The Issue An amended administrative complaint, dated July 31, 1989, alleges various violations of Chapter 459, F.S., by Respondent. Counts V, VI and VII, relating to Respondent's treatment of patient, R.C., were voluntarily dismissed by Petitioner at the commencement of the hearing. The following allegations are left at issue: That Respondent violated Section 459.015(1)(u), and (y), F.S., by prescribing Percodan and Ritalin, controlled substances, to his wife, G.I., inappropriately or in excessive quantities. That in the treatment of his wife, Respondent failed to practice osteopathic medicine with that level of care, skill and treatment which is recognized by a reasonably prudent similar osteopathic physician as being acceptable under similar conditions and circumstances, in violation of Section 459.015(1)(y), F.S. That Respondent violated Section 459.015(1)(p), F.S., by failing to keep medical records justifying the course of treatment of G.I.; and that of his mother, M.I., for whom he prescribed Demerol.
Findings Of Fact Respondent, Donald Iafornaro, D.O., is and has been at all times material to the allegations of the amended administrative complaint, a licensed physician in the State of Florida, with license number OS 0001794. Dr. Iafornaro has a limited osteopathic practice which he conducts from his home at 1802 North Lakemont, Winter Park, Florida. He has about fifty patients, and also treats his large family, including his wife, mother, eleven children and grandchildren. G.I. has been a patient of Dr. Iafornaro for approximately 25 years -- since 1973, as his wife, and prior to that, from 1964, along with the rest of her family in Cleveland, Ohio. Mrs. Iafornaro has had a demanding job caring for the Iafornaro children, her mother-in-law, the house and pets, and has recently been her husband's only staff in his practice. Between May 1985, and April 1987, her husband treated her for a variety of medical problems, including severe allergies, sleep apnea (a mechanical difficulty in breathing during deep sleep), depression, fatigue, a chronic fracture of the foot bone (a fracture which failed to heal), spinal stenosis, an unstable hip, ulcers, angina and various gynecological complaints Between May 1, 1985, and April 11, 1987, Dr. Iafornaro prescribed the following drugs, among others, to his wife: 2,720 tablets of Percodan 900 tablets of Ritalin Percodan is the product name for oxycodone hydrochloride, and Ritalin is the product name for methylphenidate hydrochloride. Both are Schedule II controlled substances and are legend drugs as defined in Section 465.003(7), F.S. With the concurrence of the parties, official recognition was taken of the Physician's Desk Reference (PDR) for the years 1984-1987. Petitioner also presented the testimony of two osteopathic physicians practicing in Dr. Iafornaro's community. The evidence from these authorities established that the prescriptions of Percodan and Ritalin for G.I. were inappropriate or in excessive quantities. Dr. Iafornaro felt that Ritalin was necessary to counteract the sedative effect of the antihistamines his wife had to take for her many allergies. He also prescribed the Ritalin for her depression. Ritalin is a mild central nervous system stimulant. It is indicated for attention deficit disorders (primarily in children) and narcolepsy. It should not be used for severe depression or for the prevention or treatment of normal fatigue. The PDR warns of drug dependence. Ritalin is also contraindicated in patients, such as G.I., who have exhibited anxiety, tension, depression and agitation. Ritalin may cause reactions such as skin rashes, a common complaint of this patient, but a problem which Dr. Iafornaro attributed to her multiple allergies. The Percodan was prescribed by Dr. Iafornaro for his wife's pain in her foot and for other pain in her low back and in her wrist. The PDR warns that Percodan may be habit forming. It contains aspirin, which can aggravate ulcers. It is indicated for relief of moderate to moderately severe pain; it is a depressant; it can cause apnea and respiratory depression in an overdose. Mrs. Iafornaro's statement that she used only about a half a tablet a day is inconsistent with the volume of the drugs prescribed for her over the relevant period. Dr. Iafornaro produced all of his medical records for G.I. for the relevant period. He claims they are incomplete because he also makes notes on odds and ends, writes on the back of a medical journal and keeps a lot of records in his head. (Iafornaro Deposition, p.15) The medical records produced by Dr. Iafornaro do not justify his course of treatment,for this patient, and particularly fail to explain the long-term volume of drugs that he was prescribing. Dr. Iafornaro claims that the probable cause panel previously reviewed his records and found them acceptable. The records were produced in response to charges that he had violated certain terms of an earlier disciplinary action. The issue was resolved with a "no probable cause" finding. That finding, in 1983, was for a different time period than the period at issue in this proceeding. Dr. Iafornaro provided records to the panel covering a limited period in 1983 when he was treating his wife for her foot fracture, a slip and fall accident and other acute conditions. The 1983 records, in contrast to those at issue here, describe the condition and his treatment. The later records provide copious listings of a variety of prescriptions, including the Percodan and Ritalin, with scant examination results, explanation of the condition being treated, or diagnoses of the complaints. Complete written medical records are an essential element of prudent osteopathic practice, particularly when, as here, the physician is treating his family and his objectivity may be questioned. Between January 5, 1987, and March 1, 1987, Dr. Iafornaro prescribed 200 50 mg Demerol tablets to his 84 year old mother, M.I. Demerol is a product name for meperidine hydrocloride, a Schedule II controlled substance, and a legend drug as defined in Section 465.003(7), F.S. The basis for the prescriptions was an episode of right upper quadrant pain felt to be of gallbladder origin. It is cheaper to purchase Demerol tablets by the 100. After M.I. took a few of the first prescription of 100, she lost the bottle and Dr. Iafornaro replaced it with another prescription. The medical records make no mention of the lost prescription, but they marginally justify the use of this drug for the limited period in issue and for the purpose intended. A previous disciplinary case involving allegations of Dr. Iafornaro's improper prescriptions and record-keeping practices was resolved with a stipulation for his one-year probation with conditions. The stipulation was approved by the Board of Osteopathic Medical Examiners in a Final Order entered on December 28, 1982. (DPR Cases #0010979, 0014467, and 0015303)
Recommendation Based on the foregoing, it is hereby, RECOMMENDED That the Department of Professional Regulation, Board of Osteopathic Medical Examiners enter a Final Order which finds Donald Iafornaro, D.O., guilty of having violated the provision of Subsection 459.015(i)(p), (u) and (y), F.S. and imposing the following penalties: Suspension of license for 90 days and until such time as he appears before the Board of Osteopathic Medical Examiners and establishes that he has taken and passed the examination conducted by the National Board of Examiners for Osteopathic Physicians and Surgeons or the Special Purpose Examination (SPEX) of the Federation of State Medical Boards, as designated by the Board of Osteopathic Medical Examiners in its final order; Upon reinstatement that his license be placed on probation for two years subject to such terms and conditions deemed appropriate by the Board, including, but not limited to, restriction of practice, direct or indirect supervision of practice or prescribing of controlled substances and required additional continuing education; That he be permanently restricted from prescribing controlled substances to family members, unless under direct supervision of another osteopathic physician; That a reprimand be imposed; That a fine of $2,000. be imposed. DONE AND RECOMMENDED this 23rd day of February, 1990, in Tallahassee, Leon County, Florida. MARY CLARK 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 23rd day of February, 1990. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 88-5277 The following constitute specific rulings on the findings of fact proposed by the parties. Petitioner's Proposed Findings Rejected as unnecessary. Adopted in paragraph 1. 3.-5. Adopted in paragraph 5. Adopted in paragraphs 6, 8 and 10. Some blood pressure monitoring is found in the records however. Adopted in paragraph 6. Adopted as a conclusion of law and in paragraph 6. Adopted in paragraph 12. Adopted in paragraph 15. Adopted in paragraph 16. Rejected as contrary to the weight of evidence. Adopted in substance in paragraph 19. Respondent's Proposed Findings Rejected as unnecessary. Adopted in paragraph l. Adopted in part in paragraphs 7-10, otherwise rejected as unnecessary. 4.-6. Rejected as contrary to the weight of evidence. 7.&8. Adopted in paragraphs 15, 17 and 18. 9. Rejected as immaterial. COPIES FURNISHED: Bruce D. Lamb, Esquire Dept. of Professional Regulation 730 S. Sterling Street Tampa, FL 33609 Sam Murrell, Jr., Esquire P.O. Box 1749 Orlando, FL 32802 Kenneth D. Easley, General Counsel Dept. of Professional Regulation 1940 N. Monroe St., Suite 60 Tallahassee, FL 32399-0792 Rod Presnell Executive Director Osteopathic Medical Examiners Dept. of Professional Regulation 1940 N. Monroe St., Suite 60 Tallahassee, FL 32399-0792
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
The Issue The issue to be resolved in this proceeding concerns whether the licensure examination taken by the Petitioner qualifies him under Section 459.007(3), Florida Statutes, for licensure as an osteopathic physician in the State of Florida.
Findings Of Fact The Petitioner, Lawrence Edward Suess, is an osteopathic physician licensed by the Boards of Medical Examiners in Texas, Alabama, and Kentucky. He seeks licensure in Florida, pursuant to Section 459.007(3), Florida Statutes. He is also licensed in Arizona and Texas as a registered nurse, holds BS and MS degrees in child development and nursing and a Ph.D. in nursing. The Respondent, the Board of Osteopathic Medicine (Board), is an agency of the State of Florida, charged with regulating the admission to practice and the practice and licensure standards of osteopathic physicians licensed or seeking to be licensed in the State of Florida. The Board issued an order, as corrected, on November 9, 1995, granting application of licensure to the Petitioner upon the condition that within one year, he successfully complete Part III of the NBOME examination for purposes of licensure in the State of Florida, and not for diplomate status. The Board found in that order that the Petitioner had not passed all three parts of the NBOME examination and had submitted certification of passage of only Parts I and II. The Board found that the “FLEX” examination was not a substantially-similar examination to the required NBOME examination since the FLEX examination did not contain an osteopathic medicine component. The Board also found that the completion by the Petitioner of a Board certification examination was not substantially similar to the NBOME examination because it tested only a single subject matter and not the broad principles contained in Part III of the NBOME examination. On November 13, 1995, a Petition for Formal Hearing was filed by the Petitioner disputing the decision of the Board which precluded him from obtaining licensure to practice medicine in the State of Florida because of failure to complete Part III of the NBOME examination. He contended that he was outside the time period in which he would be allowed to take Part III. He further contended that the FLEX examination was a substantially-similar examination to the NBOME examination. The Petitioner contends that taking the FLEX examination should be sufficient to justify licensure, although he also acknowledged that Part III of the NBOME examination tests osteopathic philosophy and principle; and he acknowledged that the FLEX examination does not, although he was attempting to testify and argue that the FLEX examination was substantially similar to the NBOME examination. He provided no testimony or evidence, however, to establish that the FLEX examination tests osteopathic philosophy and principle. The Respondent presented the testimony of Joseph Smoley, Ph.D. by deposition. Dr. Smoley holds a Ph.D. in educational measurement and has served for ten of the last eleven years as Executive Director of the NBOME. The NBOME is an organization that develops an examination that is independent of the osteopathic medical schools to evaluate osteopathic physicians who are either currently in undergraduate or in graduate medical programs. The NBOME’s main mission is to provide state licensing examinations with an independent assessment of the knowledge base of candidate osteopathic physicians. Dr. Smoley oversees NBOME policy and supervises educational measurement within the osteopathic profession. His oversight responsibilities include the examination section of the NBOME. He provides a constant review of the process of testing for the Board of Directors. The NBOME developed its examination by having questions drafted by faculty members and osteopathic physicians in independent practice. Faculty members may be D.O.’s or Ph.D.’s in the various basic sciences, and there is a multi-tiered process for preparing and reviewing questions. A copy of the bulletin of information concerning the NBOME examinations was attached to and made part of the deposition. Dr. Smoley testified that typically the candidates take Part I as a sophomore during medical school, Part II as a senior, and Part III as an intern in their first post-graduate year. He established that the purpose behind that examination is “the integration of osteopathic principles and practices as well as the philosophy of osteopathic medicine.” No allopathic physicians are involved in the grading process of that examination. Some allopathic physicians associated with osteopathic colleges may submit questions that, after the review process, may be used on the examination. The purpose of the NBOME examination, as shown by Dr. Smoley, is to make sure that each question integrates osteopathic principles and practices in some way and that the entire examination is reflective of the practice of osteopathic medicine. Dr. Smoley is also familiar with the FLEX examination, as well as the current licensure examination for allopathic physicians, the USMLE. The Federation of State Medical Boards (FSMB) does not prepare any complete examination or any additional components for its regular examination concerning manipulation or osteopathic practice and principles. According to Dr. Smoley, there has never been an official comparison or analysis between the NBOME examination and the FLEX examination. Based upon his experience and educational measurement, he has determined that if one examination, the NBOME, contains osteopathic principles and practice and the other examination, the FLEX, does not incorporate those principles and practices, then the two examinations could not be considered equivalent. The NBOME examination is more extensive because it integrates osteopathic principles and practice throughout its content. This osteopathic examination is not simply one that tests manipulation. Therefore, it is not asserted to be appropriate for chiropractors or M.D.’s who have been trained in manipulation but only for persons who have received an osteopathic medical education. The Respondent also presented the testimony by deposition of James R. Winn, M.D. He is Executive Vice President of the FSMB. The FSMB assists state medical boards in conducting their evaluation of physicians regarding their fitness to practice medicine. The FSMB developed examinations which are administered by state boards. Dr. Winn serves as the supervisor for the examination services section of the FSMB. Those examinations are developed in cooperation with the National Board of Medical Examiners. The current examination available from the FSMB is the United States Medical Licensing Examination (USMLE) used since 1992. Prior to that time, the FSMB administered the FLEX examination, which was for the evaluation of all physicians requesting licensure. The FLEX examination did not have a section on osteopathic practice, as shown by Dr. Winn. The FSMB allows all physicians seeking licensure in the United States to take that examination, including graduates of osteopathic medical schools and graduates of foreign medical schools. With the FLEX examination, unlike the NBOME examination, medical students are not eligible, only graduates of medical schools are eligible to take the examination. Dr. Winn is familiar with the examination of the NBOME and its purpose. He is not aware of any side-by-side comparison between the two examinations to determine equivalency. In his expert opinion, there would have to be such an evaluation in order to determine whether the examinations are equivalent. The testimony of Drs. Smoley and Winn was elaborated upon and corroborated by Dr. Morton Morris. Dr. Morris is a licensed osteopathic physician in the State of Florida and is board certified in osteopathic surgery by the American Osteopathic Board of Orthopedic Surgery. He is also certified by the American Board of Quality Medical Assurance and is a fellow of the American College of Legal Medicine. He is Vice-Chancellor for academic affairs in the health professions division at Nova Southeastern University, a Florida osteopathic medical school. Additionally, Dr. Morris is a licensed, practicing attorney in the State of Florida. He practices in the areas of medical malpractice, general health law and administrative law. Dr. Morris is familiar with the NBOME examination, having served as a test item writer for the NBOME. He recognizes Dr. Smoley as one who helps develop the philosophy of the examinations in question. The philosophy of the NBOME is that content concerning osteopathic practice and principles permeates the entire examination. Even when certain questions on their face are not osteopathically oriented, the evaluation and the grading of the responses is carried out from an osteopathic viewpoint and philosophy. The test item writers are directed to draft test questions which include osteopathic philosophy. In the past, the NBOME has agreed to allow a candidate to take only Part III or an equivalent examination and receive the score from the NBOME. In fact, Dr. Morris represented that person in his capacity as an attorney. He worked out the arrangements whereby that candidate could take and pass Part III of the NBOME examination in order to obtain a Florida osteopathic medical license, as the Petitioner seeks herein, even though, since he would not have taken Part III within the required seven years, he could not receive diplomate status with the NBOME. The Board’s order in this case specifically requires passage of Part III of that examination, but it does not require diplomate status. Such an arrangement would thus seem to provide a means to alleviate the Petitioner’s predicament in the instant situation. The Petitioner, in questioning Dr. Morris upon cross- examination, inquired about the possibility of a person taking all three parts of the NBOME examination, even if he had already taken Parts I and II. Dr. Morris stated that that was possible. Page 7 of the Bulletin of Information, in evidence in Respondent’s Exhibit 1, although stating that the candidate cannot take the examination “to attempt to improve his score”, states nothing to indicate preclusion of a candidate taking the entire examination for any other purpose. Dr. Morris stated that the Petitioner could take Part III of the examination and that the NBOME would make arrangements to allow him to do that, with the understanding that if he passed Part III, he would not be able to receive diplomate status from the NBOME (because of passage of time before taking Part III). In making comparisons between osteopathic medical education and allopathic medical education, Dr. Morris acknowledged that in some cases, osteopathic medical colleges use the same textbooks as used by allopathic medical schools. That does not, however, make them similar professions. Although anatomy and physiology may not be different, the philosophy of treating the whole patient is different. Responding to the Petitioner’s contention that having obtained board certification in his specialty area should count as equivalency to the entry level examination, Dr. Morris pointed out that all that the board certification accomplishes is to show that an osteopathic physician is recognized by his or her peers as competent to practice a specialty. It does not mean that the person is osteopathically oriented enough to be eligible for licensure and to be able to pass a minimum competency examination. The Petitioner contends that having passed Parts I and II of the NBOME examination, FLEX should quality him for osteopathic licensure in the State of Florida, in lieu of taking Part III of the NBOME examination, because anything of an osteopathic nature would have already been tested on Parts I and II. Dr. Morris established to the contrary, however, that Part III is the clinical testing, the testing of how the individual puts to use his clinical evaluation in treatment of patients. It is the ultimate test of whether an individual has developed and is able to apply a philosophy of practice sufficient to show that he is competent to be an osteopathic physician. Parts I and II of the NBOME examination do not test clinical skills. The FLEX does test clinical skills, but it does not test for osteopathic practices as to clinical skills. The NBOME requires that a person take Part III within seven years of having taken Part I, if that person wishes to be a diplomate of the NBOME. There is no apparent preclusion, however, in a person arranging to take only Part III, simply for purposes of state licensure. The record is not clear whether a person could take Parts I, II and III within the period of one year. It does seem apparent, however, that the Petitioner could take Part III within a one-year time period, which is all that is required in the Board’s order. Further, the statute requires that a person take all parts of the NBOME examination or a substantially-equivalent examination. What the Petitioner attempts to do is to take two parts of the NBOME examination and then substitute a different examination (FLEX) for Part III. This does not constitute a substantially-equivalent examination for the above reasons. A substantially-equivalent examination would have to be equivalent to all three parts of the NBOME examination. During discussion of the difference between osteopathic and allopathic schools of medicine, Dr. Morris pointed out that many osteopathic physicians use the same modalities that allopathic physicians use. It is just that they also use osteopathic modalities. He gave the example of a cardiac patient whom an osteopathic physician would treat just as a medical doctor would treat the basic condition with appropriate drugs but then would incorporate osteopathic philosophy, such as the “lymphatic pump”, meaning that the osteopathic physician would incorporate muscle techniques of stretching and passive manipulation in order to help the patient. The osteopathic physician would possibly use manipulative techniques on the lymphatic system and not just use drugs or other allopathic techniques. In the context of the NBOME examination, a question might reference a cardiac patient. Although the question would not mention the lymphatic pump, a proper answer might entail a clinical response that would consider that modality of treatment. In orthopedics, Dr. Morris’ specialty, an osteopathic physician can make significant use of manipulative techniques, as well as general surgery, casting and other modalities normally used by allopathic physicians. Use of the FLEX examination, rather than the NBOME examination, would not lower standards for osteopathic physicians. Rather, the FLEX examination simply embodies a different standard than the one used to test for competency in osteopathic principles and medicine. The Petitioner acknowledged that he could have taken Part III of the NBOME examination but chose not to because it was then more convenient for him to take the FLEX examination to continue his training in the State of Texas which required passage of the FLEX examination for osteopathic licensure. The Petitioner contended that if he applied for a Florida osteopathic medical faculty certificate (MFC), the FLEX examination would be acceptable and he would be eligible. That fact, he contends, by analogy, establishes that he is qualified to practice osteopathic medicine in the State of Florida. He has never applied for such a certificate nor has he been offered an osteopathic medical faculty position in the State of Florida. Thus, determination of that issue is not before this tribunal. Even if it were, there are significant differences between a full license to practice osteopathic medicine indefinitely and a medical faculty certificate. With the MFC, the Petitioner would not be allowed to be engaged in private practice of osteopathic medicine and the MFC would only allow him to practice in the academic realm for only two years. Finally, the statutory requirements for an MFC do not require the passage of any licensure examination. Accordingly, to the extent that the Petitioner’s argument and testimony implies some analogy or equivalency between eligibility for the MFC and eligibility for full licensure, such equivalency is not borne out by the greater weight of the evidence.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the application of the Petitioner, Lawrence Edward Suess, D.O., for licensure as an osteopathic physician, without conditions, is denied on the basis that the FLEX examination has not been shown to be substantially similar to the NBOME examination.DONE AND ENTERED this 28th day of February, 1997, in Tallahassee, Florida. P. MICHAEL RUFF Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 28th day of February, 1997. COPIES FURNISHED: Lawrence E. Suess, D.O., Ph.D. Owensboro Psychiatric Institute 1700 Frederica Street, Suite 106 Owensboro, Kentucky 42301 M. Catherine Lannon, Esquire Department of Legal Affairs The Capitol, Room PL-01 Tallahassee, Florida 32399-1050 William H. Buckhalt, Executive Director Board of Osteopathic Medicine Agency for Health Care Administration 1940 North Monroe Street Tallahassee, Florida 32399-0757 Jerome W. Hoffman, General Counsel Agency for Health Care Administration 2727 Mahan Drive Tallahassee, Florida 32309
Findings Of Fact Respondent, Eugene W. Williams, II, is an osteopathic physician licensed in Florida, and was so licensed at all times relevant to this proceeding. His address is 4394 Palm Beach Boulevard, Fort Myers, Florida 33905. On June 21, 1979, Sue Riley presented herself to Respondent for treatment of a fractured left distal radius. Respondent ordered arm elevation and ice bag treatment to reduce the swelling. The next day, he set the arm in a cast and performed a closed reduction. The injured arm was initially x-rayed at the hospital emergency room on June 21, 1979, and was not x-rayed again until July 5, 1979, when Respondent noted that the fracture was not closed. He then referred the patient to an orthopedic specialist. The testimony of Petitioner's expert witness indicated that a second X ray should have been taken after casting rather than two weeks later to insure that the fracture was, in fact, closed. Without such an X ray, Respondent could not be certain that the fracture was closed initially or that it had not reopened. Respondent's testimony and that of two other experienced physicians established that it is not uncommon to omit the X ray immediately after casting. In their view, no X ray is needed for ten days to two weeks provided the fracture appears to have been closed and properly aligned. Respondent's testimony established that all indications were favorable following casting and that he did not believe an X ray was needed for ten days to two weeks.
Recommendation From the foregoing, it is RECOMMENDED that the Second Amended Administrative Complaint be dismissed. DONE and ENTERED THIS 14th day of February, 1983, in Tallahassee, Florida. R. T. CARPENTER, 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 14th day of February, 1983. COPIES FURNISHED: James B. Gillis, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 JulieAnn Ricco, Esquire 1655 Palm Beach Lakes Boulevard Suite 106, Forum III West Palm Beach, Florida 33401 Frederick Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Dorothy J. Faircloth, Executive Director Board of Osteopathic Medical Examiners 130 North Monroe Street Tallahassee, Florida 32301
Findings Of Fact Background Manasota applied for a Certificate of Need to construct a 100-bed osteopathic acute care hospital in Sarasota County, (District VIII). Manasota did not specifically designate a site in its application and indeed has not obtained a site for its proposed hospital as yet. It intends to locate its facility in the southern part of Sarasota County, near the interchange of I- 75 and Jacaranda Boulevard. There are three existing acute care hospitals serving south Sarasota County. Memorial, which is a 788-bed acute care hospital located in the southerly portion of the City of Sarasota; Venice, which is a 312-bed acute care hospital located in Venice; and Englewood Community Hospital (ECH) which is a brand new 100-bed acute care hospital located in Englewood, also in southern Sarasota County, immediately south of the City of Venice. ECH opened its facility in early November, 1985. The proposed location of the Applicant Manasota is in the vicinity of the southerly environs of Venice, and is within the primary service areas of these existing hospitals. The Parties Venice Hospital is a not-for-profit, general, acute care hospital. It has 312 licensed beds, of which 6 are OB beds and 32 are intensive care beds. In fiscal year 1983, it enjoyed an 89.5% average annual occupancy. That occupancy declined to 83.5% in 1984 and the next fiscal year (1985) it dropped to 71%. The hospital's occupancy rate in fiscal year 1986 will decline to approximately 55.8%. That figure includes consideration of the impact of the November, 1985 opening of the Englewood Hospital but not the projected impact of Manasota. Venice's primary service area is the southerly portion of Sarasota County and northern Charlotte County, generally co-extensive with that proposed by Manasota. Memorial is a 788-bed, publicly owned, acute care hospital. Its primary service area is Sarasota County. Its publicly elected board requires it to maintain at least a 2% operating margin (profit) in order to maintain sufficient working capital and a sufficiently favorable bond rating so that its debt financing can be obtained at optimum cost. In 1984, Memorial obtained a 6.5% operating margin, but in 1985, that margin declined to approximately 2%, due to reduced utilization. Due to declines in utilization, only 590 of its licensed beds were in service in October, 1985. Memorial's total patient days for 1985 were the lowest it has experienced since 1973. Memorial is a full-service acute care hospital, offering services including obstetrics, psychiatric services, pediatrics, emergency care, cardiac catheterization and open heart surgery, neo-natal intensive care and ambulatory surgery. ECH is a 100-bed, full-service, acute care hospital located in Englewood, immediately south of Venice, in Sarasota County. It will open in November, 1985, and thus has not yet had an opportunity to obtain patients, adequate utilization, and a favorable operating experience. Its primary service area is southern Sarasota County and northern Charlotte County, substantially the same as that of Venice and that proposed by the Applicant. ECH has osteopathic physicians on its staff and provides manipulative therapy to patients of osteopathic physicians, as do the other two existing hospitals. The chief of ECH's medical staff is an osteopath. Manasota seeks approval for construction of a 100-bed osteopathic teaching hospital in southern Sarasota County in the immediate environs of Venice. The hospital would provide medical surgical services, ICU/CCU, a 24-hour physician staffed emergency room, outpatient surgery, a pharmacy, clinical laboratory, x-ray and other surgical and diagnostic services such as radiography, cardio-pulmonary and ultra-sonography. Manasota projects opening the facility in 1988 with 92 medical surgical beds and 8 intensive care beds. The hospital would be owned by Manasota, but will be operated and managed as a subsidiary of AmeriHealth, Inc., a Florida corporation. Ninety-two per cent of Manasota's stock has been purchased by AmeriHealth Systems, Inc., which is a wholly owned subsidiary of AmeriHealth Holdings, Inc., which in turn is a wholly-owned subsidiary of AmeriHealth, Inc. AmeriHealth Inc. is a publicly-held, Florida corporation. Manasota proposes to treat patients in accordance with the principles of osteopathy, supported by osteopathic specialists. Manasota will have an open medical staff, meaning it will have allopathic and osteopathic physicians on its staff. It maintains that management and control of the facility will be by osteopaths or those "sympathetic" to the osteopathic school of medicine. Although two of the four present members of Manasota's Board of Directors are osteopathic physicians, the chief executive officer of AmeriHealth, Inc., Mr. White established that in the near future that parent entity will nominate a new board of directors. Manasota proposes to affiliate with the Southeastern College of Osteopathic Medicine in Miami as an osteopathic teaching hospital and seek accreditation by the American Osteopathic Association. The facility would be located adjacent to or east of I-75 in southern Sarasota County, a minimum distance of five miles from existing hospitals. The primary service area would be southern Sarasota County (Census Tracts 20- 27). The secondary service area would include northern Sarasota County and northern Charlotte County, as well as the remainder of HRS District VIII, purportedly within a 30-60 minute driving time. In this connection, however, it is noted that osteopathic acute care hospitals have been held to be regional in nature and Manasota's health planning witness, Mr. Konrad, established that a two-hour driving time access standard is appropriate for osteopathic hospitals. District VIII is not, by rule, divided into subdistricts for health planning and CON review purposes. See, South Dade Osteopathic Medical Center v. Department of Health and Rehabilitative Services, DOAH Case No. 84-0750, Final Order at 7 FALR 5681 (November 14, 1985); Community Hospital of Collier, Inc. v. Department of Health and Rehabilitative Services, et al. and Naples Community Hospital v. Department of Health and Rehabilitative Services, et al., DOAH Case Nos. 84- 0744, 84-0907 and 84-0909 (consolidated), (Recommended Order August 16, 1985), p. 39. Although there are no operating osteopathic acute care hospitals in District VIII at the time of hearing, Gulf Coast Hospital has been approved by Final Order for a CON for 60 osteopathic beds and will be located approximately 68 miles and less than two hours driving time from the proposed location of the Manasota facility. Demoqraphics of the Proposed Service Area Sarasota County ranks second in the state in the percentage of its population which is 65 years of age or older. Projections show that by 1990 approximately 31% of its population will be 65 years of age or older, and 14% of the population will be 75 years of age or older. It will, at that time, rank first in the state as to the percentage of its population in excess of 74 years of age. Between 1980 and 1985, Sarasota County, which comprises most of the applicant's primary service area, increased in population approximately 40,000 persons. The county is expected to grow by an additional 43,000 persons between 1985 and 1990. Southern Sarasota County (above census tracts), between 1980 and 1985, grew by approximately 28,000 persons. Between 1985 and 1990, the southern portion of the county, will increase by an additional 33,000 persons, for growth rates of 33% and 32% respectively. Between 1980 and 1985, the population of southern Sarasota County in the 65 to 74 age group grew by about 5,000 persons, as did the population of the 75 and older age group. Between 1985 and 1990 it is projected that Sarasota County residents between the ages of 65 and 74 will increase by 5,700 persons and those in the county age 75 and older will increase by approximately 6,000 persons. Northern Charlotte County, adjacent to the southern Sarasota County primary service area of the applicant, increased by approximately 16,000 persons between 1980 and 1985. This same area is projected to increase by an additional 17,000 persons between 1985 and 1990. Approximately 7,000 of those additional persons will be 65 years of age or older. Much of the population growth in Sarasota County is due to in-migration from other areas. Approximately 43% of the immigrants to Sarasota County come from the midwestern area of the United States. This is somewhat significant because the greatest percentage of osteopathic medical schools and osteopathic physicians and acute care facilities are located in what is generally described as the midwestern United States. It may be expected that elderly immigrants from those areas might have somewhat more of a predisposition to use osteopathic acute care facilities and physicians in Sarasota County. It has not been proven, however, what percentage of the population growth of Sarasota County is attributable to in-migration from all areas of the state and nation. It has thus been demonstrated that the primary service area of the applicant has experienced significant population growth since 1980, but that that population growth will continue at the same or a lesser rate between 1985 and the horizon year of 1990. Indeed, it was established that the population growth rate of elderly persons age 65 and older, who tend to use acute care hospital services more intensively than other age cohorts of the population, will actually decline between the years 1985 and 1990. It has also been proven that between 1980 and 1985 (especially since 1983), the utilization rate for Sarasota County hospitals and District VIII hospitals as a whole, has declined markedly and will continue to do so through 1990, in spite of and counter to the population growth. This is a result of such factors as the advent of "DRG" methods of medic re reimbursement, professional review organizations and consequent shifts in the provision of many health care services to an "outpatient" basis. These changes in the Medicare reimbursement system, of course, are directly related to the segment of the population aged 65 and older, which provide the majority of all acute care hospital admissions from the general population. Because the population growth rate will decline for the age 65 and older age group, the trend of declining occupancy and utilization in the face of population growth will continue through l990 The Need for the Facilities Section 381.494(6)(c)(1), Florida Statutes. HRS has not adopted, by rule, a bed need methodology for determining need for osteopathic acute care hospitals. The normal bed need determination methodology embodied in Rule 10- 5.11(23), Florida Administrative Code, is not used for determination of bed need and need for osteopathic facilities because Section 381.494(2), Florida Statutes, requires that need for osteopathic facilities be determined separately from general acute care facilities. South Dade Osteopathic, supra at 5684. Thus, osteopathic bed need must be determined by development of agency policy in light of the general statutory criteria contained in Section 381.494(2), Florida Statutes, and Subsection (6) of that provision. HRS policy has been to consider whether the proposed facility will be osteopathic; whether a demonstrated need exists for additional osteopathic acute care beds; and whether similar services or facilities exist and are available in the area where the proposed facility is to be located. The court in Gulf Coast Hospital, Inc. v. Department of Health and Rehabilitative Services, 424 So.2d 86, 90 (Fla. 1st DCA 1982) defined "osteopathic facilities" as those maintained for the purpose of: . the cure and treatment of patients in accordance with the principles of osteopathy, the teaching and the study of osteopathic medicine, and the association in practice of doctors of osteopathy, including osteopathic specialists, with support from staff personnel suitably trained in the principles and philosophy of osteopathy. The management and control of the facility so as to actively further all of the above activities rather than to merely tolerate them, must be in the hands of osteopaths or those sympathetic to that school of medicine. Manasota has proposed in its application to construct and operate a 100-bed osteopathic acute care facility with patients being treated in accordance with the principles of osteopathy in a facility meeting the above definition. The preponderant evidence reveals however, that Manasota is not truly an "osteopathic" applicant. AmeriHealth's president, Mr. White, established that AmeriHealth would soon be appointing its own board of directors for Manasota, with no assurance given that osteopathic membership would be retained. None of the officers, directors or shareholders of AmeriHealth have any experience in ownership or operation of osteopathic facilities. Mr. White established that the proposed hospital would have an open staff, but it was not shown what percentage of the staff would be osteopaths and what percentage would be M.D.'s. Mr. White intends to staff the hospital from the existing medical community in Sarasota County. There would be no recruitment of physicians from outside that area unless it became impossible to staff the hospital with Sarasota County doctors. Mr. White would seek advice from "the medical community here" in establishing needed specialties and credentials. AmeriHealth intends to assure the viability of the proposed hospital by following the practice it employed at its Richmond Hospital of obtaining physicians in the community as investors in the hospital. It was not shown, however, what percentage of the investor-physicians the Applicant seeks would be D.O.'s and what percentage would be M.D.'s. In this connection, Dr. Fred Miller, M.D., testifying for Manasota, established that the promoters of the project intend that the staff physicians would be existing physicians in the Venice area. There are six or seven D.O.'s in the Venice area, and approximately 120 M.D.'s. In this regard, Dr. Norman Ross attended a meeting at Dr. Miller's office concerning organization of Manasota. All the doctors at the meeting were M.D.'s, except for the two D.O.'s who had an ownership interest in Manasota. Mr. White assured the physicians attending the meeting that the source of physicians for the new hospital would be physicians who had already developed practices in the Venice area who could "swing their admissions" to the new hospital. Dr. Ross was also assured that the vast majority of the staff physicians would be M.D.'s. Dr. Navarro attended this or a similar meeting and, was assured by a promoter and owner of Manasota that there would not be a heavy influx of osteopaths to town because they intended to get investor-physicians in the community to staff and support the hospital. When Dr. Navarro questioned Dr. Oliva, D.O., one of the directors of Manasota, concerning how he would build an osteopathic hospital without osteopaths, Dr. Oliva explained that "the rules did not require them to have a majority of osteopaths." The intent to staff the hospital largely with M.D.'s is borne out by the fact that the promoters of the hospital offered limited partnerships in the facility to Venice area M.D.'s first. Since Manasota's own witness, Dr. Snyder, D.O., showed that it would take 50 to 75 physicians to staff such a hospital, and since Manasota's principals see no need to recruit physicians from other areas, and have primarily sought support from M.D.'s who make up 95% of the physician population in the county, it is quite unlikely that the project would actually operate as an osteopathic hospital. In this regard, the four Sarasota osteopaths testifying for existing hospitals would definitely not use the proposed facility and feel it is not needed. The preponderant evidence thus establishes that the vast majority of staff physicians will be M.D.'s. The proposed facility has been promoted primarily to M.D.'s and the majority of Sarasota County D.O.'s testifying will not use the facility. Thus, Manasota has not demonstrated it is controlled or in the hands of osteopaths or those sympathetic to that school of medicine. It has not shown it can meet the definition of an osteopathic facility even as described by some of its own medical experts. Dr. Oliva, Dr. Lewis, Dr. Kudelko and Dr. David Lowery, (D.O.'s) opined that the majority of the medical staff and department heads would have to be osteopaths for it to truly be an osteopathic facility. This will clearly not be the case at Manasota. Manasota proposes to be accredited by the American Osteopathic Association (AOA), but also proposes to be accredited by the association which accredits allopathic facilities. The AOA accreditation manual requires osteopathic hospitals to identify themselves as such on buildings and letterheads, unless they are of mixed staff. Manasota proposes a mixed M.D. and D.O. staff. Likewise, nothing in the AOA accreditation requirements mandates any particular composition of the governing board or the medical staff. The Applicant has thus not proven that it will meet any record definition of an "osteopathic" hospital, nor that it will operate as such. Assuming arguendo that it would be osteopathic, the question of whether a demonstrated need exists for additional osteopathic acute care beds and an osteopathic acute care facility and the question of whether similar services or facilities exist and are available in the area of the proposed facility must be addressed. In this connection, although there are no osteopathic facilities currently operating in District VIII, Gulf Coast Osteopathic Hospital has had its Certificate of Need approved by final order of HRS for 60 beds with its request for 120 beds being currently on appeal. It will be located in Lee County, some 68 miles from the approximate location of the applicant. Mr. Konrad, having established that osteopathic hospitals are regional in nature, and that a two-hour travel time more or less is appropriate as a standard for access to an osteopathic facility, the service areas of Gulf Coast and Manasota will overlap. It is therefore found that an osteopathic acute care facility is legally in existence and will be operationally available for osteopathic physicians and patients in District VIII and Sarasota County in the near future. Over-bedded, under-utilized acute care facilities are available represented by existing hospitals whose need for more patients is discussed elsewhere in this Recommended Order. It is undisputed amongst the parties that there is no difference between the way allopathic and osteopathic physicians and hospitals practice in terms of the health care services rendered their patients, except for the emphasis, in the osteopathic realm, of manipulation therapy for patients and the increased emphasis on a holistic view of patients by osteopathic physicians in terms of determining a proper treatment regimen. In any event, acute care patients can be fungibly treated in osteopathic or allopathic hospitals by either osteopathic or allopathic physicians. It is thus found that the services rendered by the existing allopathic facilities are like and similar services to those proposed by the applicant. There was no testimony establishing that patients wishing osteopathic care from osteopathic physicians are not receiving it. Indeed, Drs. Furci and Nestor, osteopathic physicians in Sarasota, and Dr. Chirillo, who practice in southern Sarasota County, established that doctors are currently able to treat their patients with adequate quality of care, in an osteopathic manner, in existing hospitals. Sarasota County has a significant population of 20 osteopathic physicians. Their patients desiring osteopathic acute care services are currently receiving them despite the lack of an operating osteopathic hospital. Indeed, many of those physicians could accept more patients in their practices. Some close their offices at noon due to lack of patients. The number of osteopathic physicians per 1,000 persons in the District VIII population, when compared to the state and national averages for osteopaths per 1,000 population, reveals that there is no shortage of osteopathic physicians in District VIII. A number of the osteopaths practicing in Sarasota County testified on behalf of Manasota. Doctors James and Donald Blem and Dr. Chirillo are osteopaths practicing in southern Sarasota County and northern Charlotte County. Dr. James Them supports the application in that he would prefer to practice in an osteopathic hospital with osteopathic specialists on staff with whom he could consult. He prefers the continuity of care available if he had a situation where he could refer his patients upon admission to an osteopathic specialist, rather than having to refer patients to allopathic specialists. He also supports the teaching aspect of the Manasota application. Dr. Chirillo supported the application of Manasota essentially because it would be a teaching hospital and he feels that there is a need to train osteopathic physicians, but acknowledged that no additional acute care beds are needed in Sarasota County and District VIII. Dr. Donald Them supported the hospital's application for similar reasons. None of the three doctors would transfer all their patient admissions to the Manasota Hospital, should it be built, however. Indeed, Dr. James Them did not feel some of his patients would want to go to the Manasota facility because of the travel distances involved. Drs. Them and Chirillo are on the staff of Venice Hospital, and have no difficulty in getting their patients admitted to that hospital. They have full privileges and can practice osteopathic medicine there, including manipulation therapy. They know of no patients in Sarasota County going without acute care services because there is not an osteopathic hospital in the county. The osteopathic physicians in the county have no trouble getting staff privileges at existing facilities and each is generally practicing as he chooses without restriction, other than specialization. Osteopaths will practice with allopathic physicians at Englewood Community Hospital. Three osteopaths are on its charter Medical staff. One of these was chosen as the president elect of the ECH medical staff. The osteopaths at that facility are being provided with any needed equipment. Drs. Furci, Bipman, Yonkers, and Nestor, osteopaths testifying for the existing hospitals, all feel that they can treat their patients in a proper osteopathic manner. All are on the staffs of Doctors or Memorial Hospitals in Sarasota. They believe osteopaths in the area have enough acute care beds for their patients and there are always empty beds. All found no need for any additional beds, osteopathic or allopathic. In the words of Dr. Mervin Lipman, D.O., of Sarasota, "we don't need any more hospital beds period. We are up to our ears in hospital beds today." In short, the low utilization of acute care hospitals in the district and the county, among other factors, reveals that there are available, accessible mixed staff hospitals to serve the needs of patients of allopathic or osteopathic doctors. Manasota's proposal is, in part, consistent with the 1985-87 state health plan. That plan states at Volume 2, Pages 22 and 23: in short, the dynamic nature of health care calls for a planning approach which attends to overall development patterns rather than viewing specific health problems in isolation. Three interrelated policy guides were adopted as part of the 1985-87 State Health Plan: 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. The resources available for organized health care activities are limited and must, therefore, be utilized to their greatest effect. Given a holistic concept of health and finite health resources, priority should be placed on increasing resources for effective health promotion and primary care while containing total health care costs. In that Manasota proposes to be an osteopathic teaching hospital and the osteopathic philosophy comports with the holistic concept of health espoused above, the Manasota proposal is consistent in part with the 1985-87 State Health Plan. Neither the state nor the District VIII Health Plans specifically address need for osteopathic beds and for osteopathic hospitals and services, but rather treat all acute care services, osteopathic or allopathic, together. The State Health Plan emphasizes the growing problem and societal expense caused by excess acute care beds in the state, and states that "the combined effect of ambulatory surgery, HMO's, DRG's and other innovations could reduce acute fewer acute care beds will be needed state-wide than existed in 1984. Mr. Konrad, Manasota's own expert health planning witness, conceded that that projection may be accurate and would apply equally to allopathic and osteopathic facilities. Goal no. 3 at page 83 of the state health plan states the policy that efficient utilization of acute care services should be promoted. Objective 3.1 of that goal expresses the intent that all non federal hospitals, considered together, should attain an average occupancy rate of at least 80 per cent by 1989. District VIII currently has a district-wide occupancy rate for the last six months of 1985 of only 63.9%. Thus, approval of an additional acute care hospital would not conform with objective 3.1 of the state health plan, and, given the declining occupancy and use rates, even if the Manasota application were not approved, District VIII will not be in compliance with this objective by 1989. Due to the continuing decrease in patient days, decrease in average length of stay and decrease in admissions projected to 1989, the occupancy rate for 1989 for District VIII is likely to be less than 69%. The Department of Health and Rehabilitative Services (HRS) has not adopted a rule setting forth an osteopathic acute care bed need methodology. The policy of HRS, in this case at least, is to use the so-called "Wellington Methodology" in determining osteopathic bed need. Ms. Dudek, the sole HRS witness, collected data for this methodology from a number of·a 33 sources. She used data concerning numbers of admissions by osteopathic physicians from July, 1984 through June, 1985, and the total number of patient days by osteopathic physicians from the local health councils in Broward, Dade, Duval, Volusia, Hillsborough, Orange and Pinellas Counties. Those counties were chosen because they contain osteopathic hospitals. Ms. Dudek considers such data important when reviewing applications for acute care osteopathic beds in areas like District VIII where no such facilities exist. The department ascertained the number of licensed osteopathic physicians residing in District VIII from the Department of Professional Regulation, and used the latest population projection issued by the Governor's Office. This data was used in three formulas, the results of which were then averaged to determine the department's position as to osteopathic acute care bed need for District VIII in the horizon year of 1990. HRS used these three formulas because, by Ms. Dudek's admission, it felt no single formula was best. The first of the formulas is population based. It multiplies the number of osteopathic admissions to hospitals per 1,000 population, multiplied times the projected 1990 population for District VIII. It then multiplies that number by the average length of stay per osteopathic admission and divides the result by 365 days, further dividing that result by 80 per cent utilization to project the total number of osteopathic beds supposedly needed in 1990. Shown mathematically, that formula is as follows: [8.6 x (907, 804/1,000) 6.9]/[365 x .80] = 184 beds. The second formula is termed "physician based" and multiplies the admission rate per osteopathic physician by the number of osteopathic physicians licensed in District VIII. It then multiplies that number by the average length of stay per admission and divides the result by 365 days, once again divided by 80% utilization, to project the number of osteopathic beds putatively needed in 1990. That formula is depicted mathematically as follows: [53.1 x 67 x 6.9]/[365 x .80] = 84 beds. The third formula, also physician based, multiplies the number of osteopathic physicians in District VIII times the number of patient days per osteopathic physician (taken from the counties from which data was collected, not District VIII), divides the resulting number by 365 days; and then multiplies that by 80% utilization to project the number of beds needed in 1990. That formula is depicted mathematically as follows: [67 x369.2]/[365 x .80] = 85 beds. The Department averaged the results of these three formulas to arrive at its position that there is a gross osteopathic acute care bed need for 1990 of 118 beds. It then subtracts the 60 beds already approved for Gulf Coast Hospital, by Final Order, for a net need of 58 osteopathic beds. Formulas 2 and 3 above are essentially identical in that they are composed of the same variables and produce the same effective result, absent rounding of numbers. It is thus apparent that it is not truly valid to include both formulas 2 and 3 in the averaging calculation since they contain the same information. They would improperly weight the result (and HRS' position) in favor of the physician-based data. This is especially true in light of the fact that HRS concedes itself that no single formula used is more accurate than the other. If the results of the population based formula number 1 is averaged with only one of the other methods, the result is a gross osteopathic bed need for District VIII of 134 beds for 1990. When the 60 beds already approved for Gulf Coast Hospital are subtracted from this total, a net osteopathic bed need for 1990 of 74 beds results. Ms. Dudek acknowledged that, in reaching the agency's position she espoused at hearing, she had not considered the other applicable statutory criteria, but merely employed her "need methodology" to determine bed need results. She acknowledged however, that her data itself showed that admissions- at osteopathic facilities in the counties she surveyed were declining. Further, in employing her formula she did not determine how many physicians were available and would actually use the facility in the Sarasota County service area, nor how many of their osteopathic patients would be admitted to existing hospitals as opposed to the Applicant' s. Her formula assumed that the osteopaths would send all their patients to an osteopathic facility in District VIII. Indeed, a number of the physicians who would seek to become staff numbers at Manasota also testified that they would not necessarily refer all their patient admissions to that facility. The D.O. specialists who expressed a desire to become staff members would admit few patients because they would not have primary care practices. The evidence establishes that osteopaths as close as the City of Sarasota would not seek to use this facility. It is thus illogical to assume that physicians further away in District VIII would attempt to use it. Ms. Dudek also apparently assumed that the data regarding admissions per osteopathic physician and per one-thousand population obtained from other areas of the state would automatically apply in the service area involved in this application. There was no proof that that would be the case. Further, her formulas take into account the optimal 80% occupancy rate which the record clearly reflects does not prevail in District VIII. The average occupancy for District VIII acute care facilities is substantially less than that and will decline through 1990. In short, there is no basis in fact to support some of the HRS assumptions with regard to its bed need methodology since some of those assumptions were not shown to apply to District VIII and since it did not include in its assumptions certain data regarding osteopathic admissions which was available for District VIII. Since its formula assumptions are thus flawed and since HRS did not evaluate the remaining statutory criteria, its conclusion that there should be approval of a 60-bed osteopathic hospital (or any other number of beds) is rejected. Testifying on behalf of Manasota, Mr. Thomas Konrad, an expert in health planning, opined that a need exists for the Manasota project. Mr. Konrad believes there is no acceptable mathematical need calculation for osteopathic beds, but feels it reasonable that the district, with two large population centers in Lee County and Sarasota Counties, could support two osteopathic hospitals. He based this on his general proposition that osteopathic acute care facilities should be placed in populous areas with high acute care utilization rates based upon the age characteristics of the population. Sarasota has a relatively large population base and will be the 14th most populous county in the state in 1990, with a large percentage of elderly persons who utilize acute care services at a higher rate than the general population. Mr. Konrad performed a "reality check" to test the efficacy of his position by calculating the osteopathic acute care bed to population ratios for the populous counties in which osteopathic hospitals are located, which have similar demographic characteristics to Sarasota County. His analysis showed that the state-wide osteopathic hospital bed to population ratio is .313 beds per 1,000 population. If the 100-bed Manasota facility were approved, the ratio for Sarasota County would be .351 beds per 1,000 population. Mr. Konrad acknowledged that he has never before employed the osteopathic bed to population test used in this case. The test contains a fallacy in that Mr. Konrad did not adjust the bed to population ratio by any occupancy standard, but rather his approach necessarily embodies the assumption that either the beds are needed in those counties he surveyed, merely because they are in existence or approved, or alternatively, he failed to consider the occupancy rates in those counties vis-a- vis the present or projected occupancy rates in Sarasota County and District VIII. It is apparent from his testimony that he did not take into account the recent occupancy rates and trends for osteopathic hospitals in the counties included in his analysis. In fact, the osteopathic hospitals in the surveyed counties experienced a collective occupancy rate of approximately 43 per cent, rather than the optimal 80%, in 1984, which represented a 10% decrease since 1982. Between 1983 and 1985 the patient days per osteopathic physician in those counties decreased by almost 28%. The test used by Mr. Konrad does not present a true picture of need for District VIII since it does not take into account whether the figures upon which it is based represent excess osteopathic bed capacity and does not take into account the utilization rates in those counties, much less the presently existing and projected utilization rate for Sarasota County and District VIII as that might relate to an appropriate bed to population rates. The utilization rate at Gulf Coast is unknown because it has not had an opportunity to get into operation and the utilization rate at the allopathic hospitals which are like, existing facilities and services, is substantially lower than 80% and declining. Manasota will admittedly compete for the same declining patient day pool with those existing allopathic facilities. Thus, Mr. Konrad's general opinion that the two populous centers of District VIII involved could support two minimum-sized osteopathic hospitals, as tested by his osteopathic bed to population ratio method of analysis, was not established to be a valid test for osteopathic acute care bed need for District VIII and Sarasota County. In light of this and in consideration of the other above findings, there has been shown to be no need for additional osteopathic (or other) acute care beds or facilities in Sarasota County or District VIII. Availability, Quality of Care, Efficiency, Appropriateness, Accessibility, Extent of Utilization and Adequacy of Like and Existing Health Care Facilities in the District There presently are no acute care osteopathic hospitals operating in District VIII nor do any have dedicated portions of their facilities devoted solely to the practice of osteopathic medicine, although each of the acute care hospitals involved have varying numbers of osteopaths on their staffs. Gulf Coast Hospital, however, will construct and operate its approved facility in the immediate future and thus, at least 60 osteopathic beds are approved and not yet utilized as available osteopathic services in the district. Gulf Coast Hospital has not had the opportunity to get into operation, attain its market share and a favorable utilization experience so as to become available as yet. Given that Gulf Coast will be constructed 68 miles from Manasota in Lee County, much closer than the two-hour regional travel time standard established above, it is obvious that an osteopathic acute care hospital will soon be available and accessible to District VIII patients. Osteopathic acute care services are presently available in District VIII, notwithstanding the fact that the Gulf Coast facility is not yet open. Sarasota County osteopathic physicians have staff privileges at area hospitals and by their own testimony, are able to treat their patients in a fully osteopathic manner at existing Sarasota County acute care facilities. Venice Hospital is supportive of the practice of osteopathic medicine. Dr. James Them, D.O., is on the staff at Venice with full privileges and has no difficulty in getting his patients admitted. He can practice osteopathic medicine there in an unimpeded way, including the use of manipulation tables provided by the hospital. He acknowledged that the patients in Sarasota County are not denied acute care services because of the lack of an osteopathic hospital. Drs. Donald Them, D.O., and Joseph Chirillo, D.O., of the Venice staff are of a similar opinion. The other area D.O.'s testifying are able to treat their patients in a proper osteopathic manner at existing facilities and they would not seek staff privileges at Manasota. Although several osteopaths testified that they desired the availability of osteopathic specialists in an osteopathic facility to render consultation and referral of their patients with attendant continuity of care more facile, and to avoid, in some instances, duplication of tests in the referral process with allopaths, they did not demonstrate that their patients suffer from any lack of adequate care in existing facilities. The advent of the Manasota facility would not necessarily alleviate this "physician inconvenience" purportedly caused by referring patients to allopathic specialists, inasmuch as Manasota will be a mixed staff hospital, such that many of the specialists on its staff are likely to be allopathic physicians anyway. All of the Sarasota County osteopathic physicians can handle additional patients and have had osteopathic patients adequately cared for in existing facilities, at which they have full privileges. Osteopathic physicians have no difficulty gaining staff privileges and admitting patients at existing facilities. Indeed, at the new Englewood facility, three osteopaths are on the staff and one was chosen by his peers as president-elect of the medical staff. Osteopaths at Englewood will be provided with any needed equipment. In short, with the advent of the 100-bed Englewood facility, the 60-120 bed Gulf Coast facility, together with the existing hospitals which have substantial unused capacity, osteopaths practicing in Sarasota, Charlotte County, and District VIII have enough beds between now and 1990 for their patients at facilities at which they may freely practice osteopathic medicine. These like and similar services are available because both allopathic and osteopathic physicians and hospitals draw from the same limited patient pool. There is no essential difference between the way allopathic and osteopathic primary care physicians, surgeons, and specialists practice in terms of the services rendered acute care hospital patients. The primary difference only lies in the use of manipulative therapy, with attendant manipulation tables which are used in the osteopathic setting. This service is already available at the existing hospitals. The difference in philosophy between osteopathic and allopathic practice is manifested more at the out-patient primary care level. At the primary treating physician level the patient is looked at holistically in the sense that, in addition to treating the illness or condition the patient is presented with, the osteopath seeks to ascertain and correct causes of the illness rooted in other systems of the body or the patient's environment or family circumstance. The allopathic physician tends to be oriented toward treating the specific problem by dealing with the involved bodily system only. There is, at any rate, very little difference in the way allopathic and osteopathic physicians practice at the acute care hospital level, in caring for their patients. Thus, all persons desiring osteopathic acute care services are able to receive them in District VIII, despite the lack of an additional osteopathic hospital. In view of the number of osteopaths per thousand population in District VIII, as compared to state and national averages in evidence, there is no shortage of osteopathic physicians in District VIII. Given the low utilization of existing acute care hospitals in the district and in Sarasota County, including Gulf Coast, which has not had the opportunity to fill any of its beds, there are like, existing, available, accessible, mixed staff hospitals in Sarasota County and in District VIII providing adequate acute care services, including osteopathic of the type proposed. The quality of existing hospitals in the district has not been placed at issue. No testimony or evidence concerning quality of care about Memorial or Doctors Hospitals has been adduced. The Englewood Hospital, as of the time of the hearing, had not yet opened. Dr. Raymond McDearmott, M.D., was presented to criticize quality of care at the Venice Hospital. Dr. McDearmott, however, did not have admitting privileges and was limited in his experience to working in the emergency room at Venice. He has been engaged in a dispute with Venice's administration concerning his operation of the emergency room, which may culminate in litigation. This adversarial attitude toward Venice, together with his failure to describe specific instances of inadequate care, entitles his testimony to scant consideration. There is no competent evidence to indicate that existing hospitals are not providing adequate quality care. Likewise, the efficiency of existing facilities was largely not addressed, with the exception of Venice Hospital. Manasota contended that Venice Hospital was not operating efficiently because of an alleged excessive amount of administrative expenses. That contention was predicated upon data submitted to the Hospital Cost Containment Board by Venice Hospital which was reported by the board and indicated that administrative expenses at Venice exceeded those of other hospitals in the cost containment board "reporting group" of which Venice is a member. It was established, however, that that information had either been filed with or reported by the Hospital Cost Containment Board in error, and that indeed, the error was corrected on the Board's own volition. The administrative expenses at Venice Hospital for the reporting period in question, were at approximately the mid-point for hospitals-in its reporting group. Thus, it has not been established that Venice or any of the other hospitals in Sarasota County or District VIII, are operating inefficiently, aside from their problems with under-utilization and unused capacity. It has also been proven that the existing hospitals are "like" facilities which are accessible. Indeed, 95% of the population of District VIII is within 20-miles or less of an existing acute care hospital. The Gulf Coast osteopathic facility will be well within the proven two hour accessibility standard for osteopathic hospitals, since it will be 68 miles from the proposed location of the Manasota facility. The existing hospitals are underutilized. There has been no showing that existing hospitals are inaccessible to residents of the county and the district. Concerning the issue of extent of utilization of like and existing facilities, witnesses Konrad, Beechey, Shanika, Zaretsky, Schwartz and Porter acknowledged the declining utilization of acute care hospitals in Sarasota County and District VIII, and the continuing nature of that decline. In District VIII, occupancy of acute care hospitals has decreased significantly from 1983 through 1985, such that the composite occupancy rate for the district was 67.2% in 1983, 60.9% in 1984 and 52.4% for 1985. The dramatic changes occurring in the health care industry since 1983 have caused the severe declines in inpatient utilization. The primary reason has been the change, beginning in 1983, to the Medicare prospective payment system as opposed to the former cost-based reimbursement system. The new system is otherwise known as the "DRG" system. Thus, Medicare reimbursement is now based on a Fla. rate reimbursement based upon the type of illness, diagnosis or treatment. The effect of this change has been to sharply decrease the average length of stay of Medicare patients in hospitals, as well as to decrease Medicare admissions. Medicare admissions are decreasing through increased emphasis on utilization review by professional review organizations mandated by the Medicare system. This results in more procedures, such as some surgery, being performed on an outpatient basis. Inpatient utilization concomitantly declines. These factors, coupled with the growth of home health services, and the imminent impact of preferred provider organizations (PPO's) and health maintenance organizations (HMO's) in Sarasota County and District VIII, have and will impact hospital occupancy rates significantly to an increasing degree. Mr. Conrad and Mr. Schwartz both showed that these factors which depress hospital utilization impact utilization of osteopathic and allopathic facilities in the same way. In fact, since osteopathic facilities have historically experienced higher average lengths of stay than allopathic facilities, the DRG method of prospective reimbursement has and will have a greater impact on osteopathic hospitals. Hospital utilization in District VIII is still declining. Even though the population is increasing significantly, hospital occupancy is decreasing. During 1980 the population of Sarasota County was 205,846 from which 292,500/ patient days were generated. In 1985 the projected population for Sarasota County was 242,875 and the projected number of patient days was down to 273,486. Thus, the population of the county increased by 37,000 during that five year period, yet the number of patient days decreased by approximately 19,000. Thus, the hospital use rate is decreasing more rapidly than the population is increasing, and it has not been shown that patient days will increase in relation to the population through the year 1990. The increasing influence of the above-mentioned alternatives to inpatient care will continue to cause a drop in the hospital use rate for Sarasota County in the future. Indeed, the 1985-87 state health plan, in evidence, predicts that the combined effect of outpatient surgery and other delivery systems will result in an additional 15 per cent decline in hospital admissions by 1989. The current decline in utilization rate in Sarasota County hospitals has not yet been affected by the advent of HMO's and PPO's, but those prepaid health insurance organizations are in the offing and will cause further declines in utilization. If present trends continue, as has been proven to be likely, and the Manasota Hospital application is approved with its proposed 100 beds, hospital occupancy in Sarasota County will decline to approximately 40% in 1990. Approval of the applicant's facility would result in occupancy rates as low as 35 to 38% for Venice, Englewood and Manasota Hospitals, since Manasota, with a large number of M.D.'s on its staff will draw its patients and patient days from the same pool as the existing hospitals and thus share an insufficient number of patients with them. In order for all hospitals in District VIII to operate at the optimum of 80% utilization, as many as 1,344 acute care beds would have to be eliminated from the existing licensed and approved beds. Even if no additional beds are approved, the most realistic projection of hospital utilization in District VIII for 1990 is 44.6%. The average occupancy for acute care beds in District VIII during 1983 averaged 67.2%. By 1985 the occupancy rate was down to 52.4%. Accordingly, in view of the significantly low district-wide and county occupancy and the continuing downward trend, the legislatively mandated goal of hospital cost containment underlying Section 381.494, Florida Statutes, will not be furthered by the approval of additional hospital facilities in District VIII and Sarasota County, including that proposed by Manasota. Manasota's Abilitv to Provide Qualitv CareSection 381.494(6)(C)(3), Florida Statutes Inasmuch as the Manasota facility has not been found needed for a variety of reasons enunciated herein, the issue of its ability to provide quality health care will not be addressed in depth. It is quite likely that Manasota, if it got into operation, overcoming the operational and legal impediments discussed herein, could provide quality health care. Its management team is made up of Mr. Gerald White and other former managers of Health Corporation of America, all of whom have substantial health care managerial expertise. The Availability of Alternative Sources of Care -Section 381.494(6) (c)4, Florida Statutes There are less costly, more efficient and appropriate alternatives to the proposed Manasota project for District VIII and Sarasota County. The existing acute care hospitals are like and existing facilities offering similar health care services which are severely under-utilized. The osteopaths testifying both for and against the Manasota application acknowledge that there are plenty of hospital beds to admit their patients in Sarasota County, and that they can be satisfactorily, osteopathically treated at existing hospitals. Those D.O.'s supporting the application of Manasota acknowledged that they will continue to send their patients to existing facilities as well. Thus the existing acute care hospitals (as well as the future Gulf Coast facility), are appropriate alternatives to the Manasota facility, and since they are greatly under-utilized, or in the case of ECH and Gulf Coast, not yet utilized, they need more patients and more revenue to become more efficient, enabling them to deliver health care services in a less costly manner the public. If Manasota's hospital were approved, utilization would decline still further, generating even more excess acute care capacity. Unused capacity has a significant fixed cost increment which will have to be borne by the health care consuming public. This is wholly aside from the capital expenditure in excess of fifteen million dollars needed to place the Manasota facility in operation. This would be an unnecessary cost for the consumers of District VIII to bear in view of the lack of need for it. Probable Economies in Service Derived from Joint or Shared Resources-Section 381.494(6)(c)5, Florida Statutes Manasota does not propose to operate joint, cooperative or shared health resources in conjunction with its proposed hospital. This criteria is not really at issue in this case and no party offered proof with regard thereto. Need in the District for Special Equipment and Services not Accessible in Adjoining Areas-Section 381.494(6)(c)6, Florida Statutes This criterion is not applicable in this proceeding. Manasota will not offer specialized equipment or services of a type not already available in Sarasota County or the district. The Need for Research and Educational Facilities Including Institutional and Community Training Programs for Practitioners and for Doctors of Osteopathy and Medicine at the Internship and Residency Training Level-Section 381.494(6)(c)7, Florida Statutes Manasota proposes an osteopathic teaching hospital. It called Dr. Arnold Melnick to testify regarding the need for additional osteopathic teaching hospitals in Florida. Dr. Melnick is the Dean of the Southeastern College of Osteopathic Medicine (SECOM) in North Miami Beach. He was accepted as an expert in the fields of medical education and osteopathic medicine. Dr. Melnick established that the emphasis in osteopathic medical education is to train general or family practitioners. This aspect of medical education and practice comports with the holistic philosophy of osteopathic medicine which emphasizes treatment of a patient by looking at the patient's entire physical and environmental circumstance, rather than being specific disease, condition or system oriented. Because of the emphasis on training for ability to diagnose and treat all aspects of a patient's medical circumstance, osteopaths tend to be in general practice and family practice rather than specializing such that approximately 87% of osteopaths are in general. Only 4% of the osteopathic profession are primary care specialists in the areas of pediatrics, obstetrics and internal medicine. Dr. Melnick established that because of the holistic philosophy, there is not a significant need for more osteopathic specialists. This is also the reason that internships for osteopaths are required to be one year "rotating" internships. Osteopathic interns in teaching hospitals must rotate for a month or more through each of a teaching hospital's medical departments, such as pediatrics, obstetrics, and the like so that their training will be designed to give them a broad knowledge of many areas of medical practice. Contrastingly, with allopathic internships, interns concentrate in the area of their chosen specialty with a view toward moving on toward a residency in that specialty. It is for this reason that osteopathic teaching hospitals must offer a sufficient number of different medical practice departments so that interns may be given broad training in all the medical practice fields they will be required to know to be competent general or family practitioners, in keeping with the osteopathic philosophy of medical practice. Thus, although osteopathic practice is characterized by a vast majority of family practitioners, specialists are required· to train osteopathic physicians. The AOA accreditation requirement dictates that certified osteopathic trainers must be present in the various departments. Dr. Melnick established that an osteopathic teaching hospital should not be smaller than l00 beds, must have at least three outstanding osteopathic internists, at least two osteopathic surgeons, an osteopathic pediatric specialist, as well as an obstetrics-gynecology specialist. Manasota presented testimony of osteopathic specialists consisting of a surgeon, a pathologist and an opthamologist from Suncoast Hospital in Largo, Florida who are willing to move to Sarasota County and become staff members if the hospital is built. Manasota, however, has not established that it will have the specialists required for an appropriate quality osteopathic teaching hospital. It did not show how it would obtain the required number of internal medicine specialists, surgeons, a pediatrician nor a specialist in obstetrics and gynecology. In fact, Manasota will not have an obstetrics department. Both Dr. Melnick and Mr. White established that a teaching hospital needs more FTE staff members than a non- teaching hospital. The proposed 3.4 FTE's will be less than necessary for a teaching hospital to adequately operate. There is currently a shortage of nurses and other technical staff employees in Sarasota County, as evidenced by the difficulty Venice has had hiring and retaining people in these positions due to the advent of the Englewood facility and its competing recruitment. There is a substantial likelihood that Manasota will have difficulty obtaining sufficient staff members to be a bona fide quality teaching hospital, especially since it proposes to hire osteopathically trained nurses and technicians. It did not establish where it intends to recruit them. In view of the fact that Manasota proposes to recruit its medical staff locally, it has failed to establish where it will obtain the required number of D.O. specialists as certified trainers for each of its departments. There are eight osteopathic teaching hospitals in Florida. The most recent graduating class from SECOM consisted of 40 osteopathic physicians. All of them were placed in suitable intern programs in and out of Florida. It was not shown that all of these 40 interns would have remained in Florida even had there been an additional osteopathic teaching hospital. The college will be graduating 100 osteopathic physicians per year by 1987. It was not established that all of the internships they will require must be at Florida hospitals. In this connection it was shown that a 100-bed osteopathic teaching hospital could accommodate eight interns, but only if that hospital was operating at 80% capacity. If the same hospital had only a 57% occupancy it could accommodate 5.7 interns. Thus by Manasota's own utilization projections it could accommodate only about five interns, even if it could obtain the required number of osteopathic specialists as trainers. Further, such interns typically receive stipends of from $18,000 to $20,000 per year. Although Manasota could obtain approximately $3,000 per year per intern from a grant program established by the legislature, it did not demonstrate in its financial evidence that it has provided for the necessity of $75,000 per year for intern salaries. In short, it has not been proven that Manasota genuinely can establish its facility as an osteopathic teaching hospital in accordance with Dean Melnick's own, requirements. Availabilitv of Resources, Manpower, Management Personnel and Funds for Operating and Capital Expenditures; Effects on Clinical Needs of Training in the District for Health Care Professionals; Accessibility to Schools in the District for Health Care Training; Alternative Uses of Resources for Other Health Services; Accessibility of the Facility to all Residents of the District; Section 381.494(6)(c)8, Florida Statutes In terms of manpower availability, the Applicant intends to have an open staff of M.D.'s and D.O.'s, purportedly recruited from the existing medical community in Sarasota County. Manasota will only seek to recruit physicians from outside that area if unable to staff the hospital from existing physicians with practices in Sarasota County who could "swing" their patients from existing hospitals to Manasota's facility, discussed above. The potential physician-investors, referenced above, were assured by Manasota's principals, that the vast majority of the 20 or 30 physicians needed to staff the facility would be M.D.'s from the Venice and Sarasota area. The doctors attending these promotional meetings were told there would not be a heavy influx of osteopathic physicians to Venice to staff the hospital. There are between 100 and ll0 M.D. physicians in the Venice area. There are 20 osteopathic physicians in Sarasota County. Three support the application and would seek privileges at Manasota, four of them would not and do not feel the hospital is needed. The remainder did not testify nor indicate any interest in staff privileges. The testimony of the osteopathic physicians from other areas (Dade City and Pinellas County), as well as Dr. Melnick, as found above, established that for a hospital to be osteopathic in philosophy and operation, at least 52% of its governing body should be osteopathic physicians, as well as the majority of its department heads and staff. Only four of these doctors expressed a desire to join Manasota's staff. There is therefore simply no competent, substantial evidence of record to establish that a majority of the staff physicians will be osteopathic physicians, nor that the majority of the department heads will be osteopaths. In fact, the evidence does not reflect clearly how many staff positions Manasota proposes to obtain to operate the hospital, nor that a sufficient number of M.D.'s and D.O.'s can be obtained locally in the face of the staff privileges offered at existing hospitals. If an influx of physicians will be required from outside areas to staff the hospital, while this might provide adequate physicians to staff the hospital, it would not serve to increase hospital utilization, they would bring no patients with them. In fact, with the utilization rate decreasing, the pool of patient days available to render the hospital and medical practices feasible is continuing to shrink and if more physicians are added to the Sarasota County market, health care costs can only rise as doctors and the hospitals must raise charges in order to render their practices financially feasible when there are not enough patients in relation to the number of doctors or beds available. Better alternative uses of the resources represented by the increased charges would involve not building such a facility in such a shrinking patient market, but rather allowing existing hospitals a chance to improve their utilization experience first with their already constructed and financed excess capacity. The 3.4 full time staff equivalents (FTE's) per occupied bed based upon witness Sucher's projections are insufficient to staff an acute care hospital such as this. Indeed, as shown by Mr. White, a teaching hospital may require up to 5.6 FTE's. A minimum of 3.8 FTE's per occupied beds would be needed to staff an acute care facility such as that proposed by Manasota as shown by Mr. Schwartz, and as a teaching hospital an even higher staff ratio would be necessary. If Manasota adjusted its FTE staff to meet only the minimum 3.8 FTE standard, its costs for staffing would be $450,000 more than that proposed in its pro forma expense statement. Indeed, if it actually proposes to be a teaching hospital, its staffing requirements and concomitant expense would increase on the order of one million dollars more than that proposed in its pro forma. In connection with this, the staff proposed to be needed in certain departments was understated. For instance, 16 to 18 employees would be needed to staff a laboratory in a 100-bed hospital and Manasota only allocated 8. Similarly, it only proposes to have 3 FTE's to staff its pharmacy. This is an insufficient number of employees to staff a pharmacy seven days a week, 24 hours a day as Manasota proposes to do. Finally, although Manasota proposes to have an osteopathically trained staff of nurses and other technicians, it did not demonstrate where it would be able to recruit such staff members trained in osteopathic principles of nursing and other disciplines. Thus the Applicant has not proven the availability of sufficient manpower and related resources to feasibly operate the project. The issue of availability of funds for capital and operating expenditures for accomplishment and operation of this project is treated with more specificity infra., however, it should be pointed out that Manasota has significantly understated land purchase, site development, working capital and other capital costs by more than two million dollars, and otherwise understated the magnitude of resources the project will require. Although the facility will be readily accessible to the population of south Sarasota County, in view of the above findings there is no accessibility difficulty for acute care patients, both allopathic and osteopathic, at the present time, in the county and District VIII, especially with the advent of the Gulf Coast Osteopathic Hospital and the recently opened Englewood facility. The considerations in the above statutory criteria regarding health care training and education needs are dealt with to the extent they are relevant in this proceeding in the findings concerning Manasota's proposed posture as an osteopathic teaching hospital. Financial Feasibility Mr. Randy Sucher and Dr. Elton Scott, testified as financial experts on behalf of Manasota. Mr. Sucher testified that the projected utilization of a proposed facility is the "cornerstone" of a financial feasibility study, and financial forecast. Mr. Sucher conceded that the financial feasibility study done in this case was much less detailed and thorough than had been done in his experience when he was employed by an accounting firm to perform feasibility studies for hospital clients, especially in the area of evaluating patient demand. Mr. Sucher largely relied on the demand and utilization study performed by Dr. Scott. The frailty in the study lies in the method employed by Dr. Scott to study demand and project utilization, which lacks specificity. He determined his position regarding patient demand for Manasota's project largely by attending meetings and interviewing physicians, most of whom are M.D.'s in Sarasota County. He then projected utilization by determining the admission rate per 1,000 population in south Sarasota County which is Manasota's primary service area. He arrived at a figure of 102 admissions per 1,000 population, determined by merely considering the admissions to Venice Hospital as reported in the 1983 hospital cost containment board data. He applied that admission figure to the population figures for south Sarasota County for 1985. He performed no patient origin studies for Venice Hospital, so it was not established whether all of those admissions originated from the same south Sarasota County origin area represented by his population figure. The results of his interviews with physicians do not indicate hat all the patients admitted by those physicians to Venice Hospital, came from the south Sarasota County service area proposed for Manasota. There is thus no way to determine from this record if the patient admission figures relied upon by Dr. Scott correlate with the actual admissions to Venice and from the relevant primary service area population. Thus, even though Dr. Scott's data showed 102 admissions for Venice per 1,OO0 population, when only looking at the census tract population areas for south Sarasota County, it was not established that those admissions were not drawn from a much larger population base representing more of Sarasota County and possibly north Charlotte County. If so, that would result in a much lower admissions per 1,000 population figure for Venice Hospital, as that relates to the number of patient admissions Manasota could expect to capture from Venice. Dr. Scott's utilization assumptions were not verified by any patient origin studies for Venice Hospital, which might show, for instance, that significant numbers of its admissions come from areas from which Memorial and Englewood will draw patients. Thus, the 22 per cent share of Venice's admissions that Scott opines Manasota will attract, have not been verified by a showing that those patients are from origin areas or physicians more likely to be attracted to Manasota as opposed to Venice, Englewood or Memorial, if Manasota is built. In this connection, no in-depth physician analysis study or market analysis study was done by Dr. Scott or Mr. Sucher. Instead, they relied upon general discussions at interviews with three local osteopathic physicians and 12 to 15 M.D.'s as well as three or four out-of-district D.O.'s and, according to Mr. Sucher,: "from that, we just kind-of got a composite feeling that we could generate 'x'." Dr. Scott and Mr. Sucher also relied in part upon a 1983 informal survey conducted by a Manasota shareholder of an indefinite number of Sarasota County physicians. Some of these, including the four Sarasota D.O.'s discussed above, now have privileges at other Sarasota area hospitals and will not admit patients to Manasota. The three D.O.'s who support the application will not refer all their patients to Manasota and the osteopathic physicians from the St. Petersburg area, who indicated a desire to join Manasota's staff, are not all "admitting physicians," some of them being specialists who only engage in hospital practice and would provide no patient admissions. As found above, Manasota did not prove that it could adequately staff the hospital with M.D.'s and D.O. s. If it obtains doctors from other areas, they will not have a local patient base from which the hospital can gain the admissions necessary to achieve a feasible revenue posture. Neither Dr. Scott or Mr. Sucher took into account the market share that Englewood would obtain, including its share of admissions from Venice Hospital. Englewood is a new, 100-bed acute care facility located in Sarasota County, closely proximate to the Manasota proposed location and to Venice's location. A significant portion of its staff physicians are located in Venice. The primary service areas of all three hospitals substantially overlap. It is not reasonable to conclude that Manasota will not compete with Englewood for patients, as well as with Venice. Thus, Dr. Scott and Mr. Sucher's estimate that 22% of its admissions could be obtained from the patient pool enjoyed by Venice at the present time, is over-stated as that relates to Manasota's projected patient utilization and revenue. All three hospitals will compete for the same pool of patients, as will Memorial. Englewood is likely to claim a substantial number of the patient admissions originating in this area, and thus it is unrealistic to ignore the market share that Englewood is likely to obtain. Manasota is not likely to realize the admissions it projects obtaining from the Venice area and thus its utilization will be significantly lower than projected, as will its revenues. Patient days will continue to drop through 1990 because the use rate is dropping more rapidly than the population is increasing. Manasota will thus have to obtain most of its patient days from the admissions enjoyed by existing hospitals, which already have low and declining utilization. It has simply not been established that Manasota will be able to capture sufficient patient days from them to ensure its financial feasibility. Assuming arguendo, that its utilization projections are accurate, the revenue and expense projections based thereon are inaccurate and not supportive of finanical feasibility. "Contractual adjustments" represent the differences between what the hospital charges and what is actually reimbursed by Medicare and other reimbursement schemes. The contractual adjustment represents a deduction from gross revenue. A significant issue was raised by all parties through their financial experts, concerning the portion of the contractual adjustment related to capital cost pass-through. Mr. Beachey, and other witnesses for existing hospitals, opined that capital cost pass-through, whereby a hospital is reimbursed for its cost of capital through the DRG reimbursement system, will be eliminated entirely phased out in steps such that the increment of DRG reimbursement represented by capital cost pass-through should be eliminated from Nanasota's revenue figures. Mr. Beachy feels the ultimate federal regulations enacted will call for a phased reduction in capital cost pass-through. All experts, both for the Applicant and the protestants, agreed that the capital cost pass-through is very likely to be reduced or eliminated in future years. The dispute amongst the experts concerned whether new facilities, either CON approved, under construction, or opening in the year the regulation becomes effective, will have their capital cost pass-through reimbursement entirely eliminated. Because all the opinions are based upon conjecture and speculation regarding what the Congress will do in this regard, they are rejected. The Applicant's pro forma statement of revenues (in evidence) is predicated, in part, upon the assumption that DRG Medicare reimbursement will increase five per cent a year through fiscal year 1989-1990. This assumption is rejected in favor of Mr. Beachey's expert testimony. Mr. Beachey established that the Medicare reimbursement increase for 1986 will only be one-half of one per cent, and that for 1987 one house of congress has agreed to a one half per cent increase in the reimbursement rate, and the other to a one per cent increase. While the ultimate 1987 rate is speculative, Mr. Beachey established that for that and future years it is not likely to be on the order or magnitude of 5%. Mr. Beachey, in an abundance of caution (favorable to the Applicant), opined that at best there might be a 3% annual increase in Medicare reimbursement after 1986, rather than the 5% postulated by the Applicant (even though the 1986 increase is only one-half per cent. His opinion is clothed with substantial probability of reliability and is accepted. The Applicant projects a 5% deduction to revenue for bad debts. Mr. Beachey established that this is more likely to be 8%. That was indeed the figure used by the Applicant in its own application, also in evidence. Mr. Sucher's pro forma statement also projected Manasota providing 3% Medicaid, while the application itself, in evidence, indicates Manasota will obtain 5% of its revenue based upon reimbursement for Medicaid care. These resulting contractual adjustments, which are deductions from revenue, coupled with the necessary adjustment for the increased increment for bad debt, which was established, reveal that, because of these adjustments alone, the Applicant will experience a loss of $414,000 for its first year of operation, and a $1,012,000 loss for the second year. These loss figures do not reflect Mr. Beachey's opinion that an increased number of FTE's are necessary over the 3.4 FTE's projected by Mr. Sucher, which would reduce revenue by $512,000, nor his opinion that declines in "capital cost pass-through" would reduce revenue by $700,000 the first year and $430,000 the second year. This latter opinion was rejected for the reasons mentioned above, and his opinion regarding the additional FTE staff required is rejected because of Mr. Beachey's lack of expertise regarding adequate staffing patterns and levels. The Applicant failed to account for indigency tax assessments of $155,000 and $188,000 for 1988-1990. That assessment is designed to enhance reimbursement for indigent care for hospitals in the state. Although Mr. Sucher and Dr. Scott opined that the amount of the assessment would be reimbursed, an accounting "wash," the preponderant, expert testimony reveals that there is no direct reimbursement payment related to the amount paid into that fund. In any event, the amounts of such possible reimbursements are not proven. Additionally, the Applicant did not account in its expenses for real estate taxes which will amount to $155,000 per year. These expense increases and concomitant revenue deductions are reflected in the above found loss figures. The Applicant will have to increase its charges by a substantial amount to offset these net losses. The revenues would have to be increased on the order of 36% the first-year of operation and 35.9% the second year. It is important to remember that only 26% of the Applicant's patient mix would be private paying or insurance reimbursed patients, who could absorb these increased charges. Concerning staff salaries and benefit expense, the Applicant proposes 3.4 FTE's per occupied bed. A number of the expert witnesses, both for the protestant hospitals and the Applicant, established that that is an insufficient level of staffing for a 100-bed hospital. Mr. Sucher acknowledged that he had no personal experience in determining staffing patterns and staffing a hospital, although in his capacity as an expert in hospital finance, he had dealt with the financial implications of staffing. Mr. Sucher admitted that his 3.4 FTE figure was a rough estimate, which primarily included only nursing and administrative staff, and did not take into account laboratory staff and other technical positions. Mr. White himself finds that teaching hospitals, require a range of from 3.7 to 5.6 FTE's per occupied bed. Mr. Schwartz established that the non-teaching hospitals in the area have a minimum of 3.8 FTE's per occupied bed which is the minimum accepted for a facility such as Manasota's. Indeed, the testimony of Dr. Melnick and Mr. White shows that a higher staffing rate would be needed since Manasota proposes to be an osteopathic teaching hospital. Thus, the appropriate staff ratio (and concomitant salary and benefit expense) for Manasota would have to be substantially higher than 3.8 FTE's per occupied bed. If the FTE ratio were, however, raised to the minimum level of 3.8 FTE's, the expense figure for salaries and benefits would increase by $450,000. Given Mr. White's, Mr. Schwartz's and Dr. Melnick's testimony that a higher level of staffing is needed at a teaching facility, this expense figure might be much higher. If, for example, a modest increase in staffing to account for Manasota's obligations as a teaching hospital operation necessitated a raise in the FTE ratio to only 4.2 FTE's per occupied bed, the total additional expense over that attributable to the projected 3.4 FTE's would be on the order of $900,000. Even that figure would be on the lower end of the range normal for teaching hospitals. These additional staffing expense adjustments would increase the above loss figures by a minimum of $450,000 and likely much more. In addition to the above understated expense items, the Applicant failed to account for payment of federal income tax. The Applicant also failed to provide for payment of insurance which Mr. Sucher acknowledged would cost between $400,000 and $600,000 per year. Payments for utility expense were also not accounted for and Mr. Sucher acknowledged those would cost approximately S300,000 per year. Payments for sales taxes and contract services such as laundry service, which will be a substantial expense, were not accounted for, nor were principal payments on the approximate 14 million dollar debt. The Applicant did not allow for marketing expenses, even though Mr. Sucher and Mr. White acknowledged that an aggressive marketing strategy would be used to obtain a feasible level of admissions. Mr. Sucher testified that a great deal of these expenses generally fell under the heading "supply and other" in the pro- forma statement but, in consideration of these and many other non-itemized expenses such as kitchen or food service, supply purchases, and drug purchases which were not depicted in the pro- forma statement as to amount, it was not established that the general category for supply and other expenses was sufficient to cover all of these expenditures. Capital Costs The Applicant has additionally understated some of the capital costs involved in the project. Foremost among these, as Mr. Sucher admitted, the proposed $15,587,000 capital cost attributable to the project did not include a required 1.5 million dollars in working capital. Manasota also included only $500,000 for land acquisition. One of the sites under consideration however, would cost approximately $1,250,000. Manasota's own witness regarding real estate values established that the required 7 to 10 acre site in south Sarasota County, would cost on the order of a million dollars, exclusive of real estate commissions, legal fees, and other preliminary site costs. Although Manasota has proposed to be an osteopathic hospital, no provision was made in its proposed equipment costs for manipulative therapy tables. Ms. Usher, Manasota's equipment expert, opined that such a table would cost from $150 to $8,000. Indeed, Dr. Snyder, D.O., established that equipping a department of manipulative therapy could cost as much as $100,000. The equipment list does not provide for other items of equipment normally present in operating an acute care hospital, such as an incinerator or two-way radio communication equipment. Some items, such as televisions and a computer system, are optional to some extent, and the record does not reflect whether some items such as a telephone system might be included in the overall capital costs for the facility, even though not listed on the equipment list. It is noteworthy, however, that Manasota has not provided for any expenditure for kitchen or dining room equipment, which could cost as much as $250,000 to $350,000. This unprovided for equipment is essential for functioning as an acute care hospital. The inclusion of these items would boost the capital costs of the project to approximately $17,837,000, without considering the cost of the osteopathic manipulation tables and unknown construction contingencies, dependent on site selection, such as acceleration and deceleration traffic lanes, extension of utility lines and service, and, potentially, a package sewage treatment plant. The contingency fund of $400,000 described by Mr. Henry, was not shown to be adequate to cover these costs. Short-Term Financial Feasibility Manasota retained Morgan, Schiff and Company, Inc. as its financial adviser and broker for this project approximately three months prior to hearing. Mr. Thaddeus Jaroszewicz represented that corporation in testifying regarding financiability of the project. Neither Mr. Jaroszewicz nor Morgan Schiff have participated in the financing of a health care facility prior. Mr. Jaroszewicz stated that it was necessary to have an understanding of the health care industry in which a client operates in order to evaluate the reasonableness of cash flow projections provided to him by the client. Although Mr. Jaroszewicz has some understanding of the economics of the health care industry, due to his lack of experience with health care clients, his expertise is somewhat limited. Given his experience in the financial markets, Mr. Jaroszewicz is confident he can raise the 90% debt financing, probably through banking institutions. However, he based his opinion on the financial projections provided him by Manasota, which for reasons expressed in the other findings herein, have been shown to be inaccurate in projecting financial feasibility. The capital costs, for reasons found herein, are understated as well, such that the true capital costs of the project will approach 18 million dollars, instead of $15,587,000 which Mr. Jaroszewicz assumed. All of these factors, coupled with the fact that AmeriHealth, Inc., through its purchase of Richmond Metropolitan Hospital, the pending purchase of Antauga Medical Center and Smith Hospitals in Alabama from HCA, the Savannahs Hospital Project in Indian River County, Florida, together with its pending half-million dollar lease of a facility in Lockhart, Texas, has committed all its resources and indeed is heavily "leveraged" in seeking to accomplish these purchases. AmeriHealth owes in excess of 11.3 million dollars on the 14 million dollar Richmond Hospital purchase. Regarding the HCA Alabama facilities purchase, AmeriHealth will assume 5 to 6 million dollars in HCA debt and incur new debt totaling 8 million dollars. Additionally, it will give 2.3 million dollars in subordinated notes back to HCA for the remainder of the financing. Upon completion of an expansion project at the Antauga Hospital there will be an additional 8 million dollars in debt assumed by AmeriHealth. The Savannahs Hospital Project in Indian River County will involve an additional 9.5 million dollars in debt. That financing has not closed. AmeriHealth is additionally involved in purchasing Ambulatory Surgical Centers which will cost $450,000 to $750,000 each. AmeriHealth's net worth is approximately 4.7 million dollars. As of September 11, 1985, the HCA acquisitions had not closed because AmeriHealth was unable to secure acceptable financing. Citibank, the proposed lender, was requiring strict liquidity requirements and capital expenditure requirements on AmeriHealth before it would finance the project. AmeriHealth found these requirements unworkable so that it was unable to close the HCA transaction and had to ask for extensions of time on the closing date. AmeriHealth has not yet been able to obtain acceptable financing for that purchase. AmeriHealth is thus a fledgling company which has leveraged all its assets. It will likely have substantial difficulty obtaining financing for the Manasota project. In view of the fact that Mr. Jaroszewicz had not had the benefit of doing his own analysis of the Applicant's proposed financial projections, and in view of the other evidence that has shown that revenues have been overstated and expenses and capital costs understated, it must be concluded that if a lender was aware of this negative cash posture, obtaining of satisfactory financing would be quite doubtful. In this regard it is understood that if a CON were actually granted financing might be arranged. It must be proven that the financial projections are indeed accurate and that indeed, the project will be financially feasible on a short and long term basis for that to happen, however. Such has simply not been proven to be the case. Special Needs of Health Maintenance Organizations (HMO's)-Section 381.494(6)(c)10, Florida Statutes This provision is not at issue in this proceeding. There is no evidence regarding special needs of HMO's. Needs and Circumstances of Entities Which Provide a Substantial Portion of Services to Individuals Not in the District or Adjacent Districts-Section 381.494(6)(c)11, Florida Statutes If Manasota were approved and could feasibly operate as a teaching hospital, it would be available to provide internship and residency programs to students from SECOM and other medical schools. Additionally, Manasota would be available to provide osteopathic health care services to individuals in adjacent districts. However, the preponderant evidence of record does not reveal that osteopathic health care services in adjacent districts are not already being met, especially given the under utilization of osteopathic hospitals in Pinellas and Hillsborough Counties, approximately an hour's drive to the north. Probable Impact of Project on Cost of Providing Health Services, Effects of Competition on Innovations in Financing and Delivery of Health Services which Foster Competition Section 381.494(6)(c)12, Florida Statutes. That portion of this criterion concerning innovations in financing and delivery of health services which foster competition, etc., is not truly at issue. There was no evidence to indicate that any innovations in financing and delivery of health services are proposed other than that Manasota proposes to be an osteopathic teaching hospital, and proposes to charge 10% lower rates. As found above, the Gulf Coast Osteopathic Hospital will be substantially less than two hour's travel time from Manasota's site, and thus Manasota will not truly be an innovative health service in the district. Even if Manasota were approved, it is highly unlikely, in view of the above findings, that it can deliver its health services more cost-effectively. The probable impact of the project on cost of health services and the effects of resultant competition on the supply of health services, must be addressed. In this regard, Memorial is a full-service, acute care hospital, competing for the pool of patients in the primary service areas of Venice, Englewood and the proposed Manasota facility. Memorial is licensed for 788 beds, but as of October, 1985, only 590 beds were in service and staffed, due to a steady decline in utilization. Memorial's total patient days for 1985 were the lowest it has experienced since 1973, 15% less than its peak year of 1982. Memorial would experience substantial adverse financial impact if the Manasota project were approved. Memorial, in 1984, obtained 1,458 patients from the south Sarasota County area, including the cities of Osprey, Venice, Nokomis and Northport, in the primary service area proposed by Manasota and also served by Venice and Englewood. If the Manasota Hospital is approved, Memorial will lose approximately half of those patients. This would result in a reduction of gross revenues of approximately $3,579,000 and a concomitant reduction in its net operating revenue margin of $1,382,000. A reduction of this magnitude would reduce Memorialt's overall operating margin to 1.2%. A 2% operating margin, which Memorial will experience for 1985, is the absolute minimum safe level at which a hospital can operate in a financially viable manner. With a 1.2% operating margin, Memorial will be unable to maintain necessary working capital, nor maintain favorable bond financing ratings with bond rating agencies. If its bond rating worsens, its cost of bonded indebtedness will correspondingly rise. In order for Memorial to maintain its 2% operating margin, it would have to increase prices by at least 2.6%. The only other alternative would be to raise its tax levy as a public hospital board by approximately 28%. Either eventuality would result in a significant increase in health care costs to the Sarasota County community. Venice Hospital has 312 licensed beds. Its average annual occupancy was 71% in 1985, but will decline to 55.8% for the 1986 fiscal year. The declining utilization will be caused by the continuing effects of the DRG reimbursement system, and the other factors enumerated above. The average length of stay and projected utilization at Venice will continue to decline at least until 1990. The 55.8% occupancy rate projected for 1986 includes only the impact on Venice's utilization of the opening of the ECH, not Manasota. Even so, its projected operating revenue for 1986 will be only $589,150. The patients that Manasota will obtain will come from the same pool of patients served by Venice and the declining utilization rate, even in the face of increasing population, reveals that there are not enough patients for Venice to operate cost-effectively, especially if Manasota is opened. The loss of patients to Manasota will cause a loss of gross revenues for Venice of $10,287,200, strictly from inpatient revenues, not taking into account outpatient losses. Venice has already laid off personnel and will have to continue to do so to compensate for revenue losses from the downturn in its utilization. Venice will have to close additional nursing units and beds and further reduce staff on account of the competitive effects of the ECH opening. Even after reducing a reasonable percentage of such variable costs, Venice will suffer a net operating revenue loss of approximately $4,020,119 if Manasota is opened. If this eventuality occurs, Venice will be forced to face either bankruptcy or likely closing of entire wings and drastic reductions of present services. This would diminish access to health care services in the area, and quite likely result in declination of quality care. Dr. Scott acknowledged that Manasota would take a significant number of patients from Venice, but minimized its effect by opining that Venice could make up for the loss by operating more efficiently, believing that its recent bond refinancing resulted in unnecessary additional financing costs to Venice, that Venice had an excessive amount of administrative expenses. The above findings reflect, however, that the bond refinancing did not result in any significant increase in debt cost to Venice, and yielded several million dollars more capital funds for Venice. Dr. Scott's figures for Venice's purportedly high administrative costs was shown by Mr. Shanika to be in error. Thus, if Manasota Hospital meets its own projections, which are over-stated, it will draw approximately 2,415 patients from Venice, causing it to operate at a loss, and destroying the feasibility of its programs and endangering its quality of care. Since Venice is already operating as a relatively efficient hospital, it cannot make up those losses by becoming more efficient. Venice's operating revenue would fall to the break even point if it only lost 309 patients. If Manasota drew anywhere near 2,415 patients from Venice, charges would have to be increased on the order of 40% to compensate for the loss. Englewood is a fledgling 100-bed acute care facility scheduled to open in November, 1985, and has thus not yet had an opportunity to obtain adequate utilization of its beds and services and to secure a positive operating ratio. Dr. Scott recognized the potential impact on Englewood of the Manasota opening, particularly with respect to physicians located in the Englewood area who might swing all or part of their admissions to Manasota. If any of Englewood's staff physicians, such as Dr. Chirillo, who testified in support of Manasota, swung all or part of their patient bases to Manasota, it would have a substantial deleterious effect on the patient days and revenue for Englewood. This would result in a diminution of service at Englewood or in some cases a discontinuance of certain services. Under present projections, Englewood will not realize profit for approximately 5 years, but if the Manasota facility is built, that time will be significantly extended. Manasota will have a significant adverse impact on Englewood's utilization and financial viability by taking patients away from it before it has an opportunity to reach a profitable operating situation. Englewood has already experienced problems in hiring sufficient qualified staff members. It has experienced counter offers to prospective staff members made by other hospitals, such that in order to obtain qualified staff, Englewood has had to raise the salaries it offers. If Manasota opened, the additional competition for staff members would likely cause salaries for staff to be bid upwards still further, as well as causing technically trained staff members to become even scarcer. This situation could cause significant cost increases to all facilities involved and to the health care consuming public. Manasota seeks to staff its facility largely with physicians in Sarasota County who could swing their admissions to the new hospital. There is only one pool of patients and patient days for the four contending facilities to divide amongst them, however. Osteopathic patients come from the same patient pool as those treated by M.D.'s, in that all are acute care patients. Since there is no unserved need for more acute care beds in Sarasota County, or District VIII, inpatient utilization of the three existing facilites will necessarily decrease by the advent of Manasota. Manasota also projects 1,200 outpatient surgeries its first year. These patients must come from Venice, Englewood or Memorial. These facilities depend on outpatient surgeries as an important source of revenue and profit which is used to offset areas of service which do not operate as favorably. The loss of these patients to Manasota by the existing facilities, which are already competing for a shrinking patient market in terms of declining patient days and utilization, will inevitably lead to higher patient charges and to shrinking availability of services. The cost to the community will be significant. Under- utilized facilities are more costly to the community. As utilization declines due to the above-found causes, future patients will be forced to absorb the cost of excess beds. The more patients who utilize a service which represents a capital expenditure, the lower the unit cost will be to the health care consumer. The construction of unneeded facilities, representing excess capacity, results in capital expenses borne by the public increasing at a greater rate than the numbers of patients or patient days from which off-setting revenues must come. The patients and the community will then have to bear a higher unit cost for health care services represented by this excess capacity. While Manasota contended, as partial justification for its facility, that there are a number of hospitals-in the state with occupancy rates in the low forty percentile range, which still generate significant profits, this point ignores the high cost the health consuming public must pay for 50 to 60% unused capacity at such hospitals. Hospitals can only reduce their variable costs attributable to unused bed capacity and typically, 40% of the costs of unused capacity are fixed costs which are not covered by any revenue and which cannot be reduced by staff and service reductions. Such fixed costs must be passed on to the public through higher rates and through the government reimbursement systems. Indeed, as established by Dr. Zaretsky, the cost of 100 excess beds to the Sarasota County community would amount to $3,674,349 in aggregate added annual costs, expressed in 1983 dollars. Even without the advent of the Manasota facility, there are already considerably more than 100 excess beds in Sarasota County. If the capital cost "pass through" scheme is eliminated in whole or in part, the hospitals would have to absorb or pass on to consumers more costs through inFla.ed rates and possible increases in Medicare and Medicaid reimbursement. To the extent that existing facilities are unable to raise charges sufficiently, they will have to absorb the differences, incur losses or cut back on services and quality of care. If a hospital is approved for an area that is not currently a monopoly, with existing hospitals already competing for patients, especially if the hospitals are operating below capacity, than the added competition is destructive. It dilutes the patient volume each hospital depends upon for adequate revenue coverage of costs. This results in inefficiency in the health care system since hospitals have fewer patients to spread the fixed costs among. Thus it has been established that approval of Manasota as an additional competitor in this market will result in significant added health care costs to the community. Cost and Methods of Construction, Etc.-Section 381.494(6)(c)13, Florida Statutes Aside from the capital cost understatements reflected in the above findings, the construction costs, methods of construction and provisions for energy conservation dictated by the south Florida environment where the hospital will be built, have been shown by the Applicant to be reasonable and appropriate. Because of the indefinite site location in the south Sarasota County area, however, the funds set aside in the pro forma of $35,000 for site preparation costs, and the $400,000 contingency fund related to construction, have not been established to be adequate to cover all site preparation work and such potential offsite construction costs as additional traffic lanes, signals and utility service extensions. Available, Less Costly, More Efficient Alternatives Section 381.494(6)(d)(1), Florida Statutes. There are available less costly, more efficient alternatives to the acute care inpatient services proposed by the Applicant. The existing inpatient facilities, including Gulf Coast Osteopathic Hospital, can or will provide, inpatient services similar to those proposed. The existing facilities are providing them in an appropriate, efficient manner to the extent they are able, given their under-utilization. Existing Facilities Are Being Used in an Appropriate, Efficient Manner-Section 381.494(6)(d)2, Florida Statutes It has not been established that existing inpatient facilities are being used in an efficient manner, in terms of adequate use of their present capacity. Rather, the record reflects that existing hospitals are under-utilized with the added health care costs and inefficiencies that entails, which Manasota would aggravate. Alternatives to New Construction such as Modernization and Sharing-Section 381.494(6)(d)3, Florida Statutes The Applicant has not established that alternatives to the proposed construction have been considered and implemented to the maximum extent possible. The existing facilities are viable alternatives to the proposed new construction, in that they have substantial amounts of unused capacity and can provide additional acute care services as needed without expansion. Many of the osteopathic physicians testifying acknowledged that their patients can be treated in an appropriate, efficient manner in existing facilities. Patients Will Experience Serious Problems Obtaining Inpatient osteopathic Care in the Absence of the Proposed Facility-Section 381.494 (6)(d)4, Florida Statutes. The Applicant has not established that patients will experience serious problems in obtaining inpatient care of the type proposed in the absence of Manasota. Osteopathic acute care services are available in District VIII, notwithstanding the absence of another identifiable osteopathic facility, for the reasons delineated above.
Recommendation Accordingly, having considered the foregoing Findings of Fact, Conclusions of Law, the competent, substantial evidence of record, the candor and demeanor ot the witnesses and the pleadings and arguments of the parties, it is, therefore RECOMMENDED: That the application of Manasota Osteopathic General Hospital, Inc. for a Certificate of Need authorizing establishment and operation of a 100-bed osteopathic teaching hospital in HRS District VIII and Sarasota County, Florida be DENIED. DONE and ENTERED this 26th day of June, 1986 in Tallahassee, Florida. P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of June, 1986. COPIES FURNISHED: John D. C. Newton, II, Esquire CARSON & LINN, P.A. 253 East Virginia Street Tallahassee, Florida 32301 William E. Williams, Esquire FULLER & JOHNSON, P.A. Post Office Box 1739 Tallahassee, Florida 32302 Robert A. Weiss, Esquire 118 North Gadsden Street Suite 101 Tallahassee, Florida 32301 Ken Davis, Esquire DAVIS, JUDKINS & SIMPSON Post Office Box 10368 Tallahassee, Florida 32302 E. G. Boone, Esquire Robert Klingbeil, Esquire Post Office Box 1596 Venice, Florida 34284 W. David Watkins, Esquire OERTEL & HOFFMAN, P.A. Post Office Box 6507 Tallahassee, Florida 32314-6507 Theodore C. Eastmore, Esquire WILLIAMS, PARKER, HARRISON, DIETZ & GETZEN Post Office Box 3258 Sarasota, Florida 33578 Harden King, Esquire Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301 William Page, Jr., Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES VENICE HOSPITAL, INC., Petitioner, vs. CASE NO. 85-0045 DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, and MANASOTA OSTEOPATHIC GENERAL HOSPITAL, INC., Respondents. / HCA OF FLORIDA, INC., d/b/a DOCTORS-HOSPITAL OF SARASOTA, Petitioner, vs. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, CASE NO. 85-0047 Respondent, and MANASOTA OSTEOPATHIC GENERAL HOSPITAL, INC. AND ENGLEWOOD COMMUNITY HOSPITAL, Intervenors. / DOCTORS' OSTEOPATHIC MEDICAL CENTER, INC. d/b/a GULF COAST HOSPITAL, INC., Petitioner, vs. CASE NO. 85-0050 DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, Respondent. / SARASOTA COUNTY PUBLIC HOSPITAL BOARD d/b/a, MEMORIAL HOSPITAL, SARASOTA, Petitioner, vs. CASE NO. 85-0051 DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES and MANASOTA OSTEOPATHIC GENERAL HOSPITAL, Respondent. /
The Issue The issues are: (1) Whether Respondent exercised influence within a physician-patient relationship for the purpose of engaging a patient in sexual activity in violation of Subsection 459.015 (1)(l), Florida Statutes; (2) Whether Respondent engaged a patient in sexual activity outside the scope of practice or the scope of generally accepted examination and treatment of the patient in violation of Section 459.0141, Florida Statutes; and (3) If so, what disciplinary action should be taken against his license to practice as an osteopathic physician.
Findings Of Fact Petitioner, the Department of Health, Board of Osteopathic Medicine, is the state agency charged with regulating the practice of osteopathic medicine pursuant to Chapters 455 and 459, Florida Statutes. Respondent is and has been at all times material hereto a licensed osteopathic physician in the state of Florida, having been issued License No. OS-004450. Respondent has a bachelor’s degree and a master’s degree in clinical psychology and experimental psychology from Temple University, was an assistant professor of psychology at a community college before studying osteopathic medicine, and taught as an assistant professor of psychiatry in family practice at Southeastern Osteopathic Medical School. Respondent completed a residency program at Southeastern Osteopathic Hospital in North Hollywood, Florida, and also completed a three-year family practice residency program. After completing his residency programs, Respondent moved to Sarasota, Florida, and began as a family practice physician. In December 1998, Patient K.C. (K.C.) was 33 years old, married, and the mother of two children, six and two years old. Before getting married, K.C. had lived with her parents. She had attended community college for two years but did not obtain a degree. K.C. had been employed as a sales clerk and clerical staff person. On or about December 29, 1998, K.C. first presented to Respondent suffering from migraine headaches and neck pain, chronic conditions she had suffered for approximately ten years. From December 29, 1998, through or about October 1, 1999, Respondent provided osteopathic medical treatment for pain to K.C. During this period of time, Respondent treated K.C.'s migraine headaches and neck pain with heat, osteopathic manipulation, and prescription medication. Respondent also diagnosed anxiety and depression for K.C. and prescribed medication, Ativan, for this condition. Throughout the time Respondent saw K.C., he also prescribed up to six tablets per day of a sedative, Fioricet. During the time that Respondent was treating K.C., he saw K.C. once or twice a month, except for April, August, and September 1999. Respondent's records reflect that he saw K.C. four times in April, three times in August, and six times in September. There are several manipulation techniques used by Respondent in treating patients. One manipulation technique used by Respondent involves traction of the neck and movement of the patient’s head while the patient is lying down on her back. Another technique, while the patient is lying on her back, involves Respondent’s using his chest to exert pressure down on the patient’s crossed arms and body through the spine to Respondent’s hands located behind her neck and thoracic spine. Another technique has the patient roll over to the side with the leg up to the side while Respondent adjusts her pelvic bone. During this procedure, Respondent’s hand and forearm arm are placed on the buttocks to effect a pushing or pulling of the pelvic bone. The last technique Respondent provides is for the upper thoracic and lower neck area. For this, the patient places her hands on top of her head. Respondent then brings his hands around the torso from behind, placing them at the back of her neck. While the hands provide traction to the neck, Respondent pushes his chest against the spine of the patient to lift the thoracic vertebrae. It is not uncommon during this procedure for Respondent to brush his hands on the patient’s breast. Respondent’s normal office procedure is to do manipulations on patients in his treatment room with the door closed and no other persons present for 10 to 15 minutes. From December 1998 until August 12, 1999, Respondent provided adjustments to K.C. and prescribed medication and did not engage in any sexual activity or relationship with K.C. Prior to August 12, 1999, during his treatments of K.C., Respondent sometimes engaged in "random conversations." For example, during one treatment Respondent asked what kind of car she drove and when she told him, Respondent asked K.C, if her husband cared about her. Respondent told K.C. that a sports utility vehicle (SUV) was a safe vehicle, especially for someone with her condition and indicated that his wife drove an SUV. Respondent then insinuated that if K.C.'s husband cared about her, he should or would buy her an SUV. During another treatment, Respondent told K.C. that she had a good body and asked if she had been a cheerleader. During another treatment, Respondent, while engaging in conversation with K.C., made an unrelated statement about how many times per week the average married couple has sex. At another time, while treating K.C. at his office, Respondent mentioned that the sex life of people with chronic pain may be affected by their condition and asked if her sex life was so affected. Still, during another treatment, Respondent asked K.C. about her relationship with her husband, specifically inquiring as to how they related to one another. In the summer of 1999, K.C. traveled by car to Canada to visit her husband's family. For K.C., the trip to Canada was stressful and while there, she was in a lot pain. Because of the pain she was experiencing, K.C. called Respondent's office while she was still out-of-town to schedule an appointment for an adjustment upon her return to Sarasota and to request that one of her prescriptions be refilled. After K.C. returned from the trip to Canada, on the morning of August 13, 1999, she went to Respondent's office for her scheduled appointment for an adjustment. When K.C. arrived at Respondent's office, she was in a lot of pain and began to cry. K.C. told the nurse or medical assistant that she was in a lot of pain and had had a "bad trip to Canada." The nurse then escorted K.C. to an examination room. When Respondent came into to examination room, K.C. was sobbing and could hardly talk. Respondent asked K.C. to explain why she was so upset. Respondent proceeded to do an adjustment and, again, asked K.C. why she was so upset. K.C. described her feelings to Respondent, who then told K.C. that he used to counsel with patients, that he had helped a girl just like her, and that he could help her if she were willing to come back to the office and talk with him. After K.C. agreed to come back and talk to Respondent, he asked K.C. how he could reach her. In response, K.C. gave Respondent her pager number. After K.C.'s morning appointment on August 13, 1999, Respondent contacted K.C. on her pager and asked if she had made arrangements for her sons to be taken care of so that she could come back to the office to talk with him. K.C. told Respondent that she had made arrangements for her sons and agreed to return to Respondent's office that afternoon. When K.C. returned to Respondent's office on the afternoon of August 13, 1999, Beverly Carrington (Beverly), a medical assistant in Respondent's office, was vacuuming the office. At Respondent's direction, Beverly took K.C. to an examination room. Several minutes later Respondent came into the examination room and told K.C. that he had to make some calls and that he would be back in a few minutes. Respondent gave K.C. a sandwich that he said he had left over from lunch. After Respondent gave K.C. the sandwich, he left the examination room, closing the door behind him. Respondent eventually returned to the examination room and sat in a chair next to the chair in which K.C. was sitting. Respondent began asking K.C. questions about herself, similar to questions that she had been asked by counselors or psychologists. While Respondent was talking to K.C., Beverly knocked on the door of the examination room and told Respondent that she had finished vacuuming the office. Respondent indicated to Beverly that she could go home and soon thereafter, Petitioner heard Beverly leave the building.1 After Beverly left the office, Respondent continued to ask K.C. questions for the next 15 or 20 minutes. Respondent then asked K.C. to get up from her chair, face the mirror in the room, and look in the mirror. K.C. felt uncomfortable looking in the mirror, so she kept her head down. Respondent then put his hands on K.C.'s face and held her face up so that she was looking in the mirror. While doing this, Respondent asked K.C., "Don't you know you're beautiful?" Respondent placed his hands on K.C.'s shoulders and brushed his lips against her neck. Respondent began rubbing or massaging K.C.'s neck and while doing so told K.C. that she was "real tight in [her] neck" and that he would like to work on her neck again and see if he could loosen it up and help her relax. Respondent then led her to the examination table and "proceeded to rub [her] neck and then he started to take off [her] clothes." While on the examination table, Respondent helped K.C. take off her shirt, shorts, bra, and shoes and the only remaining clothing that she had on was her underwear. After her clothes were removed, K.C. presumed Respondent would cover her with a towel or give her a robe, but he did not provide K.C. with any covering. Instead, Respondent sat behind K.C., massaged her neck, and talked to her "soothingly" for about ten minutes. Respondent then took his hands and rubbed her arms and then moved his hands to her breasts, and then down to her waist and towards her panties. When Respondent moved toward K.C.'s panties, she would "tense up" and then Respondent would "start rubbing up the top part of her again." Respondent's hands again went toward her underwear and he "put his hand to go under [K.C's] underwear." K.C. was nervous about what was going on and told Respondent that she was uncomfortable. After K.C. told Respondent that she was uncomfortable, he acknowledged that she seemed uncomfortable. Respondent then handed K.C. her clothes, assisted her in sitting up on the examination table, and sat on the table while K.C. dressed herself. After talking to Respondent for about five minutes, K.C. left the doctor's office with a worse headache, feeling distraught. K.C. next saw Respondent a few days later, on a Monday or Tuesday, for an adjustment for a headache and pain. Respondent performed an adjustment on K.C. that day. During this appointment, Respondent, again, told K.C. that he wanted to help and counsel her. He told K.C. about an upcoming gun show and stated that they could talk while driving to the gun show. Later that week, Respondent paged K.C. and asked her to come to his office. In response to Respondent's request, K.C. went to Respondent's office. Once there, Respondent took K.C. to an examination room and talked to her again about the gun show. Respondent again told her that he would like for her to go to the gun show with him so that they could have time to talk. K.C. was in Respondent's office that day about ten minutes and did not receive a treatment. A few days later, on Saturday, K.C. met Respondent at his office to go the gun show. When she got there, Respondent recommended that she leave her car at the office and ride in his Toyota 4-Runner so that they could talk. Respondent stated that he and K.C. were going somewhere in Palmetto, Florida, but they actually ended up at the Manatee Civic Center. While Respondent was driving to the gun show, he told K.C. that he hoped that he was not mistaken as to the dates of the gun show. In fact, when Respondent and K.C. arrived at the Manatee Civic Center, there was no one there. Nevertheless, Respondent pulled his car into a space in the parking lot on the side of the building. Respondent left the car running and took off his seat belt as he talked to K.C. At some point, Respondent kicked his shoes off and loosened his pants and/or pulled them down, reached over toward K.C., took off her seat belt, told K.C. to get more comfortable, and adjusted her power seat in his Toyota 4-Runner to lean back more. Respondent then touched K.C.'s genitals and proceeded to get on top of her and have intercourse. While on top of her, Respondent pointed out that there were police cars in the back of the parking lot. Once Respondent pointed out the police cars, K.C. observed two or four police cars in the parking lot. Even though there were no policemen in the cars, K.C. expressed concern about the police cars to Respondent. Respondent told K.C. that she should not worry because the windows in his vehicle were tinted. Respondent and K.C. were in the parking lot about 20 minutes, although the intercourse was only three to five minutes. After the intercourse, Respondent put his clothes back on or pulled his pants up and drove back to his office. This was the first time that Respondent and K.C. had intercourse. A few days later, K.C. and Respondent engaged in sexual activity in Respondent’s vehicle during lunch while they drove to Marina Jack’s. Respondent picked up lunch at the hospital and then returned to the parking lot of his office, where K.C. met him. K.C. left her car in the parking lot and got in Respondent's Toyota 4-Runner. Respondent gave K.C. her lunch and then "fingered" her while she ate her lunch as he drove to Marina Jack's. During the period between August and October 1999, K.C. went to Respondent's house on Siesta Key. The house was in a gated community, and in order to gain entry, K.C. told the guard at the gate that she was going to Respondent's house and would give the guard her name or another name that Respondent had told her to use. At other times, K.C. would follow Respondent through the gate in her car. Some of these visits were on weekdays during Respondent's lunch break. During some of those visits, K.C. and Respondent would talk and have intercourse. K.C. and Respondent had intercourse at Respondent's house about ten times. One Saturday between August and October 1999, K.C. went to Respondent's house after he invited her to come out and talk to him and go to the beach. That day Respondent met K.C. somewhere in town and drove her to his house. When they arrived at Respondent's house, K.C. took out a bathing suit and went upstairs to change. It is unclear whether K.C. and Respondent had intercourse or engaged in any sexual activity on this day. K.C. contemporaneously reported the sexual relationship with Respondent to her husband and to a minister who had known and counseled her before she met Respondent. K.C. told her minister that the sexual activities with Respondent had occurred in Respondent's office, vehicle, and home. K.C. and Respondent had intercourse a couple of times at the home of a friend of Respondent's, Carole, that was on Tangerine Street and at the home of one of Respondent's friends, Jack Kentish. One Sunday morning in late September, K.C. went to Respondent’s office.2 While there, she went into an examination room to change clothes so that she would have attire appropriate to accompany Respondent to a gun show. About that time, K.C.'s husband showed up at Respondent's office, knocked on the office door, expressed his displeasure at the fact K.C. was there, and had a verbal confrontation with Respondent. K.C.'s husband stopped at Respondent's office after he saw his wife's car parked there. The incident described in paragraph 29, led to Respondent sending a letter dated September 28, 1999, to K.C., advising her that his professional relationship with her would terminate within 30 days. The reason for the 30 days was to allow K.C. time to find another physician. In October 2000, K.C. was admitted to Sarasota Memorial Hospital suffering from major depression, Fioricet dependence, and chronic pain. At or near the time of her admission and at this proceeding, K.C. acknowledged that she had some loss of memory surrounding the events related to the three-month period in which Respondent engaged in improper sexual conduct with her.3
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that the Department of Health, Board of Osteopathic Medicine, enter a final order finding that Respondent violated Subsection 450.015(1)(l) and Section 459.0141, Florida Statutes, and Subsection 459.015(1)(bb), Florida Statutes (1999), now 459.015(1)(pp), Florida Statutes, and suspending his license to practice osteopathic medicine in the State of Florida for one year and imposing an administrative fine of $2,000.00. DONE AND ENTERED this 5th day of August, 2003, in Tallahassee, Leon County, Florida. S CAROLYN S. HOLIFIELD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 5th day of August, 2003.
Findings Of Fact Prior to and during part of 1983 Dr. Sturdivant practiced as an osteopathic physician. Dr. Sturdivant operated an office in Bradenton, Florida. Sometime during 1983 Dr. Sturdivant met and discussed employment with Dr. Daniel Clark. Dr. Clark operated the Total Health Care Clinic Center (hereinafter referred to as the "Center"), in Ormond Beach, Volusia County, Florida. Dr. Clark had been licensed as a physician in Florida. Dr. Clark's license to practice medicine in Florida was revoked, however, on April 21, 1983. As a result of his discussions with Dr. Clark, Dr. Sturdivant practiced medicine at the Center four days a week during most of 1983. One day a week Dr. Sturdivant continued to work out of his office in Bradenton. Sometime during 1984 Dr. Sturdivant left the Center. He did not return to the Center until 1985. During the early part of 1985 Dr. Sturdivant returned to the Center where he worked full time as the Center's Medical Director. Dr. Sturdivant worked at the Center from at least March 27, 1985 to at least June 22, 1985. During the period of time during 1985 that Dr. Sturdivant acted as the Medical Director of the Center, Dr. Clark's title was Administrator of the Center. During the period of time after April 21, 1983, that Dr. Sturdivant was employed at the Center Dr. Sturdivant knew or had reason to know that Dr. Clark's license to practice medicine in the State of Florida had been revoked. During the portion of 1985 that Dr. Sturdivant was employed as the Medical Director of the Center Dr. Sturdivant was aware that he was responsible for the medical care of patients seen at the Center. Ms. Judy Baxley was seen as a patient at the Center several times beginning in March, 1985, while Dr. Sturdivant was the Medical Director. Ms. Baxley was treated for asthma and a "yeast" infection. Ms. Baxley was seen by Dr. Clark on some of her visits. She received medical tests and treatments at the direction of Dr. Clark, as evidenced, at least in part, by progress notes signed by Dr. Clark. Ms. Shirley Van Gampler was seen as a patient at the Center on May 8, 1985, while Dr. Sturdivant was the Medical Director of the Center. Ms. Van Gampler was seen by Dr. Clark as a patient. Dr. Clark's treatment of Ms. Van Gampler included examination, testing and diagnosis, as evidenced, at least in part, by progress notes signed by Dr. Clark. Mr. Douglas Cutsail was seen as a patient at the Center in April, 1985, while Dr. Sturdivant was the Medical Director. Mr. Cutsail had a history of heart attacks and hypertension. He went to the Clinic in an effort to control his high blood pressure. Dr. Clark treated Mr. Cutsail as a patient, performing tests on Mr. Cutsail and directing chelation therapy treatments of Mr. Cutsail's medical problems. Dr. Clark signed the progress notes on Mr. Cutsail. Dr. Sturdivant also signed the progress notes but his signature was added at a later date after Dr. Clark had already treated Mr. Cutsail. Ms. Eileen Deasy was seen as a patient at the Center in April, 1985, while Dr. Sturdivant was the Medical Director of the Center. Dr. Clark treated Ms. Deasy as a patient, as evidenced by progress notes signed by Dr. Clark. Ms. Lonna Sloan was seen as a patient at the Center in April, 1985, while Dr. Sturdivant was the Medical Director of the Center. Ms. Sloan, who is now deceased, had breast cancer at the time she was seen by Dr. Clark. Ms. Sloan was treated as a patient by Dr. Clark. The treatment received by Ms. Sloan was substandard treatment. Dr. Sturdivant allowed Dr. Clark to exercise professional medical responsibilities during 1985 while Dr. Sturdivant was the Medical Director of the Center and with knowledge that Dr. Clark was not licensed to carry out those responsibilities.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of law, it is RECOMMENDED that Dr. Sturdivant's license to practice in the State of Florida be suspended for a period of one (1) year. It is further, RECOMMENDED that the recommended suspension of Dr. Sturdivant's license for one (1) year be stayed and set aside and that he be placed on probation for a period of three (3) years in lieu thereof. During the period that Dr. Sturdivant is on probation, he should be required to work under the supervision of an osteopathic physician. He should not work in any supervisory capacity. During the period of his probation, Dr. Sturdivant and his supervisor should submit quarterly written reports of Dr. Sturdivant's employment activities. DONE and ENTERED this 8th day of February, 1988, in Tallahassee, Florida. LARRY J. SARTIN 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 8th day of February, 1988. APPENDIX The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Petitioner's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact of Acceptance or Reason for Rejection 1 Stipulated to by the parties. 2 3. 2 and 4. 5 and 6. 5 6. 6 7. 7 8. 8 9. 9 10. 10 11. 11 12. 12-13 13. This is a conclusion of law. Lonna Sloan's deposition is hearsay. It has been accepted only to the extent that it corroborates the testimony of Dr. Smith and Petitioner's exhibit 3, the progress notes on Ms. Sloan. Summary of testimony. Cumulative and hearsay. The Respondent's Proposed Findings of Fact Not supported by the weight of the evidence and irrelevant. The evidence established that Dr. Sturdivant was aware that Dr. Clark's license to practice in Florida had been revoked. Whether Dr. Clark had a license to practice in Georgia is irrelevant. The evidence failed to prove this contention. The evidence did prove that some of the products sold by the Center were nutritional products available in health food stores. The evidence also proved that persons who received nutritional products were treated medically by Dr. Clark. The evidence failed to prove that these nutritional products were prescribed as only for nutritional purposes. COPIES FURNISHED: Susan Branson, Esquire William O'Neil, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 David L. Sturdivant, D.O. 800 South Nova Road Suite H Ormond Beach, Florida 32074 Mr. Rod Presnell Executive Director Department of Professional Regulation Osteopathic Medical Examiners 130 North Monroe Street Tallahassee, Florida 32399-0750 William O'Neil General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 =================================================================
Findings Of Fact Upon consideration of the oral and documentary evidence presented at the hearing, the following facts are found: At all times pertinent to this case, Respondent was licensed to practice osteopathic medicine in the State of Florida under license numbered 0003783. On April 1, 1981, the Florida Board of Osteopathic Medical Examiners (Board), through the Department of Professional Regulation (DPR), filed an Administrative Complaint against Respondent alleging several violations of Florida Statutes governing the practice of osteopathic medicine. In an effort to forestall an emergency suspension of her license as a result of these allegations, Respondent entered into a Stipulation with the Board whereby she agreed to cancel her certificate to prescribe Schedule II and III, Chapter 893, drugs; to remain enrolled in and comply with all terms of the Impaired Physicians Program; to submit blood and urine samples for drug screening upon request of DPR; and to obey all federal and state laws and regulations pertaining to the practice of osteopathic medicine. On June 10, 1982, the Board, after an informal hearing, entered an order finding that Respondent had violated the various provisions of the statutes as alleged and suspended her license for a period of six months. However, the Board considered and incorporated into its order the aforementioned Stipulation and stayed the suspension, placing Respondent on probation for three years. Sometime in January, 1983, the Secretary of DPR, being made aware of alleged violations of the terms of the probation, entered an order of emergency suspension of Respondent's license, alleging as reasons therefor: That on November 29, 1982, Respondent prescribed Demerol, a Schedule II controlled drug, for a patient, Ernestine Franklin; That on November 10, 1982, Respondent was found in an unconscious state at home. Taken to the hospital, when she regained consciousness, she was disoriented and incoherent; her speech was garbled, and she demonstrated erratic and violent behavior; That on or about December 7, 1982, Respondent prescribed Demerol for Maureen Lyewfong, the cost of which was charged to the Respondent; On December 17, 1982, an unidentified male brought Respondent to the hospital indicating she had snorted cocaine. She would not allow herself to be examined; That on December 24, 1982, Respondent was admitted to North Shore Hospital, Miami, claiming she had suffered an epileptic seizure. During the course of her workup, she indicated she was allergic to Demerol; and That by letter dated December 30, 1982, Dr. Morgan, head of the Impaired Physicians Program, informed DPR that Respondent had diverted for own use Demerol prescribed for her patients and that she had failed to keep appointments for treatment under the program. On January 18, 1983, sometime after the emergency suspension went into effect, the Board through the Department of Professional Regulation filed a seven-count Amended Administrative Complaint seeking to suspend, revoke, or otherwise discipline Respondent's license, listing as grounds for this action basically the same allegations as found in the emergency suspension order. On November 30, 1982, Respondent treated Ernestine Franklin for removal of a pilonidal cyst. Prior to the surgery, Respondent administered an injection of Demerol to the patient from a bottle for which she had written a prescription the previous day. This prescription had been filled at a pharmacy by Nurse Susan Dukes and charged to Respondent's account. When she brought the Demerol back to the office, Dukes placed it in the locked medicine cabinet and told Respondent where she had put it. When she went to set up for Ms. Franklin's surgery, the bottle of Demerol was not there. Dr. Krantz prepared the Demerol injection for the patient herself. The injection did not use up the entire amount on the prescription, and the unused portion was neither given to the patient nor seen in the office again. On December 7, 1982, Respondent wrote a prescription for Demerol for Maureen Lyewfong, the cost for which was charged to Dr. Krantz. Demerol is another name for meperidine hydrochloride, which is a Schedule II substance, as defined in Section 893.03(2)(b), Florida Statutes (1981). Respondent first entered the Impaired Physicians Program (IPP) under the supervision of Dr. Dolores Morgan in March, 1981,,because of her abuse of Demerol, Quaaludes, and cocaine. After a month in the hospital, she was released to an outpatient program which, because of her failure to progress properly, resulted in her going to the inpatient facility at Ridgeview, Georgia, where she spent several months. According to the terms of the IPP for Respondent, when she was discharged from the Ridgeview inpatient treatment center, she was to be in the program for two years. Since the IPP main office is in Miami and Respondent practices in West Palm Beach, she was placed under the supervision of a doctor in her area. From June, 1982, the date of the Stipulation, to December, 1982, Dr. Morgan heard nothing to indicate Respondent was not living up to the terms of the agreement. However, in December, 1982, Dr. Morgan was contacted by Dr. Joan Barice, local chairman of the IPP, who informed her that Dr. Krantz was missing required meetings of Narcotics Anonymous, as well as by the administrator of a local hospital, Mr. Steven Southerland, to the effect that Dr. Krantz was not performing properly. As a result, Dr. Morgan set up an appointment with Respondent for an interview on December 23, 1982, which Respondent did not keep. Another appointment was set up to discuss the matter, but before the date scheduled for the meeting, Dr. Morgan was advised Respondent was admitted to a hospital in Miami for drug detoxification. At this point, Dr. Morgan reported the latter to DPR. As will be seen in the succeeding paragraphs, this admission was not for drug detoxification, but for epileptic seizures. On December 17, 1982, at approximately 5:15 p.m., Respondent was taken by paramedics to the emergency room at Jupiter Hospital, Jupiter, Florida. At the time she was first seen by the paramedics, an empty vial of Demerol was found in her possession. When found, at her office, she was unconscious for five to ten minutes and, upon regaining consciousness, appeared drowsy. However, by the time she was seen by the emergency room nurse, Mr. Pollack, she appeared to be coherent. She indicated to him she was allergic to Demerol and had had a seizure earlier in the day because the level of Dilantin, a drug used to control epileptic seizures, in her blood was not high enough. In fact, on December 23, 1982, Respondent contacted Dr. Jack Kammerman, an internal medicine specialist on the staff at North Shore Hospital in Miami. She explained her symptoms, and Dr. Kammerman, who knew of Respondent's background through her mother, who had worked for him, suggested she immediately be hospitalized for tests. Dr. Krantz agreed, and the initial tests taken failed to reflect a reason for her seizures. A second CAT scan ruled out a tumor, so a neurologist was called in for consultation. This expert's initial and final diagnoses were "ideopathic epilepsy," the term "ideopathic" meaning "of unknown cause." At the time of admission, blood and urine samples were taken for use in tests. The first blood screen result showed traces of meperedine hydrochloride (Demerol) and Darvon, a pain reliever. A second screening of more blood taken from the same sample, but run later, reflected minute amounts of Demerol, which could indicate that the patient had taken the substance within the prior 72 hours. It was the pathologist's opinion that Demerol had been taken by Respondent. On the other hand, a false positive test result for Demerol in the blood is possible because many external factors, such as infection or the menstrual period (which Respondent was experiencing at the time), could affect it. I find, however, that based on the findings of the pathologist, an expert in his field, the substance in Respondent's blood was in fact Demerol. Respondent's seizures are now completely controlled through the use of the drugs Dilantin and phenobarbital. Dr. Kammerman is of the opinion that an osteopathic physician who suffers from controlled seizures can safely practice within the disciplines of family practice and internal medicine. Classically, seizure patients can predict the onset of a seizure due to the symptoms they experience before the seizure. Once the patient experiences the preseizure symptoms, he or she may prevent the seizure from occurring depending upon how fast the medicine can be gotten into the bloodstream in amounts sufficient to prevent it. Though Dr. Kammerman has never seen the Respondent go through a seizure and therefore does not know how she would react, he knows it is not uncommon for a patient who has just come out of the unconscious state of a seizure to be disoriented, confused, aggressive, and talkative, even to the extent of refusing help. Mr. Steven L. Southerland, Executive Director of Community Hospital of Palm Beach and one of the individuals who contacted Dr. Morgan regarding Respondent's aberrant behavior, knew her when she was on staff in the Department of Family Practice of that hospital. In the course of his official duties, information was brought to his attention that a patient admitted to the hospital by the Respondent was not seen by her afterwards for several days. This type of conduct was confirmed by Respondent's nurse, Ms. Dukes, who noticed a decided deterioration in Respondent evidenced by days of forgetfulness and confusion. On the other hand, two qualified osteopathic physicians who worked with Dr. Krantz on staff at Community Hospital and who have observed her in the practice of osteopathic medicine off and on for six or more years are satisfied that she is an extremely competent physician. She has assisted one, Dr. Michael A. Longo, in surgery, and he found her work to be excellent. He is aware of her epileptic-based seizures, and this does not change his high opinion of her competence. The other, Dr. Kirsch, who has also collaborated with her on the treatment of several patients, has never had the slightest problem with her, nor has he ever seen her in any way incapacitated.
Recommendation Based upon the Findings of Fact and Conclusions of Law rendered herein, it is RECOMMENDED THAT: The Respondent be found subject to disciplinary action for a violation of Subsections 459.015(1)(1), (q), (r), (s), and (t), Florida Statutes; The license of the Respondent, Dr. Barbara Anne Krantz, to practice osteopathic medicine in the State of Florida be revoked; The revocation be suspended for a period of three years and that she be limited to practice while under the supervision of a licensed osteopathic physician; and, with the further provision, The restrictions and limitations continue for such time and under such terms and conditions as the Board of Osteopathic Medical Examiners determines necessary to ensure protection of Respondent's patients and her ability to practice osteopathic medicine with reasonable skill and safety. RECOMMENDED this 2nd day of May, 1983, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings Department of Administration 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of May, 1983. COPIES FURNISHED: James H. Gillis, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 William H. Pruitt, Esquire Pruitt & Pruitt 501 South Flagler Drive Suite 501 West Palm Beach, Florida 33401 Mr. Fred Roche Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Ms. Dorothy Faircloth Executive Director Board of Osteopathic Medical Examiners Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
Findings Of Fact At all times here relevant Theodore S. Brandwein, D.O., held License No. 3259 issued by the Board of Osteopathic Medical Examiners. During the calendar year 1977 and for some period subsequent thereto Respondent maintained his office and practice at 18055 Franjo Road, Perrine, Florida under the name of Brandwein Medical Practice, P.A. The sign marking Respondent's office in 1977, when these charges were preferred, is the same sign depicted in Exhibit 6 which is a photograph taken in 1979. It is the sign for which Respondent registered with the Florida Secretary of State as a service mark. In his application (Exhibit 11) for this registration Respondent described this mark as "a stethoscope, binaural in design, lying horizontally on the paper, sign, building, item, or object on which it is emblazoned, the earpieces and connecting piece forming in script the letter 'D' and the tubing and chest piece convoluted to form the 'O'. Taken together, the stethoscope forms the letters 'D. O.'" The application further provided "applicant is the owner of the mark and no other person except a related company has the right to use such mark in Florida, whether in identical form thereof, or in such resemblance thereto as might be, calculated to deceive or confuse". The sign on Respondent's office in 1977 consisted of this mark depicting a convoluted stethoscope which forms the letters "D.O." only after the exercise of a vivid imagination and an appreciation of surrealistic art. In the yellow pages of the 1977 Miami telephone directory Respondent is listed under Physicians and Surgeons MD. (Exhibit 9). He is not listed under Physicians and "Surgeons - DO. (Exhibit 10). Brandwein Medical Practice, P.A., is the Theodore S. Brandwein who is Respondent in these proceedings. Respondent's Florida license is presently inactive.
