Findings Of Fact On June 17, 1977, petitioner filed an application with respondent for licensure as a clinical laboratory technologist with specialty in biophysics. The application reflected that petitioner had received an A.S. Degree in Chemistry from Nassau Community College, Garden City, New York, based on his attendance from June 1971 to September 1975. His transcript from that institution reflects that he earned 76 credit hours during his period of attendance primarily in science courses. The application also reflected that he had received a certificate based on satisfactory completion of a twelve-month course in nuclear medicine technology at the School of Nuclear Medicine Technology, Northport V.A. Hospital, Northport, New York, on September 3, 1976. The application also showed prior employment as a staff nuclear medical technologist with the Department of Nuclear Medicine at Sun Coast Hospital, Largo, Florida, from September 1976 to March 1977. Also, the application reflected that petitioner was registered with the American Registry of Radiologic Technologists (ARRT) as a Registered Nuclear Medicine Technologist. In a letter dated May 25, 1977, to respondent, petitioner stated that although his qualifications did not strictly coincide with those listed in respondent's rules for qualification, he believed that they were adequate for licensure. (Testimony of Carlo, Composite Exhibit 1) Petitioner's application was reviewed by respondent and he was advised by letter of July 18, 1977, that he was ineligible for the requested licensure and that his application was therefore denied because he did not have a year of experience under Rule 10D-41.25(12)(m), F.A.C. Petitioner thereafter requested an administrative hearing and, in a letter of October 25, 1977, to respondent, he stated that because his qualifications were more than sufficient for the American Registry of Radiologic Technologists, he believed that they should be sufficient for licensure in the State of Florida even though they did not specifically satisfy the state's licensure requirements. Respondent's reviewing personnel determined that Nassau Community College was an accredited school and that the course of training that respondent received at the Northport V.A. Hospital was approved by the Council on Medical Education of the American Medical Association. Respondent compared petitioner's qualifications with the criteria for licensure as a technologist in the specialty of biophysics as set forth in Rule 10D-4l.25 (12), F.A.C., which set forth 14 separate methods of obtaining licensure by various combinations of qualifications. It was determined that petitioner did not qualify in any instance. This was due to the fact that he did not have a minimum of 90 semester hours college credits, or at least 60 semester hours in a nuclear medicine program, or have at least one year of experience in nuclear medicine technology in an approved laboratory. One of the foregoing requirements is necessary to meet the standards for qualification in those situations where petitioner might otherwise qualify. (Testimony of Bentz) Petitioner testified that he was valedictorian of his class at Northport V.A. Hospital and received an award as the highest scholastic achiever. Although he conceded that he only had earned 76 hours of college credits, he believed that his attendance at various seminars and workshops, and the fact that most of his 76 hours of credits were in science courses, should be taken into consideration in determining whether he has the equivalent of 90 hours of credits. He further believes that his registration by the ARRT is sufficient evidence of his qualifications to be licensed as a technologist in spite of the regulatory requirements. He has been employed as a nuclear medicine technologist in the laboratory of Lakeland General Hospital, Lakeland, Florida, since June 10, 1977. (Testimony of petitioner) Due to the fact that petitioner now has over one year of experience in nuclear medicine technology in an approved laboratory, he would be eligible to be licensed upon successful completion of a required examination. (Stipulation of parties)
Recommendation That petitioner's application for licensure as a clinical laboratory technologist in the specialty of biophysics be denied without prejudice to immediately file a new application - setting forth his current qualifications for licensure. DONE and ENTERED this 6th day of February, 1978, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 COPIES FURNISHED: Anthony DeLuccia, Esquire District VIII Counsel Department of HRS Post Office Box 2258 Ft. Myers, Florida 33901 Randy Fischer, Esquire 726 South Missouri Avenue Lakeland, Florida 33801
The Issue Two issues are raised in this case. The first issue concerns the question of whether the Petitioner must seek review and permission by and from the Respondent before engaging in this project to provide inpatient radiation therapy. See Section 381.706(1)(h), Florida Statutes. If that question is answered in the affirmative, then the next question to be answered is whether Petitioner is entitled to a certificate of need to provide inpatient radiation therapy services at its hospital in Pensacola, Florida. In answering the initial question reference is made to the case of Scared Heart Hospital of Pensacola v. Department of Health and Rehabilitative Services, and Baptist Hospital, DOAH Case No. 90-3576. That reference is made because Intervenor in the present case has made a motion in limine which asserts that the Petitioner here is estopped from raising the issue of whether jurisdiction resides with the Respondent to require a certificate of need based upon the belief that DOAH Case No. 90-3576 has answered that question in the affirmative. Thus, as argued in the motion in limine, Petitioner in the present action should be barred by doctrines of collateral estoppel and res judicata from further examining that issue. Both issues are addressed in the fact finding and conclusions of law which follow, to include a ruling on the motion in limine. At the commencement of the hearing in discussing the motion in limine an examination was made of the significance, if any, of the Petitioner having failed to clearly state its opposition to the Respondent's assertion of jurisdiction over the subject matter and that party in the Petition contesting the decision on the merits to deny the application for certificate of need. Consequently, the issue of whether Petitioner has waived its right to contest the jurisdiction is also addressed in the Recommended Order.
Findings Of Fact MOTION IN LIMINE (DOAH Case No. 92-3576) On the prior occasion described in DOAH Case No. 90-3576, Petitioner had applied to Respondent for a certificate of need to institute radiation therapy services and to construct a radiation therapy facility at the campus of its hospital in Pensacola, Florida. That center was to serve inpatients and outpatients. The projected capital expenditure for that project approximated 3.7 million dollars. Petitioner contended that the radiation therapy center that would be constructed would be an extension to an existing oncology program as contrasted with the establishment of a "new service." Consistent with that position Respondent asserted that the basis for requiring a certificate of need was found in the language at Section 381.706(1)(c), Florida Statutes, which states: A capital expenditure of $1 million or more by or on behalf of a health care facility or hospice for a purpose directly related to the furnishing of health services at such facility; provided that a certificate of need shall not be required for an expenditure to provide an outpatient health service, or to acquire equipment or refinance debt, for which a certificate of need is not otherwise required pursuant to this subsection. The department shall, by rule, adjust the capital expenditure threshold annually using an appropriate inflation index. By resort to Section 381.706(1)(c), Florida Statutes, as the basis for declaring jurisdiction, the Respondent in its preliminary position did not perceive that the proposed project constituted establishment of new institutional health services or a substantial change to the existing health services, rather, it was believed to be constituted of construction costs as a capital expenditure related to the existing oncology program which expenditure met the $1 million threshold. If the basis for jurisdiction was found within Section 381.706(1)(c), Florida Statutes, then the would-be intervenor in that case, the same intervenor here, would be denied intervention. The basis for denial is found within the limitations placed upon those persons who may participate in a decision involving certificate of need for a capital expenditure as identified in Section 381.706(1)(c), Florida Statutes. That contest is between the Respondent and an applicant for the certificate. Third parties have no right to participate. On the other hand, if the basis for jurisdiction is as argued by the petition for intervention in the prior case, that basis being the jurisdiction established by Section 381.706(1)(h), Florida Statutes, then a third party health care provider in competition with the applicant seeking a certificate of need could participate in that decision. The language in Section 381.706(1)(h), states: The establishment of inpatient institutional health services by a health care facility, or a substantial change in such services, or the obligation of capital expenditures for the offering of, or a substantial change in, any such services which entails a capital expenditure in any amount, or an annual operating cost of $500,000 or more. The department shall, by rule, adjust the annual operating cost threshold annually using an appropriate inflation index. The Hearing Officer in DOAH Case No. 90-3576, heard the matter and entered his Recommended Order to resolve the right of the present intervenor to intervene in that cause. In doing so the Hearing Officer generally addressed the jurisdictional basis upon which the agency could review the application. Nothing in that process attempted to distinguish between inpatient and outpatient costs by way of a discrete analysis and allocation of those costs. Observations were made in passing concerning the aggregate amount of inpatient and outpatient costs. In particular reference was made to the capital expenditure of approximating 3.7 million dollars. No attention was given the issue of the threshold amount associated with annual operating costs identified in Section 381.706(1)(h), Florida Statutes. Factual reference to that jurisdictional amount associated with annual operating costs was left for some other occasion. The thrust in DOAH Case No. 90-3576 was to determine whether the appropriate basis for the jurisdictional claim would be found in Section 381.706(1)(c), Florida Statutes, as initially contended by the Respondent or upon resort to Section 381.706(1)(h), Florida Statutes, as contended by the petition for intervention, without a more complete analysis concerning the jurisdictional amount set out in Section 381.706(1)(h), Florida Statutes, should the hearing officer be persuaded that the latter provision constituted the grounds for review generally stated. In the factual and legal conclusions by the hearing officer in DOAH Case No. 90-3576, he determined that the project in question for inpatient and outpatient radiation therapy services constituted the establishment of new inpatient institutional health services or at least constituted a substantial change in the services that were being provided by the applicant. Thus the petition for intervention was deemed appropriate and the motion to dismiss that petition was recommended for denial. Through the Final Order which followed, with some minor modifications which have no influence on the present case, the Respondent adopted the findings of fact of the hearing officer in DOAH Case No. 90-3576, and granted the petition to intervene. The Recommended Order was entered on April 3, 1991, and the Final Order on May 21, 1991. The parties in DOAH Case No. 90-3576 did not proceed to hearing before the present case was heard. The decision by the hearing officer in DOAH Case No. 90-3576 was to defer consideration of the matter pending hearing in the present case. That choice was upon a request by all parties in DOAH Case No. 90-3576. PARTIES STIPULATIONS CONCERNING REVIEW CRITERIA The parties agree that Petitioner's Certificate of Need Application No. 6772, the present application, meets the following statutory criteria: Section 381.705(1)(c), (h), except for the third clause which is not applicable and the fourth clause which is at issue, (i), (m), except that Intervenor contends that the project costs were not properly allocated to Petitioner's Certificate of Need Application No. 6772, and (n) to Section 381.705(1). The parties also agree that the following statutory criteria are not applicable to Petitioner's application: Section 381.705(1)(e), (f), (g) and (j), Florida Statutes. Within the context of the stipulation as to criteria, the parties agree that the following issues are to be litigated: The need for the proposed project in relation to the applicable district plan and state health plan. The availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing health care services in the service district. The availability of and adequacy of other health care facilities and services in the service district, which may serve as alternatives for the services proposed to be provided by Scared Heart Hospital. The impact of the proposed project on the cost of providing health services proposed by Scared Heart Hospital. Whether less costly, more efficient, or more appropriate alternatives to the proposed services are available. Whether existing inpatient facilities, providing inpatient services similar to those proposed are being used in an appropriate and efficient manner. Whether patients will experience serious problems in obtaining inpatient care of the type proposed, in the absence of the proposed new service. The need that the population served or to be served has for the health services proposed to be offered, and the extent to which residents in the district are likely to have access to those services. The contribution of the proposed service in meeting the health needs of members of such medically underserved groups. BACKGROUND FACTS On August 22, 1991, Petitioner gave notice that it intended to apply for the September 19, 1991, batch review cycle to initiate inpatient radiation therapy services at its Pensacola, Florida facility. That notification referred to the fact that the Petitioner was presently constructing an outpatient cancer center to provide radiation therapy services and that the anticipated opening date for that outpatient facility was December, 1991. Petitioner did apply for the September 19, 1991 batch review for initiation of inpatient radiation therapy services. At that time the construction of the outpatient radiation therapy services was proceeding. Petitioner had received a letter of non-reviewability for the construction of the outpatient cancer treatment facility on a prior date. The completion of the outpatient radiation therapy services center at the Petitioner's facility was completed and Petitioner began to provide outpatient radiation treatment in April, 1992. The cancer treatment program at Petitioner's facility is a comprehensive cancer center providing radiation therapy, chemotherapy, IV. hydration, blood transfusion, nutrition counseling, social work counseling and a library. The outpatient facility for radiation therapy is fully staffed and supplied. It was placed on the books of the Petitioner as an active asset in the year 1991. Before submitting the application for review in September, 1991 review cycle, Petitioner conferred with Respondent and was instructed to submit an application for the initiation of inpatient services and to allocate costs to the project based upon a percentage of the total facility which would be devoted to inpatient services. Through the application Petitioner noted that the total cost of the establishment of the radiation therapy services projected to open in December, 1991, was $4,124,475. Pursuant to the instruction by the Respondent $618,671 was allocated as an estimate of capital expenditures for inpatient radiation therapy services. This approximates 15 percent of patients being treated as inpatients of the total number of patients treated by radiation therapy. Generally stated, the experience of most providers is that 10 to 15 percent of radiation therapy is delivered on an inpatient basis with the balance of the radiation therapy being delivered on an outpatient basis. The allocation of capital expenditures to inpatient therapy was an artificial device mandated by the Respondent. It does not reflect the actual experience. In actuality the incremental project costs related to capital expenditures for the inpatients receiving radiation therapy are zero. The reason for this finding is based upon the fact that the equipment for providing the inpatient radiation therapy is already in place, the facility for providing that care had been constructed, there is no associated incremental depreciation for inpatient care, the project has been fully paid for from funded depreciation cash and has been placed upon the books of the facility at 100 percent of that total. In essence, the capital costs have been incurred before the advent of the inpatient radiation therapy services. Additional costs promoted by the provision of care for inpatients who receive radiation therapy at the facility would be supply expenses attributable to those inpatients and the possibility of additional salaries attributable to overtime work done by staff to serve the inpatients. These are minimal costs. Operating costs were also artificially allocated to inpatients in the application. For the first year of operation, salaries allocated to inpatient care were estimated at $64,950.00, with associated benefits at $9,898.00, other patient care expenses at $17,925.00 and depreciation in the amount of $51,135.00. Even when resort is made to this certificate the proposal to institute inpatient radiation therapy does not reach the $500,000.00 threshold in annual operating costs, in addition to having no fiscal impact by way of capital expenditures. Petitioner is a 391 bed acute general hospital located in Pensacola, Florida. The services that it provides are available to inpatients and outpatients. Among those services are an open heart facility, neonatal intensive care Level II and Level III units, and freestanding 50 bed children's hospital. The patients receiving care for cancer are provided screening programs, risk assessments, preventative education programs, diagnostic services, surgery, chemotherapy and radiation therapy on an outpatient basis. The application for inpatient radiation therapy was not favorably reviewed in the State Agency Action Report issued on or about January 8, 1992. This led to the present hearing when Petitioner contested the decision to deny the application. Intervenor and West Florida Hospital, both of Pensacola, Florida, and the same planning district where Petitioner is located, have certificates of need to provide inpatient radiation therapy. They also provide outpatient radiation therapy. The other two hospitals treat patients referred by Petitioner for radiation therapy needs. The inpatients of the Petitioner requiring radiation therapy must be transported to the other two hospitals to receive that care. The majority of those patients who are being transported are referred to the Intervenor. Pediatric cancer patients from Petitioner's facility are transported to West Florida. The patients who are transported from Petitioner's facility to the Intervenor's facility are received by the Intervenor as outpatients. When they return to the Petitioner's facility they are perceived as inpatients. Each of the other two facilities who offer radiation therapy pursuant to certificates of need have two linear accelerators to provide inpatient and outpatient radiation therapy. Petitioner seeks to have its single linear accelerator which now provides outpatient radiation therapy made available to provide inpatient radiation therapy. There are also two non-hospital based radiation therapy centers which have single linear accelerators to provide outpatient radiation therapy services. Those non-hospital based providers are located in Ft. Walton Beach and Crestview, Florida, within the same planning district that is associated with this application. REVIEW CRITERIA 1/ Section 381.705(1)(a), Florida Statutes, requires that an application be reviewed for its consistency with the state and district health plans. Neither of those plans addresses the provision of radiation therapy services. As a consequence, neither plan sets forth need allocation factors that would address this type application. In view of the silence of the state and local health plans concerning inpatient radiation therapy, the application cannot be seen as inconsistent with those plans. Section 381.705(1)(b), Florida Statutes, speaks in terms of the availability, quality of care, efficiency, appropriateness, accessibility, and extent of utilization and adequacy of like and existing health care services in the service district to be served by the applicant. As stated before inpatient radiation therapy is being delivered by two other providers. Those providers make available and could continue to make availability the quality of care, which is efficient, appropriate, accessible and adequate in delivering inpatient radiation therapy to those patients which Petitioner would serve if granted the certificate of need to do so. The inpatient radiation therapy services offered by those two providers are not over-utilized at present nor would they be in the foreseeable future. The exception to these findings would be related to a quality of care issue not pertaining to the actual delivery of radiation therapy to patients referred from the Petitioner to the other two providers but related to the inconvenience in preparing those patients for transport for delivery of therapy and the transport itself. For some patients who are required to undergo the preparation for transport and transport, that process can be quite painful. Patients have refused to be transported to receive radiation therapy and this has complicated their treatment. It would be a less uncomfortable process if the patients were undergoing the radiation therapy at the Petitioner's facility. Physician's practice patterns in this community where some physicians choose to practice in a single hospital notwithstanding their admission privileges in multiple hospitals complicates the issue in that a patient may be admitted to Petitioner's facility because the admitting physician chooses to practice there alone. Once a diagnosis is made and a decision reached that the patient in that hospital needs to undergo radiation therapy, the need to transport for those treatment ensues. Moreover, as suggested, the decision to utilize radiation therapy in the treatment is not ordinarily made at the initial moment of admission when health care professionals are trying to make the initial diagnosis concerning the patients complaints in deciding whether they are associated with cancer or not and if radiation therapy would benefit the patient or even in the instance where the patient is known to have a history of that illness whether radiation therapy is indicated. Therefore, there might not be a reason to try and place the patient in a facility that has inpatient radiation therapy available if that treatment regime upon evaluation does not seem indicated. The issue concerning the ability to transfer a patient from one facility to another for the overall hospitalization to include provision of inpatient radiation therapy such that a patient who has been determined to need radiation therapy could be transferred from Petitioner's facility to Intervenor's facility for overall care, while theoretically possible does not seem practicable. Additionally, the patients who receive outpatient radiation therapy through Petitioner's facility who would need at some future point in treating the condition to be transferred to another facility to receive radiation therapy once admitted as an inpatient in Petitioner's facility breaks the continuity of the management of the care by requiring the patient to undergo an evaluation by two different radiation therapists, disrupting the patient- physician relationship in a setting which is complicated by the patient's condition. Nonetheless, the quality of care is not so compromised by the need to transport for the inpatients at the Petitioner's facility to receive radiation therapy to conclude that it constitutes a reason standing alone to grant the certificate of need. In a similar vein, as contemplated by Section 381.705(1)(d), Florida Statutes, the availability and adequacy of other health care facilities and services and hospices in the service district of the applicant, such as outpatient care and home care services, which might serve as alternatives for the applicant's proposal have been considered. Out of that list, only the possibility of the use of outpatient care provided by the existing facilities who offer outpatient radiation therapy would arguably have pertinence to this inquiry. They would not constitute an available and adequate substitute for inpatient radiation therapy for reason that patients who are admitted to a hospital are distinguished from those who come to the facility from other places for purposes of receiving outpatient radiation therapy. That distinction has to do with the gravity of the condition of the patient which caused the patient to be admitted to the hospital in the first instance, and to receive, together with medical attention and other therapies, the provision of radiation therapy. Concerning that portion of Section 381.705(1)(h), Florida Statutes, which describes the applicant's need to address the availability of alternative uses of resources for the provision of other health services, that clause was referred to as an issue in the prehearing stipulation but was not advanced at the hearing. Through the prehearing stipulation the parties did not include reference to Section 381.705(1)(k), Florida Statutes, as a provision about which there was an agreement concerning compliance or the need to comply with its terms. The record reveals that the applicant and the existing providers address the need for radiation therapy of individuals who are not residing in the service district. This project does not appear to have a pronounced influence in improving or diminishing health care for persons not residing in the service district. Section 381.705(1)(l), Florida Statutes, addresses the probable impact of the project on the cost of providing health services proposed by the applicant and it takes into consideration the effects of competition on the supply of health services being proposed and any improvements or innovations in the financing and delivery of health services which foster competition and serve as a promotion of quality assurance and cost effectiveness. Whether the applicant delivers services to the inpatients that it would gain with recognition of its application or some other entity serves the needs of those patients, the basic costs of providing health services would be relatively the same. The exception is the improvement in the circumstance of health care costs related to the transport of the patients from the Petitioner's facility to the two other facilities for provision of the radiation therapy of inpatients in the Petitioner's facility and the attendant costs of duplication of patient charges and professional fees charged by the physician therapist potentially associated with having a patient move from the status of an outpatient at the Petitioner's facility to an admitted patient at that facility who receives radiation therapy at one of the other two facilities while undergoing inpatient care in the Petitioner's facility. These additional costs in transport and potential for patient charges associated with procedures in the other two hospitals and physicians fees in those other two hospitals which are duplicative of efforts made by the Petitioner's outpatient radiation program in its procedures and the physician's fees associated with those outpatient radiation therapy procedures could be done away with if the project were approved. There is no indication of any significant improvements or innovations in the financing and delivery of health services associated with this application which might foster competition and serve to promote quality assurance and cost effectiveness. The cost improvements that are discussed here standing alone do not justify the applicant being granted a certificate of need. The advent of an inpatient radiation therapy service will not be so adverse in its impact that it will cause the Intervenor or any other existing facility to lose financial viability concerning the ability to maintain an appropriate level of utilization of existing facilities. There are no costs of construction and the method of proposed construction need not be considered in that the construction has been concluded as previously discussed. Consequently, the necessity to address the costs and methods of the proposed constructions as described in Section 381.705(1)(m), Florida Statutes, is not relevant to the inquiry. Nor are the references within Section 381.705(2), Florida Statutes, having to do with capital expenditures pertinent to the outcome in examining the review criteria. LACK OF A VIABLE NEEDS FORMULA Respondent does not have a rule which calculates the need for inpatient radiation therapy by resort to a formula which derives need. Neither does the Respondent have an emergent policy which it is developing to formulate the amount of inpatient radiation therapy services needed in a given review cycle. Respondent and the private litigants have attempted to examine the need for inpatient radiation therapy contemplated by this application by devising various mathematical formulas to determine need. Each explanation is fundamentally flawed in that they fail to address the discrete issue contemplated for examination by the review process, that is the need for inpatient radiation therapy. Instead, these methods look at all radiation therapy both inpatient and outpatient. The statute does not contemplate that form of evaluation. It is the 10 to 15 percent of all radiation therapy patients that constitute the inpatients. It is the provision of care to those persons that is subject to examination. If need is to be derived by use of a formula, a knowledge of the circumstances existing for outpatients, a category of patient for whom no certificate of need must be obtained to serve them, should not enter in to the analysis. The formulas exercised by the parties in measuring the overall need for inpatient and outpatient radiation therapy services derive the answers by identifying the number of linear accelerators needed in the district or in one instance for the applicant's facility alone. In that exercise a count is made of the four linear accelerators in the district belonging to the two hospitals which have been granted certificates of need which would allow inpatient radiation therapy to be delivered as well as outpatient therapy and the three programs that serve outpatients on three additional linear accelerators. The total number of linear accelerators is seven counting the linear accelerator the Petitioner has to serve outpatients. No attempt by formula has been made to ascertain whether more than four linear accelerators found within the two hospitals who have certificates of need to provide inpatient radiation therapy service are warranted. Thought provoking questions have been raised by the several parties in critiquing the needs calculation made by an opponent or opponents. However, it is not necessary to choose among these competing theories because in selecting any theory one cannot derive the amount of inpatient radiation therapy services needed in the district. Furthermore, case law does not allow the trier of fact to utilize the basic information provided by the parties to construct a formula for determining need for inpatient radiation services independent of the efforts of the parties in the person of their experts whom they have consulted with on this subject. This means that the decision here must be made by a review of applicable criteria without resort to a preliminary determination of numeric needs. This has been done. On balance, when taking into account the combination of improvements to quality of care for a patient being transported from the Petitioner's facility to receive radiation therapy and the improvement concerning the removal of the cost of that transport and duplication of charges and fees for certain patients who move from an outpatient posture under treatment by the Petitioner and into an inpatient status with Petitioner receiving radiation therapy at one of the two other hospitals which has been discussed in preceding paragraphs, the project is justified and the application should be granted.
Recommendation Based upon the consideration of the facts, and in view of the conclusions of law, it is, RECOMMENDED: That a Final Order be entered which declines jurisdiction to require a certificate of need for inpatient radiation therapy services or in the alternative grants a certificate of need for inpatient radiation therapy services. DONE and ENTERED this 20th day of August, 1992, in Tallahassee, Florida. CHARLES C. ADAMS, 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 20th day of August, 1992.
The Issue Whether Respondent violated Subsections 458.331(1)(d), 458.331(1)(n), and 458.331(1)(t), Florida Statutes, and, if so, what discipline should be imposed.
Findings Of Fact Hammesfahr is a licensed physician in the State of Florida, having been issued Florida License ME 52212 on February 8, 1988. He is board-certified in neurology and pain management. Hammesfahr's office is located in Clearwater, Florida, where he maintains a practice treating patients who have had strokes. A stroke is a blockage of an artery in the brain that causes damage to the brain. As a result of the stroke certain cells within the brain will die, and the victim will develop a multitude of deficits, including paralysis, loss of vision, sensory loss, and memory problems. Between 1998 and 2000, Hammesfahr advertised his treatment for stroke patients and included the following statements in some of his advertisements: Using advanced technology, Dr. Hammesfahr has developed a sophisticated method to help restore blood flow to the damaged areas of the brain after a stroke. With increased blood flow to these areas, the brain can heal. Dr. Hammesfahr is the first physician to treat and successfully reverse the effects of stroke using vasodilators. These advertisements have appeared in Florida and in airline magazines, which travel throughout the country. In some of his advertisements, Hammesfahr indicated that based on an evaluation of the first 67 patients who went through the therapy 82 percent had major improvement, 11.9 percent had minor improvement, and 6 percent had no improvement. He further indicated that the study showing these results was peer-reviewed. Generally, Hammesfahr's treatment protocol is based on the concept of dilating blood vessels in the brain to optimize neurological function and neurological recovery. He uses vasodilator medications to dilate blood vessels in the brain and to increase blood flow into the brain. Various methods are used to monitor the therapy and improvement, including ultrasound, physical examinations, neuropsychological and physical therapy testing, EEG, transcranial Doppler, and blood pressure monitoring. Medications used to dilate the blood vessels include ACE inhibitors, calcium channel blockers, nitrates, alpha and beta blockers, and sympatholytics. After a stroke has occurred, brain cells in the center of the stroke are destroyed and cannot be revived. The area next to the stroke center is called the penumbra and consists of brain cells that are damaged and might recover. Hammesfahr does not claim that his treatment protocol can restore the brain cells that have been destroyed. He does claim that by using his protocol there may be some recovery in the damaged areas, where the blood vessels have restricted and narrowed. The medications dilate the vessels and increase the blood flow to the damaged areas. The recovery of a stroke patient consists of three phases: acute, subacute, and chronic. The acute phase occurs from the onset of the stroke to the next few days or weeks thereafter. The subacute phase starts at the end of the acute phase and lasts for approximately six weeks to three months. However, in certain cases it might last as long as 18 months. The chronic phase is the last phase, which commences at the end of the subacute phase and lasts for an indefinite period. Hammesfahr usually treats stroke patients who are in the chronic phase, but has also treated patients in the other phases of stroke recovery. When a patient contacts Hammesfahr concerning his stroke treatment, the patient will be sent a new patient package, which describes the phases of treatment, contains articles written by Hammesfahr concerning his treatment, and includes a fee schedule. Hammesfahr has different treatment plans from which the patient may choose to participate. The costs for the treatment vary according to the plan; the longer the patient is seen in Clearwater by Hammesfahr, the more costly the treatment. The average patient seen by Hammesfahr opts for the three-week plan. If a patient decides that he wants to be treated by Hammesfahr, the patient is required to see his primary care physician, provide the physician with the articles contained in the new patient package, and obtain his medical records from the physician. The primary care physician is to perform certain tests on the patient and give a medical clearance for the patient to travel to Clearwater, Florida, for treatment by Hammesfahr. The patient is also sent a package of materials, which includes a medical history form to be filled out by the patient and brought to Hammesfahr when the patient comes to Clearwater for treatment. When the patient initially presents for treatment at Clearwater, the patient is given an explanation of the treatment by Hammesfahr and his staff. Patients are advised that there are no guarantees that the treatment will be successful. An intake is performed to make sure that the needed forms are properly completed, including a history of the patient to determine that the patient's primary care physician has given the patient a clearance to come to Hammesfahr for treatment, and to review the medical records of the patient. A physical examination is performed on the patient. The patient is given a schedule for the time that the patient will be in treatment in Clearwater, and Hammesfahr's staff reviews the schedule with the patient. Tests are performed on the patient in Hammesfahr's office such as the transcranial Doppler ultrasound to generally determine the blood velocity. The patient is sent to Diane Hartley, a physical therapist, for testing of gross motor function, and to Dr. Alexander Gimon for neuropsychological testing. The tests given by Ms. Hartley and Dr. Gimon are standardized tests, for which the patient normally pays additional fees. The initial tests by Ms. Hartley and Dr. Gimon are given to form a baseline for a comparison with later test results. Those patients who are three-week patients will also have examinations by Ms. Hartley and Dr. Gimon at the end of their treatment period. The test results are compared with the test results taken at the beginning of the treatment period. The patient receives an orientation session in which the patient is informed of the responsibilities that the patient has during the course of treatment. Such responsibilities include taking blood pressure measurements at prescribed times of the day, charting the results of the blood pressure test, and seeing and providing the patient's primary care physician with the blood pressure readings. The patient must drink eight glasses of water a day, unless the patient has a heart disease, and must avoid certain types of foods that are vasoconstrictors. Once the patient completes the treatment at Hammesfahr's office, the primary care physician will take over the medical management of the patient's treatment. Hammesfahr's office will confer with the patient's primary care physician after the patient leaves Hammesfahr's office to discuss the monitoring of the patient and the altering of the patient's medication. One week after returning from treatment in Clearwater with Hammesfahr, the patient must see his primary care physician. In October 1999, a friend of M.T. mailed M.T. one of Hammesfahr's advertisements. As result of receiving the advertisement, M.T. contacted Hammesfahr's clinic and sought treatment from him for a stroke which she suffered in May 1999. Hammesfahr sent M.T. an information package and a videotape. The package contained articles written by Hammesfahr, a description of the different programs available, and a price list for the programs. M.T. decided that she would try a three-day program for $3,000. There was a dispute as to exactly which program M.T. received when she went to Clearwater. The only two programs which Hammesfahr listed as costing $3,000 were the Executive Stroke Prevention Program and the One-Week Evaluation and Treatment Program. The Executive Stroke Prevention Program was described as follows: This is a three (3) day program in which patients will undergo CAT scan and MRI at our facility, state of the art computerized EEG, and transcranial ultrasound to look at the blood vessels of the brain. They will undergo a comprehensive medical review and family review, as well as recommendations for lowering one's chances of a stroke or to treat if there has been a stroke in the past. This program is not covered by insurance. The One-Week Evaluation and Treatment Program was described as follows: This program is designed for those who want to start the stroke program and have the program advanced to a level which makes it significantly easier for the family physicians at home and neurologists to continue the program safely and rapidly. The first days [sic] involved in the initial evaluation, as well as any testing such as EEG and ultrasound testing, if necessary, and CT scans and MRIs as well as blood tests, followed by days two through five being involved in the initiation of medical treatment in that either treating the previous stroke or preventing future strokes. Recommendations are then made to the family physician or neurologists for caring through on this program. There was an additional three-day program, Initial Evaluation and Treatment, which listed for $2,000 and provided the following: This is a three (3) day consultation and evaluation with recommendations for treatment. This program is designed for patients who are interested in treatment of their stroke by their family physicians at home. A comprehensive evaluation will be made by our physicians as well as treatment recommendations. This evaluation will include review of CAT scans or MRIs and blood tests, and when appropriate, computerized EEG testing, neuropsychological testing, and ultrasound evaluations. The program is approximately three days. Prior to traveling to Hammesfahr's clinic, M.T. was directed by Hammesfahr to obtain medical tests from her primary care physician, which she did. The tests included a CT scan of the brain, a CMP, liver profile, CBC with different platelets, Westergren's sed rate, EEG, CVA, and EKG. She was also required to take and write down her blood pressure two times a day for a week before going to Hammesfahr's clinic. M.T. also filled out a medical history form and a system review checklist prior to her visit to Hammesfahr. In a letter dated February 12, 2000, to M.T. on Hammesfahr's letterhead, his office staff described the treatment that M.T. would receive as follows: Your first visits with us will be quite long. So, plan accordingly. On your first day, you will have a consultation with the doctor. The second day you will have diagnostic testing in our office, and an appointment with Dr. Gimon for a neuro- psychological evaluation and Diane Hartley for a physical therapy evaluation. Both of these doctors will be calling you to set up these appointments. The neuro-psychological testing will help us to evaluate any memory changes. You will probably see Dr. Gimon again towards the end of your treatment. On Tuesdays and Thursdays there is an orientation session outlining what we will be doing here in the office and [sic] explaining our treatment program will be given out. Each new patient must attend one of these sessions. Every day thereafter, your visit will be at least two (2) hours long. As you know, our treatment consists of sessions in this office each day Monday through Friday for the duration of your therapy. Please note: No warranties or guarantees can be made regarding the time, the degree, or the duration of improvement with this therapy. On February 20, 2000, M.T. signed a Waiver for Use of Medications, which stated: I am, or my caregiver is, aware that I have had a neurological disease and have failed to respond to other types of medications used in the conservative management of my condition. . . . Options available to me at this time are those now used at the Florida Neurological Institute. I am aware that the medications used in this therapy are medications that have FDA approval. However, I am also aware that the FDA has not approved these medications in the doses and number of medications used here at the Institute. I am aware that Dr. Hammesfahr has published many articles on his therapy. I am aware of the fact that, during the past two years, the Institute has treated many patients with similar conditions and that most have had at least some improvement in the symptoms associated with their problem. I have, and my caregiver has, been counseled regarding this theory under which this therapy is being promulgated. Upon arrival at the Florida Neurological Institute, I and my caregiver, will see and listen to the videotapes available regarding this therapy. I have, or my caregiver has, read this waiver and understands its contents. I am, and my caregiver is, aware that there is no indicated use for this therapy now. I have had all questions I may have concerning the use of these medications answered, I agree to undergo the use of these medications as outlined in the material presented to me. As stated above, I am fully aware of the fact that this therapy probably will not be covered by my insurance, but I wish to continue with this therapy as outlined to me in my training and information sessions. I also understand that no physician, or any other person in this office, can make any guarantees of success from this therapy. (Emphasis in the original) On February 28, 2000, M.T., accompanied by her husband, presented to Hammesfahr's clinic in Clearwater, Florida, for treatment. On her first day at the clinic, she received an orientation. She was required to pay $3,000 for her treatment. A staff member at Hammesfahr's clinic took M.T.'s blood pressure and directed M.T. to take her own blood pressure readings thereafter. On the second day of treatment, February 29, 2000, M.T. was sent to Dr. Alexander Gimon, a neuropsychologist, for a 30-minute evaluation. A staff member of Hammesfahr's clinic gave M.T. a transcranial Doppler, a carotid artery ultrasound, and an electrocardiogram. A Physician's Office Visit History and Physical Examination Form was filled out with a date of "2-28-00" struck through at the top of the form and the date of "2-29-00" placed next to it. At the end of the form appeared a physician's statement signed by Hammesfahr and dated February 22, 2000, a week before M.T. presented for treatment, stating that he had "examined this patient, reviewed his/her history, and consulted with him/her and the caregiver regarding the treatment planned here at Florida Neurological Institute." An Objective (Physical Examination) form was filled out, again with the date of "2-28-00" struck through at the top of the form and the date "2-29-00" placed next to it. The form does not indicate who performed the physical examination. The form does indicate that M.T.'s blood pressure and pulse readings were taken. M.T. met with Hammesfahr, who observed her gait and told her that he would send her back home and would work with her physicians. He did not prescribe any medications at that time and did not give M.T. any medications during her treatment at his clinic. On March 1, 2000, M.T. was supposed to meet with the physical therapist, Diane Hartley, for evaluation at 8:00 a.m. When she arrived at Ms. Hartley's facility, no one was there to let M.T. in the building. When M.T. went into the facility, she did not like the looks of the building, describing it as "shoddy looking." She decided that she did not want to stay for an evaluation and left. The fee Hammesfahr charged M.T. included the fees for Dr. Gimon and Ms. Hartley. On March 1, 2000, M.T. and her husband returned home with the understanding that Hammesfahr would be contacting her doctors in Alabama to arrange for the administering of the medications. M.T. was told to make an appointment with her primary care physician for the week after she returned from Clearwater. Hammesfahr first communicated with M.T.'s physicians by letter, dated April 5, 2000, asking them to administer the vasodilators and magnesium sulfate I.V.'s. M.T.'s physicians in Alabama refused to administer the medications. M.T. did not take the vasodilators, which Hammesfahr wanted her physicians to administer; nevertheless, M.T. improved. Based on the rate schedule presented to M.T. for Hammesfahr's various treatment programs, she should have received either the Executive Stroke Prevention Program or the One-Week Evaluation and Treatment Program. Hammesfahr was adamant that M.T. did not sign up for the Executive Stroke Prevention Program, and the evidence established that she did not receive this program. M.T. was given an itinerary that indicated that she would be treated by Hammesfahr for a week; however the evidence established that she did not receive the treatment that was supposed to be given in the One-Week Evaluation and Treatment Program, which promised that the initiation of medical treatment would be done on days two through five. Hammesfahr did not administer any medications or prescribe any medications for M.T. during her stay in Clearwater. The evidence does show that M.T. received the three-day Initial Evaluation and Treatment Program, for which she should have been charged only $2,000. Hammesfahr presented the expert testimony of Dr. Jacob Green, who is a board-certified neurologist, practicing in Jacksonville, Florida. He has been practicing for over 35 years. Dr. Green has written papers on the use of transcranial Doppler, and he is experienced in the treatment of acute and chronic stroke patients. Dr. Green is familiar with the protocol and procedure utilized by Hammesfahr in treating stroke patients. He has read articles written by Hammesfahr, reviewed patients' records, and spent a day in Hammesfahr's office observing Hammesfahr's practice and treatment protocol which is at issue in this case. While he was at Hammesfahr's clinic, Dr. Green observed Hammesfahr treat patients, reviewed medical records of patients when they first came to Hammesfahr for treatment, and compared the findings in those records to his observations of the patients' abilities. Dr. Green discussed the treatment and protocol with Hammesfahr. Based on his deposition testimony, Dr. Green had a good understanding of the treatment and protocol used by Hammesfahr for stroke patients. Dr. Green described the standard of care for a stroke patient as "to do good by the patient, do no harm." According to Dr. Green, Hammesfahr's care and treatment and protocol complied with the standard of care. Hammesfahr presented the expert testimony of Dr. William Scott Russell, Jr., a retired neurologist with 33 years of experience. In his practice, he had treated thousands of stroke patients. Dr. Russell retired in October 1998. Dr. Russell had first-hand knowledge of the protocol used by Hammesfahr when he treated Dr. Russell for an acute stroke. Prior to Dr. Russell's being treated by Hammesfahr, Dr. Russell had reviewed a paper written by Hammesfahr concerning Hammesfahr's treatment protocol for stroke victims using vasodilators. Dr. Russell considered the treatment protocol espoused by Hammesfahr to not be below the standard of care as of 1998. In 1996, Dr. Russell experienced a stroke. When he awoke one morning, he was confused. He went to work and had difficulty with his abilities to speak and write. Dr. Russell realized that he was experiencing a stroke and had a technician in his office run an EEG. He had peer-reviewed some of Hammesfahr's papers prior to his stroke and was impressed with Hammesfahr's work. So, he contacted Hammesfahr and presented at Hammesfahr's clinic for treatment the day he experienced the stroke. Hammesfahr performed a transcranial Doppler on Dr. Russell and administered nitroglycerine to dilate Dr. Russell's blood vessels. Ten minutes after the nitroglycerine was administered, Dr. Russell's symptoms disappeared. Within a reasonable degree of medical probability, the cause of his recovery was the use of the nitroglycerine. Nitrates are used for acute stroke patients when the patient has an extremely high blood pressure. The nitrates lower the blood pressure and are given intravenously so that the medication can be discontinued immediately if the blood pressure should fall too low. There was no evidence presented to determine whether at the time that Hammesfahr administered nitroglycerine to Dr. Russell that Dr. Russell's blood pressure was high. At the time of the final hearing, Dr. Russell felt that he had total recovery from the stroke deficits. He has reduced his intake of medications prescribed by Hammesfahr and has not had a return of the deficits. The Department presented the testimony of four expert witnesses concerning the standard of care for treatment of stroke victims: Dr. Harold Charles Friend, Dr. Steven Novella, Dr. David F. Scales, and Dr. Thomas Hoffman. Dr. Hoffman has been practicing neurology in Melbourne, Florida, since 1982. Approximately five to ten percent of his patients have had a stroke or a cerebral vascular disease. He has read some of Hammesfahr's advertisements and viewed Hammesfahr's article on Hammesfahr's Internet web site. Dr. Hoffman understands Hammesfahr's protocol to be the use of medications to increase the cerebral blood flow and the use of the transcranial Doppler to direct the medication treatment by measuring the cerebral blood flow. Dr. Hoffman does not agree that the use of vasodilators increases the blood flow to the brain. There is a loss of cerebral autoregulation when a stroke occurs. According to Dr. Hoffman, the use of vasodilators can decrease the blood flow to the brain and worsen neurological functioning in acute stroke patients. It is the opinion of Dr. Hoffman that Hammesfahr's treatment of stroke patients falls below the standard of care for acute, subacute, and chronic stroke patients. Dr. Steven Novella is a neurologist and an assistant professor at Yale University. He received his medical license in Connecticut in 1993 and obtained his board certification in neurology in 1998. He treats stroke patients and is familiar with the appropriate treatment for stroke patients. Dr. Novella understands that the treatment for stroke patients which Hammesfahr advocates is the administration of vasodilators to expand blood vessels which have an insufficient blood supply due to constriction. He disagrees with Hammesfahr's theory, espousing that the blood vessels in the area of the brain that is not receiving enough blood flow will dilate as far as they can go and that the blood vessels will not respond to the vasodilators because the blood vessels are already maximally dilated. Dr. Novella is of the opinion that vasodilators may be used for stroke patients to reduce the risk of another stroke when the patient is hypertensive, but that the vasodilators should not be used as a method of reversing deficits caused by stroke. Dr. Harold Charles Friend is a board-certified neurologist, who has been practicing neurology for 26 years. He practices in Boca Raton, Florida. Approximately five to eight percent of his practice is dedicated to treating stroke patients. He is currently treating in excess of 500 stroke patients. Dr. Friend has reviewed the charts of two patients of Hammesfahr, an article written by Hammesfahr, some of Hammesfahr's advertisements, some newspaper articles, and an article authored by Hammesfahr, which appeared on an Internet site. Dr. Friend also saw a patient in his office that had previously been treated by Hammesfahr. Based on the information from these sources, Dr. Friend incorrectly understood that Hammesfahr's methodology was to basically lower the blood pressure of his patients in an attempt to restore dead cells. He also concluded that the patients seen by Hammesfahr were also receiving physical therapy at the time of treatment. Dr. Friend opined that Hammesfahr's treatment of chronic stroke victims did not comport with the standard of care recognized in the medical community. He further concluded that given the medications that Hammesfahr administers to his patients, that one would expect some adverse effects or no effect on the patients. The only mention in the record of a patient's being harmed by Hammesfahr's treatment was by Dr. Friend. Dr. Friend reviewed a medical chart of a patient who had worsened after treatment by Hammesfahr and had to go to another physician, Dr. Nassar Elmansoury, to correct the problem. The patient had been prescribed Accupril, ten milligrams four times a day, and nitroglycerine cream. Both medications are vasodilators. When the patient presented to Dr. Elmansoury, the patient was feeling worse and experiencing chest pain, dizziness, and disequilibrium. Dr. Elmansoury eliminated the nitroglycerine cream and reduced the amount of Accupril. Within two weeks, the patient was improved. Dr. David F. Scales is a board-certified neurologist, who has been practicing for 34 years. He currently practices in the Jacksonville, Florida, area at the Jacksonville Neurological Clinic. About 50 percent of his in-patient practice consists of stroke patients. Stroke patients comprise about 20 to 25 percent of the entire practice. Dr. Scales has reviewed the medical records of two of Hammesfahr's patients, articles written by Hammesfahr, literature provided by Hammesfahr to his patients, and Hammesfahr's Internet web site. Dr. Scales understands Hammesfahr's theory to be that vasodilators are administered to dilate the blood vessels in the brain so that more blood flows through the penumbra, reactivating neurons that were in a suspended state of activation. He does not agree with Hammesfahr's theory because the blood vessels in the penumbra would be dilated to the maximum and the medications would dilate blood vessels in other parts of the body, which would in turn take away or steal the blood flow from the blood vessels in the penumbra. After reviewing the medical records of two of Hammesfahr's patients, M.T. and M.S., Dr. Scales was of the opinion that the treatment provided by Hammesfahr did not meet the standard of care for the treatment of stroke patients. Having considered the testimony of the experts presented by the parties, it is determined that the standard of care for the treatment of stroke patients varies according to the stage, type, and severity of the stroke. In the acute stage, the patient is admitted to the hospital. A medical history is taken and a physical exam is given, followed by appropriate laboratory and imaging studies to determine the site and cause of the stroke. For patients seen within three hours of the onset of the stroke, certain intravenous medications may be given in an attempt to break up the blood clot. For patients seen beyond the three-hour point, the treatment is maintenance of their blood pressure, monitoring of their vital signs, and treating any complications that may occur such as pneumonia and urinary tract infections. Patients may be given blood thinners to improve the flow of the blood, and medication to increase the blood pressure in the event the blood pressure is too low. Patients with severe hypertension, generally a blood pressure over 220 systolic or 120 diastolic, are given medications to lower their blood pressure. Patients with asymptomatic hypertension are treated judiciously during their hospital stay with anti-hypertensive medications, and the blood pressure is gradually lowered. The standard of care for subacute stroke patients is a continuation of the treatment given in the acute phase. Patients will be started on rehabilitation therapy, which may include speech, occupational, and physical therapy. The standard of care for chronic stroke patients, whom the physician is seeing for the first time, would be to take a history to determine what happened, review the medical records and any imaging studies that may have been done, and review the treatment they have had. The physician should assess the patients' risk factors for stroke such as hypertension, hyperlipidemia, diabetes, and smoking and manage those factors aggressively. Treatment with antiplatelets such as aspirin or an anticoagulation medication might be indicated. An assessment of their neurological functional abilities should be done to determine whether aids, braces, further therapy, or home care could be beneficial. Based upon the evidence presented, the treatment advocated by Hammesfahr is not within the generally accepted standard of care. However, the evidence is not clear and convincing that the treatment used by Hammesfahr is harmful to his patients. There is literature in the medical community that vasodilators can be used in the treatment of stroke as a measure to prevent future strokes. There is evidence that in over 200 patients seen by Hammesfahr that a large percentage improved after being treated by Hammesfahr. Dr. Gimon tested a group of 168 stroke patients seen at Hammesfahr's clinic during the period of November 1999 to May 2000 and another group of 163 stroke patients seen during October 2000 through February 2001. The same battery of tests was administered to both groups. Dr. Gimon evaluated these patients on nine separate neurological evaluations that are standard instruments recognized in neuropsychology. The tests measured identified areas of brain function, including verbal, visual, visual motor, and conceptual thinking. Both groups of patients were tested prior to the treatment by Hammesfahr. The patients were tested again approximately 18 to 21 days after they began treatment at Hammesfahr's clinic. The test results showed that many patients showed improvements in the areas tested. The improvements noted were measured as to a statistical difference so that the findings could not be attributable to testing error. Some patients showed no improvement in all areas. The test results revealed that there was no neuropsychological deterioration of the patients tested. Diane Hartley tested two groups of Hammesfahr's patients, who were treated at his clinic during the period of January to December 2000. Her tests were designed to measure functional motor improvement from a gross motor standpoint. She performed tests on the patients prior to their beginning treatment with Hammesfahr and again approximately two and one half to three weeks after the patients had begun treatment. Of the 242 patients tested by Ms. Hartley, 221 patients demonstrated improvement in one or more of the areas tested and 21 patients showed no improvement. Of the patients tested, ten received physical therapy from Ms. Hartley while they were being treated by Hammesfahr. These ten patients demonstrated a significant amount of improvement, which Ms. Hartley could not attribute solely to the physical therapy they received. The evidence establishes that Hammesfahr informed his patients by the use of videos, orientation sessions, literature, and a web site on the Internet of the nature of the therapy and did not guarantee that the patients would improve as a result of the treatment. Patients were able to make an informed decision on whether to try Hammesfahr' treatment.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding that Hammesfahr did not violate Subsections 458.331(1)(d) and 458.331(1)(t), Florida Statutes; finding that Hammesfahr did violate Subsection 458.331(1)(n), Florida Statutes; placing Hammesfahr on probation for six months; and imposing a $2,000 administrative fine. DONE AND ENTERED this 20th day of November, 2002, in Tallahassee, Leon County, Florida. _____ SUSAN B. KIRKLAND 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 20th day of November, 2002.
The Issue The issue in this case is whether the Board of Medicine should discipline the Respondent, Carlos C. Soriano, M.D., on allegations contained in an Administrative Complaint filed against the Respondent in DPR Case No. 89-05941: namely, allegations that the Respondent practiced medicine below the acceptable level of care, skill and treatment, in violation of Section 458.331(1)(t), Fla. Stat. (1993), by failing to offer one of his patients the option of radiation therapy or chemotherapy for cancer of the rectum and by inappropriately delaying treatment for the condition.
Findings Of Fact The Respondent, Carlos C. Soriano, M.D., is a physician licensed in the State of Florida, holding license number ME 0024149. In late 1988 and early 1989, the Respondent, Carlos C. Soriano, M.D., was the medical director of a health maintenance organization called Gold Plus. On or about October 24, 1988, a physician at Gold Plus examined the patient in question, a 90 year-old female in apparent good health for her age, and made a preliminary diagnosis of suspected cancer of the rectum. She referred the patient to the Respondent, a surgeon, for further evaluation and treatment. The Respondent examined the patient on October 31, 1988. He confirmed his associate's preliminary diagnosis of cancer of the rectum but pointed out that a flexible sigmoidoscopy with biopsy would be necessary to make a final diagnosis and to determine the kind of cancer involved. The diagnostic procedure was scheduled for November 17, 1988. The Respondent also discussed with the patient that, due to her age and the size and extent of the tumor, surgical removal of the tumor may not be appropriate. The Respondent suggested that the best course might be to perform a palliative colostomy, if necessary, and "let nature take its course." The patient was not pleased with the Respondent's attitude and consulted a nephew, who was a physician, for advice. The nephew referred the patient to another physician, who was a gastroenterologist, for a second opinion. The gastroenterologist examined the patient on or about November 8, 1988, prepared a report for the referring physician, with copies also sent to the patient and to the Respondent. The gastroenterologist's report recommended: a colonoscopy and biopsies like those already scheduled by the Respondent; a complete work-up preliminary to surgical removal of the tumor (including CEA levels, a liver/spleen scan, chest X-ray, and CT scan of the pelvis) to determine whether the cancer had metastasized; and (3) radiation therapy if there was no evidence of metastasis, or palliative radiation prior to snare polypectomy or laser fulguration, to avoid the necessity of a colostomy in the future if there was evidence of metastasis. The Respondent performed the flexible sigmoidoscopy and three biopsies as scheduled on November 17, 1988. He told the patient he would discussed the results with her as soon as they were received from the pathology laboratory. The Respondent received the pathology report and scheduled an appointment to discuss the results with the patient and her family (another nephew, and his wife) on November 30, 1988. The pathology report on the biopsies confirmed that the tumor was malignant. The report stated that the cancer was coacogenic. At the time, and to this day, radiation therapy and chemotherapy is not considered effective curative treatment for coacogenic carcinomas. Assuming the accuracy of the report, the only course of possible effective curative treatment for the patient was surgical removal. Whether or not the cancer had spread, the Respondent did not think surgical removal was appropriate for the patient, due to her age and the size and extent of the tumor. He did not think she would tolerate the kind of surgery that would be required. The decision whether to perform a particular surgery on a particular patient requires the exercise of the physician's professional medical judgment. Such a judgment cannot be made without a knowledge of the patient, through history and physical examination. It is found that, based on all of the evidence, including the Respondent's knowledge of the patient, through history and physical examination, the Respondent's medical judgment not to recommend surgical removal of the patient's tumor was not below the level of care, skill and treatment recognized by a reasonably prudent similar physician as being acceptable under similar conditions and circumstances. During the meeting with the patient and her family on November 30, 1988, the Respondent explained the results of biopsies and what he considered to be the treatment alternatives. He told them that he would not recommend surgical removal, due to the patient's age and the size and extent of the tumor. He mentioned but did not elaborate on the possibility of radiation therapy because he did not know much about it. He suggested that the patient consider a colostomy to bypass the tumor and to "let nature take its course." He informed the patient and her family that he would be out of the country on vacation for the next four weeks but that she should make an appointment to see him after the holidays. Meanwhile, he would have someone research for him whether radiation or other alternative treatment modes were appropriate. It is found that the Respondent's failure to recommend radiation therapy or chemotherapy was not below the level of care, skill and treatment recognized by a reasonably prudent similar physician as being acceptable under similar conditions and circumstances. Radiation therapy and chemotherapy is not considered effective curative treatment for coacogenic carcinoma. Assuming the accuracy of the pathology report on the biopsy, the only course of possible effective curative treatment for the patient was surgical removal. Subsequent events revealed that the patient's cancer was not coacogenic but rather squamous cell carcinoma. (It is not uncommon for biopsy reports to make such an error due to the relatively small size of the biopsy sample.) But even if the biopsy report had shown that the patient suffered from squamous cell carcinoma, it could not be found that the Respondent's failure to recommend radiation therapy or chemotherapy was below the level of care, skill and treatment recognized by a reasonably prudent similar physician as being acceptable under similar conditions and circumstances. In 1988 and 1989, the medical community did not recognize radiation therapy or chemotherapy as an acceptable curative treatment for squamous cell carcinoma of the anus. Once again, the patient became anxious that the Respondent was not offering any curative treatment plan. She asked whether the Respondent should not at least have a liver/spleen scan done to see if the cancer had metastasized. Since the Respondent was not recommending surgery (the only possible curative treatment), he did not think a liver/spleen scan would serve any useful purpose. But to satisfy the patient, and because it was one of the gastroenterologist's recommendations, he agreed to schedule one for the patient before he left for vacation. The patient scheduled a follow-up appointment for January 9, 1989. Meanwhile, the Respondent left for vacation, and the liver/spleen scan was performed on December 8, 1988. In the Respondent's absence, Gold Plus delayed giving the patient the results of the scan. She became more and more anxious as time went by. When the patient called for the results, she initially was told that Gold Plus could not give her the results until the Respondent returned. It took an angry telephone call from the wife of the patient's nephew on the day before Gold Plus closed for the Christmas holiday for Gold Plus to agree to allow another of its physicians discuss the results of the scan. The patient was promised that the physician would call the next day. Still, no call came, and the wife of the patient's nephew called again just hours before the office closed for Christmas. The patient and her family were told that the results of the scan were negative. This distasteful experience further soured the patient's relationship with Gold Plus and, by extension, with the Respondent, and they lost faith in the Respondent and his medical practice. Instead of seeing the Respondent on January 9, 1989, as scheduled, the patient cancelled the appointment and made another appointment to see the gastroenterologist again. By this time, the tumor had grown to some extent and, along with it, the patient's discomfort. It was difficult to even examine the patient's rectum either digitally or by flexible sigmoidoscopy. The gastroenterologist agreed to refer the patient to another surgeon for possible surgical removal of the tumor. The patient initiated disenrollment from Gold Plus so that her Medicare could be reinstated to cover the anticipated surgery. The gastroenterologist asked the Respondent for the patient's medical records. The Respondent's care of the patient and responsibility for the care of the patient effectively ended when the patient cancelled her appointment on January 9, 1989. Another appointment with the gastroenterologist was scheduled for February 1, 1989, in anticipation of imminent surgery. Surgery was scheduled for February 14 but, after the patient's admission, was postponed to February 17, 1989. Initially, the patient's recovery from surgery was slow, and she remained hospitalized until March 14, 1989. Subsequent events raise questions whether the surgery was effective or worth the trauma. It is debatable how well the patient tolerated the surgery. It appears that she did not ever recover the level of physical vigor and energy she had before surgery. During the summer of 1989, the cancer reappeared on her coccyx and had to be treated by radiation. By the fall of 1989, another abdominal perineal resection was necessitated by the reappearance of the cancer in her rectum. Based on the best expert testimony available at the hearing, it cannot be found that the time that went by during the Respondent's treatment of the patient was "substantial," i.e., that it contributed to the spread of the patient's cancer. Notwithstanding the results of the liver/spleen scan, which was not definitive or even very useful in evaluating the patient's cancer for metastasis, it is probable that the patient's cancer already had metastasized by the time the Respondent first saw the patient. The Respondent clearly did not inordinately delay the flexible sigmoidoscopy with biopsy or his discussion of the results and treatment alternatives with the patient. The only questionable delay was the four-week delay caused by the Respondent being out of the country on vacation; by the time he was scheduled to see the patient on his return, she had terminated his care and treatment. There was no evidence on which it could be found that this delay was below the level of care, skill and treatment recognized by a reasonably prudent similar physician as being acceptable under similar conditions and circumstances.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Board of Medicine enter a final order dismissing the Administrative Complaint against the Respondent. RECOMMENDED this 21st day of March, 1994, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 21st day of March, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-5068 To comply with the requirements of Section 120.59(2), Fla. Stat. (1991), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. 1.-4. Accepted and incorporated to the extent not subordinate or unnecessary. 5.-6. The date of the procedure was November 17, not November 11. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. 7.-10. Accepted and incorporated to the extent not subordinate or unnecessary. "[A]pproximately four (4) weeks after the Christmas holidays" rejected as not proven and as contrary to the greater weight of the evidence. (He said "in four weeks, i.e., after the Christmas holidays.") Accepted and incorporated. Rejected as not proven and as contrary to the greater weight of the evidence that it was just "for a second opinion." Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. 14.-15. Accepted and incorporated to the extent not subordinate or unnecessary. Rejected as not proven and as contrary to the greater weight of the evidence that the gastroenterologist made such a determination; rather, the subsequent surgeon did. Also, rejected as not proven and as contrary to the greater weight of the evidence that the surgery was "successful." In some senses it was, in other senses it was not. Rejected as not proven and as contrary to facts found. 18.-19. Accepted but subordinate to facts contrary to those found, and unnecessary. 20. Both as to the growth of the tumor and as to the evidence of metastasis, rejected as not proven and as contrary to the greater weight of the evidence. (The liver/spleen scan was negative, but the best expert testimony presented as the hearing indicated that subsequent events showed prior metastasis.) 21.-22. Rejected as not proven and as contrary to facts found. (The evidence was that those treatments were not alternative curative treatments. The Respondent was not given an opportunity to use them palliatively.) 23. Rejected as not proven and as contrary to facts found. Respondent's Proposed Findings of Fact. For purposes of these rulings, the Respondent's unnumbered paragraphs of proposed findings of fact are assigned consecutive numbers. 1.-3. Accepted but subordinate and unnecessary. 4.-6. Accepted and incorporated to the extent not subordinate or unnecessary. 7. As to the second sentence, a "transverse colostomy" was discussed, not a "transverse colonoscopy." Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. 8.-9. Accepted and incorporated to the extent not subordinate or unnecessary. Rejected as contrary to facts found and to the greater weight of the evidence that there was no delay. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. Subordinate and unnecessary. COPIES FURNISHED: Barbara Makant, Esquire Steven A. Rothenburg Senior Attorney Department of Business and Professional Regulation 1940 N. Monroe Street Tallahassee, Florida 32399-0792 Hugh Smith, Esquire P. O. Box 3288 Tampa, Florida 33601 Dr. Marm Harris Executive Director Department of Business and Professional Regulation 1940 N. Monroe Street Tallahassee, Florida 32399-0792 Jack McRay, Esquire Acting General Counsel Department of Business and Professional Regulation 1940 N. Monroe Street Tallahassee, Florida 32399-0792
Recommendation Based upon the findings of fact and conclusions of law recited above, it is recommended that the respondent's determination to deny petitioner's application for a certificate of need to institute radiation therapy facilities at its hospital be AFFIRMED. Respectfully submitted and entered this 9th day of June, 1977, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Art Forehand, Administrator Office of Community Medical Facilities 1323 Winewood Boulevard Tallahassee, Florida 32301 Richard R. Paige, Esquire Paige and Catlin Alfred I. DuPont Building Miami, Florida 33131 Eric J. Haugdahl, Esquire Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301 Sheldon M. Simons, Esquire Professional Building 3661 South Miami Avenue Miami, Florida 33133 Alex Hofrichter, Esquire Carey, Dwyer, Cole, Selwood and Bernard Post Office Box 450888 Miami, Florida 33145
The Issue Whether Certificate of Need (CON) Application No. 9992, filed by Sun City Hospital, Inc., d/b/a South Bay Hospital to establish a 112-bed replacement hospital in Riverview, Hillsborough County, Florida, satisfies, on balance, the applicable statutory and rule review criteria for approval.
Findings Of Fact The Parties A. South Bay South Bay is a 112-bed general acute care hospital located at 4016 Sun City Center Boulevard, Sun City Center, Florida. It has served south Hillsborough County from that location since its original construction in 1982. South Bay is a wholly-owned for-profit subsidiary of Hospital Corporation of America, Inc. (HCA), a for-profit corporation. South Bay's service area includes the immediate vicinity of Sun City Center, the communities of Ruskin and Wimauma (to the west and east of Sun City Center, respectively), and the communities of Riverview, Gibsonton, and Apollo Beach to the north. See FOF 68-72. South Bay is located on the western edge of Sun City Center. The Sun City Center area is comprised of the age- restricted communities of Sun City Center, Kings Point, Freedom Plaza, and numerous nearby senior living complexes, assisted- living facilities, and nursing homes. This area geographically comprises the developed area along the north side of State Road (SR) 674 between I–75 and U.S. Highway 301, north to 19th Avenue and south to the Little Manatee River. South Bay predominantly serves the residents of the Sun City Center area. In 2009, Sun City Center residents comprised approximately 57% of all discharges from SB. South Bay had approximately 72% market share in Sun City Center zip code 33573. (Approximately 32% of all market service area discharges came from zip code 33573.) South Bay provides educational programs at the hospital that are well–attended by community residents. South Bay provides comprehensive acute care services typical of a small to mid-sized community hospital, including emergency services, surgery, diagnostic imaging, non-invasive cardiology services, and endoscopy. It does not provide diagnostic or therapeutic cardiac catheterization or open-heart surgery. Patients requiring interventional cardiology services or open-heart surgery are taken directly by Hillsborough County Fire Rescue or other transport to a hospital providing those services, such as Brandon Regional Hospital (Brandon) or SJH, or are transferred from SB to one of those hospitals. South Bay has received a number of specialty accreditations, which include accreditation by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), specialty accreditation as an advanced primary stroke center, and specialty accreditation by the Society for Chest Pain. South Bay has also received recognition for its quality of care and, in particular, for surgical infection prevention and outstanding services relating to heart attack, heart failure, and pneumonia. South Bay's 112 licensed beds comprise 104 general medical-surgical beds and eight Intensive Care Unit (ICU) beds. Of the general medical-surgical beds, 64 are in semi-private rooms, where two patient beds are situated side-by-side, separated by a curtain. Forty-eight are in private rooms. Semi- private rooms present challenges in terms of infection control and patient privacy, and are no longer the standard of care in hospital design and construction. Over the years, SB has upgraded its hospital physical plant to accommodate new medical technology, including an MRI suite and state-of-the-art telemetry equipment. South Bay is implementing automated dispensing cabinets on patient floors for storage of medications and an electronic medication administration record system that provides an extra safety measure for dispensing medications. Since 2009, SB has implemented numerous programmatic initiatives that have improved the quality of care. South Bay is converting one wing of the hospital to an orthopedic unit. In 2001, South Bay completed a major expansion of its ED and support spaces, but has not added new beds. Patients presenting to the ED have received high quality of care and timely care. Since 2009, SB has improved its systems of care and triage of patients in the ED to improve patient flow and reduce ED wait times. Overall, South Bay has a reputation of providing high- quality care in a timely manner, notwithstanding problems with its physical plant and location. South Bay's utilization has been high historically. From 2006 to 2009, SB's average occupancy has been 79.5%, 80.3%, 77.2%, and 77.7%, respectively. Its number of patient discharges also increased in that time, from 6,190 in 2006 to 6,540 in 2009, at an average annual rate increase of 1.9%. (From late November until May, the seasonal months, utilization is very high, sometimes at 100% or greater.) Despite its relatively high utilization, SB has also had marginal financial results historically. It lost money in 2005 and 2007, with operating losses of $644,259 in 2005 and $1,151,496 in 2007 and bottom-line net losses of $447,957 (2005) and $698,305 (2007). The hospital had a significantly better year in 2009, with an operating gain of $3,365,113 and a bottom- line net profit of $2,144,292. However, this was achieved largely due to a reduction in bad debt from $11,927,320 in 2008 to $7,772,889 in 2009, an event the hospital does not expect to repeat, and a coincidence of high surgical volume. Its 2010 financial results were lagging behind those of 2009 at the time of the hearing. South Bay's 2009 results amount to an aberration, and it is likely that 2010 would be considerably less profitable. South Bay's marginal financial performance is due, in part, to its disproportionate share of Medicare patients and a disproportionate percentage of Medicare reimbursement in its payor mix. Medicare reimburses hospitals at a significantly lower rate than managed care payors. As noted, SB is organizationally a part of HCA's West Florida Division, and is one of two HCA-affiliated hospitals in Hillsborough County; Brandon is the other. (There are approximately 16 hospitals in this division.) Brandon has been able to add beds over the past several years, and its services include interventional cardiology and open-heart surgery. However, SB and Brandon combined still have fewer licensed beds than either St. Joseph's Hospital or Tampa General Hospital, and fewer than the BayCare Health System- affiliated hospitals in Hillsborough in total. South Bay's existing physical plant is undersized and outdated. See discussion below. Whether it has a meaningful opportunity for expansion and renovation at its 17.5-acre site is a question for this proceeding to resolve. South Bay proposes the replacement and relocation of its facility to the community of Riverview. In 2005, SB planned to establish an 80-bed satellite hospital in Riverview, on a parcel owned by HCA and located on the north side of Big Bend Road between I-75 and U.S. Highway 301. SB filed CON Application No. 9834 in the February 2005 batching cycle. The application was preliminarily denied by AHCA, and SB initially contested AHCA's determination. South Bay pursued the satellite hospital CON at that time because of limited availability of intercompany financing from HCA. By the time of the August 2007 batching cycle, intercompany financing had improved, allowing SB to pursue the bigger project of replacing and relocating the hospital. South Bay dismissed its petition for formal administrative hearing, allowing AHCA's preliminary denial of CON Application No. 9834 to become final, and filed CON Application No. 9992 to establish a replacement hospital facility on Big Bend Road in Riverview. St. Joseph's Hospital St. Joseph's Hospital was founded by the Franciscan Sisters of Allegany, New York, as a small hospital in a converted house in downtown Tampa in 1934. In 1967, SJH opened its existing main hospital facility on Martin Luther King Avenue in Tampa, Florida. St. Joseph's Hospital, Inc., a not-for-profit entity, is the licensee of St. Joseph's Hospital, an acute care hospital located at 3001 West Martin Luther King, Jr., Boulevard, Tampa, Florida. As a not-for-profit organization, SJH's mission is to improve the health care of the community by providing high- quality compassionate care. St. Joseph's Hospital, Inc., is a Medicaid disproportionate share provider and provided $145 million in charity and uncompensated care in 2009. St. Joseph's Hospital, Inc., is licensed to operate approximately 883 beds, including acute care beds; Level II and Level III neonatal intensive care unit (NICU) beds; and adult and child-adolescent psychiatric beds. The majority of beds are semi-private. Services include Level II and pediatric trauma services, angioplasty, and open-heart surgery. These beds and services are distributed among SJH's main campus; St. Joseph's Women's Hospital; St. Joseph's Hospital North, a newer satellite hospital in north Tampa; and St. Joseph's Children's Hospital. Except for St. Joseph's Hospital North, these facilities are land-locked. Nevertheless, SJH has continued to invest in its physical plant and to upgrade its medical technology and equipment. In February 2010, SJH opened St. Joseph's Hospital North, a state-of-the-art, 76-bed satellite hospital in Lutz, north Hillsborough County, at a cost of approximately $225 million. This facility is approximately 14 miles away from the main campus. This followed the award of CON No. 9610 to SJH for the establishment of St. Joseph's Hospital North, which was unsuccessfully opposed by University Community Hospital and Tampa General Hospital, two existing hospital providers in Tampa. Univ. Cmty. Hosp., Inc., d/b/a Univ. Cmty. Hosp. v. Agency for Health Care Admin., Case Nos. 03-0337CON and 03-0338CON. St. Joseph's Hospital North operates under the same license and under common management. St. Joseph's Hospital, Inc., is also the holder of CON No. 9833 for the establishment of a 90-bed state-of-the-art satellite hospital on Big Bend Road, Riverview, Hillsborough County. These all private beds include general medical-surgical beds, an ICU, and a 10-bed obstetrical unit. On October 21, 2009, the Agency revised CON No. 9833 with a termination date of October 21, 2012. This project was unsuccessfully opposed by TG, SB, and Brandon. St. Joseph's Hosp., Inc. v. Agency for Health Care Admin., Case No. 05-2754CON, supra. St. Joseph's Hospital anticipates construction beginning in October 2012 and opening the satellite hospital, to be known as St. Joseph's Hospital South, in early 2015. This hospital will be operating under SJH's existing license and Medicare and Medicaid provider numbers and will in all respects be an integral component of SJH. The implementation of St. Joseph's Hospital South is underway. SJH has contracted with consultants, engineers, architects, and contractors and has funded the first phase of the project with $6 million, a portion of which has been spent. The application for CON No. 9833 refers to "evidence- based design" and the construction of a state-of-the-art facility. (The design of St. Joseph's Hospital North also uses "evidence-based design.") St. Joseph's Hospital South will have all private rooms, general surgery operating rooms as well as endoscopy, and a 10-bed obstetrics unit. Although CON No. 9833 is for a project involving 228,810 square feet of new construction, SJH intends to build a much larger facility, approximately 400,000 square feet on approximately 70 acres. St. Joseph's Hospital Main's physical plant is 43 years old. The majority of the patient rooms are semi–private and about 35% of patients admitted at this hospital received private rooms. Notwithstanding the age of its physical plant and its semi–private bed configuration, SJH has a reputation of providing high quality of care and is a strong competitor in its market. St. Joseph's Hospital, Inc., has two facility expansions currently in progress at its main location in Tampa: a new five-story building that will house SJH neonatal intensive care unit, obstetrical, and gynecology services; and a separate, two-story addition with 52 private patient rooms. Of the 52 private patient rooms, 26 will be dedicated to patients recovering from orthopedic surgery, and will be large enough to allow physical therapy to be done in the patient room itself. The other 26 rooms will be new medical-surgical ICU beds at the hospital. At the same time that SJH expands its main location, it is pursuing a strategic plan whereby the main location is the "hub" of its system, with community hospitals and health facilities located in outlying communities. As proposed in CON Application No. 9610, St. Joseph's Hospital North was to be 240,000 square feet in size. Following the award of CON No. 9610, SJH requested that AHCA modify the CON to provide for construction of a larger facility. In its modification request, SJH requested to establish a large, state- of-the-art facility with all private patient rooms, and the desirability of private patient rooms as a matter of infection control and patient preference. AHCA granted the modification. St. Joseph's Hospital, Inc., thereafter planned to construct St. Joseph's Hospital North to be four stories in height. The plan was opposed. St. Joseph's Hospital, Inc., offered to construct a three-story building, large enough horizontally to accommodate the CON square footage modification. The offer was accepted. St. Joseph's Hospital, Inc., markets St. Joseph's Hospital North as "The Hospital of the Future, Today." The hospital was constructed using "evidence-based design" to maximize operational efficiencies and enhance the healing process of its residents –- recognizing, among other things, the role of the patient's family and friends. The facility's patient care units are all state-of-the-art and include, for example, obstetrical suites in which a visiting family member can spend the night. A spacious, sunlit atrium and a "healing garden" are also provided. The hospital's dining facility is frequented by community residents. In addition, SJH owns a physician group practice under HealthPoint Medical Group, a subsidiary of St. Joseph's Health Care Center, Inc. The group practice has approximately 19 different office locations, including several within the service area for the proposed hospital. The group includes approximately 106 physicians. However, most of the office locations are in Tampa, and the group does not have an office in Riverview, although there are plans to expand locations to include the Big Bend Road site. St. Joseph's Hospital, Inc., anticipates having to establish a new medical staff for St. Joseph's Hospital South, and will build a medical office building at the site for the purpose of attracting physicians. It further anticipates that some number of physicians on SB's existing medical staff will apply for privileges at St. Joseph's Hospital South. St. Joseph's Hospital, Inc., is the market leader among Hillsborough County hospitals and is currently doing well financially, as it has historically. For 2010, St. Joseph's Hospital Main's operating income was approximately $78 million. Organizationally, SJH has a parent organization, St. Joseph's Health Care Center, Inc., and is one of eight hospitals in the greater Tampa Bay area affiliated with BayCare. On behalf of its member hospitals, BayCare arranges financing for capital projects, provides support for various administrative functions, and negotiates managed care contracts that cover its members as a group. St. Joseph's Hospital characterizes fees paid for BayCare services as an allocation of expenses rather than a management fee for its services. In 2009, SJH paid BayCare approximately $42 million for services. St. Joseph's Hospital is one of three BayCare affiliates in Hillsborough County. The other two are St. Joseph's Hospital North and South Florida Baptist Hospital, a community hospital in Plant City. St. Joseph's Hospital South would be the fourth BayCare hospital in the county. Tampa General The Hillsborough County Hospital Authority, a public body appointed by the county, operated Tampa General Hospital until 1997. In that year, TG was leased to Florida Health Sciences Center, Inc., a non-profit corporation and the current hospital licensee. Tampa General is a 1,018-bed acute care hospital located at 2 Columbia Drive, Davis Island, Tampa, Florida. In addition to trauma surgery services, TG provides tertiary services, such as angioplasty, open-heart surgery, and organ transplantation. Tampa General operates the only burn center in the area. A rehabilitation hospital is connected to the main hospital, but there are plans to relocate this facility. Tampa General owns a medical office building. Tampa General is JCAHO accredited and has received numerous honors. Tampa General provides high-quality of care. Approximately half of the beds at TG are private rooms. Tampa General's service area for non-tertiary services includes all of Hillsborough County. Tampa General is also the teaching hospital for the University of South Florida's College of Medicine. As a statutory teaching hospital, TG has 550 residents and funds over 300 postgraduate physicians in training. Tampa General is the predominant provider of services to Medicaid recipients and the medically indigent of Hillsborough County. It is considered the only safety-net hospital in Hillsborough County. (A safety net hospital provides a disproportionate amount of care to indigent and underinsured patients in comparison to other hospitals.) A high volume of indigent (Medicaid and charity) patients are discharged from TG. In 2009, the costs TG incurred treating indigent patients exceeded reimbursement by $56.5 million. Approximately 33% of Tampa General's patients are Medicare patients and 25% commercial. Tampa General has grown in the past 10 years. It added 31 licensed acute care beds in 2004 and 82 more since SB's application was filed in 2007. In addition, the Bayshore Pavilion, a $300-million project, was recently completed. The project enlarged TG's ED, and added a new cardiovascular unit, a new neurosciences and trauma center, a new OB-GYN floor, and a new gastrointestinal unit. Facility improvements are generally ongoing. Tampa General's capital budget for 2011 is approximately $100 million. In 2010, TG's operating margin was approximately $43 million and a small operating margin in 2011. AHCA AHCA is the state agency that administers the CON law. Jeff Gregg testified that during his tenure, AHCA has never preliminarily denied a replacement hospital CON application or required consideration of alternatives to a replacement hospital. Mr. Gregg opined that the lack of alternatives or options is a relevant consideration when reviewing a replacement hospital CON application. T 468. The Agency's State Agency Action Report (SAAR) provides reasons for preliminarily approving SB's CON application. During the hearing, Mr. Gregg testified, in part, that the primary reasons for preliminary approval were issues related to quality of care "because the facility represents itself as being unable to expand or adapt significantly to the rapidly changing world of acute care. This is consistent with what [he has] heard about other replacement hospitals." T 413. Mr. Gregg also noted that SB focused on improving access "[a]nd as the years go by, it is reasonable to expect that the population outside of Sun City Center, the immediate Sun City Center area, will steadily increase and improve access for more people, and that's particularly true because this application includes both a freestanding emergency department and a shuttle service for the people in the immediate area. And that was intended to address their concerns based upon the fact that they have had this facility very conveniently located for them in the past at a time when there was little development in the general south Hillsborough area. But the applicant wants to position itself for the expected growth in the future, and we think has made an excellent effort to accommodate the immediate interests of Sun City Center residents with their promises to do the emergency, freestanding emergency department and the shuttle service so that the people will continue to have very comfortable access to the hospital." T 413-14. Mr. Gregg reiterated "that the improvements in quality outweigh any concerns that [the Agency] should have about the replacement and relocation of this facility; that if this facility were to be forced to remain where it is, over time it would be reasonable to expect that quality would diminish." T 435. For AHCA, replacement hospital applications receive the same level of scrutiny as any other acute care hospital applications. T 439-40. South Bay's existing facility and site South Bay is located on the north side of SR 674, an east-west thoroughfare in south Hillsborough County. The area around the hospital is "built out" with predominantly residential development. Sun City Center, an age-restricted (55 and older) retirement community, is located directly across SR 674 from the hospital as well as on the north side of SR 674 to the east of the hospital. Other residential development is immediately to the west of the hospital on the north side of SR 674. See FOF 3-6. Sun City Center is flanked by two north-south arterial roadways, I-75 to the west and U.S. Highway 301 to the east, both of which intersect with SR 674. The community of Ruskin is situated generally around the intersection of SR 674 and U.S. 41, west of I-75. The community of Wimauma is situated along SR 674 just east of U.S. Highway 301. South Bay is located in a three-story building that is well–maintained and in relatively good repair. The facility is well laid out in terms of design as a community hospital. Patients and staff at SB are satisfied with the quality of care and scope of acute care services provided at the hospital. Notwithstanding current space limitations, and problems in the ICU, see FOF 77-82, patients receive a high quality of care. One of the stated reasons for replacement is with respect to SB's request to have all private patient rooms in order to be more competitive with St. Joseph's Hospital South. South Bay's inpatient rooms are located within the original construction. The hospital is approximately 115,800 square feet, or a little over 1,000 square feet per inpatient bed. By comparison, small to mid-sized community hospitals built today are commonly 2,400 square feet per inpatient bed on average. All of SB's patient care units are undersized by today's standards, with the exception of the ED. ICU patients, often not ambulatory, require a higher level of care than other hospital patients. The ICU at SB is not adequate to meet the level of care required by the ICU patient. SB's ICU comprises eight rooms with one bed apiece. Eight beds are not enough. As Dr. Ksaibati put it at hearing: "Right now we have eight and we are always short . . . double . . . the number of beds, that's at least [the] minimum [t]hat I expect we are going to have if we go to a new facility." T 198-99 (emphasis added). The shortage of beds is not the only problem. The size of SB's ICU rooms is too small. (Problems with the ICU have existed at least since 2006.) Inadequate size prohibits separate, adjoining bathrooms. For patients able to leave their beds, therefore, portable bathroom equipment in the ICU room is required. Inadequate size, the presence of furniture, and the presence of equipment in the ICU room creates serious quality of care issues. When an EKG is conducted, the nurse cannot be present in the room. Otherwise, there would be no space for the EKG equipment. It is difficult to intubate a patient and, at times, "extremely dangerous." T 170. A major concern is when a life-threatening problem occurs that requires emergency treatment at the ICU patient's bedside. For example, when a cardiac arrest "code" is called, furniture and the portable bathroom equipment must be removed before emergency cardiac staff and equipment necessary to restore the function of the patient's heart can reach the patient for the commencement of treatment. Comparison to ICU rooms at other facilities underscores the inadequate size of SB's ICU rooms. Many of the ICU rooms at Brandon are much larger -- more than twice the size of SB's ICU rooms. Support spaces are inadequate in most areas, resulting in corridors (at times) being used for inappropriate storage. In addition, the hospital's general storage is inadequate, resulting in movable equipment being stored in mechanical and electrical rooms. Of the medical-surgical beds at SB, 48 are private and 64 are semi-private. The current standard in hospital design is for acute care hospitals to have private rooms exclusively. Private patient rooms are superior to semi-private rooms for infection control and patient well-being in general. The patient is spared the disruption and occasional unpleasantness that accompanies sharing a patient room –- for example, another patient's persistent cough or inability to use the toilet (many of SB's semi-private rooms have bedside commodes). Private rooms are generally recognized as promoting quality of care. South Bay's site is approximately 17.5 acres, bordered on all sides by parcels not owned by either SB or by HCA- affiliated entities. The facility is set back from SR 674 by a visitor parking lot. Proceeding clockwise around the facility from the visitor parking lot, there is a small service road on the western edge of the site; two large, adjacent ponds for stormwater retention; the rear parking lot for ED visitors and patients; and another small service road which connects the east side of the site to SR 674, and which is used by ambulances to access the ED. Dedicated parking for SB's employees is absent. A medical office building (MOB), which is not owned by SB, is located to the north of the ED parking lot. The MOB houses SB's Human Resources Department as well as medical offices. Most of SB's specialty physicians have either full or part-time offices in close proximity to SB. Employee parking is not available in the MOB parking lot. Some of SB's employees park in a hospital-owned parking lot to the north of the MOB, and then walk around the MOB to enter the hospital. South Bay's CEO and management employees park on a strip of a gravel lot, which is rented from the Methodist church to the northeast of the hospital's site. In 2007, as part of the CON application to relocate, SB commissioned a site and facility assessment (SFA) of the hospital. The SFA was prepared for the purpose of supporting SB's replacement hospital application and has not been updated since its preparation in 2007. The architects or engineers who prepared the SFA were not asked to evaluate proposed options for expansion or upgrade of SB on-site. However, the SFA concludes that the SB site has been built out to its maximum capacity. On the other hand, the SFA concluded that the existing building systems at SB met codes and standards in force when constructed and are in adequate condition and have the capacity to meet the current needs of the hospital. The report also stated that if SB wanted to substantially expand its physical plant to accommodate future growth, upgrades to some of the existing building systems likely would be required. Notwithstanding these reports and relative costs, expansion of SB at its existing site is not realistic or cost- effective as compared to a replacement hospital. Vertical expansion is complicated by two factors. First, the hospital's original construction in 1982 was done under the former Southern Standard Building Code, which did not contain the "wind-loading" requirements of the present-day Florida Building Code. Any vertical expansion of SB would not only require the new construction to meet current wind-loading requirements, but would also require the original construction to be retrofitted to meet current wind-loading requirements (assuming this was even possible as a structural matter). Second, if vertical expansion were to meet current standards for hospital square footage, the new floor or floors would "overhang" the smaller existing construction, complicating utility connections from the lower floor as well as the placement of structural columns to support the additional load. The alternative (assuming feasibility due to current wind-loading requirements) would be to vertically stack patient care units identical to SB's existing patient care units, thereby perpetuating its undersized and outdated design. Vertical expansion at SB has not been proposed by the Gould Turner Group (Gould Turner), which did a Master Facility Plan for SB in May 2010, but included a new patient bed tower, or by HBE Corporation (HBE). Horizontal expansion of SB is no less complicated. The hospital would more than double in size to meet the modern-day standard of 2,400 square feet per bed, and its site is too small for such expansion. It is apparent that such expansion would displace the visitor parking lot if located to the south of the existing building, and likely have to extend into SR 674 itself. South Bay's architectural consultant expert witness substantiated that replacing SB is justified as an architectural matter, and that the facility cannot be brought up to present-day standards at its existing location. According to Mr. Siconolfi, the overall building at SB is approximately half of the total size that would normally be in place for a new hospital meeting modern codes and industry standards. The more modest expansions offered by Gould Turner and HBE are still problematic, if feasible at all. Moreover, with either proposal, SB would ultimately remain on its existing 17.5-acre site, with few opportunities to expand further. Gould Turner's study was requested by SB's CEO in May 2010, to determine whether and to what extent SB would be able to expand on-site. (Gould Turner was involved with SB's recent ED expansion project area.) The resulting Master Facility Plan essentially proposes building a new patient tower in SB's existing visitor parking lot, to the left and right of the existing main entrance to SB. This would require construction of a new visitor parking lot in whatever space remained in between the new construction and SR 674. The Master Facility Plan contains no discussion of the new impervious area that would be added to the site and the consequential requirement of additional stormwater capacity, assuming the site can even accommodate additional stormwater capacity. This study also included a new 12-bed ICU and the existing ICU would be renovated into private patient rooms. For example, "[t]he second floor would be all telemetry beds while the third floor would be a combination of medical/surgical, PCU, and telemetry beds." In Gould Turner's drawings, the construction itself would be to the left and to the right of the hospital's existing main entrance. Two scenarios are proposed: in the first, the hospital's existing semi-private rooms would become private rooms and, with the new construction, the hospital would have 114 licensed beds (including two new beds), all private; in the second, some of the hospital's existing semi-private rooms would become private rooms and, with the new construction, the hospital would have 146 licensed beds (adding 34 beds), of which 32 would be semi-private. South Bay did not consider Gould Turner's alternative further or request additional, more detailed drawings or analysis, and instead determined to pursue the replacement hospital project, in part, because it was better not to "piecemeal" the hospital together. Mr. Miller, who is responsible for strategic decisions regarding SB, was aware of, but did not review the Master Facility Plan and believes that it is not economically feasible to expand the hospital. St. Joseph's Hospital presented testimony of an architect representing the hospital design/build firm of HBE, to evaluate SB's current condition, to provide options for expansion and upgrading on-site, and to provide a professional cost estimate for the expansion. Mr. Oliver personally inspected SB's site and facility in October 2010 and reviewed numerous reports regarding the facility and other documents. Mr. Oliver performed an analysis of SB's existing physical plant and land surrounding the hospital. HBE's analysis concluded that SB has the option to expand and upgrade on-site, including the construction of a modern surgical suite, a modern 10-bed ICU, additional elevators, and expansion and upgrading of the ancillary support spaces identified by SB as less than ideal. HBE's proposal involves the addition of 50,000 square feet of space to the hospital through the construction of a three-story patient tower at the south side of the hospital. The additional square footage included in the HBE proposal would allow the hospital to convert to an all-private bed configuration with either 126 private beds by building out both second and third floors of a new patient tower, or to 126 private beds if the hospital chose to "shell in" the third floor for future expansion. Under the HBE proposal, SB would have the option to increase its licensed bed capacity 158 beds by completing the second and third floors of the new patient tower (all private rooms) while maintaining the mix of semi-private and private patient rooms in the existing bed tower. The HBE proposal also provides for a phased renovation of the interior of SB to allow for an expanded post-anesthesia care unit, expanded laboratory, pharmacy, endoscopy, women's center, prep/hold/recovery areas, central sterile supply and distribution, expanded dining, and a new covered lobby entrance to the left side of the hospital. Phasing of the expansion would permit the hospital to remain in operation during expansion and renovation with minimal disruption. During construction the north entrance of the hospital would provide access through the waiting rooms that are currently part of the 2001 renovated area of the hospital with direct access to the circulation patterns of the hospital. The HBE proposal also provides for the addition of parking to bring the number of parking spaces on-site to 400. The HBE proposal includes additional stormwater retention/detention areas that could serve as attractive water features and, similar to the earlier civil engineering reports obtained by SB, proposes the construction of a parking garage at the rear of the facility should additional parking be needed in the future. However, HBE essentially proposes the alternative already rejected by SB: construction of a new patient tower in front of the existing hospital. Similar to Gould Turner, HBE proposes new construction to the left and right of the hospital's existing lobby entrance and the other changes described above. HBE's proposal recognizes the need for additional stormwater retention: the stand of trees that sets off the existing visitor parking lot from SR 674 would be uprooted; in their place, a retention pond would be constructed. Approval of the Southwest Florida Water Management District (SWFWMD) would be required for the proposal to be feasible. Assuming the SWFWMD approved the proposal, the retention pond would have to be enclosed by a fence. This would then be the "face" of the hospital to the public on SR 674. HBE's proposal poses significant problems. The first floor of the three-story component would be flush against the exterior wall of the hospital's administrative offices, where the CEO and others currently have windows with a vista of the front parking lot and SR 674. Since the three-story component would be constructed first in the "phased" construction, and since the hospital's administration has no other place to work in the existing facility, the CEO and other management team would have to work off-site until the new administrative offices (to the left of the existing hospital lobby entrance) were constructed. The existing main entrance to the hospital, which faces SR 674, would be relocated to the west side of the hospital once construction was completed in its entirety. In the interim, patients and visitors would have to enter the facility from the rear, as the existing main entrance would be inaccessible. This would be for a period of months, if not longer. For the second and third floors, HBE's proposal poses two scenarios. Under the first, SB would build the 24 general medical-surgical beds on the tower's second floor, but leave the third floor as "shelled" space. This would leave SB with a total of 106 licensed beds, six fewer than it has at present. Further, since HBE's proposal involves a second ICU at SB, 18 of the 106 beds are ICU beds, leaving 88 general medical-surgical beds. By comparison, SB currently has 104 general medical- surgical beds, meaning that it loses 16 general medical-surgical beds under HBE's first scenario. In the second scenario, SB would build 24 general medical-surgical beds on the third floor as well, and would have a total of 126 licensed beds. Since 18 of those beds would be ICU beds, SB would have 108 general medical-surgical beds, or only four more than it has at present. Further, the proposal does not make SB appreciably bigger. The second and third floors in HBE's proposal are designed in "elongated" fashion such that several rooms may be obscured from the nursing station's line of sight by a new elevator, which is undesirable as a matter of patient safety and security. Further, construction of the second and third floors would be against the existing second and third floors above the lobby entrance's east side. This would require 12 existing private patient rooms to be taken out of service due to loss of their vista windows. At the same time, the new second and third floors would be parallel to, but set back from, existing semi- private patient rooms and their vista windows along the southeast side of the hospital. This means that patients and visitors in the existing semi-private patient rooms and patients and visitors in the new private patient rooms on the north side of the new construction may be looking into each other's rooms. HBE's proposal also involves reorganization and renovation of SB's existing facility, and the demolition and disruption that goes with it. To accommodate patient circulation within the existing facility from the ED (at the north side of the hospital) to the new patient tower (at the south side of the hospital), two new corridors are proposed to be routed through and displace the existing departments of Data Processing and Medical Records. Thus, until the new administrative office space would be constructed, Data Processing and Medical Records (along with the management team) would have to be relocated off-site. Once the new first floor of the three-story component is completed, the hospital's four ORs and six PACU beds will be relocated there. In the existing vacated surgical space, HBE proposes to relocate SB's existing cardiology unit, thus requiring the vacated surgical space to be completely reconfigured (building a nursing station and support spaces that do not currently exist in that location). In the space vacated by the existing cardiology unit, HBE proposed expanding the hospital's clinical laboratory, meaning extensive demolition and reconfiguration in that area. The pharmacy is proposed to be relocated to where the existing PACU is located, requiring the building of a new pharmacy with a secure area for controlled substances, cabinets for other medications, and the like. The vacated existing pharmacy is in turn proposed to be dedicated to general storage, which involves still more construction and demolition, tearing out the old pharmacy to make the space suitable for general storage. HBE's proposal is described as a "substantial upgrade" of SB, but it was stated that a substantial upgrade could likewise be achieved by replacing the facility outright. This is SB's preference, which is not unreasonable. There have been documented problems with other hospital expansions, including patient infection due to construction dust. South Bay's proposal South Bay proposes to establish a 112-bed replacement hospital on a 39-acre parcel (acquired in 2005) located in the Riverview community, on the north side of Big Bend Road between I-75 and U.S. Highway 301. The hospital is designed to include 32 observation beds built to acute care occupancy standards, to be available for conversion to licensed acute care beds should the need arise. The original total project cost of $215,641,934, calculated when the application was filed in October 2007 has been revised to $192,967,399. The decrease in total project cost is largely due to the decrease in construction costs since 2007. The parties stipulated that SB's estimated construction costs are reasonable. The remainder of the project budget is likewise reasonable. The budgeted number for land, $9,400,000, is more than SB needs: the 39-acre parcel is held in its behalf by HCA Services of Florida, Inc., and was acquired in March 2005 for $7,823,100. An environmental study has been done, and the site has no environmental development issues. The original site preparation budgeted number of $5 million has been increased to $7 million to allow for possible impact fees, based on HCA's experience with similar projects. Building costs, other than construction cost, flow from the construction cost number as a matter of percentages and are reasonable. The equipment costs are reasonable. Construction period interest as revised from the original project budget is approximately $4 million less, commensurate with the revised project cost. Other smaller numbers in the budget, such as contingencies and start-up costs, were calculated in the usual and accepted manner for estimated project costs and are reasonable. South Bay's proposed service area (PSA) comprises six zip codes (33573 (Sun City Center), 33570 (Ruskin), 33569 (Riverview), 33598 (Wimauma), 33572 (Apollo Beach), and 33534 (Gibsonton)) in South Hillsborough County. These six zip codes accounted for 92.2% of SB's discharges in 2006. The first three zip codes, which include Riverview (33569), accounted for 76.1% of the discharges. Following the filing of the application in 2007, the U.S. Postal Service subdivided the former zip code 33569 into three zip codes: 33569, 33578, and 33579. (The proposed service area consists of eight zip codes.) The same geographic area comprises the three Riverview zip codes taken together as the former zip code 33569. In 2009, the three Riverview zip codes combined accounted for approximately 504 to 511/514 of SB's discharges, with 589 discharges in 2006 from the zip code 33569. Of SB's total discharges in 2009, approximately 8 to 9% originated from these three zip codes. In 2009, approximately 7,398 out of 14,424 market/service-area discharges, or approximately 51% of the total market discharges came from the three southern zip codes, 33573 (Sun City Center), 33570 (Ruskin), and 33598 (Wimauma). Also, approximately 81% of SB's discharges in 2009 originated from the same three zip codes. (The discharge numbers for SB for 2009 presented by St. Joseph's Hospital and SB are similar. See SB Ex. 9 at 11 and SJH Ex. 4 at 8-9. See also TG Ex. 4 at 3-4.) In 2009, SB and Brandon had an approximate 68% market share for the eight zip codes. See FOF 152-54 and 162-65 for additional demographic data. St. Joseph's Hospital had an approximate 5% market share within the service area and using 2009-2010 data, TG had approximately 6% market share in zip code 33573 and an overall market share in the three Riverview zip codes of approximately 19% and a market share of approximately 23% in zip code 33579. South Bay's application projects 37,292 patient days in year 1; 39,581 patient days in year 2; and 41,563 patient days in year 3 for the proposed replacement hospital. The projection was based on the January 2007 population for the service area as reflected in the application, and what was then a projected population growth rate of 20.8% for the five-year period 2007 to 2012. These projections were updated for the purposes of hearing. See FOF 246-7. The application also noted a downturn in the housing market, which began in 2007 and has continued since then. The application projected a five-year (2007-2012) change of 20.8% for the original five zip codes. At hearing, SB introduced updated utilization projections for 2010-2015, which show the service area population growing at 15.3% for that five-year period. South Bay's revised utilization projections for 2015- 2017 (projected years 1-3 of the replacement hospital) are 28,168 patient days in year 1; 28,569 patient days in year 2; and 29,582 patient days in year 3. The lesser utilization as compared with SB's original projections is partly due to slowed population growth, but predominantly due to SB's assumption that St. Joseph's Hospital will build its proposed satellite hospital in Riverview, and that SB will accordingly lose 20% of its market share. The revised utilization projections are conservative, reasonable, and achievable. With the relocation, SB will be more proximate to the entirety of its service area, and will be toward the center of population growth in south Hillsborough County. In addition, it will have a more viable and more sustainable hospital operation even with the reduced market share. Its financial projections reflect a better payor mix and profitability in the proposed location despite the projection of fewer patient days. Conversely, if SB remains in Sun City Center, it is subject to material operating losses even if its lost market share in that location is the same 20%, as compared to the 30 to 40% it estimates that it would lose in competition with St. Joseph's Hospital South. South Bay's medical staff and employees support the replacement facility, notwithstanding that their satisfaction with SB is very high. The proposal is also supported by various business organizations, including the Riverview Chamber of Commerce and Ruskin Chamber of Commerce. However, many of the residents of Sun City Center who testified opposed relocation of SB. See FOF 210-11. South Bay will accept several preconditions on approval of its CON application: (1) the location of SB on Big Bend Road in Riverview; (2) combined Medicaid and charity care equal to 7.0% of gross revenues; and (3) operating a free- standing ED at the Sun City location and providing a shuttle service between the Sun City location and the new hospital campus ("for patients and visitors"). SB Ex. 46, Schedule C. In its SAAR, the Agency preliminarily approved the application including the following: This approval includes, as a component of the proposal: the operation of a freestanding emergency department on a 24-hour, seven-day per week basis at the current Sun City location, the provision of extended hours shuttle service between the existing Sun City Center and the new campuses to transport patients and visitors between the facilities to locations; and the offering of primary care and diagnostic testing at the Sun City Center location. These components are required services to be provided by the replacement hospital as approved by the Agency. Mr. Gregg explained that the requirement for transport of patients and visitors was included based on his understanding of the concerns of the Sun City Center community for emergency as well as routine access to hospital services. Notwithstanding the Agency statement that the foregoing elements are required, the Agency did not condition approval on the described elements. See SB Ex. 12 at 39 and 67. Instead, the Agency only required SB, as a condition of approval, to provide a minimum of 7.0% of the hospital's patient days to Medicaid and charity care patients. (As noted above, SB's proposed condition says 7.0% of gross revenues.) Because conditions on approval of the CON are generally subject to modification, there would be no legal mechanism for monitoring or enforcement of the aspects of the project not made a condition of approval. If the Agency approves SB's CON application, the Agency should condition any approval based on the conditions referenced above, which SB set forth in its CON application. SB Ex. 12 at 39 and 67. See also T 450 ("[The Agency] can take any statement made in the application and turn that into a condition," although conditions may be modified.1 St. Joseph's Hospital and Tampa General are critical of SB's offer of a freestanding ED and proposed shuttle transportation services. Other than agreeing to condition its CON application by offering these services, SB has not evaluated the manner in which these services would be offered. South Bay envisions that the shuttle service (provided without charge) would be more for visitors than it would be for patients and for outpatients or patients that are ambulatory and able to ride by shuttle. Other patients would be expected to be transported by EMS or other medical transport. As of the date of hearing, Hillsborough County does not have a protocol to address the transport of patients to a freestanding ED. South Bay contacted Hillsborough County Fire Rescue prior to filing its CON application and was advised that they would support SB's establishment of a satellite hospital on Big Bend Road, but did not support the closure and relocation of SB, even with a freestanding ED left behind. See FOF 195-207. At hearing, SB representatives stated that SB would not be closed if the project is denied. Compliance with applicable statutory and rule criteria Section 408.035(1): The need for the health care facilities and health services being proposed The need for SB itself and at its current location is not an issue in this case. That need was demonstrated years ago, when SB was initially approved. For the Agency, consideration of a replacement hospital application "diminishes the concept of need in [the Agency's] weighing and balancing of criteria in this case." There is no express language in the CON law, as amended, which indicates that CON review of a replacement hospital application does not require consideration of other statutory review criteria, including "need," unless otherwise stipulated. Replacement hospital applicants, like SB, may advocate the need for replacement rather than expansion or renovation of the existing hospital, but a showing of "need" is still required. Nevertheless, institution-specific factors may be relevant when "need" is considered. The determination of "need" for SB's relocation involves an analysis of whether the relocation of the hospital as proposed will enhance access or quality of care, and whether the relocation may result in changes in the health care delivery system that may adversely impact the community, as well as options SB may have for expansion or upgrading on-site. In this case, the overall "need" for the project is resolved, in part, by considering, in conjunction with weighing and balancing other statutory criteria, including quality of care, whether the institution-specific needs of SB to replace the existing hospital are more reasonable than other alternatives, including renovation and whether, if replacement is recommended, the residents of the service area, including the Sun City Center area, will retain reasonable access to general acute care hospital services. The overall need for the project has not been proven. See COL 360-70 for ultimate conclusions of law regarding the need for this project. Section 408.035(2): The availability, quality of care, accessibility, and extent of utilization of existing health care facilities and health services in the service district of the applicant The "service district" in this case is acute care subdistrict 6-1, Hillsborough County. See Fla. Admin. Code R. 59C-2.100. The acute care hospital services SB proposes to relocate to Big Bend Road are available to residents of SB's service area. Except as otherwise noted herein with respect to constraints at SB, there are no capacity constraints limiting access to acute care hospital services in the subdistrict. The availability of acute care services for residents of the service area, and specifically the Riverview area, will increase with the opening of St. Joseph's Hospital South. All existing providers serving the service area provide high quality of care. Within the service district as a whole, SB proposes to relocate the existing hospital approximately 5.7 linear miles north of its current location and approximately 7.7 miles using I-75, one exit north. South Bay would remain in south Hillsborough County, as well as the southernmost existing health care facility in Hillsborough County, along with St. Joseph's Hospital South when it is constructed. The eight zip codes of SB's proposed service area occupy a large area of south Hillsborough County south of Tampa (to the northwest) and Brandon (to the northeast). Included are the communities of Gibsonton, Riverview, Apollo Beach, Ruskin, Sun City Center, and Wimauma. The service area is still growing despite the housing downturn, with a forecast of 15.3% growth for the five-year period 2010 to 2015. The service area's population is projected to be 168,344 in 2015, increasing from 145,986 in 2010. The service area is currently served primarily by SB, which is the only existing provider in the service area, and Brandon. For non-tertiary, non-specialty discharges from the service area in 2009, SB had approximately 40% market share, including market share in the three Riverview zip codes of approximately 10% (33569), 6% (33578), and 16% (33579). Brandon had approximately 28% of the market in the service area, and a market share in the three Riverview zip codes of approximately 58% (33569), 46% (33578), and 40% (33579). Thus, SB and Brandon have approximately a 61% market share in the Riverview zip codes and approximately a 68% market share service area-wide. The persuasive evidence indicates that Riverview is the center of present and future population in the service area. It is the fastest-growing part of the service area overall and the fastest-growing part of the service area for patients age 65 and over. Of the projected 168,334 residents in 2015, the three Riverview zip codes account for 80,779 or nearly half the total population. With its proposed relocation to Riverview, SB will be situated in the most populous and fastest-growing part of south Hillsborough County. At the same time, it will be between seven and eight minutes farther away from Sun City Center. In conjunction with St. Joseph's Hospital South when constructed, SB's proposed relocation will enhance the availability and accessibility of existing health care facilities and health services in south Hillsborough County, especially for the Riverview-area residents. However, it is likely that access will be reduced for the elderly residents of the Sun City Center area needing general acute care hospital services. St. Joseph's Hospital and Tampa General contend that: (1) it would be problematic to locate two hospitals in close proximity in Riverview (those being St. Joseph's Hospital South and the relocated SB hospital) and (2) SB's relocation would deprive Sun City Center's elderly of reasonable access to hospital services. St. Joseph's Hospital seems to agree that the utilization projections for SB's replacement hospital are reasonable. Also, St. Joseph's Hospital expects St. Joseph's Hospital South to reach its utilization as projected in CON Application No. 9833, notwithstanding the decline in population growth and the proposed establishment of SB's proposed replacement hospital, although the achievement of projected utilization may be extended. There are examples of Florida hospitals operating successfully in close proximity. The evidence at hearing included examples where existing unaffiliated acute care hospitals in Florida operate within three miles of each another; in two of those, the two hospitals are less than one-half mile apart. These hospitals have been in operation for years. However, some or all of the examples preceded CON review. There are also demographic differences and other unique factors in the service areas in the five examples that could explain the close proximity of the hospitals. Also, in three of the five examples, at least one of the hospitals had an operating loss and most appeared underutilized. One such example, however, is pertinent in this case: Tallahassee Memorial Hospital and Capital Regional Medical Center (CRMC) in Tallahassee, which are approximately six minutes apart by car. CRMC was formerly Tallahassee Community Hospital (TCH), a struggling, older facility with a majority of semi-private patient rooms, similar to South Bay. Sharon Roush, SB's current CEO, became CEO at TCH in 1999. As she explained at hearing, HCA was able to successfully replace the facility outright on the same parcel of land. TCH was renamed CRMC and re-opened as a state-of-the-art hospital facility with all private rooms. The transformation improved the hospital's quality of care and its attractiveness to patients, better enabling it to compete with Tallahassee Memorial Hospital. St. Joseph's Hospital and Tampa General also contend that SB's relocation would deprive Sun City Center's elderly of reasonable access to hospital services. When the application was filed in 2007, Sun City Center residents in zip code 33573 accounted for approximately 52% of all acute care discharges to SB and SB had a 69% market share. By 2009, Sun City Center residents accounted for approximately 57% of all SB discharges and SB had approximately 72% market share. Approximately half of the age 65-plus residents in the service area reside within the Sun City Center area. This was true in 2010 and will continue to be true in 2015. The projected percentage of the total population in the Sun City Center zip code over 65 for 2009-2010 is approximately 87%. This percentage is expected to grow to approximately 91% by 2015. Sun City Center also has a high percentage of residents who are over the age of 75. Demand for acute care hospital services is largely driven by the age of the population. The age 65-plus population utilizes acute-care hospital services at a rate that is approximately two to three times that of the age 64 and younger population. South Bay plans to relocate its hospital from the Sun City Center zip code 33573 much closer to an area (Riverview covering three zip codes) that has a less elderly population. Elderly patients are known to have more transportation difficulties than other segments of the population, particularly with respect to night driving and congested traffic in busy areas. Appropriate transportation services for individuals who are transportation disadvantaged typically require door-to- door pickup, but may vary from community to community. At the time of preliminary approval of SB's proposed relocation, the Agency was not provided and did not take into consideration data reflecting the percentage of persons in Sun City Center area who are aged 65 or older or aged 75 and older. The Agency was not provided data reflecting the number of residents within the Sun City Center area who reside in nursing homes or assisted living facilities. In general, the 2010 median household incomes and median home values for the residents of Sun City Center, Ruskin, and Gibsonton are materially less than the income and home values for the residents from the other service areas. Freedom Village is located near Sun City Center and within walking distance to SB. Freedom Village is comprises a nursing home, assisted living, and senior independent living facilities, and includes approximately 120 skilled nursing facility beds, 90 assisted living beds, and 30 Alzheimer's beds. Freedom Village is home to approximately 1,500 people. There are additional skilled nursing and assisted living facilities within one to two miles of SB comprising approximately an additional 400 to 500 skilled nursing facility beds and approximately 1,500 to 2,000 residents in assistant or independent living facilities. Residents in skilled nursing facilities and assisted living facilities generally require a substantial level of acute- care services on an ongoing basis. Many patients 65 and older requiring admission to an acute-care facility have complex medical conditions and co-morbidities such that immediate access to inpatient acute care services is of prime importance. Area patients and caregivers travel to SB via a golf cart to access outpatient health care services and to obtain post-discharge follow-up care. Although there are some crossing points along SR 674, golf carts are not allowed on SR 674 itself, and the majority of Sun City Center residents who utilize SB in its existing location do not arrive by golf cart -– rather, they travel by automobile. The Sun City Center area has a long–established culture of volunteerism. Residents of Sun City Center provide a substantial number of man-hours of volunteer services to community organizations, including SB. Among the many services provided by community volunteers is the Sun City Center Emergency Squad, an emergency medical transport service that operates three ambulances and provides EMT and basic life support transport services in Sun City Center 24-hours a day, seven days a week. The Emergency Squad provides emergency services free of charge, but charges patients for transport which is deemed a non-emergency. Most patients transported by the Emergency Squad are taken to the SB ED. It is customary for specialists to locate their offices adjacent to an acute-care hospital. Most of the specialty physicians on the medical staff of SB have full-time or part-time offices adjacent to SB. The location of physician offices adjacent to the hospital facilitates access to care by patients in the provision of care on a timely basis by physicians. The relocation of SB may result in the relocation of physician offices currently operating adjacent to SB in Sun City Center, which may cause additional access problems for local residents. In 2009, the SB ED had approximately 22,000 patient visits. Approximately 25% of the patients that visit the South Bay ED are admitted for inpatient care. South Bay recently expanded its ED to accommodate approximately 34,000 patient visits annually. The average age of patients who visit the South Bay ED is approximately 70. Patients who travel by ambulance may or may not experience undue transportation difficulties as a result of the proposed relocation of SB; however, patients also arrive at the South Bay ED by private transportation. But, most patients are transported to the ED by automobile or emergency transport. In October 2010, the Board of Directors of the Sun City Center Association adopted a resolution on behalf of its 11,000 members opposing the closure of SB. The Board of Directors and membership of Federation of Kings Point passed a similar resolution on behalf of its members. Residents of the Sun City Center area currently enjoy easy access to SB in part because the roadways are low-volume, low-speed, accessible residential streets. SR 674 is the only east-west roadway connecting residents of the Sun City Center area to I-75 and U.S. Highway 301. The section of SR 674 between I-75 and U.S. Highway 301 is a four-lane divided roadway with a speed limit of 40-45 mph. To access Big Bend Road from the Sun City Center area, residents travel east on SR 674 then north on U.S. Highway 301 or west on SR 674 then north on I-75. U.S. Highway 301 is a two-lane undivided roadway from SR 674 north to Balm Road, with a speed limit of 55 mph and a number of driveways and intersections accessing the roadway. (Two lanes from Balm Road South, then widened to six lanes from Balm Road North.) U.S. Highway 301 is a busy and congested roadway, and there is a significant backup of traffic turning left from U.S. Highway 301 onto Big Bend Road. A portion of U.S. Highway 301 is being widened to six lanes, from Balm Road to Big Bend Road. The widening of this portion of U.S. Highway 301 is not likely to alleviate the backup of traffic at Big Bend Road. I-75 is the only other north-south alternative for residents of the Sun City Center area seeking access to Big Bend Road. I-75 is a busy four-lane interstate with a 70 mph speed limit. The exchange on I-75 and Big Bend Road is problematic not only because of traffic volume, but also because of the unusual design of the interchange, which offloads all traffic on the south side of Big Bend Road, rather than divide traffic to the north and south as is typically done in freeway design. The design of the interchange at I-75 in Big Bend Road creates additional backup and delays for traffic seeking to exit onto Big Bend Road. St. Joseph's Hospital commissioned a travel (drive) time study that compared travel times to SB's existing location and to its proposed location from three intersections within Sun City Center. This showed an increase of between seven and eight minutes' average travel time to get to the proposed location as compared to the existing location of SB. The study corroborated SB's travel time analysis, included in its CON application, which shows four minutes to get to SB from the "centroid" of zip code 33573 (Sun City Center) and 11 minutes to get to SB's proposed location from that centroid, or a difference of seven minutes. The St. Joseph's Hospital travel time study also sets forth the average travel times from the three Sun City Center intersections to Big Bend Road and Simmons Loop, as follows: Intersection Using I-75 Using U.S. 301 South Pebble Beach Blvd. and Weatherford Drive 12 min. 17 secs. 14 min. 19 secs. Kings Blvd. and Manchester Woods Drive 15 min. 44 secs. 20 min. 39 secs. North Pebble Beach Blvd. and Ft. Dusquesna Drive 13 min. 15 secs. 15 min. 41 secs. The average travel time from Wimauma (Center Street and Delia Street) to Big Bend Road and Simmons Loop was 15 minutes and 16 seconds using I-75 and 13 minutes and 52 seconds using U.S. Highway 301, an increase of more than six minutes to the proposed site. The average travel time from Ruskin (7th Street and 4th Avenue SW) to Big Bend Road and Simmons Loop was 15 minutes and 22 seconds using U.S. 41 and 14 minutes and 15 seconds using I-75, an increase of more than five minutes to the proposed site. Currently, the average travel time from Sun City Center to Big Bend Road using U.S. Highway 301 is approximately to 16 minutes. The average travel time to Big Bend Road via I-75 assuming travel with the flow of traffic is approximately 13 minutes. The incremental increase in travel time to the proposed site for SB for residents of the Sun City Center area, assuming travel with the flow of traffic, ranges from nine to 11 minutes. For residents who currently access SB in approximately five to 10 minutes, travel time to Big Bend Road is approximately 15 to 20 minutes. As the area develops, traffic is likely to continue to increase. There are no funded roadway improvements beyond the current widening of U.S. Highway 301 north of Balm Road. Most of the roadways serving Sun City Center, Ruskin, and Wimauma have a county-adopted Level of Service (LOS) of "D." LOS designations range from "A" to "F", with "F" considered gridlock. Currently, Big Bend Road from Simmons Loop Road (the approximate location of SB's propose replacement hospital) to I-75 is at LOS "F" with an average travel speed of less than mph. Based on a conservative analysis of the projected growth in traffic volume, SR 674 east of U.S. Highway 301 is projected to degrade from LOS "C" to "F" by 2015. By 2020, several additional links on SR 674 will have degraded to LOS "F." The LOS of I-75 is expected to drop to "D" in the entirety of Big Bend Road between U.S. Highway 301 and I-75 is projected to degrade to LOS "F" by 2020. The Hillsborough County Fire Rescue Department (Rescue Department) opposes the relocation of SB to Big Bend Road. The Rescue Department supports SB's establishment of a satellite hospital on Big Bend Road, but does not support the closure of SB in Sun City Center. The Rescue Department anticipates that the relocation of SB will result in a reduction in access to emergency services for patients and increased incident response times for the Rescue Department. The Rescue Department would support a freestanding ED should SB relocate. David Travis, formerly (until February 2010) the rescue division chief of the Rescue Department, testified against SB's proposal. The basis of his opposition is his concern that relocating the hospital from Sun City Center to Riverview would tend to increase response times for rescue units operating out of the Sun City Center Fire Station. The term response time refers to the time from dispatch of the rescue unit to its arrival on the scene for a given call. Mr. Travis noted that rescue units responding from the Sun City Center Fire Station would make a longer drive (perhaps seven to eight minutes) to the new location in Riverview to the extent that hospital services are needed, and during the time of transportation would necessarily be unavailable to respond to another call. However, Mr. Travis had not specifically quantified increases in response times for Sun City Center's rescue units in the event that SB relocates. Further, SB is not the sole destination for the Rescue Department's Sun City Center rescue units. While a majority of the patients were transported to SB, out of the total patient transports from the greater Sun City Center area in 2009, approximately one-third went to other hospitals other than SB, including St. Joseph's Hospital, Tampa General, and Brandon. The Rescue Department is the only advanced life support (ALS) ground transport service in the unincorporated areas of Hillsborough County responding to 911 calls. The ALS vehicles provide at least one certified paramedic on the vehicle, cardiac monitors, IV medications, advanced air way equipment, and other services. The Rescue Department has two rescue units in south Hillsborough County - Station 17 in Ruskin and Station 28 in Sun City Center. (Station 22 is in Wimauma, but does not have a rescue unit.) Stations 17 and 28 run the majority of their calls in and around the Sun City Center area, with the majority of transports to the South Bay ED. The Rescue Department had 3,643 transports from the Sun City Center area in 2009, with 54.5% transports to SB. If SB is relocated to Big Bend Road, the rescue units for Stations 17 and 28 are likely to experience longer out-of- service intervals and may not be as readily available for responding to calls in their primary service area. The Rescue Department seeks to place an individual on the scene within approximately seven minutes, 90% of the time (an ALS personnel goal) in the Sun City Center area. Relocation of SB out of Sun City Center may make it difficult for the Rescue Department to meet this response time, notwithstanding the proximity of I-75. A rapid response time is critical to providing quality care. The establishment of a freestanding ED in Sun City Center would not completely alleviate the Rescue Department's concerns, including a subset of patients who may need to be transported to a general acute care facility. There are other licensed emergency medical service providers in Hillsborough County, with at least one basic life support EMS provider in Sun City Center. The shuttle service proposed by SB may not alleviate the transportation difficulties experienced by the patients and caregivers of Sun City Center. Also, SB has not provided a plan for the scope or method of the provisional shuttle services. Six residents of Sun City Center testified against SB's proposed relocation to Riverview, including Ed Barnes, president of the Sun City Center Community Association. Mr. Barnes and two other Sun City Center residents (including Donald Schings, president of the Handicapped Club, Sun City Center) spoke in favor of St. Joseph's Hospital's proposed hospital in Riverview at a public land-use meeting in July 2010, thus demonstrating their willingness to travel to Riverview for hospital services. Mr. Barnes supported St. Joseph's Hospital's proposal for a hospital in Riverview since its inception in 2005, when St. Joseph's Hospital filed CON Application No. 9833 and thought that St. Joseph's Hospital South would serve the Sun City Center area. There are no public transportation services per se available within the Sun City Center area. Volunteer transportation services are provided. In part, the door-to-door services are provided under the auspices of the Samaritan Services, a non-profit organization supported by donations and staffed by Sun City Center volunteers. It is in doubt whether these services would continue if SB is relocated. There is a volunteer emergency squad using a few vehicles that responds to emergency calls within the Sun City Center area, with SB as the most frequent destination. Approval of SB's project will not necessarily enhance financial access to acute care services. The relocation of SB is more likely than not to create some access barriers for low- income residents of the service area. The relocation would also be farther away from communities such as Ruskin and Wimauma as there are no buses or other forms of public transportation available in Ruskin, Sun City Center, or Wimauma. However, it appears that the Sun City Center residents would travel not only to Riverview, but north of Riverview for hospital services following SB's relocation, notwithstanding the fact that Sun City Center residents are transportation- disadvantaged. The Hillsborough County Board of County Commissioners recently amended the Comprehensive Land-Use Plan and adopted the Greater Sun City Center Community Plan, which, in part, lists the retention of an acute care hospital in the Sun City Center area as the highest health care planning priority. For Sun City Center residents who may not want to drive to SB's new location, SB will provide a shuttle bus, which can convey both non-emergency patients and visitors. South Bay has made the provision of the shuttle bus a condition of its CON. As noted herein, the CON's other conditions are the establishment of the replacement hospital at the site in Riverview; combined Medicaid and charity care in the amount of 7.0% of gross revenues; and maintaining a freestanding ED at SB. SB Ex. 46, Schedule C. Section 408.035(3): The ability of the applicant to provide quality of care and the applicant's record of providing quality of care South Bay has a record of providing high quality of care at its existing hospital. It is accredited by JCAHO, and also accredited as a primary stroke center and chest pain center. In the first quarter of 2010, SB scored well on "core measures" used by the Centers for Medicare and Medicaid Services (CMS) as an indicator of the quality of patient safety. South Bay received recognition for its infection control programs and successfully implemented numerous other quality initiatives. Patient satisfaction is high at SB. AHCA's view of the need for a replacement hospital is not limited according to whether or not the existing hospital meets broad quality indicators, such as JCAHO accreditation. Rather, AHCA recognizes the degree to which quality would be improved by the proposed replacement hospital -– and largely on that basis has consistently approved CON applications for replacement hospitals since at least 1991. See FOF 64-66. South Bay would have a greater ability to provide quality of care in its proposed replacement hospital. Private patient rooms are superior in terms of infection control and the patient's general well-being. The conceptual design for the hospital, included in the CON application, is the same evidence- based design that HCA used for Methodist Stone Oak Hospital, an award-winning, state-of-the-art hospital in San Antonio, Texas. Some rooms at SB are small, but SB staff and physicians are able, for the most part, to function appropriately and provide high quality of care notwithstanding. (The ICU is the exception, although it was said that patients receive quality of care in the ICU. See FOF 77-82.) Most of the rooms in the ED "are good size." Some residents are willing to give up a private room in order to have better access of care and the convenience of care to family members at SB's existing facility. By comparison, the alternative suggested by St. Joseph's Hospital does not use evidence-based design and involves gutting and rearranging roughly one-third of SB's existing interior; depends upon erecting a new patient tower that would require parking and stormwater capacity that SB currently does not have; requires SB's administration to relocate off-site during an indeterminate construction period; and involves estimated project costs that its witnesses did not disclose the basis of, claiming that the information was proprietary. South Bay's physicians are likely to apply for privileges at St. Joseph's Hospital South. Moreover, if SB remains at its current site, it is reasonable to expect that some number of those physicians would do less business at SB or leave the medical staff. Many of SB's physicians have their primary medical offices in Brandon, or otherwise north of Sun City Center. Further, many of the specialists at SB are also on staff at Brandon. St. Joseph's Hospital South would be more convenient for those physicians, in addition to having the allure of a new, state-of-the-art hospital. South Bay is struggling with its nursing vacancy rate, which was 12.3% for 2010 at the time of the hearing and had increased from 9.9% in 2009. The jump in nursing vacancies in 2010 substantially returned the hospital to its 2008 rate, which was 12.4%. As with its physicians, SB's nurses generally do not reside in the Sun City Center area giving its age restrictions as a retirement community; instead, they live further north in south Hillsborough County. In October 2007 when the application was filed, SB had approximately 105 employees who lived in Riverview. It is reasonable to expect that SB's nurses will be attracted to St. Joseph's Hospital South, a new, state-of-the-art hospital closer to where they live. Thus, if it is denied the opportunity to replace and relocate its hospital, SB could also expect to lose nursing staff to St. Joseph's Hospital South, increasing its nursing vacancy rate. Section 408.035(4): The availability of resources, including health personnel, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation The parties stipulated that Schedule 2 of SB's CON application was complete and required no proof at hearing. South Bay will not have to recruit nursing or physician staff for its proposed replacement hospital. Its existing medical and nursing staff would not change, and would effectively "travel" with the hospital to its new location. Conversely, the replacement hospital should enhance SB's ability to recruit specialty physicians, which is currently a challenge for SB in its existing facility. The parties stipulated to the reasonableness of SB's proposed staffing for the replacement hospital as set out in Schedule 6A, but SJH and TG contend that the staffing schedule should also include full-time equivalent positions (FTEs) for the freestanding ED that SB proposes to maintain at its existing hospital. This contention is addressed in the Conclusions of Law, concerning application completeness under section 408.037, at COL 356-57. South Bay has sufficient funds for capital and operating expenditures for project accomplishment and operation. The project cost will be underwritten by HCA, which has adequate cash flow and credit opportunities. It is reasonable that SB's project will be adequately funded if the CON is approved. Section 408.035(5): The extent to which the proposed services will enhance access to health care for residents of the service district The specific area that SB primarily serves, and would continue to serve, is the service area in south Hillsborough County as identified in its application and exhibits. The discussion in section IV.B., supra, is applicable to this criterion and incorporated herein. With its proposed relocation to Riverview, SB will be situated in the most populous and fastest-growing part of south Hillsborough County; will be available to serve Sun City Center, Ruskin, and Wimauma; and will be between seven and eight minutes farther away from Sun City Center than it is at present. However, while the relocated facility will be available to the elderly residents of the Sun City Center area, access for these future patients will be reduced from current levels given the increase in transportation time, whether it be by emergency vehicle or otherwise. Section 408.035(6): The immediate and long-term financial feasibility of the proposal Immediate or "short-term" financial feasibility is the ability of the applicant to secure the funds necessary to capitalize and operate the proposed project. The project cost for SB's proposed replacement hospital is approximately $200 million. The costs associated with the establishment and operation of the freestanding ED and other services were not included in the application, but for the reasons stated herein, were not required to be projected in SB's CON application. South Bay demonstrated the short-term financial feasibility of the proposal. The estimated project cost has declined since the filing of the application in 2007, meaning that SB will require less capital than originally forecast. While Mr. Miller stated that he does not have authority to bind HCA to a $200 million capital project, HCA has indicated that it will provide full financing for the project, and that it will go forward with the project if awarded the CON. Long-term financial feasibility refers to the ability of a proposed project to generate a profit in a reasonable period of time. AHCA has previously approved hospital proposals that showed a net profit in the third year of pro forma operation or later. See generally Cent. Fla. Reg. Hosp., Inc. v. Agency for Health Care Admin. & Oviedo HMA, Inc., Case No. 05-0296CON (Fla. DOAH Aug. 23, 2006; Fla. AHCA Jan. 1, 2007), aff'd, 973 So. 2d 1127 (Fla. 1st DCA 2008). To be conservative, SB's projections, updated for purposes of hearing, take into account the slower population growth in south Hillsborough County since the application was originally filed. South Bay also assumed that St. Joseph's Hospital South will be built and operational by 2015. The net effect, as accounted for in the updated projections, is that SB's replacement hospital will have 28,168 patient days in year 1 (2015); 28,569 patient days in year 2 (2016); and 29,582 patient days in year 3 (2017). That patient volume is reasonable and achievable. With the updated utilization forecast, SB projects a net profit for the replacement hospital of $711,610 in 2015; $960,693 in 2016; and $1,658,757 in 2017. The financial forecast was done, using revenue and expense projections appropriately based upon SB's own most recent (2009) financial data. Adjustments made were to the payor mix and the degree of outpatient services, each of which would change due to the relocation to Riverview. The revenue projections for the replacement hospital were tested for reasonableness against existing hospitals in SB's peer group, using actual financial data as reported to AHCA. St. Joseph's Hospital opposed SB's financial projections. St. Joseph's Hospital's expert did not take issue with SB's forecasted market growth. Rather, it was suggested that there was insufficient market growth to support the future patient utilization projections for St. Joseph's Hospital South and SB at its new location and, as a result, they would have a difficult time achieving their volume forecasts and/or they would need to draw patients from other hospitals, such as Brandon, in order to meet utilization projections. St. Joseph's Hospital's expert criticized the increase in SB's projected revenues in its proposed new location as compared to its revenues in its existing location. However, it appears that SB's payor mix is projected to change in the new location, with a greater percentage of commercial managed care, thus generating the greater revenue. South Bay's projected revenue in the commercial indemnity insurance classification was also criticized because SB's projected commercial indemnity revenues were materially overstated. That criticism was based upon the commercial indemnity insurance revenues of St. Joseph's Hospital and Tampa General, which were used as a basis to "adjust" SB's projected revenue downward. St. Joseph's Hospital and Tampa General's fiscal-year 2009 commercial indemnity net revenue was divided by their inpatient days, added an inflation factor, and then multiplied the result by SB's year 1 (2015) inpatient days to recast SB's projected commercial indemnity net revenue. The contention is effectively that SB's commercial indemnity net revenue would be the same as that of St. Joseph's Hospital and Tampa General. There is no similarity between the three hospitals in the commercial indemnity classification. The majority of SJH's and TG's commercial indemnity net revenue comes from inpatients rather than outpatient cases; whereas the majority of SB's commercial indemnity net revenue comes from outpatient cases rather than inpatients. This may explain why SB's total commercial indemnity net revenue is higher than SJH or TG, when divided by inpatient days. The application of the lower St. Joseph's Hospital-Tampa General per-patient-day number to project SB's experience does not appear justified. It is likely that SB's project will be financially feasible in the short and long-term. Section 408.035(7): The extent to which the proposal will foster competition that promotes quality and cost-effectiveness South Bay and Brandon are the dominant providers of health care services in SB's service area. This dominance is likely to be eroded once St. Joseph's Hospital South is operational in and around 2015 (on Big Bend Road) if SB's relocation project is not approved. The proposed relocation of SB's facility will not change the geography of SB's service area. However, it will change SB's draw of patients from within the zip codes in the service area. The relocation of SB is expected to increase SB's market share in the three northern Riverview zip codes. This increase can be expected to come at the expense of other providers in the market, including TG and SJH, and St. Joseph's Hospital South when operational. The potential impact to St. Joseph's Hospital may be approximately $1.6 million based on the projected redirection of patients from St. Joseph's Hospital Main to St. Joseph's Hospital South, population growth in the area, and the relocation of SB. Economic impacts to TG are of record. Tampa General estimates a material impact of $6.4 million if relocation is approved. Notwithstanding, addressing "provider-based competition," AHCA in its SAAR noted: Considering the current location is effectively built out at 112 beds (according to the applicant), this project will allow the applicant to increase its bed size as needed along with the growth in population (the applicant's schedules begin with 144 beds in year one of the project). This will shield the applicant from a loss in market share caused by capacity issues and allow the applicant and its affiliates the opportunity to maintain and/or increase its dominant market share. SB Ex. 12 at 55. AHCA's observation that replacement and relocation of SB "will shield the applicant from a loss in market share caused by capacity issues" has taken on a new dimension since the issuance of the SAAR. At that time, St. Joseph's Hospital did not have final approval of CON No. 9833 for the establishment of St. Joseph's Hospital South. It is likely that St. Joseph's Hospital South will be operational on Big Bend Road, and as a result, SB, at its existing location, will experience a diminished market share, especially from the Riverview zip codes. In 2015 (when St. Joseph's Hospital proposes to open St. Joseph's Hospital South), SB projects losing $2,669,335 if SB remains in Sun City Center with a 20% loss in market share. The losses are projected to increase to $3,434,113 in 2016 and $4,255,573 in 2017. It follows that the losses would be commensurately more severe at the 30% to 40% loss of market share that SB expects if it remains in Sun City Center. St. Joseph's Hospital criticized SB's projections for its existing hospital if it remains in Sun City Center with a 20% loss in market share; however, the criticism was not persuasively proven. It was assumed that SB's expenses would decrease commensurately with its projected fewer patient days, thus enabling it to turn a profit in calendar year 2015 despite substantially reduced patient service revenue. However, it was also stated that expenses such as hospital administration, pharmacy administration, and nursing administration, which the analysis assumed to be variable, in fact have a substantial "fixed" component that does not vary regardless of patient census. South Bay would not, therefore, pay roughly $5 million less in "Administration and Overhead" expenses in 2015 as calculated. To the contrary, its expenses for "Administration and Overhead" would most likely remain substantially the same, as calculated by Mr. Weiner, and would have to be paid, notwithstanding SB's reduced revenue. The only expenses that were recognized as fixed by SJH's expert, and held constant, were SB's calendar year 2009 depreciation ($3,410,001) and short-term interest ($762,738), shown in the exhibit as $4,172,739 both in 2009 and 2015. Other expenses in SJH's analysis are fixed, but were inappropriately assumed to be variable: for example, "Rent, Insurance, Other," which is shown as $1,865,839 in 2009, appears to decrease to $1,462,059 in 2015. The justification offered at hearing, that such expenses can be re-negotiated by a hospital in the middle of a binding contract, is not reasonable. St. Joseph's Hospital's expert opined that SB's estimate of a 30 to 40% loss of market share (if SB remained in Sun City Center concurrent with the operation of St. Joseph's Hospital South) was "much higher than it should be," asserting that the loss would not be that great even if all of SB's Riverview discharges went to St. Joseph's Hospital South. (Mr. Richardson believes the "10 to 20 percent level is likely reasonable," although he opines that a 5 to 10% impact will likely occur.) However, this criticism assumes that a majority of the patients that currently choose SB would remain at SB at its existing location. The record reflects that Sun City Center area residents actively supported the establishment of St. Joseph's Hospital South, thus suggesting that they might use the new facility. Further, SB's physicians are likely to join the medical staff of St. Joseph's Hospital South to facilitate that utilization or to potentially lose their patients to physicians with admitting privileges at St. Joseph's Hospital South. Tampa General's expert also asserted that SB would remain profitable if it remained in its current location, notwithstanding the establishment of St. Joseph's Hospital South. It was contended that SB's net operating revenues per adjusted patient day increased at an annual rate of 5.3% from 2005 to 2009, whereas the average annual increase from 2009 to 2017 in SB's existing hospital projections amounts to 1.8%. On that basis, he opined that SB should be profitable in 2017 at its existing location, notwithstanding a loss in market share to St. Joseph's Hospital South. However, the 5.3% average annual increase from 2005 to 2009 is not necessarily predictive of SB's future performance, and the evidence indicated the opposite. Tampa General's expert did not examine SB's performance year-by-year from 2005 to 2009, but rather compared 2005 and 2009 data to calculate the 5.3% average annual increase over the five-year period. This analysis overlooks the hospital's uneven performance during that time, which included operating losses (and overall net losses) in 2005 and 2007. Further, the evidence showed that the biggest increase in SB's net revenue during that five-year period took place from 2008 to 2009, and was largely due to a significant decrease in bad debt in 2009. SB Ex. 16 at 64. (Bad debt is accounted for as a deduction from gross revenue: thus, the greater the amount of bad debt, the less net revenue all else being equal; the lesser the amount of bad debt, the greater the amount of net revenue all else being equal.) The evidence further showed that the 2009 reduction in bad debt and the hospital's profitability that year, is unlikely to be repeated. Overall, approval of the project is more likely to increase competition in the service area between the three health care providers/systems. Denial of the project is more likely to have a negative effect on competition in the service area, although it will continue to make general acute care services available and accessible to the Sun City Center area elderly (and family and volunteer support). Approval of the project is likely to improve the quality of care and cost-effectiveness of the services provided by SB, but will reduce access for the elderly residents of the Sun City Center area needing general acute care hospital services who will be required to be transported by emergency vehicle or otherwise to one of the two Big Bend Road hospitals, unless needed services, such as open heart surgery, are only available elsewhere. For example, if a patient presents to SB needing balloon angioplasty or open heart surgery, the patient is transferred to an appropriate facility such as Brandon. The presence of an ED on the current SB site may alleviate the reduction in access somewhat for some acute care services, although the precise nature and extent of the proposed services were not explained with precision. If its application is denied, SB expects to remain operational so long as it remains financially viable. Section 408.035(8): The costs and methods of the proposed construction, including the costs and methods of energy provision and the availability of alternative, less costly, or more effective methods of construction The parties stipulated that the costs and methods of the proposed construction, including the costs and methods of energy provision, were reasonable. St. Joseph's Hospital and Tampa General did not stipulate concerning the availability of alternative, less costly, or more effective methods of construction, and take the position that SB should renovate and expand its existing facility rather than replace and relocate the facility. Whether section 408.035(8) requires consideration (weighing and balancing with other statutory criteria) of potential renovation costs as alternatives to relocation was hotly debated in this case. For the reasons stated herein, it is determined that this subsection, in conjunction with other statutory criteria, requires consideration of potential renovation versus replacement of an existing facility. St. Joseph's Hospital offered expert opinion that SB could expand and upgrade its existing facility for approximately $25 million. These projected costs include site work; site utilities; all construction, architectural, and engineering services; chiller; air handlers; interior design; retention basins; and required movable equipment. This cost is substantially less than the approximate $200 million cost of the proposed relocation. It was proven that there are alternatives to replacing SB. There is testimony that if SB were to undertake renovation and expansion as proposed by SJH, such upgrades would improve SB's competitive and financial position. But, the alternatives proposed by SJH and TG are disfavored by SB and are determined, on this record, not to be reasonable based on the institutional- specific needs of SB. Section 408.035(9): The applicant's past and proposed provision of health care services to Medicaid patients and the medically indigent Approval of SB's application will not significantly enhance access to Medicaid, charity, or underserved population groups. South Bay currently provides approximately 4% of its patient days to Medicaid beneficiaries and about 1% to charity care. South Bay's historic provision of services to Medicaid patients and the medically indigent is reasonable in view of its location in Sun City Center, which results in a disproportionate share of Medicare in its current payor mix. South Bay also does not offer obstetrics, a service which accounts for a significant degree of Medicaid patient days. South Bay proposes to provide 7% of its "gross patient revenue" to Medicaid and charity patients as part of its relocation. South Bay's proposed service percentage is reasonable. Section 408.035(10): The applicant's designation as a Gold Seal Program nursing facility pursuant to s. 400.235, when the applicant is requesting additional nursing home beds at that facility The parties stipulated that this criterion is not applicable.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered denying CON Application No. 9992. DONE AND ENTERED this 8th day of August, 2011, in Tallahassee, Leon County, Florida. S CHARLES A. STAMPELOS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 8th day of August, 2011.
The Issue This is a bifurcated proceeding in which the sole issue before the hearing officer at this present stage of the proceeding concerns whether the construction of a radiation therapy center and the institution of Radiation Therapy Medical Services by Sacred Heart Hospital should be considered a "new institutional health service" pursuant to Section 381.706(1)(h), Florida Statutes, as that relates to the right of Baptist Hospital to intervene in this proceeding. If the project is deemed to be merely a capital expenditure of a million dollars or more and reviewable only for that reason pursuant to Section 381.706(1)(c), Florida Statutes, then the Intervenor would have no standing as stated in Section 381.709(5)(b), Florida Statutes.
Findings Of Fact Radiation oncology is a therapeutic process in which external radiation beams are utilized to treat cancerous tumors to effect a cure or a palliation. Radiation therapy is provided by board certified radiation oncologists in specialized facilities which house radioactive materials and specialized equipment, such as linear accelerators. The provision of radiation therapy requires specialized medical personnel such as technicians certified to operate linear accelerators to provide radiation treatments, as well as physicians and dosimetrists to calibrate machines and insure that radiation treatments are properly delivered. Radiation therapy is a medical specialty which deals with the utilization of radiation for the treatment of cancerous tumors and sometimes benign diseases. Radiation oncology or radiation therapy involves the use of consultative services, the knowledge of clinical, biological and pathological characteristics of the disease process, the evaluation of patients, the localization of tumors, the planning of radiation, the delivery of radiation treatments, and subsequent evaluation of the effects of treatment on the tumor and the patient. Sacred Heart provides cancer therapy through surgery and medical oncology. The various aspects of those cancer treatment services do not include the provision of radiation therapy, although in the past, in several isolated instances, radiation oncology trained physicians have provided brachytherapy involving the implanting of radioactive materials in the tissues or body cavities of the patients involved. These instances did not involve a regular program of radiation therapy provided by Sacred Heart, however, and in the typical instance, any cancer patients needing radiation therapy, including brachytherapy, are and have been referred out to facilities offering such services, including the Intervenor. The present cancer therapy services offered by Sacred Heart are delineated on pages 55-60 of the transcript of this proceeding. Sacred Heart filed an application for a certificate of need (CON) for a radiation therapy center on its campus to serve inpatients and outpatients. The total project costs for constructing the building and equipping as a radiation therapy center is estimated to be approximately 3.7 million dollars. The applicant proposes that the radiation therapy center would be an adjunct or extension of the hospital's existing oncology program and would not constitute a "new service" as defined in Chapter 10-5, Florida Administrative Code. The Department also takes the position that the initiation of radiation oncology or therapy services is not the establishment of a "new institutional health service" or a "substantial change" in health services. The Department takes the position that the project and application is reviewable only for the construction costs portion of the project as a capital expenditure in excess of one million dollars. HRS maintained at hearing that it has consistently taken the position that radiation therapy is not considered to be a new inpatient institutional health service pursuant to subsections 381.702(8)(13), Florida Statutes (1989). The Department's representative who testified was unable to explicate the reason for the alleged determination by the Department that radiation therapy is not a new institutional health service. She was unable to relate when such a supposed policy of treating radiation therapy only as a capital expenditure was adopted by the Department. It is noteworthy when reviewing her testimony, appearing at page 88 through 126 of the transcript of this proceeding, that repeated references are made by the HRS witness, the overall tenor or theme of which is that the purchase of linear accelerators is not regarded as the effectuation of a new institutional health service according to her view of the Department's policy regarding radiation therapy. Thus it may be that the Department views the addition of radiation therapy as involving simply the purchase of capital equipment, i.e., a linear accelerator. The evidence reflects otherwise however. The institution of radiation therapy at a hospital involves much more than the mere purchase of a linear accelerator device. It involves the purchase of the accelerator, the construction of a shielded space or building in which to house it and operate it, the employment of physicists, dosemetrists, qualified radiation therapy oncologists, and even the institution of a machine shop to make repairs and repair parts. The institution of radiation therapy at a hospital involves much more than the mere purchase and installation of a linear accelerator and the instant application seeks to institute such a comprehensive therapy service and not merely the capital expenditure required to purchase a linear accelerator solely. Thus, the Department's purported policy of viewing the institution of radiation therapy service as merely a capital expenditure (if, indeed, a policy, which was not proven in this case) is misplaced because the evidence in this record reveals that institution of radiation therapy at a hospital involves much more in the way of equipment and services than the mere purchase and capital expenditure related to acquisition of a linear accelerator. The Department has reserved Rule 10-5.011(1)(g), Florida Administrative Code, for a radiation therapy methodology. The remainder of that rule contains methodologies reserved for other services which HRS regulates as new institutional health services as well. These include such services as medicare, certified home health agencies, cardiac catheterization programs, and open heart surgery services. The reservation of a radiation therapy methodology in the rules is significant because of its indication of what the Department's intent with regard to the regulation of this service is or might be, because the Department has deleted references in its rules to reservations for services it has since chosen to deregulate, such as computerized tomography and chronic renal dialysis (see former Rules 10-5.011(1)(c) and (1)(h). The elimination of these rule reservations was published in the Florida Administrative Weekly, Vol. 15, No. 27, July 7, 1989. The Department in the past has had a rule governing need methodology for radiation therapy services. That rule was in effect until late in 1985 when it was invalidated in a 120.56 Florida Statutes rule challenge proceeding in South Miami Hospital v. Department of Health and Rehabilitative Services, 7 FALR 5491 (DOAH Nov. 1985). After that rule methodology for radiation therapy services was invalidated, the Department's witness in this proceeding, in her supervisory capacity, signed a memorandum regarding reconsideration of certificate of need #2682 involved in the South Miami Hospital case wherein South Miami Hospital sought to initiate radiation therapy services. That memo stated: The Department does not currently have a rule in place to determine the need for radiation therapy, as such the reconsideration of CON #2682, utilizing statutory criteria, will consider an applicant's specific justification for the purchase of major medical equipment and the initiation of a new service (emphasis added). The Department subsequently reiterated that the establishment of a radiation therapy service would be reviewed as a new institutional health service in the case of Bayfront Medical Center v. Department of Health and Rehabilitative Services, DOAH Case No. 87-2029 (Final Order entered September 1988). In adopting the hearing officer's conclusions of law from the recommended order in that case concerning the need for review of St. Anthony's Hospital's CON application for a radiation therapy service the Department determined that, as did the hearing officer: A certificate of need is required when a hospital proposes a capital expenditure over a threshold amount to provide inpatient health services or proposes a substantial change of inpatient institutional health services. Section 381.706(1)(c) and (h), Florida Statutes, (1987). Since the application under consider- ation in this proceeding proposes radiation therapy services to inpatients, as well as outpatients for a total project cost of almost 4.2 million dollars, a CON is required. The Department failed to explain any reasonable basis for any proposed change in the policy explicated in the May 22, 1986 policy memorandum, quoted above, and in the final order in Bayfront Medical Center supra. The Department's position may be summed up to the effect that its policy has changed from one of considering radiation therapy to be a new institutional health service to the current alleged policy of considering it to be a capital expenditure. It did not explicate why that policy had changed or a rational, factual or legal basis for it however and in view of the totality of Ms. Dudek's testimony it seems that the Department witness was emphasizing the policy of referring to the addition of radiation therapy as reviewable as merely a capital expenditure because of the Department's view, apparent from her testimony, that it in essence involves purchase of a linear accelerator. In the face of the unrefuted evidence to the effect that much more in the way of equipment, services and staff is involved in adding radiation therapy to the range of services offered by a hospital, it is apparent that the Department has failed to explicate a rational basis for the putative policy of regarding the institution of such a health service as merely a capital expenditure. Baptist Hospital operates a radiation therapy center of its own of approximately 10,000 square foot space. This area contains shielded space for linear accelerators, examination rooms, physicians offices, as well as a machine shop for repair and maintenance of the linear accelerators and space for dosimetry computers. This department at Baptist is organized and operated separated from other oncology services. Radiation therapy is primarily used to treat cancer patients and the patients are seen, evaluated, and treated within the confines of the radiation therapy facility. Policies and procedures unique to the radiation therapy department are utilized. Staff members include, physicians, technicians, physicists, and dosimetrists who are dedicated only to the provision of the radiation therapy service at the hospital. Thus from a clinical perspective, therapy is not merely an extension or an adjunct of the existing oncology program but rather is a separate therapeutic service in and of itself to which oncology patients may be referred when the services are deemed needed. Indeed, oncology involves different forms of curative and palliative treatment, including surgery and chemotherapy, with much different protocols, differently trained specialized staff members, differently trained and/or certified physicians with different methods, therapies and protocols for treating cancer. The commonality between the two types of service is that they have the ultimate goal of treating cancer patients, but the evidence shows that they are clearly two different medical specialties and institutional health services. There is little relationship between radiation oncology and the field of diagnostic radiology. Diagnostic radiology services are utilized almost exclusively to diagnose illnesses, conditions, while radiation oncology or radiation therapy is used to therapeutically treat patients with radiation to effect a cure or palliation. Radiation oncologists consult with and exchange patients with general surgeons, ear, nose and throat specialists, and other specialists as they do with medical oncologists. Therefore medical oncology and radiology are separate and distinct services. Although there is a relationship between radiation oncology and other cancer services such as chemotherapy and surgical therapy, the relationship is different in terms of the unique services, equipment and specially trained personnel required to provide radiation therapy as opposed to differently trained personnel, different equipment, therapy and procedure protocols required for other types of cancer services. Thus from a health planning perspective it does not logically follow that because a hospital provides medical or surgical oncology services, that it should also provide radiation therapy. The issue of the need for the service in terms of patient demand, availability of the specially trained personnel, the costs of providing the service, including the financial feasibility of constructing the facilities and buying the equipment needed, as well as the impact on other providers in terms of diversion of available patient days must be considered. It is noteworthy, as a corroborative aside concerning the evidence that establishes that radiation therapy is a separate and distinct institutional health service, that 29 of the 33 states which have certificate of need programs for the regulation of acute care facilities require a separate certificate of need in order to establish a radiation therapy service program. Sacred Heart does not currently have a radiation therapy service. It does have oncology services and surgical services that includes surgical therapy for cancer patients. Patients who need radiation therapy currently are referred out to other facilities including Baptist Hospital. Sacred Heart attempted, in its case in support of the HRS position treating this as merely a capital expenditure situation, to analogize the provision of radiation therapy services to the acquisition of a lithotripter. Sacred Heart contends that lithotripsy which is a form of treating kidney stones is an extension of the urology program of a hospital and that radiation therapy, a form of treating cancer tumors is merely an extension of an overall integrated cancer treatment program. However, whereas the residency requirement for radiation therapy or oncology is four years, after at least one year of post-doctoral work, the specialized training necessary to perform lithotripsy is a specialty training course of only several weeks duration. Further, hospitals requiring lithotripters typically have urologists treating kidney stones on the hospital staff. Sacred Heart in this instance has no radiation oncologist on its staff acting with admitting privileges who could provide radiation therapy services at the present time. Although it may have medical oncologists and surgeons on staff who treat cancer patients, Sacred Heart lacks the specialized policies and protocols, equipment, shielded physical space, specially trained medical personnel such as radiation oncologists, dosemetrists and physicists necessary to provide radiation therapy absent to the establishment of a new service. The list of institutional health services for which there is a specific need methodology includes, among others, inpatient cardiac catheterization, open heart surgery, neonatal intensive care units and transplant programs. The Department's attempt to distinguish between the establishment of an inpatient cardiac cath service and an inpatient radiation therapy service by stating that HRS had a rule methodology for the establishment of inpatient cardiac cath services whereas it didn't for inpatient radiation therapy services is a distinction without any logical basis. This is because the establishment of a service such as radiation therapy as a distinct and separate institutional health service depends upon the factual uniqueness or differences in the equipment, staff, protocols and policies required to institute such a service, as compared to other existing services at such a hospital, rather than the mere fact that the Department in the past has chosen to have a rule methodology for one type of service and not for another one. This distinction cannot serve as the basis for establishment of HRS's intent or policy in this regard in any event, however, because HRS has at least reserved Rule 10-5.011(1)(g), Florida Administrative Code for a radiation therapy methodology in any event, it simply has not enacted one yet, thus belying any distinction in terms of its body of rules, regarding different institutional health services based upon the mere fact that it has enacted a rule methodology for determining need for one type of institutional health service and not for another as yet. In summary, although the Department and Sacred Heart attempt to distinguish between radiation therapy and other institutional inpatient health services such as open heart surgery and cardiac catheterization by contending that radiation therapy is not a specialized service, in reality it has been established that radiation therapy requires a separate facility with specialized equipment, specially trained medical personnel with different training from personnel devoted to other types of cancer services, different protocols and procedures. It thus cannot be found to merely be an adjunct or extension of other cancer services, but rather is a separate and distinct institutional inpatient health service, just as open heart surgery, cardiac catheterization, diagnostic radiology or medical oncology for instance.
Recommendation Having considered the foregoing findings of fact, conclusions of law, the candor and demeanor of the witnesses and the pleadings and arguments of the parties it is therefore recommended that the motion to dismiss the petition to intervene filed by Baptist Hospital be denied, that Baptist Hospital be accorded standing in this proceeding and that the case proceed to hearing on the substantive merits of the application. RECOMMENDED this 3rd day of April, 1991, in Tallahassee, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of April, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-3576 Petitioner's proposed findings of fact: Accepted. Accepted, but subordinate to the Hearing Officer's findings of fact on the subject matter. 3-6 Accepted. Rejected as subordinate to the Hearing Officer's findings of fact on this subject matter. Accepted. Rejected as immaterial in this de novo proceeding. 10-20 Accepted. 21-22 Accepted, but not itself dispositive of material issues. 23-24 Accepted. 25-26 Accepted, but not materially dispositive. Accepted, but subordinate to the Hearing Officer's findings of fact. Accepted, but not materially dispositive. Accepted, but not material. Rejected as subordinate to the Hearing Officer's findings of fact. Rejected as irrelevant. Rejected as immaterial. Rejected as subordinate to the Hearing Officer's findings of fact and as immaterial. Rejected as subordinate to the Hearing Officer's findings of fact on the subject matter. Accepted, but not materially dispositive. Rejected as subordinate to the Hearing Officer's 'findings of fact and as contrary to the preponderant weight of the evidence. 37-41 Rejected as a discussion and recitation of testimony and not fact finding and as subordinate to the Hearing Officer's findings of fact. Intervenor's proposed findings of fact: 1-18 Accepted. COPIES FURNISHED: Stephen Ecenia, Esquire Katz, Kutter, Haigler, Alderman, Davis, Marks & Rutledge, P.A. 215 S. Monroe Street Suite 400 First Florida Bank Building Tallahassee, FL 32301 Karen O. Emmanuel, Esquire Emmanuel, Sheppard & Condon 30 South Spring Street Post Office Drawer 1271 Pensacola, FL 32596 Richard A. Patterson, Esquire Department of Health and Rehabilitative Services 2727 Mahan Drive, Suite 103 Fort Knox Executive Center Tallahassee, FL 32308 Sam Power, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Linda Harris, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700
Findings Of Fact Petitioner South Broward Hospital District operates Memorial Hospital located in Hollywood, Florida. On March 14, 1977, Petitioner's hospital administrator, S. A. Mudano, informed the local Health Systems Agency (HSA), which is the Health Planning and Development Council for Broward County, Inc., of Petitioner's intent to acquire an 18 million electron volt linear accelerator capable of providing radiation therapy by means of both X-ray and high energy electrons for its radiation therapy department. The cost of this acquisition was to be $455,000.00 for the machine and accessories, plus approximately $150,000.00 for construction of an addition to the existing radiation therapy department to house the unit and support facilities. This notice of intent was followed by submission of an application to the HSA and Respondent on June 20, 1977. The application was reviewed by the staff of the HSA and, although it was determined that the project did not conform to certain criteria contained in the "Goals and Standards for Diagnostic Radiology, Therapeutic Radiology, and Nuclear Medicine Services" which had been adopted by the HSA after public hearings on August 18, 1977, the HSA recommended the project for approval on October 20, 1977, and so informed Respondent on October 28, 1977. By letter of November 23, 1977, Respondent informed Petitioner that its proposal was not favorably considered because it was inconsistent with the aforesaid local goals and standards for Broward County in that maximum utilization of existing and available like equipment items had not been achieved nor projected, and that such radiation therapy units were accessible within Broward County in less that sixty minutes automobile travel time. In this letter, Respondent pointed out that existing radiation therapy units in Broward County had been utilized at only some 61 percent of their capacity in 1976 and were projected as having only the utilization rate of 87 percent by 1990, and that such rates clearly indicated a lack of demonstrated need for an additional unit. The letter further stated that although the HSA had recommended approval, it had not provided justification for its deviation from its own goals and standards. Petitioner thereafter appealed Respondent's denial of its application on December 20, 1977. (Exhibits 1 - 5) Petitioner South Broward Hospital District is a special tax district created and incorporated by a legislative act of 1947. Memorial Hospital is its only facility and provides medical care on a non-profit basis to persons in the district requiring such treatment. However, individuals living outside of the tax district who require services of Memorial Hospital may utilize the same based upon medical need and criteria established by the district's Board of Commissioners. The radiation therapy department of Memorial Hospital was constructed several years ago and presently has in use a 4 MEV linear accelerator to serve the needs of South Broward cancer patients, mostly on an outpatient basis. In 1977, this machine was operated at 116 percent capacity computed on a forty-hour week and rendered 9,655 patient treatments during that period. The first quarter of 1978, 3,056 treatments were performed, which was a utilization rate of 147 percent on a forty-hour week and 98 percent on a 60-hour week. At the time the radiation therapy department was planned, it was anticipated that additional equipment would be required in the future and therefore "shell" space was reserved in the original construction plans for ease of future installation of new equipment. Construction for the proposed linear accelerator primarily will consist of construction of a concrete vault within the existing shell, plus facilities for operation of the radiation equipment. It will take approximately 18 months "lead-time" from issuance of a Certificate of Need to acquire the equipment, and complete construction. (Testimony of Mudano, Margulies, Exhibits 1, 16, 19) Radiation therapy in cancer cases is accomplished by both external therapy machines and sealed sources of radioactive material The machines include both conventional X-ray machines and the super voltage or megavoltage units which include linear accelerators, cobalt, and betatron units. The conventional machines are used primarily for superficial treatment, such as skin cancer. The megavoltage units deliver much heavier radiation to deep tumors with greater intensity so that a localized volume of tissue can be treated without the danger of damaging surrounding organs and normal tissue. They also produce less side effects such as nausea, weakness and anemia. However, the cobalt and betatron methods have certain limitations which make them less satisfactory for many patients than the linear accelerators. The linear accelerators most commonly used today are those of 4, 6, and 18 million electron volts (MEV). The 18 MEV accelerator provides deep therapy by utilizing an electron beam that is highly controllable to most effectively treat tumor tissue. Additionally, high-energy X-ray radiation can be delivered from an 18 MEV unit for deeper penetration. The 18 MEV is thus particularly effective for obese cancer patients and for those requiring treatment in the neck and head areas. Although machines of lesser voltage, such as the 4 MEV, are capable of treating all types of cancer patients, they do not protect adjoining organs and non-cancerous tissues to the degree afforded by the 18 MEV, nor can they be utilized for the variety of radiation patterns of the larger machine which has the additional flexibility of using pure electron radiation. (Testimony of Green, Margulies, Munson, Exhibits 1 - 2) At the time the HSA staff evaluated Petitioner's application, it predicated much of its data upon the utilization of existing radiation machines in Broward County at various hospitals and one private clinic. The staff report showed that there were four cobalt units, one betatron unit, and four 4 MEV units in Broward County. In addition, the report took into consideration one 18 MEV unit for which a Certificate of Need had been issued for the North Broward Hospital on March 12, 1977, and which is expected to be operational in January, 1979. At the hearing, however, it was discovered that both the HSA and the Respondent had overlooked the fact that a Certificate of Need for three MEV units had been issued to the Florida Medical Center in Broward County on June 27, 1975. It is expected that one 18 MEV unit and two 6 MEV units will be operational in that facility in July, 1978. In view of this information, the Hearing Officer determined that prior data was incomplete and required the parties to make new projections of need for presentation at a subsequent hearing session. The revised data is shown in composite Exhibit 16 and forms the basis for consideration of the need for Petitioner's requested additional 18 MEV unit. (Testimony of Chamlis, Composite Exhibits 16, 19, 21) Although the Respondent has a state medical facilities plan in existence, it does not address the question of radiation equipment. Consequently, the only general criteria issued by an agency in the state on this subject bearing on Petitioner's application is the document issued by the HSA entitled "Goals and Standards for Diagnostic Radiology, Therapeutic Radiology, and Nuclear Medicine Services." The pertinent provisions of that document which were used by the Respondent as a basis for denial of Petitioner's application read pertinently as follow: Cost -. High quality radiology and nuclear medicine services should be provided in the most efficient and effective manner, minimizing duplication of services and facilities, as well as expenses incurred. The utilization of each piece of equipment, and all services, should be maximized; services should be an effective and economical use of resources. If there are excess providers and excess capacity exists, growth or an increase in capacity should be discouraged. If an adequate number of providers exists, yet there is excess capacity, there should not be an increase in services until demand catches up. This does not exclude an allowance for new developments or techniques. If there is an adequate number of providers and sufficient capacity, providers should be encouraged to expand services only in response to an increase in demand. This does not refer to new modalities and services previously unavailable. If there are too few providers and inadequate capacity, existing providers should be encouraged to expand and/or additional qualified providers should be encouraged to offer services. Accessibility -. Quality radiology and nuclear medicine services should be reasonably accessible to all individuals in need, taking into consideration: transportation, sociological and cultural factors and relationships to all components of the health care system. B. Radiation therapy services and equipment should be accessible to the population within sixty (60) minutes travel time by automobile. D. Regardless of economic status, race and geographic location, all individuals should have access to radiology and nuclear medicine services at the most appropriate setting with the most efficient and effective use of resources. The HSA "goals and standards" are a part of its comprehensive health systems plan promulgated to comply with federal and state law and regulations, and are designed to achieve the optimum or ideal health care situation in the community. Although the governing body of the HSA determined that Petitioner's project would not meet the goals contained in paragraphs III C and IV 18, it recommended approval of the application because of "extenuating circumstances." (Testimony of Margulies, Anderson, Tupler, Marrinson, Composite Exhibit 7) Broward County has six hospitals and one private clinic where radiation therapy units are located. However, the two 18 MEV units which have been approved by Respondent will be located in the North Broward Hospital and Florida Medical Center, both of which are in the northern part of the country. Although from a mileage standpoint, each of these facilities is accessible to the county population within an hour's driving time, the large population in the area and congested highways would make it impossible for residents of the extreme southern part of the county to reach these facilities by bus or automobile in sixty minutes during normal hours. If elderly cancer patients living in South Broward County are required to expend the time necessary to journey to the facilities located in the northern part of the county for outpatient services, it would be deleterious to their mental and physical condition, and would be disruptive to the "team" concept employed at Memorial Hospital for the diagnosis, care, and cure of cancer patients. (Testimony of Margulies, Cohen, Tupler, Rodensky, Hartley, Atkin, Marrinson, Zenkel, Boyd, Nelson, Miller, Bennett, Spiegel, McPherson, Exhibits 10, 13 - 15, 17) The data compiled by the HSA and Respondent to assess the need for an additional 18 MEV linear accelerator was obtained from patient statistics in Broward County for prior years and projections of necessary equipment in the future predicated on on a variety of factors. These include population figures, incidence rate for cancer nationally and in Broward County, numbers of patients previously treated in local hospitals and numbers of treatments, estimated capabilities of existing and approved units based on a forty-hour, forty-eight hour and sixty-hour week basis, projected need in the future for radiation therapy treatments, and the percentage of past and projected therapy equipment utilization in Broward County. In its revised statistical charts, Respondent also applied similar projections solely with respect to the population and equipment located in South Broward County. Additionally, it included projections relative to the need and utilization of high-energy equipment, including the betatron machine at Broward General Hospital and the two 18 MEV's which will become operational in the future. Petitioner presented data based primarily on projected utilization of equipment in the South Broward area, and therein employed certain standards and criteria recently announced by the Department of Health, Education and Welfare as national guidelines which will govern health system plans developed after December 31, 1978, unless modified as authorized therein in certain instances. (42 CFR 121.209) The Hearing Officer took official recognition of these guidelines which provide that each megavoltage radiation therapy unit such as Cobalt 60 and linear accelerators, should serve a population of at least 150,000 persons and treat at least 300 cancer cases annually within three years after initiation, and that no additional units should be opened unless each existing unit in the health service area is performing at least 6,000 treatments per year. However, adjustments downward may be justified when travel time to an alternate unit is a serious hardship due to geographic remoteness based on analysis by the HSA. The guidelines indicate that about half of new cancer patients require megavoltage radiation therapy and that the 6,000 treatment standard reflects an average of about 25 patients or treatments per day as a reasonable standard. However, it is also stated that extra high energy machines which have "limited but important applications" may not reach such numbers of treatments and should be evaluated individually by HSA's in the development of the health systems plans. Also, it is noted that when each existing unit cannot reasonably be expected to reach the target level and a new unit is appropriate, the HSA may call for an adjustment in the standard based on pertinent local conditions. Such local conditions may include the age of the local population, seasonal population fluctuation, and access to needed care. (Exhibits 16, 19 - 20) In consideration of the foregoing facts and supporting exhibits, and in the absence of specific published state criteria, the following findings as to the actual projected need are made: Projected need should be based on the year 1980 because Petitioner will require a "lead time" of approximately 18 months from the time any Certificate of Need is issued in which to obtain equipment, construct a vault and ancillary facilities, and place the unit in operating condition. Although there are two separate hospital taxing districts in North and South Broward County that generally service the population in their respective geographic areas, projected need should be based on Broward County as an entirety because it is the designated "health service area." An 18 MEV linear accelerator can provide better treatment in a variety of types of cancer than other radiation therapy equipment presently in use in Broward County. Therefore, projected need should be based on Broward County requirements for such machines or its closest equivalent, the betatron. In 1980, there will one betatron and two 18 MEV linear accelerators in Broward County. The estimated population of Broward County in 1980 is 1,090,400. The incidence rate of cancer patients in Broward County is estimated at 490 per 100,000, which results in 4,910 projected cancer patients. Sixty percent of cancer patients are deemed to require radiation therapy and 40 percent of this number will benefit significantly from treatment by an 18 MEV linear accelerator or equivalent. Thus, 3,205 patients will require radiation therapy in Broward County and 1,282 will benefit from the specialized treatment of the higher voltage machines. At least 20 treatments will be required for the 1,282 patients. Based upon a predicted utilization rate of 3.5 patients per hour for the betatron and four patients per hour for the two projected 18 MEV's, the machines would be utilized in excess of 100 percent in 1980 for a forty-hour week. This does not make allowance for "down time" of the 18 MEV machines for maintenance or seasonal patient fluctuation. It is found from the foregoing that the extra high-voltage units that will be in operation in Broward County in 1980 will not be adequate to serve the needs of the county population and that therefore an additional 18 MEV linear accelerator to become operational during that year would not unnecessarily duplicate the existing resources. Consequently, a need will exist for an additional unit to be operational at that time.
Recommendation It is recommended that the Petitioner's application for Certificate of Need/Capital Expenditure Proposal be approved. DONE and ENTERED this 7th day of July, 1978, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Mr. Art Forehand, Administrator Office of Community Medical Facilities 1323 Winewood Boulevard Tallahassee, Florida 32301 Chester Senf, Esquire Assistant General Counsel Department of HRS 1323 Winewood Boulevard Tallahassee, Florida 32301 R. J. Fegers, Esquire 6011 Rodman Street Hollywood, Florida 33023 Clifford F. Anderson, Jr. Executive Director Health Planning and Development Council for Broward County 416 South West 1st Avenue Ft. Lauderdale, Florida 33301
