The Issue The issue involved in this case is whether the Petitioner Good Samaritan Health Systems, Inc., should be issued a Certificate of Need to construct an ambulatory surgical center in West Palm Beach, Florida. Testifying on behalf of the Petitioner at the final hearing were Kenneth A. Weda, President of Good Samaritan Hospital; Ms. Patricia Sher, an expert in alternative delivery systems; Samuel G. Tischler, an expert in ambulatory surgical design, administration and planning; Dr. Milton R. Tignor, Jr., a urologist on the staff of the Good Samaritan Hospital; Dr. Abraham Schmuckler, an anesthesiologist at Good Samaritan Hospital; Jerome A. Goebel, an expert in hospital design and architecture; Ross Raneri, an expert in architecture for health care facilities; Byron Thompson, an expert in health care finance; Ms. Linda Vossler, an expert in operating room administration, nursing, staffing and equipment; Robert L. Broadway, an expert in health care planning, administration and finance; and Daniel J. Sullivan, an expert in health care planning and finance. Elizabeth Dudek, Health Services and Facility Consultant Supervisor in the Office of Community Medical Affairs, testified for the Department of Health and Rehabilitative Services. Michael L. Schwartz, an expert in health care planning; Rick D. Knapp, an expert in financial feasibility; and Robert J. Zasa, a former vice-president of Alternative Care, testified on behalf of Intervenors. Nancy McAnallen, nursing director of surgical services at St. Mary's Hospital testified by deposition for Intervenors. Petitioner Good Samaritan's Exhibits 1-3, 6-9, 11-12, 14, 15(a)-(i) and Department of Health and Rehabilitative Services' Exhibits 1-4 were offered and admitted into evidence. The following Intervenor's Exhibits were offered and admitted into evidence: St. Mary's Exhibits 1-4, 6 and 7; Visual Health's Exhibit 1; Intervenor's Exhibits 1-4 and Palm Beach Exhibits 1, 2, 3(a), (b) and (c). At the final hearing ruling was reserved on Petitioner Good Samaritan's Exhibits 4-5 and Intervenor St. Mary's Exhibits 5-6 which are now admitted. The transcript of hearing was filed on September 16, 1986. The parties filed their proposed recommended orders on October 16, 1986. Ruling on the parties' proposed findings are contained in the attached appendix.
Findings Of Fact Paragraphs 1-14 Accepted. 15-28 Accepted, but not in dispute at the hearing. 29-30 Accepted and covered in paragraphs 3-5 of Recommended Order. 31-32 Not relevant to this proceeding. 33-39 Accepted. 40-54 Accepted, but not relevant only to the extent institution specific criteria are considered. 55-58 Accepted. 59-64 Rejected. The preponderance of the evidence supports a finding that the proposal will not merely shift existing services, but will add to the under-utilization problem experienced in the service district. 65-66 Accepted, except as modified in the Recommended Order. 67-70 Rejected. 71-78 Accepted. 79 It is unclear from the record whether scheduling problems exist because of the size of the rooms or doctor preference. 80-81 Accepted. 82-84 Accepted, but modified to show that although the applicant's present operating rooms are far from ideal, less costly and more efficient solutions were not adequately considered as an alternative to the Ambulatory Surgical Center. Rejected. Accepted. 87-90 Accepted. 91-109 Rejected. Table 7 was not utilized in the formulation of the Recommended Order primarily because it uses only a portion of the population of Palm Beach County, the North Palm Beach subdistrict, instead of the entire county or health planning district population as required by law. 110 Accepted. 111-124 Rejected. The Department's non-rule policy was not adequately explained nor justified at hearing. The Department's failure to consider the capacity of approved but not yet operational facilities in granting CON's within the service district was likewise never justified. 125 Accepted. 126-130 Rejected. The capacity-based analysis was adequately explained and justified and was essentially accepted. 131 Accepted. 132 Rejected. The elderly presently have numerous alternatives to inpatient treatment within the service district. 133-134 Accepted. 135 Rejected. 136 Accepted, but modified to reflect that neither Palm Beach nor Visual Health are organized as nonprofit corporations. 137-150 Accepted to the extent they are relevent to this proceeding. 151-159 Rejected. It was not adequately demonstrated that the costs of renovation would be greater or less efficient than shutting down existing space and adding space in a new, separate facility. 160-162 Rejected. Not relevant to these proceedings. 163-169 Accepted. 170-243 Accepted as modified in the Recommended Order. 244 Accepted as modified to reflect that the applicant will increase its market share as a result of this project. 245-247 Rejected. The proposal adds services and capacity to the service district. 248 Accepted. 249-250 Rejected. The nature of this project will affect referral patterns of physicians. 251-253 Accepted. 254 The first sentence is accepted and the second sentence is rejected. 255-256 Accepted. 257 Rejected. The project is not cost-effective if it duplicates the services provided by under-utilized facilities. 258 Accepted. 259. Accepted. The proposal will result in increased outpatient market share and additional revenue for the applicant. 260-261 Accepted. 262-264 Rejected. To the extent that competition exists in the health care field, any added health care provider will foster competition. However, the law permits a CON to issue only when a need for the service is demonstrated. It is based on the assumption that excess services will not lower prices, but will instead result in under- utilized, over-duplicated facilities in the service district. INTERVENORS' PROPOSED FINDINGS OF FACT Paragraphs 1-4 Accepted as modified in the Recommended Order. 5-10 Accepted as modified in the Recommended Order. 11-12 Accepted as modified. 13-14 Not relevant to this proceeding. 15-21 Accepted, not in dispute at the final hearing. 21-25 Accepted as modified in the Recommended Order. 26-38 Accepted. 39-40 Accepted as modified in the Recommended Order. 41 Accepted if the 10-hour day is reasonable. 42-43 Rejected. The need in the community is the primary focus of the CON law rather than the need of an applicant. 44-45 Accepted. There are six approved or existing centers in Palm Beach County. 46 Accepted as modified in the Recommended Order. 47-50 Accepted. 51-54 Accepted. 55-61 Rejected. 62 Accepted. 63-64 Rejected. 65 Accepted. COPIES FURNISHED: Byron Mathews, Esquire Paul H. Amundsen, Esquire MCDERIOTT, WILL & EMORY 101 North Monroe Street Suite 1090 Tallahassee, Florida 32301 Douglas H. Mannheimer, Esquire CULPEPPER, PELHHAM, TURNER & MANNHEIMER, P.A. 300 East Park Avenue Tallahassee, Florida 32301 R. Bruce McKibben, Esquire Assistant General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Charles Stampelos, Esquire MCFARLAIN, BOBO, STERNSTEIN, WILEY & CASSEDY 666 First Florida Bank Bldg. Tallahassee, Florida 32301 Terry Cole, Esquire OERTEL & HOFFMAN, P.A. Post Office Box 6507 Tallahassee, Florida 32314-6507 F. Philip Blank, Esquire Reynold D. Meyer, Esquire 241 East Virginia Street Tallahassee, Florida 32301 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
Recommendation Based on the foregoing, it is RECOMMENDED that Petitioner's application for a Certificate of Need authorizing establishment of an ambulatory surgical facility in Palm Beach County, Florida be DENIED. DONE and ENTERED this 9th day of March, 1987 in Tallahassee, Florida. SHARYN L. SMITH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of March, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 84-3722 RULINGS ON PETITIONER'S JOINTLY
Findings Of Fact South Palm Beach Utilities Corporation is a private provider of water and sewer services in Palm Beach County, Florida. It is presently operating within a specified service area according to a certificate issued by the Public Service Commission. The utility is seeking to expand its service area north of the present boundaries, and has filed various notices of its intention with the Public Service Commission. As to some of these notices, no protests were filed, and the utility has commenced preliminary engineering planning activities to provide water and sewer lines to those areas. Palm Beach County has filed timely protests with respect to four off the parcels to which the utility is proposing to extend its certified service area. These four properties have been called the "Atlantic," "Mitchell," "Snow," and "Benson" properties. In its notices, the utility described the "Atlantic" property as follows: Tracts 49 thru 56 inclusive; 73 thru 88 inclusive and 105 thru 120 inclusive, in Section 21; and Tracts 9 thru 24 inclusive; 41 thru 56 inclusive; 73 thru 88 inclusive; and 105 thru 120 inclusive, in Section 28, all as shown on Palm Beach Farms Company Plat No. 1, as recorded in Plat Book 2, Pages 26, 27 & 28, Public Records of Palm Beach County, Florida, together with the West Half of the East Half of Section 21 and the West Half of the East Half of Section 28, all in Township 46 South, Range 42 East, Palm Beach County, Florida. EXCEPTING therefrom the dedicated public right of ways of record, as shown on the said Palm Beach Farms Company Plat No. 1, and the Plat of Delray Roads (containing 10.9500 acres) and the following Lake Worth Drainage District right of ways: LWDD Canal L-34: Beginning at a point where the Southerly line of a public right of way, 120.0 feet wide known as Del Ray West Road (State Road 806) intersects the North & South Quarter Line of Section 21, Township 46 South, Range 42 East, Palm Beach County, Florida, said point being S 1 degree 54' 34" E, 34.13 feet from the North Quarter Corner of said Section 21; run thence along said Quarter Section Line S 1 degree 54' 34" E, 90.02 feet; thence N 89 degrees 18' 11" E, 1342.63 feet to the East line of the West Half of the East Half of said Section 21; thence along said East Line N 2 degrees 06' 02" W, 90.03 feet to the South Line of said Del Ray West Road; thence along said South Line S 89 degrees 18' 11" W, 1342.33 feet to the Point of Beginning, Containing 2.7737 acres; LWDD Canal L-35: The South 10.0 feet of the West Half of the Northeast Quarter; the North 80.0 feet of the West Half of the Southeast Quarter; the South 15.0 feet of the Northwest Quarter (less the West 55.0 feet); and the North 75.0 feet of the Southwest Quarter (less the West 55.0 feet), in Section 21, Township 46 South Range 42 East, Palm Beach County, Florida, Contain- ing 8.2207 acres; LWDD Canal L-36: The South 15.0 feet of the West Three-Quarters of Section 21 (Less the West 55.0 feet); and the North 75.0 feet of the West Three-Quarters of Section 28 (less the West 40.0 feet); all in Town- ship 46 South, Range 42 East, Palm Beach County, Florida, Containing 8.2672 acres; LWDD Canal L-37: The South 40.0 feet of the North Half of the West Three-Quarters; and the North 50.0 feet of the South Half of the West Three-Quarters of Section 28, Township 46 South, Range 42 East, Palm Beach County, Florida, (Less the West 40.0 feet Thereof), Containing 8.1733 acres; LWDD Canal L-38: The South 105.0 feet of the West Three-Quarters of Section 28, Township 46 South, Range 42 East, Palm Beach County, Florida (less the West 40.0 feet thereof), containing 9.6120 acres; and LWDD Canal E-3: The West 55.0 feet of the South Half, and the West 55.0 feet of the South 664.91 feet of the North Half of Section 21; and the West 40.0 feet of Section 28, all in Township 46 South, Range 42 East, Palm Beach County, Florida, con- taining 9.2135 acres. Containing a net acreage of 816.1290 acres. The utility described the "Mitchell" property as follows: All of Tracts 65 to 128 inclusive, Section 29, Township 46, South, Range 42 East, (less 30.59 acres sold to Florida State Turnpike Authority and more particularly described in Deed Book 1104, Page 577), The Palm Beach Farms Co. Plat No. 1, according to the Plat thereof on file in the Office of the Clerk of the Circuit Court in and for Palm Beach County, Florida, recorded in Plat Book 2, Pages 26 to 28. The "Snow" Property is described as follows: The North half of Sections 31 & 32, Town- ship 46 South, Range 42 East, Palm Beach County, Florida, and also known as Tracts 1 through 60, Block 71 and Tracts 1 through 64 of Block 70, Palm Beach Farms Company, Plat No. 3, as recorded in Plat Book 2, Page 52, Palm Beach County, Florida. At the hearing, the utility amended its notice with respect to the "Snow" property to withdraw its intention to provide service to the north half of Section 32, or that property east of Lyons Road. As to the property west of Lyons Road, being the north half of Section 31, the utility maintains its intention. The "Benson" property has been described by the utility as follows: Tracts 65 through 70, 91 through 102, and 123 through 128, Block 70, Palm Beach Farms Company, Plat No. 3, Plat Book No. 2, as recorded on Page 52 wholly within the South Half of Section 31, Township 46 South, Range 42 East, Palm Beach County, Florida. [This finding is determined from a stipulation of the parties as stated on the record at the final hearing, and from Exhibit 1.] The South Palm Beach Utilities Corporation is a fit provider of water and sewer service. No issue has been raised with respect to the quality of the service provided by the utility, and it is under no citations from any government agency. The utility has the financial integrity and engineering capability to provide service to the four properties involved in this proceeding. With respect to each of the four properties, the utility has provided the notices required by statute. Extension of the utility's service area to include the four properties would not result in a duplication of any existing facilities. No other utility is providing service to the area. In its long-range plans, the County envisions providing service to the area, but it does not provide service now, and would not be in a position to provide service for at least three to five years. The owners of the four proporties have proposed developments which would require provision of water and sewer service. [This finding has been determined from stipulations stated by the parties on the record at the final hearing.] In accordance with the "Local Government Comprehensive Planning Act of 1975" (Florida Statutes Section 163.3161, et seq.), Palm Beach County has promulgated a comprehensive plan which includes a "sewer, potable water, drainage and solid waste element" and a "land use plan element." The land use element of the comprehensive plan provides that the areas where South Palm Beach Utilities Corporation is seeking to expand its territory will be set aside for low density development. The County contends that expansion by the utility into these areas would allow for a level of development which is not in harmony with the land use element of the comprehensive plan. The evidence does not support this contention. No specific evidence was presented as to development densities proposed by developers, and it does not appear that allowing the utility to expand its service area would as a factual or legal matter allow for development of any kind. [This finding is determined from the testimony of the witnesses Garbrick and King, and from Exhibits 3, 4 and 5.] Extension of the South Palm Beach Utilities Corporation service area into the four properties at issue would conflict with the "sewer, potable water, drainage and solid waste element" of the County's comprehensive plan. Under this element of the comprehensive plan, which is in harmony with an overall management plan to treat wastewater pollutants that the County has developed in accordance with Federal funding requirements ("201 Plan"), the County envisions that it would provide sewer service to the "Atlantic" and "Mitchell" properties through a central wastewater treatment facility. Plans for providing such service have been made on a long-range basis, and the County is in the process of refining the plans so that it can obtain Federal funding. Removal of the "Atlantic" and "Mitchell" tracts from the area that the County proposes to serve through the central facility would not be in accordance with the "201 Plan." Removal of the properties would reduce the service area of that central facility, and could affect the size of the central facility, and funding. Removal of the properties would furthermore be contrary to the plans because of the introduction of a wastewater treatment facility other than the central facility. Both the "sewer, potable water, drainage and solid waste element" of the County's comprehensive plan and the "201 Plan" are long range. The County is not presently prepared to offer service to the properties at issue, and will not be prepared to do so for some time. This finding is determined from the testimony of witnesses Garbrick and King, the stipulation of the parties stated on the record at the final hearing, and Exhibits 2, 3 and 5.] While the evidence establishes that extension of the South Palm Beach Utilities Corporation's service area would on its face conflict with the County's comprehensive plan, the evidence does not establish that the conflict would adversely affect the plan. The evidence does not reveal that provision of services by facilities other than the County's central system would render the central system less feasible. While it was speculated that the central system might need to be reduced in size as a result, and that the rate base for it would be lessened in an unspecified amount, no competent evidence to these effects has been presented. [This finding is determined from the record as a whole.]
Findings Of Fact By application dated October 9, 1984, the Palm Beach County Water Utilities Department applied for a permit to construct a temporary septage receiving facility at a location within Palm Beach County known as Sewage Treatment Plant 2S which is adjacent to and immediately north of Petitioner's neighborhood. It was estimated that this facility would receive between 30,000 and 50,000 gallons of septage each day from septic tanks in Palm Beach County. The specific operation procedure to be used at the site begins with access to the site from Forest Hill Boulevard, located to the north, using an unpaved, curved roadway. Septage trucks arriving at the site are faced with a potentially dangerous situation since the roadway is very narrow in parts, and is somewhat elevated and they therefore have to be very cautious to avoid accidents. The arriving trucks back over an asphalt paved area to a transfer box and discharge septage through a four-inch rubber hose into the transfer box. Septage flows through the transfer port and is distributed over a bar screen. Materials collecting on the bar screen are manually raked onto the drainage place, collected and placed into a dumpster for removal to a landfill. Septage then flows from the transfer box through a twelve inch pipe by gravity into a 120-inch wet well, and is diluted. The septage flows through an 8-inch sewer pipe by gravity into an existing pump station wet well on site. Two pumps then pump the septage into a force main system through which it flows to the West Palm Beach Regional Sewage Plant. The facility for which this permit is sought is intended to receive septage formerly deposited at Dyer Boulevard landfill septage facilities which has ceased operation under a Consent Order between Palm Beach County and the Department of Environmental Regulation. This is proposed as a receiving and transporting facility only, and not a treatment facility. Roy Duke, the Southeast District Manager with the Department of Environmental Regulation, who was accepted as an expert in environmental permitting, testified that in his opinion the site in question is the best site available to Palm Beach County for such a receiving facility. Due to the need to find a suitable replacement for the Dyer Boulevard site, the Department of Environmental Regulation requested that the County Water Utilities Department submit this application and supports the issuance of the permit. In accordance with an Operating Agreement between the Palm Beach County Health Department and the Department of Environmental Regulation, the County Health Department has authority to review and issue permits for sewage collection and transmission systems. Upon receipt of this permit application, the County Health Department requested additional information in the review process, which the County Water Utilities Department provided, in order to determine if "reasonable assurances" were being provided that the receiving facility would not discharge, emit, or cause pollution contrary to applicable standards, rules or regulations. According to Umesh Asrani, a Professional Engineer with the County Health Department, who was accepted as an expert in wastewater treatment technology, and the processing and evaluation of wastewater treatment facility permits, "reasonable assurances" have been given in this permit application. Testimony at the final hearing establishes that the proposed site has already been put into operation by the County with the approval of the Department of Environmental Regulation due to the emergency need to find an alternative to the Dyer Boulevard site. A temporary injunction was sought against this operation by residents of the area but it was not granted. The current operation of the facility is not challenged in this proceeding, but Petitioner points out that adverse effects on the neighborhood resulting from this operation are relevant to the issuance of the permit sought in this case. Specifically, Petitioner Kevin Donovan testified that truck traffic and noxious odors have increased since the operation began and would be expected to continue if the permit is granted. He has also seen evidence of spills at the site, and introduced evidence to establish that "sludge" containing commercial wastes and grease was being deposited at the site as well as "septage." Petitioner expressed his concern that hazardous wastes could be deposited at the site. Roy Duke testified that small amounts of hazardous wastes could be disposed of in residential septic tanks and ultimately collected at this site, but that in his opinion this was not a widespread practice, and the amounts would not present a danger to health or the environment. Petitioner also expressed his fear that the surface and ground water could be contaminated from leaks and spills occurring at the site. Expert witnesses testifying on behalf of Respondents stated that no such discharges were reasonably likely to occur. The greater weight of the evidence supports Respondents' position that reasonable assurances have been given that dangerous amounts of hazardous wastes will not be deposited at the site, and that surrounding surface and ground waters will not be contaminated by operation of the site. With the exception of a pH test which is conducted at the site when septage is received to determine its level of acidity, no tests or treatment are performed on the septage at the site. It is simply deposited and transmitted through the sewer system to the West Palm Beach Regional Sewage Plant for testing, treatment, and final disposal. The amount of septage deposited at this site is very small (30,000 to 50,000 gallons per day) in relation to the total amount treated each day at the Regional Sewage Plant (approximately 40 million gallons per day). Based upon bills of lading for deposits at the site since it was placed in operation, the site is used to receive and collect septage, including grease and sludge, from residences, restaurants, construction sites, digesters, and race tracks.
Recommendation Based upon the foregoing, it is recommended that a Final Order be entered issuing the permit sought by the Palm Beach County Water Utilities Department and denying the relief sought by Petitioner. DONE and ENTERED this 2nd day of May, 1985, at Tallahassee, Florida. DONALD D. CONN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of May, 1985. COPIES FURNISHED: Frank A. Kreidler, Esquire 521 Lake Worth Avenue Suite 3 Lake Worth, Florida 33460 Julia D. Cobb, Esquire Department of Environmental Regulation 2600 Blairstone Road Tallahassee, Florida 32301 Thomas C. McEaddy, Jr., Esquire Post Office Box 1989 West Palm Beach, Florida 33402 Victoria Tschinkel, Secretary Department of Environmental Regulation Twin Towers Office Building 2600 Blairstone Road Tallahassee, Florida 32301
The Issue Whether Petitioner's application for a Certificate of Need for a 50-bed addition to the Ormond Beach Hospital should be approved, pursuant to Chapter 381, Florida Statutes. This case involves petitioner's application for a certificate of need to expand, renovate, and consolidate ancillary service areas, and a 50-bed addition to its hospital. Respondent approved the application and issued a certificate of need for all aspects of the project except the 50-bed addition which it found would be inconsistent with the current health systems plan of Health Systems Agency of Northeast Florida, Inc., and because it determined that there was not a need for the additional beds in Volusia County. Petitioner filed its request for a Chapter 120 hearing. Thereafter, Intervenor Daytona Beach General Hospital, Inc., an orthopedic hospital located in Daytona Beach, petitioned for and was granted intervention in the proceeding over the objection of petitioner. During the course of the extensive hearing in this case, 15 witnesses testified in behalf of Petitioner, two were called by respondent, and four by the Intervenor. Eighty-seven exhibits were admitted in evidence. Exhibit 68 was withdrawn by stipulation of the parties.
Findings Of Fact Petitioner is a licensed 81-bed non-profit osteopathic general acute care hospital located at 264 South Atlantic Avenue, Ormond Beach, Florida. It is located on a site of approximately 4.6 acres bordered by Highway A1A on the east and Ormond Parkway on the north. The hospital plant consists of three buildings which have been joined together. One is a one-story dietary building that was originally a restaurant. A two-story building was built in 1970, and a one-story structure was built in 1954 and added to in 1960 and 1967. Other buildings owned by the hospital are adjacent residential homes on the premises which are used for storage, laundry, and other purposes. (Testimony of Hull, Exhibits 1-2, 13, 30, 59, 70) By a series of letters commencing on January 25, 1979, Petitioner advised Respondent's Office of Community Medical Facilities and the Health Systems Agency of Northeast Florida Area 3, Inc. (HSA) of its intent to expand and modernize its hospital and increase bed capacity. The last letter of intent was dated July 24, 1979. On September 21, 1979, Petitioner submitted its Certificate of Need Project Review Application to Respondent which included a request to increase the hospital's bed capacity from 81 to 161 beds. By letter of September 25, 1979, Respondent requested further information and, on December 11, 1979, Petitioner complied with the request and revised its application to seek only 50 additional beds. The proposed expansion and modernization plan included construction of a two-story addition to provide approximately 39,500 additional square feet, and renovation of approximately 22,000 square feet. Completion of the project would raise the hospital's total square footage of 39,350 to approximately 79,000 square feet. Incident to its request for additional beds, Petitioner proposes to initiate a 6-bed obstetrical unit at the hospital. (Exhibits 1-2, 7, 45-48) Petitioner's application was considered by various components of the HSA in January 1980, which resulted in a report and recommendations on the application which was filed with Respondent on February 25, 1980. During the course of the HSA's consideration of Petitioner's application at its several levels, representatives of Petitioner and the Intervenor appeared at the various meetings and presented their respective views regarding the application. The HSA report recommended approval of Petitioner's application for the renovation of its existing facilities and ancillary services, and approval of 44 additional beds. It further recommended that the state should take actions necessary to delicense a like number of beds within Petitioner's service area. The recommendation of 44 instead of 50 beds resulted from a finding that the proposed 6-bed obstetrical unit was not needed in the community in view of the probability that osteopathic physicians would likely be granted obstetric privileges in the future at allopathic facilities as a result of the enactment of legislation prohibiting the discrimination by particular provider professions against osteopathic physicians. The HSA found that although "Goal" DTS 1 in its Health Service Plan (HSP) which is used as a "guide" for health planning called for less than 4.3 acute care hospital beds per 1000 population with an overall average annual occupancy rate of at least 80 percent by 1984 in Health Service Area 3, it could approve additional beds for opening prior to 1984 if "extraordinary circumstances" exist as identified in "Goal" EA 2. It further found that Area 3 then had 5255 civilian acute care hospital beds, or a rate of 5.4 beds per 1000 population, with an average occupancy of 61 percent, and that, therefore, approval of additional beds, without cause, would be contrary to "Goal" DTS 1. However, the agency determined that extraordinary circumstances existed in Petitioner's case due to the fact that it had been operating for the past several years at an average occupancy of near or above 90 percent and that within its service area there existed in excess of 200 licensed medical surgical beds which were not staffed or used. The HSA therefore concluded that the situation denied ready access to acute care facilities to the citizens residing in Petitioner's service area. The HSA also considered that approval of the project would improve the effective and geographic distribution of beds and patient and physician accessibility in Volusia County because it was the only hospital located on the beach peninsula. It further found that the great number of elderly patients living in Volusia County and seasonal population fluctuations due to large numbers of tourists living in the area could be denied access to inpatient facilities if the project was not approved. As other extenuating factors, the HSA report stated that Petitioner had been granted prior certificates of need to expand its bed capacity, but that they had expired prior to implementation, that its inpatient facilities were antiquated, that denial of the beds would serve to deny access to patients of osteopathic facilities, and that federal law (PL 96-79) recognized that the need for additional or expanded osteopathic facilities should be determined on the basis of the need for and availability in the community for such services and facilities. (Testimony of Floyd, Hull, Exhibits 4, 8-12, 14, 59) By letter of March 28, 1980, Respondent's Administrator, Office of Community Medical Facilities, informed Petitioner that its application for certificate of need to expand, renovate and consolidate ancillary service areas at a total project cost of four million dollars was approved, and Certificate of Need Number 1236 was attached. The letter further advised petitioner that the proposed 50-bed addition was denied as being inconsistent with the current Health Systems Plan of the HSA, that there was not a need for the additional 50 beds in Volusia County as evidenced by facts contained in an attached State Agency Action Report, and that the extraordinary circumstances upon which the HSA recommended approval were not valid as evidenced by the same report. However, the referenced report was not submitted in evidence at the hearing, nor was any testimony adduced as to the rationale for the agency decision. By letter of May 28, 1980, Petitioner requested Respondent to increase the amount of the issued certificate of need to ten million dollars due to anticipated additional costs of construction and, by letter of July 24, 1980, Respondent advised Petitioner that the "cost over-run" had been approved and an amended copy of the Certificate of Need Number 1236 reflecting the additional cost was attached. (Testimony of Hull, Exhibits 57-58) Volusia County has eight hospitals of which six are allopathic and two are osteopathic. There are five hospitals in the Daytona Beach/Ormond Beach "coastal area" of the county which include Petitioner, Intervenor Daytona Beach General Hospital, Inc. (osteopathic), Ormond Beach Memorial Hospital, Daytona Community Hospital, and Halifax Hospital Medical Center. Two other hospitals in the county are Fish Memorial and West Volusia located in Deland. The remaining hospital is Fish Memorial at New Smyrna Beach. Petitioner is the only hospital on the beach peninsula which is connected to the mainland by several drawbridges. Daytona Beach General Hospital and Ormond Beach Memorial Hospital are located on the mainland in the northern "coastal area" several miles in distance from Petitioner. The remaining two hospitals in the area are within an average of 30 minutes driving time from Petitioner except during the peak tourist season of February to July each year, or when undue delays are experienced at the drawbridges. The HSA recognizes Petitioner's health service area to be Volusia County. In June 1979, the eight hospitals in Volusia County had a total of 1675 licensed beds, of which 1395 were open and staffed for use. Of the 378 osteopathic beds, only 178 were open and staffed. Occupancy of the licensed beds during the period July 1978 to June 1979 ranged from a low of 13.8 percent for Daytona Beach General Hospital to a high of 92 percent for Petitioner. The average occupancy of all licensed hospital beds was 51.2 percent. For the month of July, 1980, 1418 beds were open and staffed with 65.2 percent occupancy. Fish Memorial Hospital of New Smyrna Beach has a certificate of need for an additional 45 beds. In June 1979, all of Petitioner's licensed beds were staffed, but only 97 of Daytona Beach General Hospital's 297 licensed beds were staffed and available for use. Its patient population, however, has increased during the past year. In July 1978, Volusia County had a population of approximately 230,000 and therefore had about 7 acute care beds per 1,000 population. The 1980 preliminary census figures for the county showed the population to be 249,434 and it is projected that the final census figures will increase from one to two percent which would place the county population at between 252,000 and 254,000. If the higher figure is utilized, the bed ratio for the county at the present time would still be over 6 beds per 1,000 population. It is projected that the population of Volusia County will increase to 275,900 by 1984. If the current 1675 licensed beds remain the same, there would then be approximately 6 beds per 1,000 population. Approximately 25 percent of the Volusia County population consists of individuals who are 65 years of age or older whereas only some 9 percent of the population in the other six counties in HSA Area 3 are in that category. Although the HSA's plan arrived at its goal of 4.3 beds per 1,000 population for Area 3 in accordance with federal guidelines which allowed for adjustments in areas with referral hospitals, high tourism rates, and areas with greater than 12 percent of the population being 65 years of age or older, no further adjustment was made for Volusia County in spite of the fact that the Area 3 rate of about 13 percent of elderly population is about half that of the county. Further, the seasonal fluctuation as a result of tourists was not quantified on the basis of available statistics. However, in its justification for the 4.3 beds goal, the HSP makes note of the fact that Volusia County has 22 percent more patients per day during the high tourist months than during the lowest occupancy months of he year. On an average day in 1979, 73,000 tourists were in Volusia County which equated to approximately an additional 30 percent of the county population of 240,421. During the year 1979-80, about 22 percent of Petitioner's patients were residents of places other than Volusia County. However, there are no available statistics on the numbers of such persons who were inpatients. Most of the tourists seek only outpatient treatment for sunburn and minor injuries, although some undergo surgery during the months they are visiting the coastal area. (Testimony of Schwartz, Floyd, Smith, Hull, Clapper, Exhibits 3, 5-6, 18-26, 29, 51) Petitioner's application reflected that its 81 licensed beds were then utilized as medical/surgical (69 beds), intensive care (6 beds), and pediatrics (6 beds). The proposed additional 50 patient beds would be utilized as medical/surgical (29), intensive care (6), progressive care (4), pediatrics (3), obstetrical (6), and isolation (2). However, subsequent to filing its application, Petitioner discontinued its pediatric ward, and created 3 additional medical/surgical beds from the 6 former pediatric beds. (Testimony of Hull, Exhibit 2) The need for six additional intensive care beds and the initiation of a four-bed progressive care unit is to eliminate the past practice of prematurely transferring intensive care patients to other patient beds due to an insufficient number of intensive care beds. Such transfers required the conversion of semi-private into private rooms with additional equipment and nursing care which also reduced the total number of available beds within the hospital. Transfers of this nature were made extensively during the past fiscal year. (Testimony of Hull, Schwartz, Nargelovic, D'Assaro, Exhibit 2) The request in the application for two beds to serve as isolation rooms is based upon the fact that petitioner does not maintain any such rooms at the present time and it requires them to meet acceptable standards of health care. Currently, when isolation is necessary, a semi-private room is converted for the single patient requiring isolation, thus reducing the number of available beds. (Testimony of Schwartz, Hull, Nargelovic, Exhibit 2) Petitioner's request to establish a six-bed obstetrical unit is based upon its claim that such a unit is necessary to properly provide patients of osteopathic physicians with such a service and to provide full health care services which would not only attract new physicians to the hospital, but also enable Petitioner to conduct an intern training program. In addition, Petitioner is of the opinion that such a unit is necessary to provide service to patients living on the peninsula because the closest hospital providing obstetrical care is Halifax Hospital which is located on the mainland. The other obstetrical units are located at Fish Memorial Hospital at New Smyrna Beach and West Volusia Hospital at Deland which are some thirty miles away and do not conduct approved intern or residence programs for osteopathy. Halifax Hospital restricts staff privileges to those physicians who have met American Medical Association criteria and, therefore, osteopathic physicians generally are not eligible to utilize the obstetrical unit there. The HSA found that Petitioner projected 375 deliveries in its proposed obstetrics department during the third year of operation. The agency's HSP goal DTS 4.2 provides that no additional obstetrical departments should be approved in Volusia County until each existing department in the county is performing at least 1,000 deliveries annually. Only Halifax Hospital exceeds the 1,000 annual delivery standard. The HSA disapproved the requested obstetrical beds based upon its view that obstetrical beds at Halifax Hospital would eventually become available for use by osteopathic physicians. (Testimony of Schwartz, Hull, Rees, Exhibit 2-3, 6, 14, 54-55) Petitioner primarily bases its request for the additional 29 medical/surgical beds on the fact that it is the only hospital on the peninsula, has extreme seasonal demands placed on it by tourist population, and that the hospital census has been over 92 percent average occupancy during the past fiscal year. At times, the hospital has been filled to capacity, and has found it necessary to use "hall beds" to meet the need for emergency admissions. The crowded conditions have necessitated frequent delays in patient admissions or the referral of patients to other hospitals. A patient occupancy rate averaging 80-85 percent is normally acceptable, but Petitioner experiences a certain amount of inefficiency and lessened quality of care when over 80 percent of its beds are occupied. This is reflected in the difficulty of staffing and providing support services, and possible premature patient discharge. (Testimony of Schwartz, Hull, D'Assaro, Draper, Mason, Shoemaker, Exhibits 2, 51, 69) Although approximately 80 percent of Petitioner's patients reside in the coastal area of Volusia County, only some 29 percent reside in the northeastern part of the county where Petitioner's hospital is located. Petitioner currently has 27 osteopathic physicians on its staff, 18 of whom admit their patients principally to Ormond Beach Hospital and 7 admit there exclusively. Nineteen of the osteopathic physicians have staff privileges at other hospitals. Twenty-four allopathic physicians have staff privileges at Ormond Beach Hospital, but most are specialty consultants who admit less than one percent of Petitioner's patients. (Testimony of Schwartz, Floyd, Hull, D'Assaro, Exhibits 16-17, 60, 67) The quality of care provided patients at Ormond Beach Hospital is excellent, particularly in view of the antiquated physical plant and prevailing crowded conditions. These problems have led to the existence of a number of existing beds which do not conform to state fire, safety and other standards. It is planned that the majority of the existing beds will be located in a new building to provide room in the present buildings for expansion of ancillary and support facilities. The hospital is accredited by the American Osteopathic Association and by the Joint Commission on Accreditation of Hospitals. Accreditation by the Joint Commission indicates that a hospital provides an excellent standard of Health care. (Testimony of Draper, Boxx, Hull, Wisely, Mason, Shoemaker, D. Smith, Exhibits 1-2, 28-42, 49-50, 71-77) Petitioner is an osteopathic hospital whose Board of Directors is composed of osteopathic physicians. There are no physical differences between allopathic and osteopathic hospitals with the minor exception that the latter utilizes a table for manipulative therapy for some 20 to 30 percent of the patients. The primary difference between the two concepts is philosophical in nature. Osteopathy emphasizes a "wholistic" approach to medicine which stresses the importance of the musculoskeletal structure and manipulative therapy in the maintenance and restoration of health. It is family practice-oriented with about 75 percent of osteopathic physicians engaged in general practice rather than specialty medicine. Emphasis is placed upon personal attention by the physician to the patient. These factors produce a certain amount of patient preference for treatment in an osteopathic facility. (Testimony of Floyd, Schwartz, Wisely, Hull, Mason, Shoemaker, D. Smith, D'Assaro, Exhibit 78) Although the bylaws of two of the three allopathic hospitals located in the coastal area of Volusia County have recently been amended to permit osteopathic physicians to obtain staff privileges, certain vestiges of prior discrimination still exist due to the fact that hospital control is exercised by allopathic physicians, and that board certification is required which excludes many osteopathic physicians. The third hospital, Halifax, requires board certification in an American Medical Association approved specialty or residence program. As a consequence, only one osteopathic physician is on its staff. (Testimony of Draper, Hull, Porth, Helker, Rees, D. Smith, Exhibits 54, 63, 66) Daytona Beach General Hospital, Inc. is the other osteopathic hospital in the area which is located on the mainland several miles away from Ormond Beach Hospital. It has 297 licensed beds, but only 107 were staffed and open for use in July 1980. Its rate of occupancy in June 1979 was 13.8 percent of the licensed beds. The hospital has experienced past difficulties due to a substandard physical plant and inadequate staffing in certain areas. Although many osteopathic physicians decline to admit patients to the hospital, they generally agree that the standard of care is adequate, except for critical care cases. The hospital has sought in the past to attract additional patients by accepting staff applications from qualified area physicians. Daytona Beach General is accredited by The American Osteopathic Association and has pending an application for accreditation by the Joint Commission on Accreditation of Hospitals. (Testimony of Draper, Wisely, Boxx, Hull, D. Smith, Clapper, Solomon, Exhibits 27, 29-80) Petitioner has exerted efforts to acquire licensed hospital beds from other area hospitals to alleviate its shortage, but has been unsuccessful. Hospitals are reluctant to give up licensed beds even though they are not currently being utilized because they normally anticipate a need for them in future years. Although Daytona Beach General Hospital has been the subject of negotiations for sale with various entities, including Petitioner, in recent years, they have not been successful. None of the hospitals, including Petitioner, desires to share space in other hospitals due to the resulting lack of control over operations and procedures. Petitioner held a certificate of need for 84 beds in 1976 which it was forced to relinquish when it received a certificate of need for the proposed purchase of Daytona Beach General Hospital. (Testimony of Boxx, Hull, Porth, Hilker, Clapper, Rees, Draper, Exhibits 15, 28, 21-37, 43-44, 55-56) It is estimated that the renovation and expansion of Ormond Beach Hospital will take from 18 to 24 months to complete. Approval of additional beds will result in dividing construction expenses among a greater number of patients, thus lowering costs of health care. On the other hand, without the addition of hospital beds, an increase in patient costs is to be expected. The addition of new beds will be a positive factor in Petitioner's recruitment of osteopathic physicians to the area and in initiating an intern training program. It should also serve to increase Petitioner's competitive position among other area hospitals and provide a better quality of care for its patients. (Testimony of Draper, Boxx, Hull, D. Smith, Clapper)
Recommendation That the application of Petitioner for a certificate of need for a 50 acute-care bed addition to its facility be approved in part for 38 additional acute-care beds. DONE and ENTERED this 6th day of April, 1981, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of April, 1981. COPIES FURNISHED: Eric J. Haugdahl, Esquire Department of HRS 1323 Winewood Boulevard Tallahassee, Florida 32301 Bernard H. Dempsey, Jr., Karen L. Goldsmith, Esquires Suite 610 Eola Office Center 605 East Robinson Street Orlando, Florida 32801 L. LaRue Williams, and Glenn R. Padgett, Esquires Kinsay, Vincent, Pyle, Williams and Tumbleson 52 South Peninsula Drive Daytona Beach, Florida 32018 Honorable Alvin Taylor Secretary, Department of HRS 1323 Winewood Boulevard Tallahassee, Florida 32301 =================================================================
