of administrative res judicata. In addition, the legislative purpose behind the CON law is to provide for a balanced consideration of all relevant criteria. Any single material change in facts, or a change in the law, including the Agency's rules, therefore, necessarily affects the "weighing and balancing" process as a whole and may affect the outcome. If substantial enough, a change precludes application of res judicata or administrative finality. See North Ridge General Hospital, Inc. v. NME Hospitals, Inc., 478 So. 2d 1138, 1139 (Fla. 1st DCA 1985).
Using the Bethesda I Final Order (and its Recommended Order to the extent adopted by the Final Order) as a benchmark, new facts have been brought to bear on this proceeding as well as additional submissions, such as those related to hurricanes.
Chief among the additional submissions in this proceeding not addressed in Bethesda I are those that relate to emergency overcrowding. The emergency overcrowding case presented by Bethesda also included new facts. For example, existing hospitals have not been able to meet the needs of the Subdistrict with regard to ED services despite a finding in Bethesda I that the existing hospitals in the Subdistrict can meet the acute health care needs of the Subdistrict by incremental expansion of their facilities.
With regard to ED overcrowding not being an issue in Bethesda I, Bethesda offered the following:
ED overcrowding was not at issue in the prior application. At the time of the last application, Bethesda Memorial Hospital was about to open a newly expanded ED facility which it hoped would enable it to avoid overcrowding problems there. However, Bethesda has experienced ED overcrowding during the past two years due to bottlenecks on the inpatients units and increasing ED patient visits, notwithstanding the availability of almost twice as many ED treatment bays as before. Thus, the experiences in the past two years show that construction of expanded ED's will not prevent ED overcrowding problems at existing hospitals. Significant relief will result only from the addition of more hospital emergency departments and in facilities without inpatient unit bottlenecks.
Bethesda's Response to Delray's Motion for Summary Recommended
Order, filed March 20, 2006, at 17.
Delray and JFK argue that Bethesda could have raised ED overcrowding as an issue in Bethesda I and should have if res
judicata is to be defeated in this proceeding.
The argument is based on language from a Corrected Summary Final Order in Lake Weston Apartments (Orlando) L.P. v. Florida Housing Finance Corp., Case No. 98-0774 (DOAH April 2, 1998): "Under the doctrine of res judicata, a final order is conclusive as to all matters which were or which could have been determined. Neale v. Balcerak, 627 So. 2d 1310 (Fla. 1st Dist. 1993)" (emphasis supplied). As Bethesda points out, the facts in Lake Weston Apartments, a non-CON case, are distinguishable. Furthermore, the case the order relies on, Neale, is an appeal from an order of family court not an administrative case. In contrast, the review process for CON applications include review cycles (batching cycles) established by rule as mandated by statute. See § 408.039(1), Fla. Stat. The batching cycle review process allows the repeated filing of applications once the appropriate amount of time has lapsed. The process takes into consideration the changing dynamics of health care and allows new applications with updated information.
Aside from the effect of new facts and submissions, the change in the CON legal framework since Bethesda I is significant. This change, alone, defeats the application of administrative res judicata to this case.
Delray points out that the practical effect of the 2004 CON Amendments had no bearing on Bethesda I because Bethesda, unlike JFK, was not required to show "not normal" circumstances. Furthermore, as determined by the ALJ in Bethesda I, adopted in the Final Order, and stated by the appellate court: "the difference between applying a 'need' standard and a 'not normal' standard is probably meaningless." Bethesda Healthcare System, Inc., supra, at 577. But there is a critical difference between need in this case and in Bethesda I. Analysis of need in this case, commences with application of Florida Administrative Code Rule 59C-1.008(2)(e) rather than from a presumption of no need based on a fixed need pool of zero arrived at through application of an AHCA need methodology. In this case, need analysis commences with the applicant's own need methodology. The examination of need in this case, therefore, is from a different legal perspective than in Bethesda I. The legal framework within which this case is to be decided, moreover, has ramifications not present in Bethesda I.
For example, Bethesda took exception to conclusions of law in the Bethesda I Recommended Order on the basis that they failed to follow Agency policy and precedent regarding satellite hospitals applications as reflected in approval of six satellite hospital applications. The Final Order stated Bethesda's description of the policy and precedent:
"Specifically, Bethesda states '[t]he Agency's policy and precedent regarding satellite hospital applications consistently has been to improve access to hospital acute care services in areas of rapid population growth and to decentralize the provision of acute care services through the relocation of existing acute care bed resources within a subdistrict." Bethesda I Final Order at 3. The Agency reviewed the six cases, distinguished them from Bethesda I on their facts and denied the exception.
The differences between the cases cited by Bethesda and Bethesda I were summarized as follows:
In all the cases cited by Bethesda, except Halifax, there were serious access issues involving the main facilities that were addressed by the CON applications for satellite hospitals. In all of the cases cited by Bethesda, including Halifax, all of the hospitals that applied for CONs had underutilized bed space at their main facilities, and expansion of the main facilities was not a feasible alternative to satellite hospitals. In this case, there was no showing that the subdistrict was experiencing any serious access problems.
Further, Bethesda made no showing that the beds at its main facility were underutilized.
Bethesda I Final Order at 10. Despite the distinctions between the cases involving satellite hospital approval cited by Bethesda, the six are generally representative of the medical treatment trend identified by AHCA at hearing in this case:
improved access to basic acute care hospital services including emergency services in non-urban areas of rapid population growth. This medical treatment trend is relevant in this proceeding under Florida Administrative Code Rule 59C- 1.008(2)(e).
New facts and submissions in support of the application and a change in condition (the new legal framework) preclude the application of the doctrine of administrative finality or administrative res judicata to Bethesda's CON Application No. 9838.
Balancing of the Statutory and Rule Criteria 641. Bethesda has established need for its Proposed
Hospital through consideration of the four topics listed in subparagraphs a., b., c., and d., of Florida Administrative Code Rule 59C-1.008(2)(e)2. The establishment of need distinguishes this case from Bethesda I. There are other distinguishing factors under applicable CON criteria as well.
Factors that weighed most heavily against approval in Bethesda I were exacerbation of the shortage of specialty physicians for ER coverage, the negative impact on the competitive balance in the West Boynton area and the costs associated with construction of the facility.
Bethesda showed in this case that the factors in support of denial in Bethesda I are not as weighty as they were
in the earlier case. It is reasonable to expect that the competitive balance in the West Boynton area will be skewed by approval of Bethesda's application just as in Bethesda I. But there are other considerations under Section 408.035(7) which lessen that concern.
As in Bethesda I, approval of Bethesda's application will exacerbate the shortage in the Subdistrict of specialty physicians for ER on-call coverage. A solution to the shortage, however, will not rise or fall on whether the application is approved. Concrete steps have been taken to resolve the shortage. Ultimately, solving it depends not on denial of Bethesda's application but on whether the recommendations of the MDContent Study Report are appropriately implemented.
Bethesda I concluded "that [Bethesda failed to demonstrate] the costs of construction of the proposed facility [to be] a less-costly way to add beds to the subdistrict," Bethesda I Final Order at 12. The weight to be given the cost of the proposed facility is less in this proceeding. Bed inventory Subdistrict is no longer relevant. Furthermore, Bethesda met the criterion in Subsection (8) of the CON Review Criteria. It demonstrated the costs and methods of the proposed construction. There is no evidence of record of alternative, less costly, more effective methods of construction.
In favor of Bethesda's application is the need for enhancement of access to ED services. Acute care services are appropriately utilized in the Subdistrict with the exception of one component of those services. ED services are over-utilized. Bethesda has shown that expansion of ED services at existing EDs in the Subdistrict will not remedy the access problem.
Concomitantly, Bethesda has shown that approval of its application will remedy the access problem for a discrete population: the elderly in the West Boynton area. A WBCH in an affluent area less likely to be used by the uninsured as a source of primary care will enhance access to better quality of emergency care and basic acute care services that follow emergency care for the elderly population in the West Boynton area.
There is an exception to Bethesda's case of access enhancement. Approval of the application will not improve the quality of care for a small fraction of patients: those who present at WBCH in need of emergent services not provided at WBCH and whose treatment, therefore, is delayed to their detriment pending transfer to an appropriate facility. Patients in need of emergent care not provided at WBCH and taken to a hospital by EMS personnel in an ambulance, however, are not likely to present at WBCH since EMS personnel are trained to transport them to an appropriate facility.
In short, there is a need for improved access to ED services in the Subdistrict. That need is especially great among the elderly in the Subdistrict. There is a significant and growing population of elderly in the West Boynton area.
Approval of the application to build and operate WBCH in the West Boynton area will enhance access for the bulk of the West Boynton elderly population in need of emergency care. Access will be enhanced to the extent that quality of care for the West Boynton elderly will be improved.
Bethesda's application, therefore, is generally favored under criteria in Subsections (1), (2) and (5) of the CON Statutory Review Criteria and Florida Administrative Code Rule 59C-1.030(2).
No weight is given to Bethesda's case with regard to access for the under-served Hispanic population in the Subdistrict. The case relates to only a segment of the Hispanic population in the Subdistrict: migrants, many of whom are undocumented. Although it is clear that the Spanish-speaking migrant population gains access to basic health care at the Caridad Clinic, it is not clear from the evidence where the population resides. Some in all likelihood reside outside of the District. The improved access to the Spanish-speaking migrant population appears to depend a great deal on the expected relationship between the staff at the Caridad Clinic
and a new WBCH. It appears to depend furthermore on the comfort level that undocumented aliens who access health care at Caridad would expect to feel at WBCH. There are policy implications relevant to the Spanish-speaking migrant population in the Subdistrict that were not articulated on this record particularly when the SAAR and testimony of Agency personnel make reference to Hispanic cultural access in general and not to the segment of the Spanish-speaking population served at Caridad. Finally, the case for improved access to the Spanish- speaking migrant population is substantially diminished by the fact that WBCH will not offer obstetric services, the basic hospital service most needed by the population served at Caridad.
Nor under the facts found in this proceeding is significant weight given to any improved access due to drive time improvement in the future for the elderly in the West Boynton area, described in Bethesda I as "marginal" at best.
Application of Subsection (4) of the CON Review Criteria Statute is not favorable to the application. The evidence showed that the resources listed in the subsection are available to Bethesda for project accomplishment and operation including On-Call Specialist Physicians through arrangements with BMH. Nonetheless, WBCH will most likely exacerbate the On- Call Specialist Physician shortage that exists in Palm Beach
County and the Subdistrict. The exacerbation weighs against approval. The shortage, however, will exist whether WBCH is approved or not. Solution to the shortage, will most likely not be defeated by approval of WBCH. The solution depends on successful implementation of the MDContent Report recommendations, not on whether WBCH is approved. If the recommendations are implemented properly, whether WBCH is approved or not, the shortage will likely be solved in the long term, that is, sometime after five years.
Application of Subsection (7) of the CON Statutory Review Criteria neither favors nor disfavors the application.
Otherwise, Bethesda generally meets the CON statutory and rule criteria. On balance, application of the CON statutory and rule criteria favors approval of Bethesda's application.
Based on the foregoing Findings of Fact and Conclusions of Law, it is
RECOMMENDED that a final order be entered by the Agency for Health Care Administration that approves CON Application No.
9838.
DONE AND ENTERED this 5th day of April, 2007, in Tallahassee, Leon County, Florida.
S
DAVID M. MALONEY
Administrative Law Judge
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-3060
(850) 488-9675 SUNCOM 278-9675
Fax Filing (850) 921-6847 www.doah.state.fl.us
Filed with the Clerk of the Division of Administrative Hearings this 5th day of April, 2007.
COPIES FURNISHED:
Dr. Andrew C. Agwunobi, Secretary Agency for Health Care Administration Fort Knox Building III, Suite 3116 2727 Mahan Drive
Tallahassee, Florida 32308
Craig H. Smith, General Counsel Agency for Health Care Administration Fort Knox Building III, Suite 3431 2727 Mahan Drive
Tallahassee, Florida 32308
Richard Shoop, Agency Clerk
Agency for Health Care Administration Fort Knox Building III, Suite 3431 2727 Mahan Drive
Tallahassee, Florida 32308
Michael O. Mathis, Esquire Sandra Allen, Esquire
Agency for Health Care Administration Fort Knox Building III, Suite 3431 2727 Mahan Drive
Tallahassee, Florida 32308
John H. Parker, Esquire David Fenstermacher, Esquire
Parker, Hudson, Rainer & Dobbs, LLP 1500 Marquis Two Tower
285 Peachtree Center Avenue, Northeast Atlanta, Georgia 30303
Robert A. Weiss, Esquire Karen Putnal, Esquire
Parker, Hudson, Rainer & Dobbs, LLP The Perkins House, Suite 200
118 North Gadsden Street Tallahassee, Florida 32301
Stephen A. Ecenia, Esquire
J. Stephen Menton, Esquire Rutledge, Ecenia, Purnell &
Hoffman, P.A.
215 South Monroe Street, Suite 420 Post Office Box 551
Tallahassee, Florida 32302-0551
C. Gary Williams, Esquire Dylan Rivers, Esquire Ausley & McMullen
227 South Calhoun Street Post Office Box 391 Tallahassee, Florida 32302
Robert D. Newell, Jr., Esquire David Terry, Esquire
Newell & Terry, P.A.
817 North Gadsden Street Tallahassee, Florida 32303-6313
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions within
15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.
| Issue Date | Document | Summary |
|---|---|---|
| Aug. 08, 2007 | Agency Final Order | |
| Apr. 05, 2007 | Recommended Order | Bethesda Healthcare demonstrated the need for an 80-bed satellite hospital in the West Boynton area on the basis of enhanced access to emergency services for the elderly. |
