Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the prehearing stipulation and stipulations of fact reached at the hearing, the following relevant facts are found: Lee County, which contains the city of Ft. Myers, is the most populous county in HRS Service District VIII. There is a need in District VIII for 175 acute care hospital beds by the year 1988. A five-year horizon period is typically utilized when planning for the addition of new acute care hospital beds. At the time of the hearing, HRS had net yet projected the 1989 acute care bed need for District VIII. According to the records of the Department of Professional Regulation, there are 58 licensed doctors of osteopathy located in District VIII, with 26 residing in Lee County, and 11 in the adjoining counties of Collier and Charlotte. The petitioner's proposed facility will be an osteopathic facility. For the purposes of this proceeding, there are no other osteopathic acute care hospitals in HRS Service District VIII. Petitioner desires to construct and operate a 120-bed acute care osteopathic hospital in south Ft. Myers. The facility will be located no further than one mile south of Highway 865 (Summerlin Road), and will be bounded on the east by Highway 41, on the north by College Parkway and on the west by McGregor Boulevard. Eleven osteopathic physicians practicing in Lee County own stock in the proposed facility, and eight of these have their offices in close proximity to the proposed site. It is anticipated that Gulf Coast Hospital will be a teaching hospital used by the Southeastern College of Osteopathic Medicine to train osteopathic interns and residents. Since all osteopathic physicians presently in Lee County are family practitioners, the proposed facility will not initially be suitable for training in the required areas of obstetrics, pediatrics or gynecology. It is anticipated that these areas of training will initially be provided in rotating internships with other osteopathic hospitals and that the proposed facility, when operating, will attract additional osteopathic physicians, including specialists, to the Lee County area. HRS has not enacted a specific rule setting forth a methodology for determining acute care osteopathic hospital bed need. 1/ The need methodology chosen by petitioner to demonstrate osteopathic acute care bed need was to attempt to identify the current osteopathic patient population size, trend that number forward and then apply various bed-to- population ratios and use rates to that population. The various bed-to- population ratios applied to the population derived were the current and projected ratios in District VIII, the current and projected ratios for a combination of Charlotte, Collier and Lee Counties, and the current and projected ratios for Lee County alone. The ratios utilized range from 4.4 beds per thousand osteopathic patients to 5.0 beds per thousand osteopathic patients. The use rate based method employed by the petitioner relied upon actual hospital utilization by patients, and assumed that the osteopathic use rate would be the same as the allopathic use rate in he service area. The various bed-to- population ratios and use rate methodologies employed by the petitioner predicted a range of osteopathic bed need between 182 and 225 beds for Lee County alone, between 198 and 244 for Charlotte, Collier and Lee Counties combined and between 191 and 239 for District VIII as a whole. These projections were for 1984, 1988 and 1989. Utilization of a bed-to-population ratio as a methodology to determine need is one of the commonly accepted methods among health care planners. This methodology is particularly useful when more extensive data, such as actual numbers of physician admissions, patient utilization and average lengths of stay, is not known. This method's reliability is, of course, entirely dependent upon the reliability of the number used as the population figure. This would be true also of the use rate methodology. To derive the osteopathic patient population size, petitioner engaged the firm of Price Waterhouse and Company to count active osteopathic patient files. An active patient was defined as a patient who had seen the osteopathic physician in the past three years. Generally, a patient below the age of 45 will visit a physician once every three to five years, a patient between 45 and 55 will visit once every three years, a patient between 55 and 65 will visit once every two years, and a patient over 65 years of age will visit once a year. Thus, the three-year period was chosen as an accurate depiction of an active patient. Representatives from Price Waterhouse, on two separate occasions, went to the offices of various osteopathic physicians and performed an actual count of active patient charts, defined as being a medical record for any patient visiting the physician during the preceding three year period. No individual patient was counted more than once at the same office. In March of 1983, the offices of eight osteopathic physicians were visited and 33,108 total active charts were counted. In June of 1984, the active medical charts of fourteen osteopathic physicians were counted resulting in a figure of 41,186. Thirteen of the fourteen physicians had offices in Lee County, and one had an office in Naples. This latter count did not include one physician's files which had been counted in March of 1983 for a total of 3,432 active medical records. The figure of 41,186 active charts was utilized by petitioner's health planning expert as the basis for making his need projections as discussed in paragraph (6) above. While the figure of 41,186 may be said to be conservative in that it counts the patients of only 13 of the 26 Lee County osteopathic physicians and only 14 of the 37 osteopathic physicians in the three-county area, this chart-counting method of depicting the osteopathic patient population has certain drawbacks. For example, among the patients who would be counted as active osteopathic patients would be former patients who have died, transients or seasonal visitors, persons under the primary or even joint care of an allopathic physician, persons who no longer wish to be treated by an osteopathic physician, persons who were seen by an osteopath solely because he was on call in a hospital emergency room or persons who have permanently moved out of the service area. While bed-to-population ratios are typically utilized to calculate future bed need, the counting of "active patient charts" to determine the population size is not a usual health planning tool. The methodology employed by HRS in this proceeding to determine the number of osteopathic acute care beds needed was to analyze and utilize the actual experience in 1983 of other established osteopathic facilities in Florida. It was determined that all existing osteopathic hospitals are located in the seven counties of Broward, Dade, Duval, Hillsborough, Pinellas, Orange and Volusia. HRS extracted data from these existing facilities which reflected the number of admissions, the number of patient days, the average lengths of stay, the number of admission and patient days per osteopathic physician, and the admissions and patient days per 1,000 population. These figures were then lumped together by County, and then averaged or totalled to give an overall historical view of osteopathic utilization in Florida. The statewide use rates were then projected to the anticipated Lee County 1989 population and projected to 30 osteopathic physicians (a number derived by rounding the number 26 upward). This methodology resulted in an osteopathic bed-need range of from 52 to 79 bed In HRS's expert health planner's opinion, the correct measure of need is 60 beds. The HRS proposed methodology also suffers from serious drawbacks. It is well established that health planning is to be performed on a community, as opposed to a statewide, need basis. The variances in the numbers compared and averaged among the seven counties in which osteopathic facilities are established exemplifies the need and requirements for planning which is specific to a particular community. For example, the number of osteopaths licensed in the seven counties ranged from 52 in Orange County to 219 in Broward County. The number of admissions per osteopath ranged from 51.5 in Broward County to 103.6 in Orange County. The number of admissions per 1,000 population ranged from 5.3 in Hillsborough County to 22.3 in Pinellas County, and the number of patient days per 1,000 population ranged from 36.1 to 198.0 in the same counties. It is difficult to accept the assumption that Lee County osteopathic utilization will approximate the "state-wide" osteopathic utilization for one specific year when the statistical data itself is illustrative of wide divergencies among the seven counties with established osteopathic facilities. Obviously, a County's or service area's utilization will be dependent upon the size of the population, the age mix of the population and the number of physicians in the area. Additional shortcomings with HRS' methodology of analyzing a one-year period of historical data from existing osteopathic facilities are that the data utilized does not depict the number of allopathic physicians who admit patients to osteopathic facilities, the number of osteopathic physicians who admit patients to allopathic facilities, and the number of osteopathic physicians and/or patients residing in a county which does not have an osteopathic hospital but utilize the facilities of an existing osteopathic hospital.
Findings Of Fact The parties stipulated that s. 381.494(6)(c) 5, 6, 10, and 11, Fla. Stat. (1983) and s. 381.494(6)(d)3 and 5, Fla. Stat. (1983) either were not applicable to, or were satisfied by, Petitioner's application. The statutory criteria remaining in dispute at the final hearing are as follows: s. 381.494(6)(c) 1, 2, 3, 4, 7, 8, 9, 12, and 13; s. 381.494(6)(d) 1, 2, and 4. SUBURBAN MEDICAL CENTER, INC., the Petitioner in this case, operates an osteopathic primary care facility at the intersection of U.S. Highway 1 and Southwest 97th Avenue in South Dade County, and a satellite primary care facility in Naranja, Florida. Petitioner also has a certificate of need to operate an outpatient surgical clinic at its main facility, and is associated with International Medical Center, a health maintenance organization. Petitioner has approximately 6 physicians on its staff, and these physicians generate 1 to 3 patients per day needing acute care hospitalization with an average length of stay of about 6 to 7 days. Intervenor BAPTIST HOSPITAL OF MIAMI, INC., (BAPTIST), is a licensed and accredited 513 bed general acute care hospital located at 8900 North Kendall Drive, Miami, Florida, in subdistrict 4. Intervenor AMERICAN HOSPITAL OF MIAMI, INC., d/b/a AMERICAN HOSPITAL (AMERICAN), is a licensed and accredited 412 bed general acute care hospital located at 11750 Bird Road, Miami, Florida, also in subdistrict 4. Although both intervenors allow osteopathic physicians on their respective staffs, there is insufficient evidence to conclude that either intervenor in whole or in part constitutes an "osteopathic facility" as that term is used in Section 381.494(2), Fla. Stat. There is no evidence that any portion of either intervenor is under the management and control of osteopathic physicians so as to actively further, rather than to merely tolerate, the practice of osteopathic medicine. Both intervenors have allopathic physicians controlling admissions to staff and all important medical departments. Further, there is no evidence in this record that any other facility in District XI, with the exception of Southeastern Medical Center and Westchester Hospital, meet the definition of "osteopathic facility" contained in the statute as construed above by the Court in Gulf Coast Hospital, Inc. v. DHRS, 424 So. 2d 86 (Fla. 1st DCA 1982). Southeastern Medical Center is a 224 licensed acute care osteopathic teaching hospital located in North Miami Beach, Florida, close to the Broward County line. Westchester is a 100 licensed acute care osteopathic hospital located approximately at the intersection of Southwest 22nd Street (Coral Way) and the Palmetto Expressway in subdistrict 4, District XI, in Dade County. Pursuant to a settlement agreement with HRS, Westchester has permission to build a new, replacement 125 bed hospital for its current 100 bed facility. This permission is not pursuant to the current certificate of need law, and thus is not regulated by a certificate of need. There is no evidence in the record upon which to conclude that Westchester will exercise its permission, and therefore the existence of the permission is irrelevant to the determination of bed need for osteopathic facilities. Put another way, absent evidence that Westchester will in fact build a replacement facility, the Hearing Officer cannot conclude that it will, and will not find that Westchester will in the future provide osteopathic patients with a new 125 bed hospital. All calculations of osteopathic bed need on this record will be based upon the facts in the record, which show that Westchester now provides 100 osteopathic beds. Osteopathic medicine differs from allopathic medicine in several fundamental ways. Osteopathy is holistic, emphasizing treatment of the entire body; allopathic medicine tends to focus upon particular diseased areas of the body. Osteopathic medicine places great emphasis upon the health of the musculoskeletal system as a condition of healing, and employs techniques of manipulation of muscles and joints in the process of therapy for illness. Allopathic medicine does not. Osteopathic physicians tend to be general practitioners, since the emphasis of osteopathy is holistic. Allopathic physicians tend to specialize. Osteopathic medicine is growing in the United States. About 5 percent of all physicians in the United States are osteopaths. Of these, some 87 percent are general practitioners. Since 1970, the number of osteopathic medical schools has increased from 5 to 15 and these colleges now produce about 2000 graduates per year as compared to only 700 in 1970. Southeastern College of Osteopathic Medicine is affiliated with the Southeastern Medical Center in North Miami Beach, and in a few years will graduate 100 osteopathic physicians annually. Petitioner, SUBURBAN MEDICAL CENTER, originally sought 150 acute care beds, but amended its petition to 100 beds at the hearing. Petitioner intends to locate its proposed facility in conjunction with its primary care facility located at the intersection of U.S. 1 and Southwest 97th Avenue, commonly called Franjo Road. The facility's proposed location lies within subdistrict 4 of HRS Health Planning District XI. The primary service area for the proposed hospital extends from Southwest 152nd Street into South Dade County and the upper area of North Monroe County. The secondary service area for the proposed facility extends northward from the primary service area to Southwest 88th Street, also known as Kendall Drive, and southward to encompass the upper Keys in North Monroe County. These service areas generally encompass the northern portion of subdistrict 5 and the southern portion of subdistrict 4. Petitioner sought to demonstrate a need or a new 100 bed osteopathic hospital on the southern boundary between subdistrict 4 and 5 by projecting the need for such beds by means of a formula based upon current data. This primary evidence of need was supplemented with additional need evidence: the need for an osteopathic teaching facility, and the need to provide an osteopathic hospital that is closer to potential patients than Westchester Hospital or Southeastern Medical Center. As will be discussed more completely ahead in the conclusions of law, there is no specific rule available to calculate osteopathic hospital bed need. Moreover, pursuant to the Gulf Coast case, the need for osteopathic hospital beds must be considered separately from considerations of need for allopathic bed needs. Consequently, the rule applicable for acute care hospital beds is inappropriate for calculating need. The parties offered a variety of methods to project the future need for osteopathic hospital beds, but none of the methods presented were very satisfactory. Each of these methods will be discussed with respect to the witness who offered the method for consideration. Petitioner presented calculations of need through the testimony of Ms. Gail Buck, who was accepted as an expert in certificate of need review and health planning. Based upon data contained in the District XI health plan, 3 percent of the physicians in Dade County in 1983 were osteopathic physicians. (169 osteopaths in Dade County in 1983.) From other studies, she testified that the percentage of osteopathic physicians nationally is about 5 percent, and that these physicians have approximately 10 percent of all patients as osteopathic patients. Applying this ratio, she concluded that one could reasonably assume that 6 percent of all patients in Dade are osteopathic patients. From other studies she had read, the number of osteopathic patients hovers around 5-7 percent. One of these studies was a study done by HRS, developed by the Office of Health Planning. Ms. Buck further testified that for acute care hospital bed planning, it was normal to project need five years in the future. She then testified that by 1989, 8,792 acute care beds would be needed in District XI based upon HRS projections. Assuming that 5 percent of these beds were needed for osteopathic patients, by 1989 District XI would need to allocate 440 of these hospital beds to osteopathic patients. Ms. Buck then calculated the net osteopathic bed need by subtracting 224 beds at Southeastern Medical Center, and 100 beds at Westchester, resulting in 116 net beds need. Using a 6 percent rate, the net bed need was 204 beds using the same method. Ms. Buck further testified that the data as to the number of osteopathic patients using allopathic hospital beds does not exist, but that such patients were not accounted for in the 5 percent estimate above. Ms. Buck stated that since the majority of osteopaths are general or family practitioners and refer their hospital-bound patients to specialists, who in turn admit the patients to hospitals, it is very difficult to obtain data as to actual osteopathic patient need, and that for this reason, the 5 percent method, as well as other methodologies, lacked a firm data base. She said ". . . there's no one methodology that can be considered totally accurate." Ms. Buck chose the 5 percent method because she felt it was based upon more accurate data than other methods. Ms. Buck did not set forth any underlying data to justify the assumption that osteopathic patients constitute from 5 to 10 percent of all patients. She simply stated that these figures came from various studies. Other data in the record reveals that at least for District XI, the S to 10 percent standard of need is much too high. In 1982, District XI had 11,052 licensed acute care beds as shown by American Exhibit 1. 324 of these beds, or 2.9 percent, were osteopathic acute care beds. If these beds had been running at 100 percent occupancy, then the data would be at least consistent with Ms. Buck's opinion that the "need" is from 5 to 6 percent of all acute care beds, though this would not necessarily be total proof of the point. But in 1982, these osteopathic beds were on the average only 60 percent occupied, thus indicating that "need" for osteopathic beds in 1982 in the District was only 60 percent of 2.9 percent of all acute care beds, or only 1.7 percent of all acute care beds. The difference between a real figure of 1.7 percent and the 5 to 10 percent range is so great that the conclusion has to be drawn that the 5 to 10 percent figure is inappropriate in this case for District XI. While Petitioner's need calculation is unreasonably high, the calculations presented by Respondent and Intervenor, AMERICAN HOSPITAL, suffered from unreliability that would tend to underestimate need. Daniel J. Sullivan was presented as an expert in health planning by AMERICAN HOSPITAL, and was accepted as such. He testified with respect to projections of need, and his testimony formed the basis for introduction into evidence of American Exhibit 1. Need was first calculated using the rule for acute care hospitals, rule 10-5.11(23), F.A.C. As will be discussed ahead in the conclusions of law, this evidence may be relevant to the issue of the financial feasibility of the proposed project, since an osteopathic hospital must compete for many of the same ill patients as are served by allopathic hospitals; but in accordance with the decision in the Gulf Coast case, the rule cannot be used to project osteopathic need because it impermissibly assumes that allopathic beds will be adequate for osteopathic patients. Mr. Sullivan criticized the 5 percent methodology presented by Ms. Buck as being overstated. In 1982, the number of patient days in osteopathic hospitals in Florida was 3.6 percent of all the patient days in all hospitals in Florida, and was 2.67 percent in Dade and Monroe Counties. From this he reasoned that 5 percent was too high as a representation of osteopathic patient needs. His reasoning, however, fails to account for the number of patient days of patients in allopathic hospitals admitted to those hospitals by osteopaths who would have been admitted to an osteopathic facility had one been available. Calculation of future osteopathic need based upon osteopathic hospital availability is inherently faulty because it equates supply of facilities with demand of patients. Three additional methods of projecting acute care osteopathic hospital bed needs were presented by Mr. Sullivan. The first was to project need based upon a projection of the number of patient days that would be generated by the supply of osteopathic physicians in the District. There are 184 currently licensed osteopathic physicians in District XI as shown by the records of the, Florida Board of osteopathic Medical Examiners. Mr. Sullivan then selected the number of osteopathic patient days per osteopathic physician in Florida in 1983 as a basis for determining need. The data came from HRS, and simply reflects patient use of osteopathic hospitals. The method used by HRS to count osteopathic physicians in this data was not explained. The data results in 510 patient days per osteopathic physician which, when multiplied by the number of currently licensed osteopaths in District XI, results in a projection of 93,840 patient days. This number divided by 365 results in 257 beds needed at 100 percent capacity, and 321 beds needed at 80 percent capacity. Since 324 beds already exist, there is no need using this method. The above method of calculating need is inadequate for two reasons: it fails to account for osteopathic patients in allopathic hospitals and other patients who might want to be treated in an osteopathic hospital but cannot due to lack of facilities, and it fails to consider the number of additional osteopathic physicians who might be attracted to South Dade County if an adequate osteopathic hospital existed there. Parenthetically, Mr. Sullivan noted that most of the osteopaths in District XI have offices close to Southeastern Medical Center, and concluded from this zip code analysis that there was no need for an osteopathic hospital in South Dade County. The conclusion is untenable. From other testimony it is clear that all physicians tend to locate their offices near hospitals (just as lawyers tend to locate their offices near the courthouse.) More important, however, there was credible testimony of prior and lingering discriminatory practices against osteopathic physicians who try to practice at allopathic hospitals. A minority profession, under such circumstances, would be expected to locate offices close to a friendly, home osteopathic hospital, and not in areas lacking such a facility. Health planning methods that look for osteopaths in areas lacking osteopathic hospitals put the cart before the horse. The next need methodology proposed by Mr. Sullivan multiplied the rate of osteopathic patient days per 1,000 of population (based upon osteopathic hospital patient days in 1983 in seven districts) times the District XI projected population in 1989. This method resulted in a net projected osteopathic bed need of 20 beds. Again, the methodology is faulty in that it is based upon the status quo, the current availability of osteopathic hospitals, and fails to account for osteopathic patient needs which the existing stock of osteopathic hospitals may or may not be able to serve. The final methodology offered by Mr. Sullivan was first to compute the 1982 osteopathic hospital patient days for Dade County as a ratio of population in 1982, and then to extrapolate the expected number of osteopathic hospital patient days in 1989 for the 1989 projected population. This method projects a surplus of 52 osteopathic hospitals beds in Dade County by 1989. Again, the problem with the methodology is that it is based upon the status quo, and would be substantially inaccurate as a projection of need if current need is unmet by existing osteopathic hospitals. Respondent, HRS, proposed several methods to calculate need through the testimony of Walter Eugene Nelson, administrator of the Office of Community Medical Facilities at HRS, who was accepted as an expert in health care planning and certificate of need review in Florida. Mr. Nelson first mentioned the 5 percent method which was relied upon by the Petitioner, as described above. Mr. Nelson did not attempt to support this methodology, even though it had been proposed by HRS as a rule, and the record contains no other evidence from HRS to prove that the 5 percent method is reasonable or that it should determine need in this case. The second method proposed was to estimate the number of osteopaths in Dade County in five years and then to project the number of patient days chat would be generated by this number based upon current use rates for the two osteopathic hospitals in Dade County. This method projects a surplus of 86 osteopathic beds by 1989. This projection is mathematically incorrect. The surplus projected is actually 22. (The error is in the calculation of patient days per osteopath in 1984, Respondent Exhibit 1, which is 439.5 not 353.6, since 59,766 is divided by 136, resulting in 439.5.) Other than this error, the method has more fundamental flaws. First, though it reasonably projects that the 1984 census of osteopaths (136) will grow to a larger number in 1989, it accounts only for growth expected from graduates of Southeastern Medical College. Surely the climate of south Dade County will attract osteopaths from other colleges and other areas of the country, particularly if south Dade County were to have ample osteopathic hospitals. Second, as discussed above, the method fails to count the number of patients in allopathic hospitals who might prefer an osteopathic hospital if additional facilities were available. In summary, all of the methods of projecting need discussed above have major problems. But the primary evidence of lack of need in this case is a result not of the relatively unsatisfactory methods of predicting the future that have been offered, but the lack of need shown by the recent past use rates at the two osteopathic hospitals in the District. There are two osteopathic hospitals in District XI discussed above. The occupancy rates at these two osteopathic facilities have been significantly lower than capacity in recent years, and have been very similar to the use rates of allopathic hospitals: OCCUPANCY RATE 1981 1982 All district XI Hospitals 67.4 percent 66.6 percent Westchester Hospital 67.8 percent 65.8 percent Southeastern Medical Center 61.3 percent 58.4 percent This is strong evidence that District XI has had an excess of osteopathic beds in recent years. Moreover, the need for the existing osteopathic beds in 1984 has decreased. In the first six months of 1984, the use rate at Westchester dropped to 46.7 percent and the rate at Southeastern Medical Center dropped to 52.5 percent. The cause of these lower use rates have been causes that apply equally to osteopathic and allopathic hospitals, thus leading to the conclusion that the lack of need shown by the above data will probably persist for several years into the future. All acute care hospitals have lost patients due to growth of alternatives to in-patient care, such as nursing homes, rehabilitation centers, outpatient surgical centers, and the like. Additionally, medicare policy changes have reduced the length of stay at all acute care hospitals. There is no compelling evidence on this record that osteopathic hospitals will not suffer from diminished need from these market forces in the same way that allopathic hospitals have suffered. The Petitioner presented some evidence that the lower use rate at Westchester was due not to lack of osteopathic patient demand and need, but rather to poor quality of care at that facility. But the evidence was insufficient to dispel the conclusion that an additional major cause was simple lack of need. Dr. Jules Gary Minkes testified with respect to the adequacy of Westchester Hospital for osteopathic patients. He said that there have been emergencies where Westchester was too far away to take the patient in the ambulance, and the patient had to be taken to a closer allopathic hospital. He did not testify as to how frequently this had occurred. Further, he testified that the bulk of the area to be his proposed osteopathic hospital was outside the service area of Westchester. Both of these problems, however, are ones that naturally flow from the fact that osteopathic physicians and patients constitute such a small percentage of all patients and physicians. Even if 10 percent of the acute care beds in District XI were osteopathic beds, these beds would be located at only a few hospitals at great distances from many of the osteopathic patients. Dr. Minkes further testified in a general way that at some time in the middle 1970's, Westchester ". . . did not develop and did not meet the needs of the osteopathic physicians and did not keep up. And there was not a sufficiently integrated cohesive development." In the next sentence he implied that Westchester did not keep its staff, but did not testify to that fact. Finally, Dr. Minkes testified that physicians that practice at Westchester had made requests to upgrade equipment and take a "more aggressive competitive attitude," but that this had not occurred at Westchester. On cross examination Dr. Minkes again acknowledged that he had "problems gaining access of my patients in our service area to go to Westchester," but he did not state further what those problems were. Perhaps the strongest evidence of the inadequacy of health care at Westchester came from Dr. Ira Hershman, an osteopathic physician who has practiced in Dade County since 1960. Dr. Hershman's testimony, however, is ultimately as general and nonspecific as the testimony of Dr. Minkes. Dr. Hershman was chief of staff at Westchester a number of years ago, and in the early years osteopathic physicians tried to modernize the facility. Dr. Hershman then testified without explanation or elaboration that in recent years those efforts had "gone by the boards," and he was of the opinion that the current management at Westchester would not support expansion of osteopathic medicine in south Dade County and Monroe County. Dr. Hershman was convinced that no effort now would improve Westchester. Dr. Hershman primarily admits his patients to Westchester, however, although he used allopathic hospitals occasionally for specialities not found at Westchester. Westchester has six or seven specialists on its staff, but does not have neurology, obstetrics, or psychiatry. Dr. Hershman said that his patients often do not approve of the quality of the facility at Westchester. Westchester, in his opinion, is designed in a "very poor way" and there are many, many inconveniences in there." He stated that Westchester is "very unpleasant for the patient and their families in many ways." He felt that the management of Westchester could have made improvements, but that architecturally "in its very design, it was just not made as a real facility." Dr. Hershman testified that Westchester had problems with equipment, both in terms of modernization and quality, with equipment breaking down. He concluded that "although I can get by with my cases in there on a general primary care level, it is really not an ideal facility. And that is being kind, I suppose." Dr. Kathleen M. Tillman, an osteopathic physician specializing in internal medicine and practicing in Dade County, testified that she admits patients to both Westchester and Larkin hospitals. She stated that there was a "definite problem" for her patients due to the distance to Westchester Hospital. She said that due to the distance and travel time to Westchester, she had to "almost talk them into going" to Westchester. She said that a lot of her patients were over 65 years of age, and driving was a problem for them, that family visitation at Westchester was a problem due to the distance, and that she planned an office further south, thus increasing the distance in her work to Westchester. Other than driving distance, the only reason Dr. Tillman could think of that her patients did not want to go to Westchester was the physical facility, "the actual looks of the place more than anything, more than the actual health care." Dr. William Levin is also an osteopathic physician who practices in Dade County. He testified that he had "difficulty" admitting patients to Westchester Hospital. Dr. Levin said that his difficulty is partially caused by the physical plant at Westchester, and partially caused by the location. He felt that the physical plant was a major factor, but that rebuilding the facility would not solve the problem of patient acceptance. Dr. Levin further testified that for the past 10 years, the chief of staff at Westchester has always been an osteopathic physician. He also testified that he had been the past chairman of general medicine at Westchester, that Westchester had a department of family medicine, and that department heads at Westchester, to the best of his knowledge have always been osteopathic physicians. Dr. Nsitibe Nelson Ikpe, an osteopathic physician who practices in Dade County, is trying to expand his practice to the southern portion of Dade County. Dr. Ikpe is currently using Westchester Hospital. Dr. Ikpe has not in the last few years had any problem admitting patients to Westchester. Dr. Ikpe conceded that it could "take up to 30 minutes" for a patient to drive from north Monroe County to Westchester, but he did not say it would take more than 30 minutes, and did not testify that this driving time was a problem for him. Dr. Ikpe did not provide any other evidence as to the adequacy of Westchester. Finally, Dr. Arnold Melnick, Dean of the Southeastern College of Osteopathic Medicine, was offered the opportunity to express an opinion as to the adequacy of Westchester Hospital, and his testimony leads the Hearing Officer to conclude that he found no fault with Westchester, at least as a training facility. Dr. Melnick testified that if the American Osteopathic Association (AOA) approved a hospital, he would have no hesitation to recommend it to his students. He then testified that Westchester was AOA approved for internships. Finally, when asked to express an opinion as to the need for a new osteopathic hospital, assuming Westchester was no longer adequate, Dr. Melnick testified: "Since Westchester is accredited as a training institution by the American Osteopathic Association, I couldn't comment because it contradicts what you're stating." None of the osteopathic physicians who expressed general dissatisfactions with Westchester supported their conclusions with concrete examples of inadequacies. While the foregoing is evidence that there are problems at Westchester for the physicians who testified, these problems were not proven with sufficient specificity and have not been shown to be such for this Hearing Officer to conclude that Westchester is so inadequate that it should be replaced by the hospital proposed by Petitioner. Nor is the evidence sufficient for the Hearing Officer to conclude that the low use rate at Westchester is due solely to inadequate health care at Westchester. As stated above, the record evidence indicates that the use rate at Westchester is quite similar to the use rates at allopathic hospitals in the District, which is consistent with the conclusion that the lower use rate at Westchester is caused by the same diminished need. Further, the use rate at Westchester is quite similar to the use rate at Southeastern Medical Center. On this record, there is no indication that Southeastern Medical Center is other than an adequate health care facility. The similarity in use rates, therefore, leads one to the conclusion that the use rate at Westchester is driven primarily by the same force that drives the use rate at Southeastern: lack of need or demand by osteopathic patients. Petitioner also argued need for its proposed hospital because of plans to make the new osteopathic hospital a teaching hospital serving the needs of osteopathic students, interns, and residencies. Dr. Melnick, Dean of the Southeastern College of Osteopathic Medicine, testified with respect to the need for teaching hospitals for these purposes. The Southeastern College of Osteopathic Medicine has been in existence only a few years, and has yet to graduate its first class. The first class will be 40 students, but the fourth graduating class, and in every year thereafter, will be 100 students. In order to be certified as an osteopathic physician, a graduate of a college of osteopathy must serve an internship in an osteopathic hospital approved by the American Osteopathic Association. In District XI, Southeastern College of Osteopathic Medicine currently places about 16 of its interns in internships at the Southeastern Medical Center. Westchester is approved by the AOA for from 2 to 5 interns, and currently has one. Dr. Minkes testified that the proposed new hospital would strive to be approved by the AOA and provide at least 5 osteopathic internship slots, and possibly more based upon outpatient and emergency room use. Thus, if there were other compelling evidence of need to fill the beds of the proposed 100 bed osteopathic hospital, the above evidence would be some additional evidence of need. By itself, however, the need to provide 5 internships is not sufficient justification for the project, particularly since the internship crisis facing Southeastern College would be ameliorated only in a small way by the availability of 5 intern positions at the proposed hospital. Dr. Melnick testified that in a few years in Florida there would be a shortage of as many as 500 osteopathic internships. Petitioner further sought to establish a need for its proposed hospital by presenting evidence that Westchester does not have obstetric beds, and the proposed hospital would devote 10 percent of its beds (10 beds) to obstetrics. First, it should be noted that whether or not existing allopathic hospitals provide obstetric services, or whether any such allopathic services are currently running at capacity, is not relevant to this case since allopathic obstetric beds are not an adequate equivalent to osteopathic obstetric beds. Nonetheless, other than the fact that Westchester has no obstetric beds, there is no evidence in the record of the magnitude of need for such beds. Moreover, the proposed hospital will devote only 10 percent of its beds to obstetrics. Even assuming a need have been proved, this is not a sufficient reason to grant a certificate of need for all 100 beds. As further justification for need, Petitioner presented evidence that osteopaths had been discriminated against in the years before this decade, and that the growth of the profession has thus been retarded by these practices. Petitioner argued that the numbers of osteopathic physicians in District XI was not reflective of actual patient need, and that a new osteopathic hospital would attract more osteopathic physicians. Though not extensive, the evidence of discrimination by allopathic hospitals and physicians through the 1970's was shown by the record. Moreover, there is good reasons in the record to believe that osteopathic physicians will cluster around an osteopathic hospital. Osteopaths currently locate their offices near Southeastern and Westchester. Despite the general truth of the above two principles, however, on the record of this case the operation of these principles does not compel the conclusion that a new osteopathic hospital is needed. If indeed there were continued serious discrimination against osteopaths and their patients, one would expect that the use rates at Westchester and Southeastern would be higher. The relatively low use rates at Westchester and Southeastern lead one to the conclusion that the magnet effect of those hospitals has already pulled all available and interested osteopathic physicians to District XI, and has attracted all those osteopathic physicians who have been discriminated against. And still, presuming the full operation of both principles, both existing osteopathic hospitals run at about 50 percent capacity. In sum, prior discrimination and the potential of attracting new osteopaths to a new hospital, even if probably true, do not ultimately show a need for a third osteopathic hospital in District XI. Dr. Melnick testified that about 80 percent of his students at Southeastern College of Osteopathic medicine came from Florida, and estimated that "a good number" would practice in Florida. Dr. Melnick did not provide any data as to the number that might practice in Dade County. Eugene Nelson based his estimates of the number of osteopathic physicians who might stay in Dade County after graduating from Southeastern College of Osteopathic Medicine upon actual experience at the University of Miami College of Medicine, and as such his testimony is based upon better evidence and is accepted over the estimate of Dr. Melnick. Eugene Nelson mentioned one other methodology for calculating bed need, a methodology which assumes that each osteopathic physician will generate 660 patient days per year. This methodology was used in OMHI-UHSI vs. DHRS, 5 FALR 2294A, the "Wellington" case, and is based upon the use rate at one osteopathic facility in Palm Beach County. It therefore was based upon a sample of data relevant only to that case, a sample size too small to provide a basis for extrapolation to this case. As will be discussed ahead in the conclusions of law, since osteopathic bed need constitutes at most only 10 percent of all acute care hospital beds, the 30 minute driving standard for urban areas is of little use in this case to determine osteopathic hospital bed need. Many osteopathic patients will always be at some distance from the few osteopathic hospitals if, at best, only 1 out of 10 hospitals is an osteopathic hospital. Nonetheless, for the record, additional findings will be made with respect to the evidence of driving distances to the two osteopathic hospitals, Westchester and Southeastern. Southeastern Medical Center is located in the northeastern portion of Dade County and, of the hospitals considered at the hearing, is the furtherest hospital from residents living in subdistricts 4 and 5. Southeastern Medical Center is currently over 30 minutes driving time from all the persons residing in subdistricts 4 and 5, and will continue to be beyond 30 minutes driving time in 1988. Westchester Hospital is closer to residents in subdistricts 4 and 5. It is located approximately at the intersection of Coral Way and the Palmetto Expressway about 9 miles north northeast of the proposed new osteopathic hospital. Westchester is located in a dense urban area, and consequently the 30 minute driving distance surrounding the hospital consists of a smaller area. In 1984, about 30 to 35 percent of the population in subdistrict 4 resided more than 30 minutes driving time from Westchester, and 100 percent of the population of subdistrict 5. In 1988, about 40 to 45 percent of the population is subdistrict 4 is expected to reside beyond 30 minutes driving time of Westchester, and 100 percent of subdistrict 5. Baptist Hospital presented travel time evidence that showed 30 minute distances from locations on major roadways to four allopathic hospitals and Westchester Hospital, all located in the south Dade County area. The data provided did not show the percentage of population within 30 minutes driving time of Westchester Hospital. Moreover, the driving distances tend to overstate the accessibility of the hospitals considered. The data does not account for driving time from residential areas to major roadways, but rather, begins (or ends) at points still on major roadways. The driving data presented by Petitioner, however, tends to understate the area of accessibility to Westchester Hospital and Southeastern Medical Center. Petitioner's travel times include time to park at the hospital and walk to the entrance. This is an entirely reasonable approach, at least with respect to parking time as discussed above. Rule 10-5.11(23)(i)1, F.A.C., is concerned with "beds" being "accessible within an automobile travel time." A bed is not accessible until one is there, and parking can take a few minutes. However, it is also reasonable for HRS to construe its own rule, for the sake of simplicity, as not counting these periods of travel, and therefore it is the obligation of the Hearing Officer to follow the interpretation of the agency of its own rule, if reasonable. The record does not reflect how much time, on the average, Petitioner's expert added to the driving time for parking and walking, but the amount should not have been more than a few minutes. Petitioner's travel may have also been understated because Petitioner's expert assumed that travel by night would be 10 percent slower. The testimony of intervenor's expert, that night driving should be the same or faster, is accepted as more correct. Petitioner's expert further assumed that driving times in the future would be 10 percent slower. Intervenor's expert presented a contrary view, arguing that it was impossible to predict future traffic demand and traffic improvements but on this point Petitioner's expert's view of the future traffic in south Dade County is accepted as being more accurate. Since none of the allopathic hospitals represented in any of the travel studies was shown to be an "osteopathic facility" as discussed above, the travel times to these hospitals for this case was irrelevant. If one were to rely upon the acute care bed rule to project need for osteopathic patients, District XI by 1989 shows a significant maldistribution of beds. Subdistrict 4 will have a net surplus of 1012 beds, while subdistrict 5, the extreme southern portion of Dade County and Monroe County, will have a net need for 533 beds. This is some evidence that were this proposed project to be located in subdistrict 5 it would serve the unmet needs of that district. However, this is not an appropriate conclusion to draw for several reasons. First, the overbedded situation in subdistrict 4 is so extreme that the better policy would be to require patients in subdistrict 5 to travel to hospitals in subdistrict 4, at least until the extreme circumstance in subdistrict 4 is improved. The distances from south Dade County are not that much greater, and the distances from the keys would remain troublesome for any new hospital located in the northern part of subdistrict 5. Moreover, the bulk of the population of subdistrict 5 lives in the northern section immediately adjacent to subdistrict 4. More importantly, however, if the acute care bed rule is inappropriate for projecting osteopathic bed need, it remains inappropriate whether it shows or does not show a need. The financial feasibility of the proposed project depends primarily upon whether the new hospital will attract and keep an adequate number of patients Petitioner projected that its hospital would be 44 percent occupied in the first month of operation, 65 percent at the end of the first year, and 75 percent at the end of the second year. These projections were not substantiated by Petitioner, and the evidence would indicate that they are overly optimistic. First, the other two osteopathic hospitals are having trouble attracting enough patients to fill 50 percent of their beds, thus suggesting that the new facility will rely upon a pool of patients that is inadequate to fill two facilities. Second, the record does not contain adequate evidence as to the numbers of osteopathic patients currently treated in allopathic hospitals who would want to switch to the new osteopathic facility. What little evidence there is on that point tends to show that the new osteopathic hospital cannot expect to gain large numbers of osteopathic patients from allopathic hospitals. In 1983, BAPTIST had 18,167 patient admissions. Ernest Nott, Chief Executive Officer at BAPTIST, testified that in the same year, osteopaths admitted only 240 of these patients, or 1.3 percent of all 1983 admissions. (Petitioner submits as a proposed finding that osteopathic physicians admitted 42 patients to AMERICAN HOSPITAL in 1984, and that osteopaths admitted 121 patients during 1984 to BAPTIST HOSPITAL, citing Petitioner's exhibits 12 and 13 as containing that evidence. This proposed finding is rejected because those figures are not contained in those exhibits.) Thus, if the data from BAPTIST is typical, there are very few osteopathic patients in allopathic hospitals available to the new hospital as a future source of income. Finally, the projection that the new osteopathic hospital will be 75 percent occupied by the second year of operation is suspect given the fact that established subdistrict 4 hospitals in two consecutive years (1981 and 1982) operated at only a 63.2 percent occupancy level. Since the most basic element of financial feasibility, projected patient days, has not been shown on this record, there is no need in this Recommended Order to consider the subsidiary points as to financial feasibility raised by the parties. Thus, no findings have been made with regard to the reasonableness of financing proposals, projected costs and expenses, projected revenues, or the reasonableness of the space study. Westchester is also in subdistrict 4, the same subdistrict as the proposed hospital, and therefore the fiscal impact upon Westchester would very likely be quite negative. As discussed above, the osteopathic physicians who testified in this case would probably discontinue using Westchester, thus lowering its use rate even below the current 47 percent. The magnitude and precise effect of the impact cannot be ascertained on this record, but a significant negative impact is certain. The impact of the proposed new osteopathic hospital upon the two intervenors would not be substantial, and would not be a cogent reason to deny this application. Both of these hospitals have continued to be profitable despite lower occupancy levels. In 1982, American had only a 51.4 percent occupancy level, but it ended up with $153.48 excess of patient charges per day over operating expenses per day, which was an excess of 22 percent over the average charge per patient day. Similarly, Baptist was occupied at the level of 66.7 percent in 1982, and it had $93.25 excess of patient charges per day over operating expenses for 1982, a margin of 20 percent. Either hospital could lose a number of patients to the proposed new hospital and not suffer major financial damage. Moreover, if it is true that fewer than 2 percent of the patients at these hospitals are osteopathic patients, even the loss of all of these patients would not cause major economic damage to either intervenor. The acute care bed need rule, section 10-5.11(23), F.A.C., contains a health care planning standard for general medical and surgical beds: new beds should be authorized when existing beds reach 80 percent of their capacity. (This standard is contained in the formula district bed allocation in subpart (f)3a of the rule.) While the formula used in this rule (which treats osteopathic beds to be adequate alternatives to allopathic beds, and vice versa) is inappropriate as a means to project osteopathic bed need, the 80 percent planning standard is useful to measure osteopathic bed need based upon utilization of existing osteopathic facilities. The 80 percent standard has applicability to any acute care hospital since it addresses basic efficiencies in operation, and unlike the 30 minute driving standard, is not inapplicable to an osteopathic facility due to some factor unique to the osteopathic circumstance. Further, the 80 percent threshold was supported by other evidence in the record as a suitable standard for measurement of bed need in this case. First, the 80 percent standard is also used by The Health Council of South Florida, Inc., which is the local health planning agency responsible for the health plan for District XI. The 80 percent standard was used in the District XI health plan adopted in July 1983. Second, the 80 percent standard is a standard that is a generally accepted standard for acute care hospitals contained in national medical planning guidelines. All of the parties proposed a number of findings concerning the availability of allopathic hospital services in District XI, and in subdistricts 4 and 5 in particular. Since, as discussed above, no party proved that any allopathic hospital had any portion thereof which was in fact so dedicated to osteopathy that it could be called an "osteopathic facility" as defined by the Gulf Coast decision, supra, evidence as to the nature of existing or future allopathic hospital services was deemed to be irrelevant to this case. Likewise, evidence that osteopathic physicians are admitted to the staff of allopathic hospitals, or admit patients to allopathic hospitals, was also deemed to be irrelevant to this case because the evidence did not show that such osteopathic patients to have been treated in "osteopathic facilities" within such allopathic hospitals. The fact that some osteopaths may prefer to practice in an allopathic hospital was found to be true, and it was recognized that not all of the osteopathic patients currently served by allopathic hospitals would necessarily be served by the proposed osteopathic hospital. However, the A magnitude of this diminution of osteopathic patient need was not presented in the record, and was not necessary to the ultimate conclusion that no need was shown. There were a number of other findings of fact proposed by the parties in this case which are not mentioned in the above findings. No separate finding will be made as to these since they were subordinate to the findings made above, were unnecessary in view of findings made above, were cumulative, or were irrelevant. In summary, there may be a need for additional osteopathic hospital facilities in District XI, but that need was not shown in this case. First, the low utilization of the existing osteopathic hospitals was not adequately explained. And second, there was no reliable data as to the numbers of osteopathic patients who would prefer treatment in an osteopathic hospital but have been diverted to an allopathic hospital due to lack of existing osteopathic facilities.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the application of the Petitioner in this case for a certificate of need to establish and operate a 100 bed osteopathic teaching hospital in subdistrict 4, District XI, in Dade County, Florida, be DENIED. DONE and ENTERED this 15th day of February, 1985, in Tallahassee, Florida. WILLIAM C. SHERRILL, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of February, 1985. COPIES FURNISHED: F. Philip Blank, Esquire Susan A. Maher, Law Clerk F. Philip Blank, P.A. 241 East Virginia Street Tallahassee, Florida 32301 John F. Gilroy, Esquire Culpepper, Turner & Mannheimer 318 North Calhoun Street Tallahassee, Florida 32301 Kyle R. Saxon, Esquire Paige & Catlin 169 East Flagler Street Suite 816 Miami, Florida 33131 Ivan Wood, Esquire Steven T. Mindlin, Esquire Wood, Lucksinger & Epstein 1501 Venera Avenue, Suite 200 Miami, Florida 31146 Mr. David Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received and the entire record compiled herein, I make the following relevant factual findings: At all times material hereto, Respondent was an osteopathic physician licensed by the State of Florida having been issued License Number OS 0016000. In August, 1984, one Jacob Kantor was a regular patient of both Respondent and Dr. Barry Goldberg, a chiropractor employed by Respondent. Kantor periodically came to the office for chiropractic therapy with Dr. Goldberg and for medical examination and treatment by Respondent. Kantor often showed up at Respondent's office without an appointment. On August 13, 1984, Jacob Kantor came to Respondent's medical office and discussed with Dr. Goldberg whether he could obtain reimbursement for a bill Kantor had paid to another chiropractor. Goldberg advised Kantor that, as an HMO patient, procedurally he should have first sought a referral to another chiropractor before obtaining services from a chiropractor, not affiliated with Respondent's practice, when he wished to be reimbursed by Respondent. Goldberg suggested that he talk with Respondent who perhaps would make an exception to the usual procedure in this instance. Kantor did not ask for medical treatment from Respondent on that visit although he did speak with Respondent about getting reimbursed for the fees he paid to an unaffiliated chiropractor. Respondent explained to Kantor that he was not entitled to reimbursement for chiropractic treatment received from chiropractors not associated with his office without his prior approval. Respondent then terminated the conversation with Kantor and proceeded to an examination room to treat a female patient. Kantor followed Respondent into the examination room and insisted upon continuing the conversation concerning the reimbursement. Respondent escorted Kantor out of the room and closed the door. Kantor persisted and re-entered the room, again interrupting Respondent's intended examination of the female patient and was, for a second time, escorted by Respondent out of the examining room. Debbie Lombardo, a medical assistant whose employment was terminated by Respondent five days after the alleged incident, recalled Kantor's repeated interruption of Respondent's attempt to examine the female patient. Respondent touched or pushed Kantor which resulted in his (Kantor) losing his balance and falling backwards inside the doorway of an adjoining room. Lombardo assisted Goldberg in picking up Kantor from the doorway that he fell into in losing his balance. Dr. Goldberg did not see what caused Kantor to lose his balance but he did observe Kantor back-pedalling out of an examination room, through the hallway, into an adjoining room and ultimately landing against the back wall of that room. Goldberg assisted Kantor in getting up from the floor. Lombardo was in another room assisting with a patient at that time. Kantor, who did not testify at the Final Hearing, alleged in his initial written complaints to the Petitioner that he did not fall but instead fell into the arms of Dr. Goldberg. To the contrary, both Goldberg and Lombardo denied that Goldberg prevented Kantor from falling after he lost his balance. In his statement to Investigator O'Connell during 1984, Kantor again stated that when he lost his balance, he was caught by Goldberg who prevented him from falling. Respondent denied pushing or otherwise attempting to strike or threaten Kantor. Archie Page, a former patient of Respondent, witnessed the incident in August, 1984. Page observed that Kantor appeared mad and taunted Respondent while Respondent was trying to restrain and calm him down. Page observed Goldberg coming out of his office, putting his arms around Kantor and taking him toward the waiting room following the incident, all in an effort to put him at ease. Page denied that Respondent pushed Kantor or that Kantor was ever on the floor. 1/ Resolution of the issue, concerning an alleged battery, although not charged in the complaint, requires a credibility choice between Respondent, his former patient Archie Page and Respondent's two previous employees, Debbie Lombardo and Barry Goldberg. The testimony of former patient Archie Page appears more credible as he has no personal interest in the outcome of the proceedings, his testimony was direct and he appeared most credible during the hearing. Three months after the subject incident, investigator O'Connell went to the offices of Respondent to investigate the incident and interviewed Respondent and Goldberg. During that interview, Goldberg, who was not under oath, stated that Jacob Kantor needed a lot of help as he had a bad psychological problem. Referring to the alleged incident of August 13, 1984, Goldberg stated that, "its possible that I may have seen (Kantor) that day but I don't recall it, and I'd certainly remember seeing him if I was supposed to have seen Dr. Shore strike him. Nothing of this sort ever took place to my knowledge." (T-page 121, lines 14 through page 122, line 17.) Goldberg testified under oath at a deposition in a related civil case that he did not have to lie to the DPR agent because the subject did not come up. Goldberg further testified at final hearing herein that he told the truth when questioned during the course of that deposition. Goldberg again testified under oath at the trial of the related civil case that he did not lie to the DPR agent and that he did not even discuss the incident with the agent. Goldberg, under oath at final hearing herein, again initially testified that he did not discuss the incident with the DPR agent. Finally, Goldberg claimed that he lied by means of withholding information from the DPR agent and that he did so because Respondent threatened to hurt him if he did not lie to DPR's agent. 2/ Respondent did not strike, threaten to, or attempt to strike Kantor at anytime on August 13, 1984. Kantor, as testified by all witnesses, was a demanding and overbearing patient who would show up at Respondent's office, without an appointment and would demand treatment whenever he showed up. Within one week after the subject incident, Kantor came back to Respondent's office seeking treatment for an abrasion and a cyst and wanted a referral to a proctologist. Respondent made the referral and had no further contact with Kantor. Such actions by Kantor is not indicative of a patient who was the subject of an assault and battery at the hands of Respondent.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: Petitioner enter a Final Order dismissing the Administrative Complaint filed herein in its entirety. DONE and ORDERED this 28th day of October, 1988, in Tallahassee, Florida. JAMES E. BRADWELL 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 28th day of October, 1988.
Findings Of Fact THE APPLICANT Petitioners Osteophathic Medical Hospitals, Inc. (OMHI), proposes to build a 120-bed acute care osteopathic teaching hospital in the Hobe Sound area of Martin County. Hobe Sound is located in the south-central portion of the county, along the eastern seaboard. The hospital is intended to serve the needs of both osteopathic and allopathic physicians and their patients but will be openly identified and administered as an osteopathic institution. Osteopathic physicians, under the guidance of the current principals of OMHI, will be responsible for recruitment and organization of the professional staff, along with the development and administration of an osteopathic intern and residency training program. OMHI's application was filed on August 15, 1983, and was deemed complete by Respondent, Department of Health and Rehabilitative Services (DHRS), on October 15, 1983. DHRS reviewed the application and, in January 1984, denied the application. This administrative proceeding followed. OMHI revised its application twice during the pendency of these administrative proceedings, the most recent revision occurring on October 18, 1985. The most outstanding revision is the involvement of Hospital Corporation of America (HCA) in the proposed hospital and HCA's backing and eventual takeover of the project. The revision also based the need for the project on need projected for January 1, 1991. OMHI is a Florida corporation, the shareholders of which are three osteopathic physicians practicing in District IX: Dr. Harold Kirsh, Dr. Michael Longo, and Dr. Albert LaTorra. 0MHI is party to a binding contract with Hospital Corporation of America (HCA), under which HCA has agreed that, if the certificate of need is granted, HCA shall acquire the stock of OMHI and, thereafter, shall construct the proposed hospital and operate it as an osteopathic institution, consistent with the representations included in the CON application. HCA had no such interest in this project when the original CON application was filed in August 1983. OMHI had not intended to involve HCA in this project and, indeed, would have preferred to have proceeded autonomously with development of the hospital. At the time the original application was denied, OMHI had entered into an agreement with a large commercial developer whereby the latter had agreed to finance and construct the hospital if the application were granted. OMHI's original intention was then to employ a professional management company to operate the hospital. When the application was denied, it became necessary to seek another joint venturer to underwrite the anticipated financial burden of the administrative hearing. OMHI representatives contacted various proprietary health care chains to ascertain whether any would agree to underwrite the cost of an administrative proceeding in return for the opportunity to own and operate the new osteopathic facility. OMHI had such discussions with Universal Health Services, Inc. and American Medical International, Inc., in addition to Hospital Corporation of America. Further, Dr. Kirsh inquired whether Martin Memorial would be interested in a joint venture in connection with Martin Memorial's then pending application to construct a satellite hospital in central Martin County on the condition that this latter proposed facility be open to all licensed osteopathic physicians. Ultimately, OMHI elected to enter into the relationship with Hospital Corporation of America. In addition to acquiring the stock of OMHI should this application be granted, HCA has agreed to operate the facility as an osteopathic institution, to insure that the professional staff by-laws comport with the requirements of the American Osteopathic Association, to seek accreditation by the AOA, and to implement an osteopathic intern and residency program. For their part, the principals of OMHI agree to assume responsibility for recruitment and staff of the new facility and for supervision and administration of the proposed osteopathic intern and residency programs. The principals of OMHI already have had such experience in connection with their role in the development of the new osteopathic hospital in Wellington, as well as the development of Community (now Humana) Hospital of the Palm Beaches when it was an osteopathic facility. The principals of OMHI also are parties to the contract and would have a continuing right of enforcement. OSTEOPATHIC MEDICINE AND OSTEOPATHIC TRAINING. The osteopathic profession emphasizes the delivery of primary care. Approximately 80 percent of practicing osteopathic physicians today are engaged in general/family practice. Although there may be increasing numbers of osteopathic students who seek specialty training, more than 70 percent of the osteopathic students graduating today still go into family practice. Because of the profession's commitment to the emphasis upon primary care, the curriculum at osteopathic colleges varies significantly from the course of study at allopathic medical schools. Osteopathic schools require all students to take a broad range of clinical and didactic courses, so that the student is exposed to all medical subject matter. Further, during upper class years, each student is required to take rotating "externships" during which he or she concentrates, for months at a time, on different medical specialities at various osteopathic hospitals. By contrast, the allopathic student typically elects his or her specialty during the medical school years and begins to concentrate on a narrower range of medical subject matter during that time. Upon graduation, the allopathic student continues this specialty training with two or more years of postgraduate training in that particular area. As a result, many allopathic students may complete their entire education without exposure to the broader medical subject matter with which every family physician must have a working familiarity. Osteopathic postgraduate education is also quite different from the allopathic model. Unlike the allopathic student, who continues his specialty training during his postgraduate years, the osteopathic graduate is required to take a one year "rotating internship" at an osteopathic hospital. Again, the emphasis and point of this internship is to prepare the student for family practice because that preparation is the profession's mission. During the internship, the student is required to serve in all of the major hospital departments, including surgery, internal medicine, OB/GYN, family practice and the ancillary departments. Allopathic training and postgraduate programs are accredited by the AMA through the Liaison Committee on Graduate Medical Education. The Liaison Committee has no connection with osteopathic postgraduate programs, which are accredited by the AOA. As a result of this training in general medicine, the osteopathic physician is fully qualified to enter family practice following his or her one- year rotating internship. Florida grants licensure to osteopathic students at that time. In essence, the profession's emphasis on general practice during the student's early medical school years commences his or her "specialty" training in family practice well before graduation and the postgraduate internship. Osteopathic medicine differs from the allopathic school not only in philosophy, but also in the clinical approach to the musculoskeletal system. Osteopathic physicians are trained not only to treat the symptoms of disease through drug therapy but to view disease as dysfunction in a patient's system as a whole. Thus, osteopathic physicians stress a "holistic" approach to the healing arts with emphasis on nutrition and preventive medicine. The distinctiveness of osteopathic medicine arises from its emphasis upon osteopathic manipulative therapy. Manipulative therapy is taught in osteopathic medical schools and is practiced clinically at osteopathic hospitals as an element of the osteopathic focus on preventive medicine and on treating the body's symptoms as an integrated whole. HISTORY OF OSTEOPATHIC DISCRIMINATION. Martin Memorial Hospital is a 336 bed allopathic acute care hospital located in Stuart, Florida. Martin Memorial is located in the northeast section of Martin County and is within the proposed service area of OMHI's planned hospital. Jupiter Hospital is an allopathic acute care hospital located in northern Palm Beach County, just south of the Martin County line. Jupiter Hospital is located approximately 8 to 10 miles from the proposed site of OMHI's planned hospital. Growth of the osteopathic profession in Martin County has been impeded by the policies of Intervenors, Martin Memorial Hospital, Inc. (Martin Memorial), and Jupiter Hospital, Inc. (Jupiter Hospital). To some extent, Martin Memorial and Jupiter Hospital are responsible for the shortage of D.O.S (osteopaths) in Martin County and, if OMHI's facility were opened, more osteopathic physicians soon would move to the area. Both Martin Memorial and Jupiter Hospital had adopted medical staff policies and by-laws intended to preclude osteopathic physicians from qualifying for staff privileges. As Florida law has changed to prohibit this direct discrimination, both adopted new policies which comply with the law but have had the continuing effect of excluding the majority of osteopathic physicians from their respective medical staffs. Martin Memorial. In the early 1970's, the Martin Memorial by-laws seemed to permit privileges for osteopathic physicians by allowing an applicant to offer "equivalent training" as a means of satisfying the educational criteria. Nevertheless, when a fully credentialed osteopathic physician applied for privileges in 1973 that application was denied despite the fact that the applicant presented three letters from allopathic physicians offering "unhesitating" recommendations and documenting his professional skills. In response to that application, the Martin Memorial by-laws were amended to require specifically that an applicant have training approved by the American Medical Association and the Association of American Medical Colleges. Because osteopathic physicians are trained in schools approved by the American Osteopathic Association, all osteopathic graduates were precluded from staff membership by this provision. Martin Memorial similarly relied upon its by-law provisions to deny the applications of Drs. Equi and Shefter, two osteopathic physicians who applied for staff privileges in 1976. In October 1976, Dr. Equi notified Martin Memorial that he had obtained legal counsel and served notice that he intended to challenge the hospital's blanket prohibition of staff privileges for graduates of AOA-approved medical schools. In reaction, the medical staff several months later (January 1977) voted to amend the staff by-laws to permit applications from osteopathic physicians. As with the previous by-laws, however, the new provision had the effect of excluding most osteopathic physicians from the medical staff, since it additionally required all applicants to have two years of postgraduate training recognized by the American Medical Association. As stated above, osteopathic physicians take their postgraduate training at AOA- approved medical schools and hospitals. Although an osteopathic physician may qualify to attend AMA postgraduate programs, in fact few D.O.s choose to do so for example, approximately one percent of the graduating class of SECOM, the Southeastern College of Osteopathic Medicine. In 1979 a new Florida law was enacted, effective January 1, 1980, requiring all hospitals to accord equal treatment to osteopathic and allopathic applicants for staff privileges. Section 395.0653, Florida Statutes (1979). Accordingly, in February 1980, Martin Memorial amended its by-laws to permit training accredited by the American Osteopathic Association as an acceptable credential for privileges at the hospital. Nevertheless, the hospital retained its prior requirement that all applicants have two years of postgraduate education in order to qualify for privileges. The practical effect of the two-year postgraduate education requirement was to exclude the majority of osteopathic physicians from staff positions at Martin Memorial. As stated above, approximately 70 percent to 80 percent of all osteopathic physicians enter general practice, and the AOA requires only a one-year postgraduate internship for licensure because of the concentration on general practice during medical school. The exclusionary effect of the two year postgraduate education requirement is reflected in the experience of Martin Memorial itself. Since the by-law provisions seemingly were amended to permit equal treatment in February 1980, only three osteopathic physicians have obtained admitting privileges, and one of those (Dr. Equi) obtained privileges only as a result of litigation. By contrast, there are approximately 170 allopathic physicians on the Martin Memorial staff, of whom 140 are active and associate members. The earlier discrimination against osteopathic physicians practiced by Martin Memorial, together with the effective exclusion of most osteopathic physicians from the hospital staff today, has caused an undersupply of osteopathic physicians in the Martin County area. Hospital privileges are essential to the establishment of a medical practice in a community today. Privileges are important not only to provide access to hospital facilities, but also to convey to the public that the physician is "good enough to be on a hospital staff." Jupiter Hospital. The first set of medical staff by-laws adopted by Jupiter Hospital in 1979 prohibited osteopathic physicians from staff membership by requiring graduation from a school approved by the AMA's Liaison Committee on Graduate Medical Education and by requiring similar postgraduate training, Like Martin Memorial, Jupiter Hospital agreed to amend its by-laws to permit hospital privileges for D.O.s only when required to do so by changes in Florida law. Nevertheless, when Jupiter Hospital amended those by-laws in 1980, the new provisions relating to osteopathic applications retained the requirement that D.O. applicants have postgraduate training approved by the Liaison Committee on Graduate Medical Education, and those provisions continue to exist today. (Although HCA provides financial management services at Jupiter Hospital, that corporation has no involvement with the hospital's staff by-laws or the granting and denial of staff privileges.) Dr. Harold Kirsh, who lives in the northern Palm Beach County area, has encountered difficulty because he is unable to obtain staff privileges at Jupiter Hospital. Although Dr. Kirsh received two years of postgraduate training in his specialty, he was denied privileges at Jupiter because that training was approved by the American Osteopathic Association rather than the allopathic Liaison Committee on Graduate Medical Education. As a result, Dr. Kirsh has been unable to treat friends, neighbors, and patients in the northern Palm Beach County area who prefer to seek treatment at a hospital near their homes. Proximity to a hospital is a critical factor in a patient's selection of a physician. Osteopathic specialists, although they receive more than one year of postgraduate training, similarly are discouraged from applying for allopathic hospital staff privileges by the two year postgraduate requirement. Because osteopathic specialists rely upon osteopathic general practitioners for referrals, osteopathic specialists are not likely to locate in areas in which the existing hospitals limit access by osteopathic general practitioners. The effect of Jupiter Hospital's past discrimination against osteopathic applicants, and current by-laws indicating that osteopathic physicians who do not have two years of postgraduate training approved by the Liaison Committee on Graduate Medical Education will not be admitted to the staff, is reflected in the fact that only four or five osteopathic physicians have privileges at Jupiter on a medical staff of approximately 140 allopathic physicians (including at least one Bonnie Hubicz, D.O. whose post-graduate training was not approved by the Liaison Committee despite provisions in the By- Laws requiring Liaison Committee approval.) Even if the many osteopathic general practitioner graduates in Florida today desired to obtain more than one year of postgraduate training in family practice, only three or four residency slots offering two years of such postgraduate family practice training are available in the entire state. DHRS. OMHI did not prove that DHRS discriminates against osteopaths or has been purposefully obstructionist in the face of applications for certificates of need for osteopathic facilities. The evidence only proves: (1) that, from its enactment in 1972 as Chapter 72-391, Laws of Florida (1972), DHRS interpreted Section 381.494(2), Florida Statutes, contrary to the interpretation ultimately given by the District Court of Appeal, First District, by its decision in the Gulf Coast case on December 16, 1982; (2) that DHRS has not yet promulgated a rule methodology for determining osteopathic bed need; and (3) that, on a case- by-case basis, DHRS recently has changed the utilization assumptions it has used in determining osteopathic bed need in the face of declining average length of stay and occupancy rates for osteopathic (as well as allopathic) hospitals. No discriminatory intent or effect is inferred from these facts. NEED FOR FACILITY. State Health Plan and District Health Plan. The 1985 Florida State Health Plan provides little guidance with regard to an osteopathic hospital, whether or not a teaching hospital. Page 22 of the Plan establishes the policy guide that "a holistic concept of health is espoused which views man's well-being as a function of the complementary interaction of mind, body, and environment. The holistic concept of health places emphasis on promotion of well-being and prevention of illness." As was previously discussed, osteopathic medicine is founded on the holistic concept of medicine. The development of additional osteopathic facilities and training for osteopathic physicians advances this policy guide of the 1985-87 State Health Plan. Additionally, the State Health Plan notes the applicability of Section 381.494(2), Florida Statutes (1979), and its distinction between allopathic and osteopathic medical practices. Neither the State nor the District IX Health Plan specifically address numerical need for osteopathic hospitals and services. But both address the problem of acute care overbedding and optimal occupancy rates for such facilities. Those portions of the Plans apply equally to osteopathic and allopathic hospitals. The acute care section of Volume II of the 1985-87 State Health Plan emphasizes the ever growing problem and societal expense caused by excess acute care beds in the State. It states that "the combined effect of ambulatory surgery, HMOs, DRGs, and other innovations could reduce acute care bed need for (1989) by 15 percent or more," with the result being fewer acute care beds needed statewide than existed in 1984. The State Health Plan also contains the goal that all acute care hospitals in each district of the state attain an average annual occupancy rate of 80 percent by 1989. The Acute Care Section of the 1985 District IX Health Plan states that the overall annual licensed bed occupancy rate for acute care general hospitals in District IX should equal 80 percent. The local health plan also states that before needed new beds may be approved, the average annual occupancy rate of the applying facility for the most recent calendar year, and the corresponding subdistrict average, should equal or exceed 80 percent. Although this section of the local health plan only addresses "needed beds," as determined by Rule 10- 5.11(23), Florida Administrative Code, its minimum required average occupancy should apply equally before any new acute care beds, including new osteopathic beds, are approved. In 1985, The District IX Local Health Council raised its recommended occupancy levels for medical surgical beds (and its required minimum occupancy before "needed" new beds may be approved) from 75 percent to 80 percent. Citing the Florida Hospital Bed Utilization and Distribution Study, the 1985-87 State Health Plan notes that the concentration of surplus beds occurs primarily in four geographical areas: District IV (Jacksonville), District VI (Tampa), District x (Ft. Lauderdale), and District XI (Miami). The study notes that Districts VI and XI alone accounted for 57.1 percent of the total projected surplus in the state in 1983. The four districts cited accounted for 87.9 percent of the state's bed surplus. The Existing Osteopathic Facilities and Services. Wellington Medical Center is an approved, 120 bed osteopathic hospital in Palm Beach County. Humana Hospital Palm Beaches is listed as an osteopathic hospital in the 1985-86 Yearbook and Directory of the Florida Osteopathic Medical Association. Humana Hospital Palm Beaches is listed as an accredited osteopathic hospital in the American Osteopathic Association's 1984-85 Yearbook of Osteopathic Physicians. The American Osteopathic Association, Division of Accreditation, on October 15, 1985, directed a letter to Jennings, Ryan, Federa & Co. which stated: The institution Humana Hospital Palm Beaches 3 was surveyed and examined by a survey team earlier this year. The Committee on Hospital Accreditation examined the survey report and made a recommendation for continuing approval of the institute that was acted upon by our Board of Trustees at its July, 1985 meeting. The Humana Hospital Palm Beaches is accredited by the American Osteopathic Association and has an internship program that is also accredited by that organization. Approximately 22 percent of the admitting medical staff at Humana Hospital Palm Beaches is composed of osteopaths. Of 150 total on the staff in 1983, 50 were osteopaths. Now 50 of approximately 200 on the staff are osteopaths. Humana Hospital Palm Beaches' governing board has one D.O. member and one M.D. member. Approximately 44 percent of Humana Hospital Palm Beaches' patient admissions in February 1985 were by D.O.s. The hospital's D.O. admissions are "approximately 50/50." The medical staff by-laws of Humana Hospital Palm Beaches provide that the position of chairman of each department be held by an osteopath every other year. The chairman and vice- chairman, one of whom is an allopath and one of whom is an osteopath, rotate positions annually. Similarly, the office of chief of staff is alternated between an allopathic and an osteopathic physician. Humana Hospital Palm Beaches has an Osteopathic Methods and Concepts Committee which meets regularly. It has an organized Department of Osteopathic and Family Medicine. There is also an Accreditation Committee whose duties include assuring "that the hospital is presently, and in the future, in compliance with the accreditation standards of the American Osteopathic Association." Humana Hospital Palm Beaches (Humana) has numerous attributes of an osteopathic hospital. Based on the testimony and record of this proceeding, there is little difference between the osteopathic attributes of Humana Hospital Palm Beaches and the osteopathic attributes proposed for OMHI's proposed hospital. From a health planning standpoint, osteopathic services rendered at Humana Hospital Palm Beaches should be counted among the available osteopathic services in District IX. Humana has always had osteopathic manipulation tables. The hospital's osteopathic internship program is currently training eleven interns. The reason Humana responded to OMHI's interrogatories stating that it is not an osteopathic facility was its administrator's understanding that "osteopathic hospital" meant totally osteopathic with no allopathic participation. Although the Humana Hospital's obligations to maintain AOA accreditation and to operate an intern program for osteopathic physicians are the result of a law suit settlement Humana has no plans to discontinue the AOA accreditation or the intern training program. There is no basis to assume that Humana will discontinue the osteopathic services now offered. Under the terms of that settlement agreement, Humana's compulsion to operate an intern program lapses this year. Similarly, Humana's obligation to refrain from any effort to amend the medical staff by-laws, which provide for the rotation of department chairmanships between M.D.'s and D.O.'s, terminates five years after the settlement date (1987). In addition to the Humana and Wellington facilities, osteopathic services are offered at other area acute care hospital that have osteopaths on their staffs, including Martin Memorial and Jupiter. Bed Need. In part, OMHI proposes two supply-based methods for use in projecting the number of osteopathic beds needed in District IX. A supply-based method attempts to project bed need by multiplying a physician use rate by the number of physicians projected to be practicing in an area in the future. For several reasons, the statewide supply-based methods OMHI proposes are unreliable. First, in general it is more appropriate to base need projections on population use rates and projected population. It is the sick portion of the population represented by the population use rates and population that generates bed need, not the supply of physicians (whether allopathic or osteopathic.) Generally, it should be assumed that physicians follow the sick population, not vice versa. Second, it is more accurate to project population than it is to project the number of physicians expected to be practicing in an area. Being a much smaller group than the population as a whole, projections of the number of osteopaths expected to be practicing in an area in the future are more affected by variables other than passing of time than are population projections. In addition, because the current number of osteopaths in District IX is significantly influenced by the variables of past allopathic hospital staff privilege policies, as discussed above, it is even more difficult to project the number of osteopaths expected to be practicing in District IX in the future. Adding to this inherent unreliability, OMHI's expert witness may not have plotted the data points correctly in performing his regression analysis, a significant error when one has only ten data points with which to work. Third, a statewide supply-based method must assume that the percentage of physicians who do not actively practice in the area in question is the same as the percentage of physicians who do not practice in the area used to obtain the physician use rates. For example, as of November 1985, there were approximately 121 osteopaths in Districts IX, but only 88 were practicing. The use rate used by OMHI in its statewide supply-based method is a use rate for osteopathic hospitals throughout Florida. There was no evidence that the same percentage of active osteopaths in District IX, i.e., approximately 73 percent, obtains statewide. Fourth, the osteopath use rate incorporated in OMHI's statewide supply-based method includes both osteopath and allopath admissions at osteopathic hospitals throughout the state. The method must therefore assume that there is one osteopath admission at an allopathic hospital for each allopath admission included in the admission statistics of the osteopathic hospitals. There is no evidence supporting the validity of this assumption, but the assumption is reasonable given the limitations of the available data. OMHI also, in part, proposes a type of supply-based method for determining osteopathic bed need referred to as the "Wellington rate." The "Wellington rate," so called because it was used by OMHI to support its application to construct the Wellington osteopathic hospital in Palm Beach County, actually uses the statistics generated at Humana Hospital Palm Beaches. The Wellington rate isolates osteopath admissions at the Humana Hospital and applies the resulting use rate to the projected number of osteopaths expected to be in District IX in the future. It therefore does not suffer from the weakness noted in paragraph 53(d.) above. But it does share the other weaknesses of a supply-based method set-out in paragraph 53., plus one. The problem referred to in paragraph 53.(c) above is exacerbated in OMHI's "Wellington rate method" because it uses only 33 heavy admitting osteopaths to generate its osteopath use rate but multiplies the resulting use rate by all osteopaths expected to be in District IX in the future, whether admitting, active or inactive. OMHI'S Wellington rate method therefore assumes that all the osteopaths expected to be in District IX in the future will be active and just as heavy admitters as the 33 heavily admitting osteopaths now on the staff of the Humana Hospital, the only osteopathic hospital in District IX at this time. Such an assumption is unreasonable. It is more reasonable to assume that, if the Wellington rate is used, future osteopathic bed need will be the product of the Wellington rate and the number of admitting osteopaths projected to be actively practicing in District IX on the relevant planning horizon. As alluded to earlier, a population-based method for determining bed need generally is preferable to a supply- based method. But because of the limitations of available data, the population-based method used in part by OMHI to project osteopathic bed need has weaknesses, too. Because there is only one hospital in District IX that has a substantial number of osteopath admissions, the choice of population-based use rates is between a "Wellington" population-based rate and a statewide osteopath admission rate. If the statewide rate is used, it assumes that the statewide use rate "fits" District IX. There was no evidence supporting this assumption. To the contrary, the evidence was, e.g., that use rates in 1984 at osteopathic hospitals in the state (excluding irrelevant obstetrical and psychiatric admissions where possible) varied from a low of approximately 12.5 patient days per 1,000 population in District VI to a high of 113 in District V, with an average of approximately 45. Because the statewide osteopathic use rate is obtained from the use rates at osteopathic hospitals, as is the rate for the statewide supply-based method, it shares with that supply-based method the weakness of requiring an assumption that there is one osteopath admission at an allopathic hospital for each allopath admission counted among the admissions at the osteopath hospital. Finally, population-based methods share with supply-based methods the difficulty of trending declining use rates forward to the relevant planning horizon. Each of three methods statewide supply-based, the Wellington rate, and statewide population-based have weaknesses which make it unwise to determine osteopathic bed need exclusively-on any one of them. The most rational approach is to average the three in the hopes of obtaining the best projection. There was insufficient evidence on which to conclude that the average should be weighted in any way. The best population-based approach available from the evidence in the record would use a statewide use rate of 42.39 patient days per 1,000 population. This use rate is derived by taking twice the total patient days at all AOA accredited hospitals in Florida, excluding irrelevant obstetrical and psychiatric admissions to the extent possible, for the first half of 1985 and dividing the total by the total population of the districts in which those hospitals are located. Using Tampa Bay Community Hospital, not AOA accredited, as part of the data base to generate the use rate is specifically rejected as unreasonable; likewise, not using Humana Hospital Palm Beaches, under the facts of this case, is specifically rejected as unreasonable. In addition, it is not reasonable to include irrelevant obstetrical and psychiatric admissions in the numbers generating the use rate. On these points, the testimony of Martin Memorial's expert, Judy Horowitz, is accepted, and the contrary testimony of OMHI's expert, Phillip Taylor, and HRS' expert, Elizabeth Dudek, is rejected. The formula for using the statewide population-based use rate of 42.39 to projection bed need is: Bed Need = 42.39 patient days x Population divided by 1, 000 365 days/yr divided by 80 percent occupancy standard Population for District IX is projected to be: 1,145,423 on July 1, 1988 1,218,311 on July 1, 1990 1,235,361 on January 1, 1991 Using the formula, osteopathic bed need under the statewide population-based method would be: 166 on July 1, 1988 177 on July 1, 1990 179 on January 1, 1991 For comparison purposes, if the use rate were obtained by dividing the total patient days by the population only of the counties, instead of districts, in which the hospitals are located, the bed need would be: 233 on July 1, 1988 248 on July 1, 1990 251 on January 1, 1991 The "old" Wellington rate first suggested by OMHI for use in projecting osteopathic bed need is obsolete and should not be considered. The "new" and more appropriate Wellington rate is 618 patient days per osteopath. But OMHI proposes to multiply that rate by the total of all osteopaths projected to be in District IX on the relevant planning horizon although the "new" Wellington rate is generated by dividing total osteopathic patient days at the Humana Hospital only by the admitting osteopaths. This methodology is rejected. It results in an unreasonably high bed need projection. Instead, the "new" Wellington rate should be multiplied only by the number of admitting osteopaths expected to be practicing in District XI on the relevant planning horizon. No party explicitly offered a method of projecting the number of admitting osteopaths expected to be practicing in District IX in the future. However, there was evidence that, of the 121 osteopaths registered by the Department of Professional Regulation as residing in District IX on November 1, 19B5, only 33 were the heavily admitting osteopaths whose admissions from January to June 1985 resulted in the "new" Wellington rate. Using Horowitz' linear regression analysis, which is specifically accepted as more reliable than Taylor's (since Taylor could not testify whether he plotted the ten data points correctly), the number of admitting osteopaths expected to be practicing in District IX in the future can be projected by the formula: Y 33 + 0.756 X where Y number of osteopaths And X number of months after January 1985 Using that formula: Y on July 1, 1988 33 + 0.756(42) 65 Y on July 1, 1990 33 + 0.756(66) 83 Y on January 1, 1991 33 + 0.756(72) 87 Multiplying the "new" Wellington rate of 618 by the number of admitting osteopaths expected to be practicing in District IX yields the following bed need projections: Bed Need 7/1/88 618 patient days x 65 D.O.s divided by D.O. 365 days/yr 80 percent occupancy standard = 138 Bed Need 7/1/90 618 patient days x 83 D.O.s divided by D.O. 365 days/yr 80 percent occupancy standard = 176 Bed Need 1/1/91 618 patient days x 87 D.O.s divided by D.O. 365 days/yr 80 percent occupancy standard = 184 Finally, there is evidence supporting a statewide supply-based method of projecting osteopathic bed need. The statewide use rate of 313.24 admissions per osteopath suggested by Horowitz is specifically accepted as more reasonable than the use rate of 369.2 suggested by Taylor and Dudek. See paragraphs 61 and 62 above. Since the statewide use rate is obtained by dividing total osteopathic admission by total osteopaths registered with the Department of Professional Regulation, it is appropriate to multiply the statewide use rate by the total number of osteopaths Horowitz' linear regression analysis projects will be in District IX on the relevant planning horizon. Again, Horowitz' linear regression analysis is preferred as more reliable than Taylor's. The statewide supply-based method described in paragraph 70 yields the following results: Bed Need 7/1/88 313.24 patient days x 141 D.O.s divided by D.O. 365 days/yr 80 percent occupancy standard = 151 Bed Need 7/1/90 313.24 patient days x 159 D.O.s divided by D.O. 365 days/yr 80 percent occupancy standard = 171 Bed Need 1/1/91 313.24 patient days x 164 D.O.s divided by D.O. 365 days/yr 80 percent occupancy standard = 176 The results of the three applicable osteopathic bed need methods population-based, statewide supply-based, and Wellington rate supply-based, as revised based on the evidence in this case can be summarized: Population- Statewide Supply- Revised Wellington Average Based Based Rate Supply-Based 7/1/88 166 151 138 152 7/1/90 177 171 176 175 1/1/91 179 176 184 180 Since there already are 120 approved osteopathic beds at Wellington and approximately 81 of the Humana Hospital's 162 beds are used to render osteopathic services, there is no raw bed need for OMHI's proposed 120-bed osteopathic hospital. Area hospitals have a high seasonality factor of approximately 122 percent of average. Occupancy in a hospital above 90 percent at any time created quite a few problems with regard to a patient's ability to receive inpatient care. Any time one deals with an occupancy rate above 90 percent, particularly when some rooms are semi-private, one must be concerned about the type of patients, infectious disease control, and other serious problems that can arise in terms of ability to admit a patient. But the peak season high utilization still does not justify the addition of 120 beds in District IX. It would be more accurate to subtract beds at an osteopathic facility filled by allopathic physicians from osteopathic bed inventory. But it is impossible to do this from the evidence in this case. The only osteopathic hospital in District IX (excluding Humana) is not yet operating. In addition, it would logically follow that a pro rated portion of all osteopathic admissions at all allopathic hospitals in District IX also would have to be added to the inventory, an impermissible result under the law. Consideration of the beds at the Humana Hospital serving osteopathic patients is based on the uniqueness of the Humana Hospital, as more fully described above. Health Planning Horizon. Because of the length of lead time necessary to plan new construction of a 120-bed hospital facility and to open the facility to the public, it is reasonable from a health planning viewpoint to determine whether a new hospital is needed based upon the need for the facility projected five years from the completion date of the application or, if there are formal administrative proceedings, five years from the final hearing in the administrative proceedings. DHRS has in the past followed a non-rule policy of projecting need for all acute care hospitals, allopathic and osteopathic, five years into the future from the completion date of the application or, if there are formal administrative proceedings, from the final hearing in the administrative proceeding. There was no evidence that DHRS has decided whether or how to re- formulate its policy in light of the recent decision in Gulf Court Nursing Center vs. Department of Health and Rehabilitative Services, 10 FLW 1983 (Fla. 1st DCA 1985), clarified on rehearing, 11 FLW 437 (February 14, 1986.) Other Need Considerations. Although the evidence was that only approximately 10 percent of the population as a whole prefers to use osteopathic physicians, the evidence demonstrates a shortage of osteopaths in Martin County. Past history of discrimination and current staff privilege policies at area hospitals have contributed to the shortage, as previously explained in more detail. Only three osteopaths are on Martin Memorial's staff of approximately 173 physicians, and Jupiter Hospitals's staff of approximately 145 physicians includes only 4 or 5 osteopaths. There are only two osteopaths in all of St. Lucie County. OMHI's proposed osteopathic hospital would attract osteopaths to the area and help alleviate the shortage. There also is a shortage of osteopathic internship and residency programs. Only eight of the fifteen osteopathic hospitals in Florida have internship programs. (In addition, the osteopathic Wellington hospital being built by OMHI will have an internship program with the Southeastern College of Osteopathic Medicine.) Those programs cannot accommodate Florida graduating osteopaths, much less the net influx of out-of-state graduates who desire to intern in Florida. Only three to four osteopathic hospitals in the country offer residency programs for osteopaths, one of which fortunately is located in Florida. OMHI's proposed teaching hospital with internship and residency programs might help meet the need for such programs. However, low and declining utilization at existing osteopathic facilities will adversely impact the viability of osteopathic intern programs already existing in Florida. A hospital with a low utilization rate would have difficulty supporting such a program. Stated conversely, a hospital with adequate utilization of 75 percent or more would have more opportunity to train students. Currently, only eight of the fifteen osteopathic hospitals in Florida are able to offer such programs. Given the decline in osteopathic utilization which will be discussed below, the approval of OMHI's proposed hospital could further decrease utilization at existing and approved osteopathic facilities and jeopardize the existing program at Humana and the proposed program at Wellington, as well as OMHI's own proposed program. OMHI did not prove that it has studied and found not practicable less costly and less efficient alternatives for meeting the need for osteopathic internship and residency programs in Florida. Those alternatives include the expansion or formation of internship and residency programs at the existing Florida osteopathic hospitals, especially the seven which have no such programs at this time. The other alternative would be for HCA to operate one or more of its existing allopathic hospitals in manner similar to the way in which Humana Hospital Palm Beaches is operated. If, for example, HCA's Port St. Lucie or Lawnwood Memorial Hospital, both in St. Lucie County, could be operated as Humana Hospital Palm Beaches is, HCA could help meet the need for osteopathic hospital beds and internship and residency programs in District IX in a less costly and more efficient manner. ACCESSIBILITY. The only substantial and persuasive evidence on accessibility to osteopathic services and hospitals was that most of Martin and all of St. Lucie and Indian River Counties would be more than a thirty minute drive from Humana Hospital Palm Beaches and the proposed Wellington Hospital. This would be more than 10 percent of the total population of District IX. However, OMHI did not prove that a thirty minute drive time is the appropriate standard for geographic accessibility to osteopathic services and hospitals. Nor did OMHI prove that such accessibility to 90 percent of the total population of the district is the appropriate standard in this case. Although DHRS has by rule made geographic accessibility within a 30 minute drive time in urban areas for 90 percent of a district's population the standard for all acute care hospitals under Rule 10-5.11(23)(i), Florida Administrative Code, those standards cannot logically be used to measure osteopathic accessibility since only approximately 10 percent of the population prefers to use osteopathic physicians. There was no competent proof what osteopathic geographic accessibility standard should be applied in this case. Nor was there proof that there are no osteopathic facilities or services in adjoining districts that are accessible to remote parts of District IX. Finally, there was no proof how accessible OMHI's proposed hospital would be to the most northern parts of District IX. Nor was there proof that the Rule 10-5.11(23)(I) standard for accessibility to acute care hospitals (either allopathic or osteopathic) is not satisfied in District IX. The evidence suggested that the standard is satisfied. OMHI estimates that 2.5 percent of its patients will be Medicaid patients. UTILIZATION. Utilization of acute care hospitals is declining. The reasons for the decline are the dramatic changes which the health care industry has undergone since 1983. The primary reason has been the shift in 1983 to the Medicare prospective payment system, otherwise known as DRGs. The DRG system changed Medicare reimbursement from cost base to a set reimbursement based on type of illness. The effect of this change has been primarily to sharply decrease the average length of stay of Medicare patients. Other causes of decline in utilization include an increased emphasis on utilization review and the use of outpatient services such as outpatient surgery and home health services. In many areas of the country, preferred provider organizations (PPO's) and health maintenance organizations (HMO's) also have impacted hospital occupancy rates significantly, lowering lengths of stay and admission rates. As specifically recognized by the State Health Plan, "the emergence of these alternative delivery systems ... have exacerbated declining occupancy rates." In District IX, average lengths of stay have declined in acute care hospitals as follows: 1983 6.9 First half of 1984 6.5 1984 6.2 First half of 1985 6.2 During the same time periods, occupancy rates in District IX acute care hospitals have declined as follows: 1983 73.7 First half of 1984 72.3 1984 65.8 First half of 1985 64.7 Statewide, average lengths of stay in osteopathic hospitals have declined as follows: 1983 7.9 First half of 1984 7.1 July 1, 1984 thru June 30, 1985 6.9 During the same time periods, occupancy rates at osteopathic hospitals throughout the state have declined as follows: 1983 50.4 1984 43.3 July 1, 1984 thru June 30,1985 39.9 Meanwhile, at Humana Hospital Palm Beaches, the only hospital in District IX with significant osteopathic admissions, average lengths of stay declined as follows: 1983 7.7 1984 6.8 First half of 1985 7.4 Occupancy rates at Humana Hospital Palm Beaches declined as follows: 1983 82.9 1984 76.9 First half of 1985 67.2 Generally, utilization of medical/surgical beds have declined faster than overall hospital bed utilization. For example, occupancy rates at Humana, Jupiter and Martin Memorial have declined as follows: 1983 1984 Semiannual 1984 1985 Semiannual Jupiter 71.4 67.8 58.2 59.9 Martin Memorial 74.8 71.2 66 68.3 Humana 82.7 85.8 76.9 66.9 The low average occupancy rates for District IX do not include over 700 beds in District IX which have been approved but have not yet been licensed (120 of which are at the Wellington facility). Underlying part of OMHI's need and utilization projections has been the contention that an osteopathic hospital will attract new osteopathic physicians to an area in sufficient numbers to adequately utilize a facility. However, the utilization evidence in this case does not support this "magnet effect". If this magnet effect were a valid principal upon which to base need or utilization projections, one would expect the existing osteopathic facilities in Florida to have attracted sufficient osteopaths to support reasonable utilization of those facilities. The fact of low and falling osteopathic utilization in Florida, rather than supporting such a contention, casts serious doubts on the ability of any osteopathic facility to achieve adequate utilization. It is probable that utilization will decline somewhat more before the decline bottoms out. It is highly unlikely that utilization will increase in the next five years. OMHI's ABILITY TO PROVIDE QUALITY CARE. OMHI and HCA possess the ability to provide quality care at the proposed acute care hospital. Several doctors of osteopathy have expressed an interest in practicing in the area if an osteopathic hospital is located there and others would be attracted. HCA owns approximately 35 hospitals in Florida. It owns or operates 420 hospitals throughout the world. It has assets of 4 billion dollars and has committed the approximately 23 million dollars that will be necessary to construct and begin operation of this facility. It has a one billion dollar line of credit as a part of its general debt capability. It can attract the manpower and other resources necessary to operate OMHI's proposed hospital. The principals of OMHI have the credentials and experience to recruit a qualified staff of osteopathic physicians. The staffing of the hospital would be accomplished in part by interns who will be a part of the hospital's teaching program. The American Osteopathic Association has no particular staffing requirements for osteopathic teaching facilities. Over the years, it is likely that students who receive internship, externship and residency training at OMHI's proposed hospital will remain in the vicinity. There is ample medical staff personnel available to support OMHI's proposed hospital. METHOD OF CONSTRUCTION. OMHI proved that the cost and methods of construction of the proposed hospital can be expected to be reasonably energy-and-cost-efficient. I. FINANCIAL FEASIBILITY. As previously mentioned, HCA has the financial ability to construct and begin operating OMHI's proposed hospital in the short term. However, OMHI did not prove the long-term financial feasibility of its proposed hospital. The evidence presented by OMHI's experts on the long- term financial feasibility of the proposed hospital were dependent upon the accuracy of the osteopathic bed need projections of Dr. Philip Taylor. As previously discussed, Dr. Taylor's need projections erroneously inflated the osteopathic bed need. For these and other reasons, the testimony of OMHI's financial experts was based upon erroneous assumptions and did not prove long- term financial feasibility. The Site Of OMHI's Proposed Hospital. OMHI does not yet know exactly where the proposed location of the hospital is. Hobe Sound, where the proposed OMHI hospital is to be located, is near the northern border of Jonathan Dickinson State Park. Jonathan Dickinson State Park is a large, unpopulated park area. There is no evidence that either HCA or OMHI can purchase property in or around Hobe Sound that is appropriate for a proposed hospital for a price at or below 1.5 million dollars. Zoning Considerations. To construct an acute care hospital in the vicinity of Hobe Sound, the property must be designated "institutional" under the Martin County Comprehensive Plan. According to the Zoning Administrator of Martin County, the lands in the vicinity of Hobe Sound that are designated "institutional" are south of Bridge Road along U.S. 1 somewhat adjacent to Jonathan Dickinson State Park. This property was so designated because the Hobe Sound Company, which owns the "institutional" designated lands, wanted to keep residential development off of the property. This would insure that their well fields would not be encroached upon by small subdivisions. No evidence was adduced that any of this property is for sale, could be purchased by HCA within its budget, or is appropriate for a hospital. The only other "institutional" land near Hobe Sound is owned by Martin County for park sites, fire halls, and uses of that nature. No applications are pending to designate other lands "institutional" in the Hobe Sound area. The only time such applications can be made is between September 1 and October 31 of each year. The earliest OMHI could apply for such a designation, therefore, is September 1, 1986. Typically, it would take at least until April, 1987 to approve a change in designation to "institutional." Other building and zoning approvals necessary to construct a hospital would take until approximately the middle of 1987. OMHI's CON application projects that "continuous" construction would be underway in October, 1986. According to existing zoning and land use requirements in Martin County, it is likely that construction of the proposed hospital could not begin until at least mid-1987, some nine months behind schedule, assuming necessary approvals are successfully obtained. If construction of OMHI's proposed hospital was delayed longer than six months, HCA would have to rebudget the project. Forecasted Utilization. OMHI's forecasted utilization for its proposed hospital suffers from several flaws. OMHI's forecasted utilization at its proposed hospital is based upon OMHI's need analysis. In forecasting 1988 utilization, OMHI did not consider the timing difference between the need projection it issued (July, 1990) and the proposed opening date of the hospital (January, 1988). Because the need for osteopathic beds is less in 1988 than in 1990, basing a utilization forecast on 1990 need would result in an overestimate of patient days. OMHI assumed an average length of stay of 6.9 days in its bed need calculation, yet the projected average length of stay used by OMHI's financial expert at the proposed hospital is 5.8 days. If the average length of stay in January 1988 is 5.8 days, use of 6.9 will have resulted in an overestimate of need and, thus, an overestimate of utilization. OMHI projects a first year of occupancy at the proposed hospital of 51.7 percent which is greater than the average experienced in 1984 by all existing Florida osteopathic hospitals. The 15 AOA accredited hospitals in Florida experienced an aggregate acute care occupancy rate of 42.5 percent in 1984. None of those 15 hospitals is a start-up facility like OMHI proposes. None of the occupancy levels of other existing osteopathic hospitals even approached OMHI's 75 percent estimate of occupancy for the second year at the proposed new hospital. The aggregate acute care occupancy for all existing District IX hospitals in 1984 was 65.8 percent. Only 3 of 18 existing hospitals experienced occupancies greater than 75 percent in 1984. There will not be a sufficient number of osteopaths in the Martin-St. Lucie primary service area in 1988 and 1989 to reach OMHI's projected occupancy levels. Even if all the growth in the supply of osteopaths projected for 1988 or 1989 by OMHI for District IX occurred in only Martin and St. Lucie Counties, OMHI's utilization forecast is not supported. All of this goes to show that OMHI's need analysis was faulty and over-estimated the need for osteopathic beds in District IX, as previously discussed. Financial Feasibility Of The Proposed Hospital To evaluate the financial feasibility of OMHI's proposed project, OMHI's expert used a computer model. The computer model used by OMHI's financial expert incorrectly includes all insurance costs, including malpractice insurance costs and liability insurance, rather than just insurance that is rightfully associated with capital costs, to determine capital cost reimbursement by Medicare. The impact of including all insurance in allowable capital costs depends upon the Medicare payor mix. If that Medicare payor mix is about 60 percent, the impact of including all insurances would erroneously increase the bottom line of OMHI's pro forma. OMHI's financial expert used three different hospitals in the development of payor mix assumptions: Lawnwood Medical Center, Port St. Lucie Hospital, and Doctors General Hospital in Lake Worth. In assuming a 55 percent payor mix of Medicare patients, OMHI's financial expert did not know the percent of persons that are 65 and over in either the Hobe Sound area, Martin County, or District IX. One of the hospitals that OMHI's financial expert considered in assuming a 55 percent Medicare payor mix was Lawnwood, which has an obstetric/gynecology department. OMHI's application does not propose OB/GYN. Using Lawnwood's experience in determining the payor mix for the proposed hospital without making any adjustment is unreliable because people 65 and over do not use obstetric programs. Assuming a 55 percent Medicare payor mix for OMHI's proposed hospital was inappropriate. A Medicare payor mix of between 60-65 percent would be more in keeping with the demographics of the Hobe Sound area and Stuart and to the south. OMHI's financial expert failed to include emergency room physician fees in his analysis even though the proposed hospital will offer a 24 hour a day emergency room. The hospital is unlikely to generate sufficient emergency room revenues in its first 2 years of operation to cover the total expense of having emergency room physicians. OMHI's assumption of physician fees is understated. Staffing an emergency room with qualified physicians could cost $500,000 a year, $125,000 to $250,000 of which would have to be subsidized by OMHI. OMHI's financial expert inappropriately assumed that annual inflation would be 5 percent on both the expense side and the revenue side of his analysis. Rate Controls, a publication relied upon by financial professionals, shows all expense inflation rates above 5 percent. A higher inflation rate for expenses should have been used by OMHI's financial expert, recognizing the different components of inflation. Very few expense components will experience rates less than 5 percent. HCA's acquisition costs of the project are not included in the analysis performed by OMHI's financial expert. These costs should have been accounted for under generally accepted accounting principles. OMHI's financial expert erroneously assumed the same fixed amounts of $559,000 for deductions from revenue for 1988 and 1989 Medicaid and outpatient Medicare contractual allowances. Using fixed amounts in this manner illustrates a lack of understanding of the reimbursement system or an inability of OMHI's computer model to properly reflect how the system works. To assume these amounts would be fixed is totally erroneous. The bottom line profitability projected by OMHI's financial experts, approximately $3,000,000 before taxes after the second year, is not believable. Martin Memorial's financial feasibility expert, Robert Smith, prepared an alternative financial statement which reflects estimates and assumptions that more appropriately reflect the financial outcome of the proposed OMHI hospital in its first 2 years of operation. Mr. Smith's alternative assumptions reflect that the OMHI hospital will lose approximately $1.8 million dollars in its first year and $1.9 million dollars in its second year. The break-even analysis performed by OMHI's financial expert is not a valid analysis of the projected break- even point of OMHI's proposed hospital. OMHI's financial expert assumed in his break-even analysis that many of the projected expenses at the proposed hospital would be 100 percent variable. For example, physician fees and other fees, supply expenses, leases, rentals and repairs. It is inappropriate and erroneous to treat such items as totally variable. OMHI's financial expert's break-even analysis concludes that that proposed hospital will break-even with an average daily census of 35 or an occupancy of about 29 percent. A hospital, and particularly a 120-bed teaching hospital, is unlikely to break even at an average daily census of 35. Over a five-year period, using the more reasonable assumptions employed by Martin Memorial's expert, OMHI's hospital is not financially feasible. The hospital probably would lose a significant amount of funds in its fifth year of operation. IMPACT OF THE OMHI HOSPITAL ON COMPETITION. OMHI'S original CON application, on page 18, contained a discussion about HCA's impact on the market in the area of its proposed hospital to the north and west through its Lawnwood and Port St. Lucie Hospitals in St. Lucie County and H. H. Raulerson Hospital in Okeechobee County. OMHI stated in that initial application that its application would "bring competition to a health care market now dominated exclusively by Hospital Corporation of America and Martin Memorial Hospital." This discussion was omitted from the application after HCA became involved as a future owner of OMHI. Approval of the OMHI hospital would give HCA the opportunity to increase its impact on the health care market in and near the Martin-St. Lucie metropolitan statistical area. HCA would own three out of the four hospitals in Martin and St. Lucie Counties. In addition, Raulerson Hospital in Okeechobee County is owned by HCA. (Jupiter is managed by HCA but is not owned by HCA and HCA does not control policy there.) But approval of the OMHI hospital would not enable HCA to set prices and salaries in the area or take away the charge-paying patients, leaving the nonpaying patients. Only the primary service areas of Martin Memorial and Port St. Lucie overlap with OMHI's proposed service area. Even with OMHI's additional 120 beds, Martin Memorial still would have more beds than OMHI and Port St. Lucie. The OMHI Hospital would further HCA's advantage over Martin Memorial in the CON process. For example, Lawnwood and Martin Memorial are at present competing for an open-heart and cardiac catherization CON in the same batch. Martin Memorial faces an uphill battle because Lawnwood can draw upon a network of referral base hospitals, such as Port St. Lucie, Raulerson in Okeechobee, and perhaps others to the south. Given the lack of need for 120 osteopathic beds and the current under-utilization of allopathic hospitals in District IX, it should not be expected that OMHI's additional competition will promote quality assurance or cost effectiveness. To the contrary, the additional hospital services probably would result in duplication of services, higher costs and economic pressures to sacrifice quality assurance for cost considerations. MORE COST-EFFECTIVE ALTERNATIVES. HCA owns the Port St. Lucie, Lawnwood Memorial and H. H. Raulerson hospitals. Virtually no osteopaths practice at any of them. If HCA would operate those hospitals as Humana Hospital Palm Beaches is operated, the future need for osteopathic services and hospitals and internship and residency programs in District IX could be met more efficiently and at a lower cost. OMHI did not prove that it explored those alternatives and found them not to be practicable. There are now approximately 15 osteopathic hospitals in Florida, but only eight have internship or residency programs. If such teaching programs could be established at those hospitals, any additional need for them in Florida could be met in a more efficient and less costly manner than by building a hospital that is not otherwise needed. OMHI did not prove that it has explored those alternatives and found them not to be practicable. IMPACT OF THE PROPOSED HOSPITAL ON MARTIN MEMORIAL, JUPITER, AND NME. If the proposed hospital succeeds and fills with patients, it will negatively impact both Martin Memorial and Jupiter Hospitals. It would introduce another 120 beds, which are not physically any different from available beds. Jupiter Hospital has received 15 percent of its patients from the Hobe Sound area for the last few years. Jupiter Hospital is a fifteen minute drive from Hobe Sound. The OMHI hospital would have a substantial effect on Jupiter's market in the Hobe Sound area. It would impact substantially on Jupiter's financial viability. The OMHI hospital could result in Jupiter Hospital eliminating some services that it now makes available to the community. The OMHI hospital would probably result in another reduction of staff at Jupiter. The OMHI hospital probably would cause an increase in patient charges at Jupiter Hospital. National Medical Enterprises, Inc., d/b/a West Boca Raton Medical Center (NME), applied for a certificate of need to add 15 allopathic obstetrical beds at its hospital. The NME application was reviewed in the same batching cycle as the OMHI application. Approval of the OMHI application would decrease the net need for acute-care allopathic beds under Rule 10-5.11(23), Florida Administrative Code, and substantially impact NME's application.
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that Respondent, Department of Health and Rehabilitative Services, deny the application of Osteopathic Medical Hospitals, Inc., for a Certificate of Need for an osteopathic hospital in Martin County, CON Action No. 2842. RECOMMENDED this 8th day of April, 1986, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 8th day of April, 1986.
The Issue Whether the Respondent committed the violations set forth in the Amended Administrative Complaint dated November 19, 1998, and, if so, the penalty which should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Board of Osteopathic Medicine is the entity responsible for imposing discipline on those licensed in Florida as osteopathic physicians. Section 459.015(2), Florida Statutes. The Department of Health is the state agency responsible for investigating and prosecuting disciplinary cases in which a probable cause panel of the Board of Osteopathic Medicine has found probable cause to support the filing of a formal complaint against a licensee. Section 455.621(4), Florida Statutes. Christopher Wayne, D.O., was at the times material to this proceeding, and is currently, a licensed osteopathic physician in the State of Florida, specializing in family practice and certified by the American Osteopathic Board of Family Physicians. Dr. Wayne operated at the times material to this proceeding, and currently operates, a primary care medical practice under the name of Dr. Christopher Wayne, D.O., Incorporated ("Company"). At the times material to this proceeding, the Company's office was located on the fifth floor in a building adjacent to the Mount Sinai Medical Center in Miami Beach, Florida. At the times material to this proceeding, Dr. Wayne and the physicians employed in his practice had staff privileges at several hospitals and medical centers in the Dade County area. However, at the times material to this proceeding, Dr. Wayne did not have staff privileges at Parkway Regional Medical Center ("Parkway"). At least one physician employed by the Company, Agustin Andrade, had staff privileges at Parkway. Dr. Wayne began discussions with Agustin Andrade with respect to his possible employment by the Company as a family practice physician in or around June 1995. Dr. Andrade is a medical doctor who completed a three-year residency in internal medicine and a two-year fellowship in endocrinology at the University of Miami, in Miami, Florida; he is board-certified in internal medicine and endocrinology. Dr. Andrade was also a citizen of Ecuador at the times material to this proceeding. On July 7, 1995, Dr. Andrade signed an Employment Agreement with the Company, and he began working for the Company in October 1996. The delay was attributable to Dr. Andrade's need to obtain legal residency and authority to work in this country. He obtained legal residency and authorization to work in this country in June 1996, and he obtained his green card, representing the permanent right to stay in this country, in February 1997. As part of the process for obtaining a green card, Dr. Andarde completed a HUD J-1 Visa Waiver Policy Affidavit and Agreement in which he agreed to the following conditions: I understand and agree that in consideration for a waiver, . . . I shall render primary medical services to patients, including the indigent, for a minimum of forty (40) hours per week within a USPHS designated HPSA. Such service . . . shall continue for a period of at least two (2) years. I agree to incorporate all the terms of this HUD J-1 Visa Waiver Affidavit and Agreement into any and all employment agreements I enter pursuant to paragraph 3 and to include in each such agreement a liquidated damages clause, of not less than $250,000 payable to the employer. This damages clause shall be activated by my termination of employment, initiated by me for any reason, only if my termination occurs before fulfilling the minimum two year service agreement. Soon after he began working for the Company, Dr. Andrade's professional relationship with Dr. Wayne deteriorated rapidly for a variety of reasons. After two weeks, Dr. Andrade told Dr. Wayne that he wanted a raise because he had learned that the other physician employed by the Company at the time was paid a higher salary than he was paid. Dr. Andrade also accused Dr. Wayne of forcing him to engage in what Dr. Andrade termed "illegalities," of forcing him to see too many patients at too many different hospitals, and of requiring him to see pediatric patients, which he did not feel he was qualified to treat. On January 7, 1997, Dr. Wayne and Dr. Andrade were the only physicians employed by the Company. On the evening of January 7, 1997, medical orders were given by telephone for three of Dr. Andrade's patients hospitalized at Parkway. The physician order forms indicate that the person giving the orders was Dr. Andrade. Dr. Andrade denies giving these orders, and he subsequently refused to accept responsibility for the orders by declining to sign them. At around 8:00 p.m. on January 9, 1997, Dr. Andrade went to Parkway and spoke with the nurses in Parkway's surgical intensive care unit, specifically Ann Bravi, a registered nurse who has been employed at Parkway for twenty-eight years. Dr. Andrade told Nurse Bravi that someone was impersonating him and giving telephone orders for his patients. While Dr. Andrade was standing beside her, Nurse Bravi called Dr. Andrade's answering service regarding one of his patients. The call was returned by someone who identified himself to Nurse Bravi as Dr. Andrade and who told her that there would be "[n]o orders for now." Nurse Bravi cannot recall whether she telephoned the answering service at Dr. Andrade's request or on her own initiative, nor could she recall whether she called the answering service number noted on the patient's chart or called a number that Dr. Andrade gave her. On Friday, January 10, 1997, Dr. Andrade terminated his employment with the Company, accusing Dr. Wayne of having breached the Employment Agreement by impersonating him with the staff at Parkway and by giving telephone orders on Dr. Andrade's patients at Parkway. On Monday, January 13, 1997, Dr. Andrade was distributing business cards indicating that he was practicing medicine with another physician, whose offices were located on the first floor of the building in which the Company's office was located. The Company has sued Dr. Andrade for damages resulting from breach of contract, and Dr. Andrade has sued Dr. Wayne for defamation. At the time of the final hearing, both lawsuits were pending in the Circuit Court of the 11th Judicial Circuit in and for Dade County, Florida. If an osteopathic physician gives medical orders by telephone for a patient who is not his patient and who is hospitalized in a facility at which he does not have medical staff privileges, then that physician has acted in a manner inconsistent with ethics and the standard of care practiced by an osteopathic family physician. The osteopathic physician has further acted in a manner inconsistent with ethics and the standard of care practiced by an osteopathic family physician if that physician gives telephone orders using the name of another physician. The evidence presented by the Department is insufficient to establish with the requisite degree of certainty that Dr. Wayne gave telephone orders for any of Dr. Andrade's patients at the Parkway Regional Medical Center or that he identified himself as Dr. Andrade in telephone conversations with staff at the Parkway Regional Medical Center.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Board of Osteopathic Medicine enter a final order dismissing the Amended Administrative Complaint against Christopher Wayne, D.O. DONE AND ENTERED this 28th day of October, 1999, in Tallahassee, Leon County, Florida. PATRICIA HART MALONO 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 28th day of October, 1999.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following facts are found: Respondent, Henry J. Petrillo, D.O., has been licensed to practice osteopathic medicine in the State of Florida since July 1, 1973 and at all times pertinent to these proceedings was licensed by the State of Florida as a Doctor of Osteopath. The Board entered an order dated February 18, 1982, in a prior unrelated case, placing respondent on probation for a period of two (2) years commencing February 18, 1982 with the condition, among others, that the respondent " . . . shall obtain/continue counseling with a psychiatrist or psychologist and shall cause progress reports to be submitted to the Board or probation supervisor every three (3) months." In response to that order, respondent began to visit psychologist Sidney T. Merin, Ph.D. for counseling. Dr. Merin submitted progress reports on the respondent to the Board by letter on April 15, 1982, August 5, 1982, October 25, 1982 and January 24, 1983. No progress reports were submitted by Dr. Merin, or any other psychiatrist or psychologist, on the respondent to the Board after January 24, 1983. Based on Petitioner's Exhibit 1 (letter to respondent from Dr. Merin date stamped received March 25, 1984), Dr. Merin continued to treat respondent until his probation was terminated. But, there was a period of time from January 24, 1983 until November 30, 1983 that respondent did not visit Dr. Merin for counseling. Respondent attended counseling sessions with Dr. Merin on November 30, 1983 and January 9, 1984. Respondent petitioned the Board for early termination of his probation by letter dated February 21, 1983. On June 25, 1983 the Board heard respondent's request. On August 6, 1983 the Board entered its order denying the respondent's "request for termination of probation and full reinstatement of his license to practice osteopathic medicine." The Board's order specifically required that respondent was to "continue to be on probation pursuant to the terms and conditions set forth in the final order dated February 18, 1982." The evidence indicated that the Board was aware that respondent had completed counseling with Dr. Merin in January, 1984 and had been "discharged" other than for visits on a "as needed" basis. On June 25, 1983, at the time of respondent's hearing on his request for reinstatement of license and termination of probation, over three (3) months had expired since Dr. Merin's last progress report to the Board on the respondent. Angela Turner was one of respondent's patients. Between May 9, 1983 and July 30, 1983, the respondent saw Angela Turner eight (8) times on a physician-patient relationship. The respondent's medical records and Angela Turner's testimony indicated that she was suffering from a continuing vaginal infection that resulted in a discharge. Angela Turner's last visit with respondent on July 30, 1983 was for the purpose of bringing in a urine sample for a pregnancy test which respondent had requested on Angela Turner's prior visit of July 26, 1983 and for consultation with respondent as to the results of the pregnancy test. Upon arriving at the respondent's office on July 30, 1983, Angela Turner submitted the urine sample to Janaee Brown, a nurse in respondent's office. Later, Angela Turner was taken to the examination room by Janaee Brown who inquired as to how Angela Turner was feeling, Angela Turner replied, "that she was feeling a lot better, but she had slight dizziness and she thought her yeast infection might be coming back." Janaee Brown then left Angela Turner in the examination room. At this point, there is conflicting testimony concerning whether Janaee Brown relayed instructions from the respondent for Angela Turner to disrobe from the waist down and provided a gown for this purpose. The more credible evidence is that Janaee Brown did not instruct Angela Turner to disrobe from the waist down and that Janaee Brown did not give Angela Turner a gown or robe for this purpose. Although there was some evidence that respondent may have deviated, at one time or another, from his office policy of having someone accompany him at all times while consulting with or examining a female patient, the weight of the evidence shows that respondent did have such an office policy and that no exception to that office policy was made during Angela Turner's visit with respondent on July 30, 1983. Angela Turner's testimony was that respondent came into the room alone, reported a negative pregnancy test, asked how she was feeling, examined her vagina without gloves, or lubricant or device to spread vagina, unbuttoned her blouse and moved her bra and examined her breasts. Respondent then kissed each of her breasts, her stomach, her vagina and tried to kiss her lips but she pushed him away. The respondent denies any impropriety with Angela Turner on July 30, 1983. The weight of the evidence shows that respondent consulted with Angela Turner in the presence of his wife, Vida Petrillo, concerning her pregnancy test, prescribed five (5) douches for vaginal infection and discussed something about abortion. The evidence shows that Angela Turner did mention to Janaee Brown something to the effect that the doctor had done something he shouldn't do and asked if that was office policy, to which Janaee Brown replied "no." The evidence shows that Angela Turner did not appear to be emotionally upset at this time. Angela Turner paid her bill, picked up her douches and went outside and called her husband who in turn contacted the police. Counsel for petitioner stipulated that a civil suit for damages had been filed by Angela Turner and her husband against respondent and presently there was an ongoing lawsuit. The evidence fails to establish sufficiently that the respondent conducted a vaginal examination on July 30, 1983 or made any sexual advances toward Angela Turner by kissing her breasts, stomach, and vagina or attempting to kiss her lips.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that respondent be found not guilty of the violation of Sections 459.015(1)(k), and 459.014, Florida Statutes (1983) and that Count II and Count III be DISMISSED. It is further RECOMMENDED that respondent be found guilty of violating a lawful order of the Board in violation of Section 459.O15(1)(x), Florida Statutes (1983). For such violation, considering the mitigating circumstances surrounding the violation, it is RECOMMENDED that the Board issue a letter of Reprimand to the respondent. Respectfully submitted and entered this 1st day of May, 1985, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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 1st day of May, 1985. COPIES FURNISHED: Mr. Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Ms. Dorothy Faircloth Executive Director Osteopathic Medical Examiners 130 North Monroe Street Tallahassee, Florida 32301 William M. Furlow, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Grover C. Freeman and David P. Rankin FREEMAN & LOPEZ, P.A. 4600 West Cypress, Suite 410 Tampa, Florida 33607 =================================================================
Findings Of Fact South Dade Osteopathic Medical Center, Inc., d/b/a Suburban Medical Center is an outpatient office facility in South Dade County, Florida. Suburban Medical Ambulatory Surgical Center (the "Am/Surg Center") is a licensed ambulatory surgical center which is operating out of the same building. (Together these entities will hereinafter be referred to as the "Outpatient Center.") The Outpatient Center currently provides outpatient services including ambulatory surgical, diagnostic, radiologic, and laboratory services. The existing building which houses the Outpatient Center was completed in approximately 1980. The building has two floors. The AM/Surg surgical center occupies the second floor of the building. The Outpatient Center currently has approximately 6,000 open patient files and has serviced approximately 12,000 patients since it opened in or about 1980. The license to operate the AM/Surg Center was obtained in approximately 1988. The Outpatient Center operates as an osteopathic facility. However, it does have allopathic physicians on staff. Dr. Jules G. Minkes is an osteopathic physician who owns and controls the Outpatient Center. Dr. Minkes is also the sole owner of Suburban Medical Hospital, Inc. ("Suburban" or the "Applicant"), the applicant in this case. On March 29, 1989, Suburban filed an application for a Certificate of Need to convert the existing Outpatient Center into a 36-bed osteopathic acute care hospital. The Application was assigned CON #5868. The Executive Summary contained in the Application summarizes the project as follows: The proposal is to convert the 26 ambulatory surgical recovery beds into hospital beds. The surgi-center and 26 beds are on the second floor of the facility which was constructed in accordance with hospital code specifications. Thus, conversation of the center into a hospital will primarily involve certain struc- tural changes on the first floor of the center to meet code specifications. The project will also require additional construction for ten ICU/CCU beds, a cafeteria, and certain engi- neering equipment. The Center will continue to offer its current out-patient services. The evidence at the hearing created some confusion and questions as to the Applicant's intended operation of the proposed project. At the hearing, Dr. Minkes testified that the AM/Surg Center will continue to exist and operate in the same physical structure as the proposed hospital. The plan for continuing the AM/Surg Center is not detailed in the Application. It is not clear where the ambulatory surgical center would be located in the converted facility and what equipment and/or space would be shared. Furthermore, it is not clear to what extent the revenues and expenses for the ambulatory surgical center are included within the projections set forth in the Application. It should be noted that, under existing law, an ambulatory surgical center cannot be part of a hospital. See, Section 395.002(2)(a), Florida Statutes (1989). (This issue is discussed in more detail in the Conclusions of Law below.) As noted in Gulf Coast Hospital v. Department of Health and Rehabilitative Services, 424 So.2d 86 (Fla. 1st DCA, 1982), osteopathy and allopathy are two primary and separate schools of medicine which differ substantially in philosophy and practice. Doctors of medicine are licensed under Chapter 458, Florida Statutes. Osteopathic physicians are licensed under Chapter 459, Florida Statutes. The practice of medicine is defined in Section 458.305, Florida Statutes as the "diagnosis, treatment, operation, or prescription for any human disease, pain, injury, deformity, or other physical or mental condition." Allopathy is defined in Webster's Third New International Dictionary as "a system of medical practice that aims to combat disease by use of remedies producing effects different from those produced by the special disease treated." 424 So.2d at 89 n.8. Section 459.003(3), Florida Statutes, (1989) defines osteopathic medicine as the "diagnosis, treatment, operation, or prescription for any human disease, pain, injury, deformity, or any other physical or mental condition which practice is based in part upon educational standards and requirements which emphasis the importance of the musculoskeletal structure and manipulative therapy in the maintenance and restoration of health." Osteopathic medicine places great emphasis upon the health of the musculoskeletal system as a condition of healing, and employs techniques of manipulation of muscles and joints in the process of therapy for illness. As explained by Dr. Minkes, osteopathic medicine is a distinct school of practice that embodies a philosophy based on a holistic approach that integrates the biomechanical and structural aspects of the body's function in all aspects of the functioning of the body. Dr. Minkes testified that it is his intention to seek accreditation for the proposed facility from the American Osteopathic Association and to operate the proposed hospital as an osteopathic hospital. Suburban intends to locate its proposed facility in conjunction with the existing Outpatient Center at the intersection of U.S. 1 and S.W. 97th Avenue. This location lies within Subdistrict 4 of HRS Health Planning District XI near the dividing line between Subdistricts 4 and 5. Baptist and South Miami are general acute care hospitals located in southern Dade County, Florida. The primary service area proposed by Suburban overlaps the primary service areas of Baptist and South Miami. Suburban's proposed service area is "bounded by S.W. 88th Street (Kendall Drive) and Homestead, Florida City and the upper Keys on the north and south; Biscayne Bay and the Everglades on the east and west: Subdistrict 4 from Kendall Drive south, subdistrict 5a, northern subdistrict 5(b)." There is an existing osteopathic hospital in District XI. That hospital, Westchester General Hospital ("Westchester"), is also located in Subdistrict 4. Currently, Westchester is licensed for 100 beds. It is an approved osteopathic teaching hospital and intern training hospital. Until 1989, there was another osteopathic hospital located in District XI. Southeastern Medical Center ("Southeastern") was a 224 bed facility that was approved for delicensure by HRS as of May 9, 1989. Southeastern was located in North Miami Beach Florida, close to the Broward County line. In 1983, South Dade Osteopathic Medical Center, Inc., one of the corporations owned and controlled by Dr. Jules Minkes, filed a Certificate of Need Application for a 150 bed osteopathic teaching hospital at the same site as the current Suburban proposal. The prior application was subsequently amended to 100 beds. After HRS denied that prior application, a hearing was held leading to the entry of a Final Order dated October 11, 1985 denying the application. See, South Dade Osteopathic Medical Center, Inc., d/b/a Suburban Medical Center vs. DHRS, 7 FALR 5686. (This case will hereinafter be referred to as the "South Dade" case.) In denying the prior application for a 100-bed osteopathic hospital, the Hearing Officer in the South Dade case noted the existence of the two osteopathic facilities in the district (Westchester and Southeastern) and found their occupancy rates had been significantly lower than capacity in the immediate years preceeding that application. He also noted that those occupancy rates were very similar to the occupancy rates for allopathic hospitals in the area. In 1981, the occupancy for all acute care hospitals in District XI was 67.4 percent. The occupancy rate for Westchester was 67.8 percent and Southeastern's occupancy rate was 61.3. In 1982, the overall occupancy for all District XI hospitals was 66.6 percent, Westchester's occupancy dropped to 65.8 percent and Southeastern's occupancy rate dropped to 58.4 percent. The Hearing Officer in the South Dade case noted that, in 1984, the occupancy rate for osteopathic beds had decreased even further. Based upon this evidence, the Hearing Officer found that there was an excess number of osteopathic beds in District XI in the years preceding that hearing. In the Recommended Order denying South Dade's application, the Hearing Officer noted: ...The cause of these lower use rates have been causes that apply equally to osteopathic and allopathic hospitals, thus leading to the conclusion that the lack of need shown by the above data will probably persist for several years into the future. All acute care hospitals have lost patients due to growth of alternatives to inpatient care, such as nursing homes, rehabilitation centers, outpatient surgical centers, and the like. Additionally, medicare policy changes have reduced the length of stay at all acute care hospitals. There is no compelling evidence on this record that osteopathic hospitals will not suffer from diminished need from these market forces in the same way that allopathic hospitals have suffered...7 FALR at 5698. The South Dade Recommended Order predicted that the lack of need for new acute care facilities of any affiliation was destined to continue for several years into the future. That prediction has proven to be correct. The evidence in this proceeding demonstrated that many of the same forces that caused reduced occupancy at both allopathic and osteopathic hospitals in 1984 continue to influence occupancy at both allopathic and osteopathic facilities. Without question, the overall occupancy rates and number of patient days in District XI acute care facilities has been declining significantly since 1984. The average annual occupancy rate for all acute care facilities in District XI was approximately 51 percent in 1988. The occupancy in Dade County alone was approximately 47 percent. These figures are well below the 80 percent efficiency standard established by HRS for an acute care facility. This decline can be attributed to a number a factors including the development of diagnostic related groups ("DRG's") for Medicare reimbursement. Osteopathic facilities have not been immune to this decline. Indeed, since 1984, the occupancy for the two existing osteopathic facilities in District XI decreased at a significantly greater rate than occupancy in allopathic facilities. In 1984, Westchester's occupancy was 46.7 percent. Westchester's average occupancy in 1987 was approximately 30.5 percent. By the end of the calendar year 1988, that occupancy had declined to 27 percent. Similarly, Southeastern Medical Center experienced declining occupancies from 1984 until its closure. Occupancy at Southeastern in 1984 was approximately 60 percent. Southeastern's average utilization rate for 1988 was only 20.3 percent. These trends are consistent with the statewide occupancy of osteopathic facilities which has been dropping at a rate equal to, if not greater, than, that of allopathic facilities. Suburban attempted to explain the closure of Southeastern through the testimony of several witnesses who were affiliated with that facility. Petitioner contends that the decline and eventual closing of Southeastern was the result of a conscious decision on the part of the owner of that facility, AMI, to focus its resources and efforts on the development of a nearby allopathic hospital which it also owned. While management decisions and/or problems may have contributed to the declining occupancy and ultimate closure of Southeastern, it is clear that the facility was also impacted by many of the factors that have contributed to the overall decline in occupancy at acute care facilities throughout the District. Based on the evidence presented at the hearing, it is concluded that there was an excess number of licensed osteopathic beds in the District at least prior to the time of the delicensure of Southeastern. With the delicensure of Southeastern, there are now 100 licensed osteopathic beds in the District, all of which are located at Westchester in the same Subdistrict as the proposed project. Petitioner presented extensive testimony regarding the perceived inadequacy of Westchester to meet the need for osteopathic services in the District. That testimony indicates that some osteopathic physicians are unhappy with the management philosophy of Westchester and they feel they are unable to provide quality osteopathic care in that facility. Most of the complaints about the care and treatment at Westchester were voiced by Dr. Minkes and Dr. Hershmann. Both of these physicians are expected to have a significant financial investment in the proposed facility. Several osteopathic physicians who do not have an interest in the proposed project testified that they did not have a problem with the quality of care at Westchester. Thus, while there may be some minor and/or individual problems with Westchester, the evidence was not sufficiently compelling to establish that the occupancy problems at Westchester are due to problems and/or inadequacies that facility. In other words, while some osteopathic physicians may prefer to treat their patients in a new, more modern facility, Westchester has not been shown to be so inadequate that it should be replaced or supplemented by the proposed project. The HRS Office of Licensure and Certification has not received any complaints against Westchester regarding the facility's physical plant or quality of care. Furthermore, Westchester's license is in good standing and it is accredited by the JCAH and the AOA. Petitioner presented hearsay evidence suggesting that a number of the beds at Westchester are not being utilized because of space limitations and that a number of the beds are contained in undesirable four bed rooms. As a result, Petitioner suggests that Westchester's functional bed count should be considered in the neighborhood of 50 rather than 100 beds. If this argument is accepted, Westchester's occupancy rates would not appear nearly as dismal. However, the evidence was insufficient to justify this conclusion. Westchester is presently licensed for 100 beds and no evidence was presented to establish that the hospital is not trying to fill all those beds. Petitioner also contends that Westchester has ceased functioning as a distinct osteopathic facility. The evidence was insufficient to support this conclusion. The testimony from several osteopathic physicians indicated that they still admit patients to Westchester. Similar contentions regarding Westchester were made in the South Dade case. In that earlier proceeding, the Hearing Officer found: ...While the foregoing is evidence that there are problems at Westchester for the physicians who testified, these problems were not proven with sufficient specificity and have not been shown to be such for this Hearing Officer to conclude that Westchester is so inadequate that it should be replaced by the hospital proposed by Petitioner. Nor is the evidence sufficient for the Hearing Officer to conclude that the low use rate at Westchester is due solely to inadequate health care at Westchester. As stated above, the record evidence indicates that the use rate at Westchester is quite similar to the use rates at allopathic hospitals in the District, which is consistent with the conclusion that the lower use rate at Westchester is caused by the same diminished need. Further, the use rate at Westchester is quite similar to the use rate at Southeastern Medical Center. On this record, there is no indication that Southeastern Medical Center is other than an adequate health care facility. The similarity in use rates, therefore, leads one to the conclusion that the use rate at Westchester is driven primarily by the same force that drives the use rate at Southeastern; lack of need or demand by osteopathic patients. 7 FALR 5702 The evidence in this case was similarly insufficient to attribute the low occupancy at Westchester to other than market forces. While the low occupancy rates at Westchester may be due in part to problems with that facility and reluctance on the part of some osteopathic physicians to utilize that hospital, the evidence indicates that both Southeastern and Westchester have experienced declining enrollments for many of the same reasons that all acute care facilities in District XI have. The evidence did establish that osteopathic physicians experience some difficulties in practicing osteopathy in allopathic facilities and that the facilities of many allopathic institutions are not conducive to osteopathic treatment. Most physical therapists at allopathic facilities are not trained to provide osteopathic treatment. In addition, few osteopathic specialists have obtained staff privileges at allopathic facilities. On the other hand, it appears that many of the difficulties and barriers that osteopathic physicians have historically experienced are being eroded. Virtually all of the osteopathic physicians who testified had staff privileges at several allopathic facilities and regularly admit patients to those facilities. Several of the osteopathic physicians who testified are practicing in partnership with or in association with allopathic physicians. Suburban presented the testimony of several osteopathic physicians who testified that additional osteopathic hospitals are needed in the District in order to enhance the survivability of osteopathy as a distinct approach to health care. Such facilities enable osteopathic physicians to learn and practice together and consult with osteopathic specialists in a forum that is supportive of osteopathy. The evidence established that approval of the proposed facility would, to some degree, enhance the survivability of osteopathy as a distinct and separate alternative treatment mode in the District. However, no evidence was presented to demonstrate that individuals seeking osteopathic care are currently being denied such services. While a significant number of osteopathic physicians have indicated an intention to use the proposed facility if it is approved (even though many of them do not use the existing osteopathic facility in the District, Westchester,) the evidence was insufficient to establish the need for an additional 36 osteopathic beds in the District. Moreover, as discussed in more detail below, the evidence did not establish that Suburban's Application satisfies the remaining criteria necessary for the issuance of a CON. Section 381.704(1), Florida Statutes (1989), recognizes that the review of CON applications includes consideration of the state and local Health Plans. Neither the Local Health Plan nor the State Health Plan specifically address osteopathic facilities. Therefore, Petitioner contends that the State and Local Health Plans are largely irrelevant to this case. This legal argument is addressed in the Conclusions of Law below. The Local Health Plan for District XI is prepared by the Health Council of South Florida. Linda Quick, Executive Director of the Health Council of South Florida testified that the Health Council does not support the construction of any new hospitals in the District. The Health Council opposes the construction of any new hospitals regardless of whether they are osteopathic or allopathic. The Health Council has prepared a booklet entitled District XI CON Allocation Factors Report for 1989. That booklet does not contain any CON allocation factors for osteopathic facilities. There are approximately thirty-two acute care facilities in the District. Utilizing the state's bed need methodology, the Health Council has concluded that there are nearly two thousand too many acute care hospital beds in the District through 1993. This determination does not differentiate between osteopathic and allopathic acute care beds. Because of the existing excess number of beds in the District, Linda Quick emphasized the need to fully explore alternatives to the construction of a new acute care facility. Such alternatives could include the acquisition of an existing facility, establishing a working relationship with an existing provider, increasing utilization at Westchester or arranging a joint venture with a licensed hospital. The Petitioner's failure to fully explore these alternatives weighs against approval of Suburban's Application. The purpose of the Local Health Plan is to describe the existing health care system, the existing population and its health status. The Plan also establishes goals and objectives for the growth, development and change of the local health system. The Local Health Plan sets forth general criteria and policies regarding health planning for services to individuals within the area. One of those goals is for the District to have a licensed bed capacity of no more than five beds per one thousand population by 1993. The State Health Plan calls for an even lower ratio. Currently, the ratio of acute care beds to the population is well in excess of five per one thousand. Approval of Suburban's Application would increase the number of acute care beds and, therefore, would be contrary to this goal of the Local Health Plan. However, it should be noted that this goal does not differentiate between osteopathic and allopathic acute care beds. Another pertinent goal of the Local Health Plan for District XI is to make services in the community geographically and financially accessible to all segments of the resident population. Because the proposed facility is located in the same Subdistrict as Westchester, it does not appear that the proposed project would significantly improve geographic accessibility to osteopathic services. Similarly, because of the large number of hospitals in the District, it does not appear that this proposed project would measurably improve the accessibility to acute care services. Section 381.705, Florida Statutes, sets forth the specific criteria to be considered in the review of a CON application. The first criteria to be considered under Section 381.705(1)(a) is the need for the proposed project in relation to the State and Local Health Plans. In assessing need, it is necessary to also consider the provisions of Section 381.713(2), Florida Statutes which provides that the need for an osteopathic hospital "shall be determined on the basis of the need for and availability of osteopathic services and osteopathic acute care hospitals in the District..." The Application cites the First District Court of Appeal's decision in Gulf Coast Hospital v. Department of Health and Rehabilitative Services, 424 So.2d 86, for the assumption that approximately ten percent of the population of the United States prefers to be treated by osteopathic physicians. Based upon this assumption and the most recent population estimate for Dade County (1.829 million as of 1987), Petitioner suggests in its Application that there should actually be 750 osteopathic beds in Dade County. No evidence was presented to support the assumption that ten percent of the population in the District prefers to be treated by osteopathic physicians. Indeed, the evidence of occupancy at osteopathic facilities in Dade County indicates that the ten percent assumption is vastly overstated. In 1985, only 2.4 percent of the total patient days for all hospitals in District XI were in osteopathic facilities. In 1986, that number decreased to 2.1 percent and in 1987 it decreased to 1.8 percent. These rates coincide with the declining occupancy rates at the existing osteopathic facilities in the District during this period. These facts indicate that the assumption that ten percent of the patients prefer osteopathic facilities is not accurate, at least in District XI. HRS has not adopted a rule or an official methodology to calculate osteopathic bed need. The need methodology set forth in Rule 10-5.011(1)(m) for calculating acute care bed need is not applicable to osteopathic facilities. The Application does not present any methodology to demonstrate osteopathic need in the District. At the hearing in this case, Suburban attempted to demonstrate the need for additional osteopathic beds in Dade and Monroe counties through the testimony of Dr. Howard Fagin, who was accepted as an expert in health planning, bed need methodology development and health economics. Dr. Fagin presented several calculations of "need" which Petitioner contends support the conclusion of need set forth in the Application. None of Dr. Fagin's calculations were included in the Application. Dr. Fagin's calculations used current hospital and physician utilization data and, by applying certain assumptions, attempt to project osteopathic need and/or demand in the District for five years into the future. In other words, Dr. Fagin attempted to develope a methodology specifically geared to calculate osteopathic need over a five-year planning horizon. Dr. Fagin set forth five different approaches for calculating osteopathic need. Most of these approaches had been considered and rejected by HRS in connection with other applications for osteopathic facilities. Intervenors and Respondent have painstakingly pointed out the deficiencies in Dr. Fagin's testimony. While their criticisms have merit, the shortcomings in the methodologies submitted by Dr. Fagin must be considered in the context of Section 381.713(2), Florida Statutes, and the lack of an approved and/or workable methodology for determining osteopathic need. It does not appear that there is a reasonably identifiable osteopathic unit of service for planning purposes. It is extremely difficult, if not impossible, to measure osteopathic need in accordance with the usual "normative" methodologies used to determine need for discreet services. However, the burden is on the Applicant to overcome these obstacles and present persuasive evidence of the need for the proposed project. Insufficient evidence was presented to accomplish this task. Intervenors and Respondents suggest that only those patients who receive osteopathic manipulative therapy during their stay in the hospital should be considered in determining "osteopathic patient days." They contend that such manipulative therapy is the only specific procedure measurable and monitored as distinctly osteopathic. The Hospital Cost Containment Board's data indicates that only two percent of the patients discharged from "osteopathic" hospitals received osteopathic manipulative therapy during their hospital stay. However, the evidence established that osteopathic care includes more than manipulative therapy. Thus, utilizing this unit of measure would significantly understate osteopathic need. All of the projections prepared by Dr. Fagin rely upon an assumption that "osteopathic patient days" are an identifiable unit of service which can be distinguished from allopathic patient days. There are several problems with this assumption. Dr. Fagin obtained the number of "osteopathic patient days" by simply taking the number of days in osteopathic designated facilities. However, not all patient days in an osteopathic hospital are "osteopathic patient days." There are clearly a number of allopathic physicians who admit and treat patients in osteopathic facilities. Indeed, at some osteopathic facilities, allopathic physicians constitute a majority of the staff. While Dr. Fagin contends that the number of allopathic admissions to osteopathic hospitals is a "wash" with the number of osteopathic admissions to allopathic hospitals, no evidence was presented to support this assumption. Patient days is a generally recognized unit of service for inpatient care and acute care beds. Typically, patient days are broken down into discreet units of service, i.e., obstetrical, psychiatric, pediatric, etc., relating to the underlying epidemiology of the population. Osteopathy is an approach to the practice of medicine rather than a specific clinical service. Osteopathy can not be measured in the same manner as a clinical service. Mixed staff hospitals and the inability to isolate a discreet unit of measurement such as an osteopathic patient day make it virtually impossible to quantify need for an osteopathic facility utilizing a traditional "normative" approach to planning. A "normative" approach provides a projection based on an estimate of the number of units of service or resources that should be in place. It is based on a number of unit of services related to an underlying need of the population. Dr. Fagin's forecast of "osteopathic patient days" includes the "need" for osteopathic beds to provide patient services in several specialized areas of care which will not be offered in the proposed project. For example, the proposed project will not offer obstetrics, psychiatry, pediatrics, tertiary care services, or cardiac catheterization. "Osteopathic patient days" as utilized by Dr. Fagin includes all of these services because he did not isolate those services that will be offered by the proposed facility. At best, Dr. Fagin's calculations show how many beds would be utilized at an osteopathic hospital if it achieved the average utilization of other osteopathic facilities. There was no showing that the average utilization at other osteopathic hospitals is appropriate or reflective of need. Thus, these methodologies do not measure need or demand for osteopathic services in the true sense of the word. In making his calculations, Dr. Fagin relied upon population figures published by the Executive Office of the Governor on May 15, 1989. The Intervenors and Respondent objected to the testimony and contended that only the population projections which had been released at the time the Application was filed could be used in connection with this Application. The earlier projection figures were released on January 1, 1989. These objections are discussed in more detail in the Conclusions of Law below. The evidence indicates that there would be no material changes in Dr. Fagin's conclusions regardless of whether the January 1st or May 15th projections are used. From 1980-1989, District XI experienced a population growth of approximately 14.6 percent and from 1990 through 1994 the projected increase is 22.1 percent. Thus, the population in the District is growing significantly. There is less than a one percent difference in the January and May population projections. In addition to the general limitations set forth above, there are several specific flaws contained in certain of the calculations performed by Dr. Fagin. The first methodology employed by Dr. Fagin was referred to as Florida Osteopathic Utilization Based Bed Need. This methodology divided the 1988 Florida population by the number of "osteopathic patient days" in the state that year to obtain a rate of 31.62 patient days per one thousand population. "Osteopathic patient days" was determined from the Florida Health Care Cost Containment Board, 1988 Hospital Budget Data. The rate of 31.62 osteopathic patient days was then multiplied by the projected 1994 District XI population, resulting in a projection of 65,192 osteopathic patient days in District XI in 1994. The projected number of osteopathic beds needed in District XI to accommodate these patient days was accomplished by dividing the projected patient days by 365 to arrive at an average daily census of 179. The average daily census was then divided by the HRS standard of eighty percent occupancy for efficient operations, resulting in a projected need of 223 osteopathic beds in District XI in 1994. Subtracting the 100 licensed beds at Westchester, this methodology results in a projected need of 123 additional osteopathic beds by the year 1994. This first methodology suffers from the deficiencies noted in Findings of Fact 53-58 above. In addition, the state wide total of osteopathic patient days for purposes of this first methodology was obtained from fourteen "osteopathic" hospitals. However, the evidence raises serious doubt as to the reliability of this data. At least one of those hospitals is no longer osteopathic and another one of the hospitals includes a utilization rate of ninety-five percent for a service (psychiatric) which will not be offered by the proposed facility. The next methodology submitted by Dr. Fagin was entitled Florida Osteopathic Physician Based Bed Need. This method calculated patient days per osteopathic physician in the State of Florida by dividing the 1988 "osteopathic patient days" by the number of osteopathic physicians in 1989. Patient days per osteopathic physician was then multiplied by the projected number of osteopathic physicians in District XI in 1994 to arrive at a projection of 66,544 osteopathic patient days in District XI in 1994. The projected patient days were then divided by 365 to arrive at an average daily census of 182. Applying the occupancy standard of eighty percent, this method projects 228 osteopathic beds will be needed in District XI in 1994. Again, subtracting the beds at Westchester, Dr. Fagin concludes that there is a net bed need of 128 beds. In addition to the overall problems noted above with respect to identification of "osteopathic patient days," this calculation includes an overly optimistic assumption of the number of osteopathic physicians that can be expected in District XI. In making this calculation, Dr. Fagin assumed a thirty percent increase in the number of osteopathic physicians in District XI from 1989 to 1994. This assumption is predicated on an expectation that a large number of graduates from Southeastern College of Osteopathic Medicine ("SECOM") would remain in the area and there would also be an influx of practicing osteopaths moving into the area. Dr. Fagin based his assumption, in part, on data provided by the Florida Health Care Atlas which showed that there were 198 osteopathic physicians in District XI in 1986, 180 in 1987, and 256 in 1989. Dr. Fagin attributes the apparent increase in osteopathic physicians in the District from 1987 to 1989 on the influx of the first graduating class from the SECOM in 1988. However, the 1986 and 1987 data reflected only active osteopathic physicians whereas the 1989 data reflected all licensed osteopaths. In other words, the 1986 and 1987 data did not include retired and inactive physicians whereas the 1989 data did. No reliable evidence was presented to compare the number of active osteopathic physicians to any year subsequent to 1987. Furthermore, SECOM's first graduating class actually occurred in 1985, not 1988. Additional classes also graduated in 1986 and 1987. Therefore, Dr. Fagin's assumption that SECOM graduates will increase the ranks of osteopathic physicians in the district is not necessarily correct. In addition, these projections assume new physicians in the area will be as productive as established physicians, which is unlikely to be the case. In sum, Dr. Fagin's assumptions as to the expected growth and the number of osteopathic physicians in District XI during the next five years is predicated on several erroneous assumptions. The next methodology presented by Dr. Fagin was entitled District XI Osteopathic Utilization Based Bed Need. Dr. Fagin projected a minimum and maximum number of expected osteopathic patient days in 1994 in the District based upon the actual utilization of existing osteopathic facilities in the District (Westchester and Southeastern) in 1986 and 1987. He calculated the number of "osteopathic patient days" in the District in those years and divided it into the District population to obtain rates of 24.67 and 19.72 patient days per one thousand population. These rates were multiplied by the projected District population in 1994, then divided by 365 and achieved an average daily census of between 139 and 111. Applying the eighty percent occupancy standard, Dr. Fagin calculated that there would be a need in District XI for between 174 and 139 osteopathic beds. After subtracting the existing beds at Westchester, he calculated the net bed need in 1994 to be between 74 and 39 beds. In addition to suffering from the general defects noted above, this approach is unnecessarily narrow. This methodology does not include any years prior to 1986 because Dr. Fagin did not feel that DRG's fully impacted on occupancy rates prior to that time. Dr. Fagin eliminated any years after 1987 on the grounds that the impending closure of Southeastern introduced too many variables into the equation. By eliminating all other years, this methodology provides a limited view of actual utilization and ignores the continuing decline in the utilization rate of osteopathic facilities in the District dating back to the 1970's. Dr. Fagin's next methodology was entitled Osteopathic Physician Based Bed Need. The "osteopathic patient days" from the existing facilities in District XI in 1986 and 1987 were divided by the number of osteopathic physicians in the District. The patient days per physician were then multiplied by the projected number of osteopathic physicians in the District in 1994 to arrive at an estimate of maximum and minimum patient days in 1994. Dividing by 365, an average daily census of between 210 and 188 was projected. Applying the eighty percent occupancy standard, Dr. Fagin concluded there would be a need for between 263 and 235 osteopathic beds in District XI in 1994. After the 100 beds at Westchester were subtracted, a net need of 163 and 135 beds was calculated. This methodology suffers from the same deficiencies as those noted in Findings of Fact 53 through 59 and 63 through 65 above. Dr. Fagin's final projections were based on the relationship of the overall bed need in District XI to Osteopathic Bed Need. In 1986, osteopathic facilities in the District accounted for 2.1 percent of the total patient days. This figure was 1.8 percent in 1987. Applying these percentages to HRS' projected total bed need for the District in 1994, Dr. Fagin concluded that a minimum of 159 to 137 osteopathic beds were needed. After subtracting the beds at Westchester, he calculated a net need of between 59 and 37 beds. This approach suffers from the deficiencies noted in Findings of Fact 55 through 59 above. In addition, it does not account for the continuing decline in occupancy at osteopathic facilities in the District. Suburban's Application includes over 2,000 signatures from members of the community indicating their support for the proposed project. Those petitions do not specifically indicate support for an osteopathic facility. Instead, the petitions include the following statement: "I support the establishment of Suburban Medical Hospital in the Perrine/Cutler Ridge area." It is clear from the evidence that the desire of osteopathic physicians to have a new facility in the area and the reputation of Dr. Minkes will attract a number of admissions to the proposed project. Suburban presented extensive testimony from osteopathic physicians regarding their interest in the project and their intent to refer patients to the proposed facility if it is built. Physician referral plays a large role in determining where a patient is admitted. Thus, it does appear that the proposed project can be expected to achieve a higher occupancy rate than Westchester or other acute care facilities in the area. However, this expected occupancy does not in and of itself establish need. The second review criteria set forth in Section 381.705(1), deals with the availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing health care services in the district. For purposes of reviewing applications for osteopathic acute care facilities, HRS has interpreted "like and existing health care services" to include all acute care facilities irrespective of their orientation towards osteopathic or allopathic care. In evaluating this criteria, the goals of the local Health Plan are pertinent. One of the goals set forth in the local Health Plan is an access standard that an acute care hospital should be available to all residents of the District within 30 minutes average driving time. The Plan does not set forth a goal for access to osteopathic facilities. The existing hospitals in the District are sufficient to satisfy this criteria without the need to add another hospital. In accordance with the State Health Plan, HRS has concluded that the efficient level of utilization for acute care services is eighty percent occupancy. The utilization rate for osteopathic beds in Dade County is twenty- seven percent. Thus, the effective utilization standard is not met regardless of whether it is applied to all acute care hospitals or only osteopathic hospitals. Section 381.705(1)(c), Florida Statutes, requires a consideration of the Applicant's ability to provide quality care. HRS did not dispute Suburban's ability to provide quality osteopathic medical care. The Intervenors and Respondents have questioned whether quality care could be provided in the project as it is currently planned since the physical layout of the proposed facility does not meet hospital code requirements. Those deficiencies are discussed in more detail in Findings of Fact 97 through 101 below. Certainly, if those deficiencies are not corrected, the quality of care could be affected. Although the parties stipulated that Section 381.705(1)(e), Florida Statutes, remained at issue in this proceeding, no evidence was presented with respect to this criteria. Suburban's Application does not involve joint, cooperative, or shared health care resources and, therefore, there are no probable economies or improvements in service that may be derrived from its proposal. Section 381.705(1)(g), Florida Statutes, requires a consideration of the need for research and educational facilities. The existing Outpatient Center currently provides externship training for SECOM students. While the proposed facility may provide some additional training opportunities for osteopathic students, the evidence did not demonstrate that any such additional benefits would be significant. Section 381.705(h) requires a consideration of the availability of resources, including health manpower, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation. It also requires a consideration of the effects the project will have on clinical needs of health professional training programs in the District and the extent to which the services will be accessible to schools for health professions in the service district for training purposes if such services are available in a limited number of facilities. Finally, this Section requires a consideration of the availability of alternative uses of the resources for the provision of other health services and the extent to which the proposed services will be accessible to all residents of the District. The evidence indicates that there is a current shortage in the District of nurses and skilled hospital personnel, such as physical therapists, laboratory technicians, radiation therapy technicians, respiratory therapists and pharmacists. This shortage of available health care personnel is ongoing and long standing. While a number of existing employees of the Outpatient Center have indicated a willingness to become employees of the proposed project at the salary stated in the Application, they constitute only 35% of the projected staff for the proposed project. It does not appear that any of the existing staff are required to work weekends and nights on a regular basis. Such positions are likely to be the most difficult to fill. Petitioner has not demonstrated an ability to recruit and hire the additional skilled staff necessary to run a hospital on a full-time basis. Approval of this project is likely to exacerbate the existing shortage. It is also not clear from the Application whether Suburban intends to hire a hospital administrator. No such position is reflected on the tables in the Application setting forth "manpower requirements." The evidence presented at the hearing was very sketchy as to the availability of funds for capital and operating expenditures. Suburban's audited financial statements only show $10,000.00 cash on hand, all of which was donated by Dr. Minkes. Thus, Suburban has virtually no capital resources except to the extent that it might be able to borrow funds for capital expenditures and operating expenses. The Applicant does not own the property on which the proposed project will be located. No evidence was presented to establish the basis upon which the proposed project will be occupying the land and existing facility. The existing Outpatient Center and the land on which it is located is owned by Dr. Minkes and subject to a first mortgage of 1.5 million dollars. Monthly interest payments on this mortgage currently run between $25,000 and $35,000. The proposed project budget does not provide for the payoff of this mortgage. Dr. Minkes contended that the interest/amortization figures on the long-term feasibility table contained in the Application included the funds necessary to service the underlying mortgage on the property. However, no specific breakdown of this figure was provided. Furthermore, no clear explanation was given as to the basis upon which the proposed hospital would occupy the land and existing facility. Thus, it is not clear whether the existing mortgage would be paid off, some lease arrangement would be entered into between Suburban and Dr. Minkes as owner of the property, or whether some other arrangement would be made. It is not clear from the initial Application whether Suburban intends to finance 100% of this project. Lending institutions typically are not willing to assume all of the risk for a proposed project and, therefore, will usually only lend between 60 to 70% of the project cost. While the Applicant suggests that private investors may participate in the financing of the project, the only evidence introduced to support this contention was the testimony of Dr. Minkes that he had talked with various osteopathic physicians who had indicated an interest in participating as private investors and the testimony of Dr. Hershman who indicated that he was willing to commit $100,000.00 to the project. These statements do not provide a sufficient basis to conclude that Suburban has the resources available to meet the initial capital expenditures for this project. Dr. Minkes suggested that one possible way to raise funds for the project would be through a limited partnership offering or a private placement. However, the estimated project costs in the Application does not provide for the cost of registering a limited partnership or otherwise raising money through private investment. As part of its Application, Suburban submitted a letter from a real estate investment banking firm, Sonnenblick-Goldman Southeast Corp., indicating an "interest in exploring arranging financing" for 4.1 million dollars for the proposed project. At the hearing, Petitioner also proffered another "letter of interest" from James F. Perry of Professional Bancorp Mortgage indicating an interest in processing a loan application for the project. This letter was not part of the Application and does not provide any additional proof that the resources are available to complete this project. Both letters merely reflect an interest in seeking a loan on behalf of Suburban. Neither of these letters establishes that Suburban has secured sufficient funds to finance the proposed capital expenditure. The Application indicates that the proposed facility would treat all patients requiring medical care regardless of ability to pay and would implement payment schedules based on the patient's ability. The Application contains a projected distribution of fifty percent Medicare patients, ten percent Medicaid patients, and three percent indigent. However, no competent evidence was presented to support the reasonableness of this projected patient mix. The issues related to training are discussed in Findings of Fact 75 above. Section 381.705(1)(j), Florida Statutes, requires a consideration of the immediate and long-term financial feasibility of the proposal. As set forth in Findings of Fact 76 through 82 above, Petitioner has not demonstrated that it has the resources available to complete the project. Therefore, there are significant questions regarding the short-term feasibility of the project. In addition, as set forth in Findings of Fact 91 through 101, below, there are significant questions as to whether the project can be completed within the budgeted cost of $4,085,780 and still meet hospital code requirements. The long term financial feasibility and the pro forma projections contained in the Application were not verified by any direct testimony at the final hearing. Suburban's financial feasibility expert, Mr. Darrell Lumpkin, did not prepare the pro formas contained in the Application. Mr. Lumpkin was not hired by Suburban until several months after the Application was filed and shortly before the hearing in this cause. Suburban conceded that Mr. Lumpkin did not base his financial feasibility analysis on the Application filed by Suburban and that he would not testify regarding the figures contained in the Application. Mr. Lumpkin prepared a feasibility study generally applicable to any 36-bed proprietary hospital in the State. His study utilizes occupancy rates of 50% for year one and 60% for year two. In presenting his testimony concerning operating expenses, Mr. Lumpkin looked only to the average charges, average deductions from revenue, average contractual allowances, etc., from all proprietary hospitals in Florida. He did not adjust these average figures to reflect the payor mix anticipated at Suburban or to compensate for the small size of Suburban. He was provided with occupancy figures and salary costs to use in making his projections. However, the reasonableness of these figures was never established. While Petitioner contended that Mr. Lumpkin's study confirmed the reasonableness of the pro formas contained in the Application, there were several significant differences between Mr. Lumpkin's study and the information contained in the Application. For example, the Application assumes a first year occupancy of 38%; Mr. Lumpkin's study assumes a first year occupancy of 50%. Furthermore, Mr. Lumpkin's first year revenue projections and average daily charges were significantly higher than the figures contained in the Application. The reasonableness of the figures used by Mr. Lumpkin are also questionable. He used HCCB data which contained consolidated information from all proprietary hospitals rather than utilizing information that was more closely tailored to the proposed project. In determining revenue deductions, he utilized statewide averages which contain many variables. In sum, Mr. Lumpkin's study is of minimal help in evaluating the financial feasibility of this project. The evidence did not establish the reasonableness of the income and expense projections contained in the Application. Moreover, there are several areas where the Application omits or understates expected operating costs. For example, the benefits to be provided to employees, as stated in the pro forma projections, are only 8% of salaries. This percentage would be insufficient to cover the cost of the statutorily mandated benefits of Social Security and unemployment insurance. Furthermore, this benefit level would not cover Workers' Compensation, health insurance, disability insurance, retirement benefits or life insurance. While Suburban suggested that some or all these costs were built into the salary figures rather then the benefit numbers, no specific evidence was presented to support or explain this position. The Application assumes that financing can be obtained at a 10% interest rate. However, the evidence suggests that, at the time the Application was filed and as of the date of the hearing, this rate was probably overly optimistic. It is possible, indeed likely, that Suburban will have to borrow money at a rate in excess of 10%. Therefore, the monthly principal and interest payments may be higher than allotted. The evidence was unclear as to exactly what equipment would be purchased and/or leased for the Project. The Application contains no provision for the purchase of anything other than medical equipment. While a $600,000 contingency is provided, it does not appear that serious consideration has been given to the expected costs for day-to-day items such as furniture, televisions for patient rooms, and similar such items. In addition, it was unclear as to exactly what medical equipment would be required, whether it would be purchased or leased, what equipment in the existing Outpatient Center could be utilized, and whether there would be costs associated with such utilization. Much of the existing equipment serves as security for indebtedness of the Outpatient Center. The Application does not provide for the cost of security or a dietician, both of which are required at an acute care hospital. In sum, Suburban has not proven that the costs set forth in the Application are a reliable estimate of the costs that will necessarily be incurred to open the proposed hospital. The Application provides for ten ICU beds and 26 acute care beds. This bed configuration makes it unlikely that the facility will be able to achieve the utilization rate set forth in the Application. Thus, it is not clear that the projected revenues are reasonable. Section 381.705(1)(l), Florida Statutes, requires a consideration of the "probable impact of the proposed project on the cost of providing health services proposed by the Applicant, ... including... the effects of competition on the supply of health services being proposed and the improvements or innovations in the financing and delivery of health services which foster competition and service to promote quality assurance and cost-effectiveness." It is not clear whether osteopathic health services should be distinguished from allopathic health services in applying this criteria. No evidence was presented as to the probable impact of the proposed project on the cost of providing osteopathic services. Suburban contends that it will be offering health care services at lower cost than allopathic facilities in the area and, therefore, will have a positive effect on the cost of health care in the area and enhance competition to the benefit of health care consumers. To support this contention, Suburban argues that its per diem charges will be less than the Intervenors' and other allopathic facilities per diem charges. However, as indicated above, the evidence was insufficient to establish the reasonableness of the projected costs set forth in the Application. Furthermore, Suburban will not be providing some of the more costly services provided by larger hospitals. Suburban did not present any evidence comparing its charges with facilities providing similar services and/or with small hospitals. A comparison of Suburban's proposed patient charges with the average charges of larger hospitals does not reflect whether Suburban will be a cost-effective provider of acute care services. Finally, the proposed project may somewhat increase the demand for nurses and other skilled health care personnel which could exacerbate existing shortages in the District and lead to higher costs. Section 381.705(1)(m), Florida Statutes, requires a consideration of the costs and methods of the proposed construction. Suburban is proposing to convert an existing outpatient center to an acute care hospital. The Application projects a total project cost of $4,085,780. The total construction costs are estimated at $2,173,600. This sum includes a construction contingency of $190,000. In addition, the total project costs include a working capital reserve of $600,000. Schematic plans of the proposed project to 1/16th inch scale are required to be submitted with the CON Application. The Application is also required to contain certain tables that indicate the functional spaces, square footage per space, and construction cost per square foot for various areas. HRS conducts an architectural review of the submitted plans to determine whether the state requirements for the planned facility can be met. The physical plant requirements for general hospitals in this state are set forth in Rule 10D-28.081, Florida Administrative Code. As noted below, the plans submitted by Suburban fell short of these requirements in many areas. The evidence demonstrates that the proposed project could not be licensed without significant modifications to the submitted architectural plans. Such modifications will necessarily impact upon the cost of the project and, unless rectified, may also impact upon the quality of care rendered in the new facility. The uncertainty surrounding the changes needed to the architectural plans weighs heavily against approving the Application. When the existing building was constructed, Suburban attempted to build it to the then-existing hospital codes. Many aspects of those code requirements have changed and several aspects of the building do not meet the new standards. While Suburban has suggested that, because there is an existing building in place, it may not have to meet all of the current standards, no persuasive evidence or legal precedent was presented to indicate that HRS can or will waive those standards. Bernard Horovitz, the architect who prepared the plans for Petitioner, testified that the plans submitted were conceptual in nature and were not intended as final plans to be held to code standards. According to Mr. Horovitz, the development and refinement of the plans is an ongoing process with HRS that continues even after a Certificate of Need is issued. While Mr. Horovitz felt that the project could be completed in accordance with the applicable code requirements at a price that was not significantly different than the cost estimate set forth in the initial Application, the extent of the deficiencies detailed below raises considerable doubt as to this conclusion. During the review of Suburban's plans, James Gregory, the HRS Architectural Supervisor for the Office of Plans and Construction, discovered that certain essential functions were missing or not indicated in the plans. Some of the omissions and/or deficiencies in the plans submitted with the Application were as follows: Emergency room- The plans indicate that the emergency room is to be constructed in the area of the existing outpatient clinic. The evidence was unclear as to how or whether the outpatient clinic would continue to operate. Moreover, while the Application indicates that the facility would be operating an emergency room on a 24 hour basis, Dr. Minkes' testimony at the hearing raised some question as to whether the proposed hospital would have a fully- staffed emergency room. In any event, the plans provide no clear layout as to how the emergency room and out-patient clinic would be mixed. The plans contain no emergency grade level entrance for ambulance entry, parking or emergency room entry as required by Rule 10D-28.081(12), Florida Administrative Code. There was no reception and control area for the emergency room shown on the plans. Such a reception and control area is required by Rule 10D-28.081.(12)(b). Mr. Gregory testified that during his review he scaled the plans and discovered that the examination and treatment rooms were not large enough to meet the 100 square foot requirement set forth in Rule 10D-28.081(12)(e). Furthermore, Suburban's plans show a corridor running through the emergency room contrary to Rule 10D- 28.081(12)(m). While the cost estimates in the Application indicate extensive remodeling will be done in the area of the outpatient clinic, it is not clear that the remodeling could be completed and the emergency room brought up to code standards within the costs allocated. Furthermore, the evidence was unclear as to the Applicant's intentions with respect to jointly operating an emergency room and an outpatient clinic. Dietary and Dining Facilities - While the Application indicates the conversion of the existing building will include a cafeteria, the evidence at the hearing indicates that a final decision has not been made as to whether Suburban will operate a cafeteria for employees and visitors. In any event, the plans provide for only 720 square feet for the hospital's dietary and dining facilities. This area is too small to meet the functional requirements of Rule 10D-28.081(21). Storage Areas - Suburban's plans only allocate 1,260 square feet for general stores and central service areas. Rule 10D-28.081(25) requires the general storage area of a hospital to contain 20 square feet of storage per patient. In order to meet the general stores requirement, Suburban will only have 540 square feet of storage for central services. This remaining storage area would have to include a decontamination receiving room, a clean workroom to clean medical supplies used in the hospital, storage for clean medical supplies, storage for equipment used in delivery of patient care and a storage room for distribution carts. Furthermore, the plans did not provide for a body holding room as required by Rule 10D-28.081(19)(f). It is unlikely that all of these functions could be fit in the allocated area. Operating rooms - Rule 10D-28.081(10) sets forth a minimum size requirement of 360 square feet for operating rooms. The surgery rooms reflected on the plans do not meet this requirement. Moreover, the surgical area set forth in the plans contains only 75% of the required functions specified in the rule. The area lacked a storage room for splint and traction equipment and a sink for plaster work as required by Rule 10D-28.081(10)(b) if orthopedic surgery is to be performed. The proposed recovery room did not provide for an isolation room with an anteroom for infected patients, a medication administrative station, a supervisor's office, a nurses station, two scrub stations for each operating room, an equipment storage room of at least 100 square feet, a soiled workroom for the exclusive use of the operating staff, a storage room, an out-patient change area, (which is required if out-patient surgery is to be provided,) a stretcher alcove and a storage area for portable x-ray equipment as required under Rule 10D-28.081(10)(d) and (e). ICU/CCU - The ICU area was only generally laid out on the plans and there was no indication where the isolation room, emergency cardio-pulmonary resuscitation cart storage, soiled utility room, clean linen storage, equipment storage, staff toilets, staff lounge, waiting room, conference room, and nurses station would be located within this unit. All of these functions are required by Rule 10D-28.081(6). The ICU area functions cannot be shared with the general medical/surgical and nurses stations. The proposed ICU area does not appear to be large enough to accommodate the proposed ten ICU beds. This lack of space exists whether the rooms are arranged in a corridor or suite arrangement. The area where the ICU is proposed to be located has only one means of exit/access. Therefore, the ICU units will have to be set up in corridor system rather than a suite arrangement. Such an arrangement will reduce the usable square footage by approximately 800 feet. The loss of this 800 square feet further exacerbates the problem of lack of area. Nursing Care Unit - The nursing care unit shown on the plans does not have enough area to include all of the required functions set forth in Rule 10D- 28.081(5). Among the functions required to be located in the nursing care unit are a medication room of at least 50 square feet, a workroom and a storage room of at least 60 square feet, an equipment storage room and an alcove for stretchers. The plans submitted by Suburban failed to appropriately represent that the proposed project would meet the minimum standards set forth in Chapter 10D-28, Florida Administrative Code. While Suburban contends that the plans were not intended to be final and many of the issues could be addressed with HRS during the licensure process, the extent of the deficiencies raises serious questions as to whether this project could be completed within the budget set forth in the Application. A major redesign of the project will be necessary in order for it to meet code requirements. Suburban's contentions that these modifications could be made within the existing budget (including contingencies) and/or that waivers of certain elements could be obtained during the licensure process were not supported by persuasive evidence. Section 381.705(1)(n) requires a consideration of the applicant's past and proposed provision of health care services to Medicaid patients and the medically indigent. As indicated above, no competent evidence was presented to establish the reasonableness of the patient mix set forth in the Application. Since Suburban has not begun operations, it has no historical record regarding provision of services to Medicaid and indigent patients. Dr. Minkes testified that the existing Outpatient Center treats all patients regardless of ability to pay and that the proposed project will operate on a similar basis. The existing Outpatient Center has entered into a contract with the State of Florida to provide primary care to Medicaid patients on a prepaid basis. Dr. Minkes anticipates that the proposed project would be used to provide hospital care to a large portion of the patients who enroll in the program. If that contract is implemented, the proposed project should provide some increased access for Medicaid patients. Section 381.705(2)(a) requires a consideration of the availability of less costly, more efficient or more appropriate alternatives to the proposal. Alternatives to new construction include purchasing an existing acute care hospital, working in conjunction with an existing acute care hospital in a joint venture or shared facility arrangement or increasing the utilization of Westchester. All of these alternatives could further the osteopathic presence in the District and Subdistrict without the need for additional construction and the addition of new acute care beds. While Dr. Minkes indicated that he did not feel any of these alternatives were viable, it does not appear that any serious efforts were undertaken to explore these alternatives. Section 381.705(2)(b) requires a consideration of the utilization of existing facilities providing inpatient service similar to those proposed. As set forth in Findings of Fact 14 through 19 above, Westchester, which is located in the same subdistrict as the proposed facility, has been operating at approximately 27% occupancy. This occupancy level has been steadily decreasing for several years. It must be anticipated that the approval of this Application would further deteriorate the efficient use of Westchester. For purposes of this Section, HRS interprets "similar services" to osteopathic acute care bed applications to include allopathic facilities which provide osteopathic services within the service area. If this interpretation is accepted, it is clear that there is a great excess of acute care beds in the District and the addition of the proposed beds would only diminish the potential for their efficient use of the existing beds. Section 381.705(2)(d) requires a consideration of whether patients will experience problems in obtaining inpatient care of the type proposed in the absence of the proposed new service. While there are only one hundred licensed osteopathic beds in the District, the evidence did not indicate that any individuals seeking osteopathic care were being denied such services. Section 381.705(2)(c) Florida Statutes, requires that, in the case of new construction, alternatives to new construction such as modernization or sharing arrangements, be considered and implemented to the maximum extent possible. As set forth in Findings of Fact 41 and 104 above, the evidence did not indicate that the modernization of Westchester or shared arrangements with other facilities have been fully explored. Baptist and South Miami are general acute care hospitals located in South Dade County. The primary service area for the proposed project overlaps the primary service areas of Baptist and South Miami. The evidence indicated that both intervenors are likely to loose some admissions and will probably experience some difficulties in obtaining skilled staff if this Application is approved. Both of the intervenor hospitals have a substantial number of vacant positions for which Suburban would be competing. If the Application is approved, Suburban will be seeking to fill its skilled staff positions from an already limited pool. One expected result would be an increase in salary structure for both Baptist and South Miami. Petitioner challenged the accuracy of the zip code analysis prepared by Mr. Cushman which attempted to estimate the number of lost admissions that each of the Intervenors could expect. While the zip code analysis does have many flaws, the evidence was sufficient to establish that both South Miami and Baptist will loose some admissions if the proposed facility is opened. Established programs at Baptist and South Miami could be substantially affected by the increase in salaries and lost admissions that are likely to occur if the proposal project is approved.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby, recommended that HRS enter a final order denying Suburban Medical Hospital, Inc.'s application for Certificate of Need #5868 to convert an existing outpatient surgery center to an osteopathic acute care hospital by conversion and new construction. RECOMMENDED in Tallahassee, Leon County, Florida, this 22nd day of March, 1991. J. STEPHEN MENTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of March, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-4445 All four parties have submitted Proposed Recommended Orders. The following constitutes my rulings on the proposed findings of fact submitted by the parties. The Petitioner's Proposed Findings of Fact Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order Where Accepted or Reason for Rejection. 1.-2. Adopted in substance in the Preliminary Statement. Adopted in substance in Findings of Fact 1 and 3. Adopted in substance in Findings of Fact 5. Adopted in substance in Findings of Fact 4 and 10. Adopted in pertinent part in Findings of Fact 8 and 10. Adopted in pertinent part in Findings of Fact 8 and 9. Adopted in substance in Findings of Fact 14 and 15. Adopted in substance in Findings of Fact 48. Subordinate to Findings of Fact 50-58. Subordinate to Findings of Fact 59. 12. Subordinate to Findings of Fact 63 and 64. 13. Subordinate to Findings of Fact 52 and 53. 14. Subordinate to Findings of Fact 61 and 62. 15. Subordinate to Findings of Fact 63 and 64. 16. Subordinate to Findings of Fact 65. 17. Subordinate to Findings of Fact 66. 18. Subordinate to Findings of Fact 67. Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 58. Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 53 and 56. Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 55 and 65. Subordinate to Findings of Fact 69, 33 and 34. Rejected as a summary of testimony rather than a finding of fact. Subordinate to Findings of Fact 68. Adopted in substance in Findings of Fact 44 and in the Preliminary Statement. 26. Subordinate to Findings of Fact 37-42. 27. Subordinate to Findings of Fact 37 and 42. 28. Subordinate to Findings of Fact 37. 29. Subordinate to Findings of Fact 26. 30. Subordinate to Findings of Fact 27. 31. Subordinate to Findings of Fact 24-30. 32. Subordinate to Findings of Fact 24. 33. Subordinate to Findings of Fact 24 and 28. Rejected as vague, overbroad and irrelevant. Subordinate to Findings of Fact 26 and 30. Adopted in substance in Findings of Fact 15. Rejected as constituting a summary of testimony rather than a finding of fact because it is irrelevant to the conclusions reached in the Recommended Order. Subordinate to Findings of Fact 21-23. Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 21-23. Rejected as constituting a summary of testimony and legal argument rather than a finding of fact. This subject area is addressed in Findings of Fact 41, 70, 94 and 106. Subordinate to Findings of Fact 73. Adopted in substance in Findings of Fact 73. Subordinate to Findings of Fact 74. Subordinate to Findings of Fact 75. Subordinate to Findings of Fact 75. Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 75. Subordinate to Findings of Fact 79-81 and 90. Rejected as irrelevant. This subject matter is addressed in Findings of Fact 76. Subordinate to Findings of Fact 76. Subordinate to Findings of Fact 81 and 82. Rejected as unnecessary and irrelevant. Subordinate to Findings of Fact 13 and 83. Rejected as constituting a summary of testimony and legal argument rather than a finding of fact. This subject matter is addressed in Findings of Fact 41, 104 and 108. Subordinate to Findings of Fact 85. Subordinate to Findings of Fact 82. Subordinate to Findings of Fact 86-93. Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 69 and 93. Subordinate to Findings of Fact 69 and 93. Subordinate to Findings of Fact 69 and 93. Subordinate to Findings of Fact 69 and 93. Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 69 and 93. Rejected as constituting a summary of testimony and argument rather than a finding of fact. This subject matter is addressed in Findings of Fact 69 and 73. Subordinate to Findings of Fact 80 and 89. Subordinate to Findings of Fact 80. Subordinate to Findings of Fact 86 and 87. Subordinate to Findings of Fact 86-93. Subordinate to Findings of Fact 86-92. Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 93 and 98-100. Rejected as constituting a summary of testimony and legal argument rather than a finding of fact. This subject matter is addressed in Finding of Fact 86 and 87. 70-72. Subordinate to Findings of Fact 94 and 105. 70.(sic) Rejected as unnecessary. A related issue is addressed in Findings of Fact 94. Adopted in substance in Findings of Fact 95. Subordinate to Findings of Fact 100. Subordinate to Findings of Fact 100. Rejected as unnecessary. Subordinate to Findings of Fact 90. Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 96-101. Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 96-101. Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 100. Subordinate to Findings of Fact 102. Subordinate to Findings of Fact 103. Subordinate to Findings of Fact 104. See the rulings on proposed findings 29-40 above. Subordinate to Findings of Fact 108. Subordinate to Findings of Fact 26 and 27. Subordinate to Findings of Fact 31. Suburban has submitted eleven proposed findings with respect to the standing issue. Those proposals are subordinate to Findings of Fact 109-112. The Respondent's Proposed Findings of Fact Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order Where Accepted or Reason for Rejection. 1. Adopted in substance in Findings of Fact 5. 2.-3. Adopted in substance in Findings of Fact 1. 4. Adopted in substance in Findings of Fact 5. 5.-6. Subordinate to Findings of Fact 7. 7.-8. Adopted in substance in Findings of Fact 36 and 42. Addressed in Findings of Fact 36, 42, 43 and 71. Adopted in substance in Findings of Fact 42. Adopted in substance in Findings of Fact 40. Adopted in substance in Findings of Fact 14. Adopted in substance in Findings of Fact 21. Adopted in substance in Findings of Fact 15 and 21. Subordinate to Findings of Fact 43. Subordinate to Findings of Fact 71. Adopted in substance in Findings of Fact 33. Adopted in substance in Findings of Fact 24 and 25. Rejected as unnecessary. Rejected as unnecessary. Adopted in substance in Findings of Fact 41-43 and 71. Adopted in substance in Findings of Fact 42. Adopted in substance in Findings of Fact 72. 24.-25. Adopted in pertinent part in Findings of Fact 21. Adopted in substance in Findings of Fact 20 and 21. Adopted in substance in Findings of Fact 20. 28. Subordinate to Findings of Fact 40. 29. Subordinate 106. to Findings of Fact 105 and 30. Subordinate 49. to Findings of Fact 46 and 31. Subordinate 49. to Findings of Fact 46 and Adopted in substance in Findings of Fact 50. Subordinate to Findings of Fact 51. Subordinate to Findings of Fact 59. Subordinate to Findings of Fact 53. Subordinate to Findings of Fact 53. Subordinate to Findings of Fact 53 and 55. Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 8, 10 and 56. 39. Subordinate to Findings of Fact 58. 40. Subordinate to Findings of Fact 62. Subordinate Subordinate to Findings of to Findings of Fact Fact 57. 53 and 57. 43. Subordinate to Findings of Fact 55. 44. Subordinate to Findings of Fact 53-55. 45. Subordinate to Findings of Fact 54. 46. Subordinate to Findings of Fact 65. Subordinate Subordinate to Findings of to Findings of Fact Fact 65. 63 and 66. Subordinate Subordinate to Findings of to Findings of Fact Fact 64 and 64. 66. Subordinate to Findings of Fact 55 and 64. Subordinate to Findings of Fact 67. Adopted in pertinent part in Findings of Fact 53. 54. Subordinate to Findings of Fact 85-93. 55. Subordinate to Findings of Fact 85-93. 56. Subordinate to Findings of Fact 86 and 87. 57. Subordinate to Findings of Fact 87. 58. Subordinate to Findings of Fact 86 and 87. 59. Subordinate to Findings of Fact 87. 60. Subordinate to Findings of Fact 87. 61. Subordinate to Findings of Fact 87. Addressed in pertinent part in Findings of Fact 86. This subject matter is also addressed in the Preliminary Statement and the Conclusions of Law. Subordinate to Findings of Fact 86 and 87. This subject is also addressed in paragraphs 17 of the Conclusions of Law. Addressed in paragraphs 17 of the Conclusions of Law. Addressed in pertinent part in Findings of Fact 65. 66. Subordinate to Findings of Fact 82. 67. Subordinate to Findings of Fact 81. 68. Subordinate to Findings of Fact 81. 69. Subordinate to Findings of Fact 81. 70. Subordinate to Findings of Fact 78 and 81. 71. Subordinate to Findings of Fact 86-93. 72. Subordinate to Findings of Fact 86-93. 73.-74. Addressed in pertinent part in Findings of Fact 86 and 88. Addressed in the Preliminary Statement. Adopted in substance in Findings of Fact 96. Adopted in substance in Findings of Fact 96. Adopted in substance in Findings of Fact 96. Adopted in substance in Findings of Fact 101. 80.-101. Adopted in substance in Findings of Fact 101. Subordinate to Findings of Fact 100 and 102. Subordinate to Findings of Fact 98, 100 and 102. Rejected as a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 71. Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 20. Subordinate to Findings of Fact 42, 43 and 107. Adopted in substance in Findings of Fact 107. Subordinate to Findings of Fact 31, 33, 42, 43 and 70-73. Adopted in substance in Findings of Fact 20 and 21. Adopted in substance in Findings of Fact 70 and 106. 111. Subordinate 101. to Findings of Fact 73 and 97- 112. Subordinate and 108. to Findings of Fact 45, 104 113. Subordinate and 108. to Findings of Fact 45, 104 Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 45, 104 and 108. Rejected as unnecessary. Furthermore, there is considerable confusion as to how this per diem calculation was made. 116.-117. Subordinate to Findings of Fact 105-106. The Intervenor's Proposed Findings of Fact (Baptist Hospital) Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order Where Accepted or Reason for Rejection. 1.-7. Subordinate to Findings of Fact 109-112. This subject matter is addressed in paragraph 2 of the Conclusions of Law. 8.-14. Subordinate to Findings of Fact 50-67. Subordinate to Findings of Fact 15 and 17- 23. Adopted in pertinent part in Findings of Fact 17, 21, 30, 65 and 69. This proposal consists largely of legal argument and is addressed in the Conclusions of Law. Pertinent portions of the proposal are addressed in Findings of Fact 14 and 18. Subordinate 37. to Findings of Fact 42. 19. Subordinate and 108. to Findings of Fact 41, 104 20. Subordinate to Findings of Fact 71 and 83. 21. Subordinate 71-73. to Findings of Fact 24-33 and 22. Subordinate to Findings of Fact 71. 23. Subordinate 71-73. to Findings of Fact 37-43 and 24. Subordinate 72. to Findings of Fact 20, 42 and 25. Much of this proposal consists of legal argument. The pertinent factual provisions are addressed in Findings of Fact 70 and 106. 26. Subordinate to Findings of Fact 106. 42 and 27. Subordinate to Findings of Fact 105. 42 and 28.-29. The pertinent portions of these proposals are addressed in Findings of Fact 73. The remainder of these proposals are rejected as irrelevant. Subordinate to Findings of Fact 71. Adopted in pertinent part in Findings of Fact 14 and 75. 32. Subordinate to Findings of Fact 76. 33. Subordinate to Findings of Fact 77. 34. Subordinate to Findings of Fact 78-81. 35. Subordinate to Findings of Fact 75. 36. Subordinate and 108. to Findings of Fact 41, 104 37. Subordinate 103. to Findings of Fact 83 and 38. Subordinate 85. to Findings of Fact 76-82 and 39. Subordinate to Findings of Fact 85-102. 40. Subordinate 93. to Findings of Fact 86-88 and 41. Subordinate to Findings of Fact 86-102. 42. Subordinate to Findings of Fact 94. This proposal consists largely of legal argument. Pertinent factual issues are addressed in Findings of Fact 20 and 21, 76 and 94. Subordinate to Findings of Fact 95-102. Subordinate to Findings of Fact 83 and 103. Much of this proposal consists of legal argument and/or speculation. Pertinent factual issues are addressed in Findings of Fact 41, 104 and 108. Subordinate to Findings of Fact 105 and 106. Subordinate to Findings of Fact 41, 104 and 108. Subordinate to Findings of Fact 69. The Intervenor's Proposed Findings of Fact (South Miami Hospital) Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order Where Accepted or Reason for Rejection. Adopted in substance in Findings of Fact 4. Adopted in substance in Findings of Fact 5. Adopted in substance in Findings of Fact 6. 4.-6. Subordinate to Findings of Fact 16-19. Adopted in substance in Findings of Fact 15, 20 and 21. The first sentence is adopted in substance in Findings of Fact 48. The remainder is rejected as constituting legal argument. Adopted in pertinent part in Findings of Fact 49 and 50. Adopted in substance in Findings of Fact 6. Subordinate to Findings of Fact 7. Subordinate to Findings of Fact 101. Adopted in substance in Findings of Fact 79. Adopted in substance in Findings of Fact 2. Adopted in pertinent part in Findings of Fact 101. Subordinate to Findings of Fact 100. Included in the Preliminary Statement. Subordinate to Findings of Fact 73. Adopted in pertinent part in Findings of Fact 96. Adopted in substance in Findings of Fact 101. Subordinate to Findings of Fact 101. Subordinate to Findings of Fact 98-100. Subordinate to Findings of Fact 100 and 102. Rejected as constituting a summary of testimony rather than a finding of fact. This subject matter is addressed in Findings of Fact 98-102. Adopted in substance in Findings of Fact 44 and in the Preliminary Statement. Adopted in substance in Findings of Fact 44 and 45. Adopted in substance in Findings of Fact 45. Adopted in pertinent part in Findings of Fact 48 and 49. Rejected as irrelevant. Subordinate to Findings of Fact 70 and 106. Adopted in pertinent part in Findings of Fact 20 and 21. Rejected as vague. This subject matter is addressed in Findings of Fact 20 and 21. Subordinate to Findings of Fact 33 and 35. Subordinate to Findings of Fact 20, 21 and 42. Subordinate to Findings of Fact 23 and 30. Adopted in substance in Findings of 25. Subordinate to Findings of Fact 24. Subordinate to Findings of Fact 24 and 30. Subordinate to Findings of Fact 23. Subordinate to Findings of Fact 23. Addressed in pertinent part in Findings of Fact 20 and 21. 42.-43. Rejected as overly broad. This subject matter is addressed in Findings of Fact 31. 44. Subordinate to Findings of Fact 40 and 42. 45. Subordinate to Findings of Fact 73. 46. Subordinate to Findings of Fact 35. 47.-51. Subordinate to Findings of Fact 49-67. 52. Subordinate to Findings of Fact 35. 53.-55. Subordinate to Findings of Fact 109-112. 56. Subordinate to Findings of Fact 85-93. 57. Subordinate to Findings of Fact 69. 58. Subordinate to Findings of Fact 69 and 93. Rejected as overly broad. This subject matter is addressed in Findings of Fact 35 and 73-109. Rejected as unnecessary. COPIES FURNISHED: Daniel C. Minkes, Esquire 17615 S.W. 97th Avenue Miami, Florida 33157 Silvio Amico, Esquire 6401 S.W. 87th Avenue Suite 114 Miami, Florida 33173 Thomas R. Cooper, Esquire Edward Labrador, Esquire Suite 103 2727 Mahan Drive Tallahassee, Florida 32308 Kyle Saxon, Esquire Catlin, Saxon, Tuttle & Evans 1700 Alfred I. Dupont Building 169 East Flagler Street Miami, Florida 33131 Jay Adams, Esquire 1519 Big Sky Way Tallahassee, Florida 32301 Jean Laramore, Esquire 7007 McBride Pointe Tallahassee, Florida 32312 Sam Power, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Linda K. Harris Acting General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
