SOUTH BROWARD HOSPITAL DISTRICT, d/b/a...

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SOUTH BROWARD HOSPITAL DISTRICT,

d/b/a MEMORIAL HEALTHCARE

SYSTEM,

Petitioner,

vs.

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Respondent.

_______________________________/

CLEVELAND CLINIC FLORIDA HEALTH

SYSTEM NONPROFIT CORPORATION,

d/b/a CLEVELAND CLINIC HOSPITAL,

Petitioner,

vs.

PLANTATION GENERAL HOSPITAL

LIMITED PARTNERSHIP, d/b/a

PLANTATION GENERAL HOSPITAL, AND

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Respondents.

_______________________________/

Case No. 15-0129CON

Case No. 15-0130CON

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative

Hearings, by its designated Administrative Law Judge, W. David

Watkins, held a final hearing in the above-styled case on

August 17-19, 21 and 24-26; September 14-17; October 15, 16, 19,

and 30; and November 13, 2015, in Tallahassee, Florida.

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APPEARANCES

For South Broward Hospital District, d/b/a Memorial

Healthcare System:

F. Philip Blank, Esquire

George N. Meros, Jr., Esquire

D. Ty Jackson, Esquire

GrayRobinson, P.A.

301 South Bronough Street, Suite 600

Post Office Box 11189

Tallahassee, Florida 32302

For Cleveland Clinic Florida Health System Nonprofit

Corporation, d/b/a Cleveland Clinic Hospital:

Michael J. Cherniga, Esquire

Sonya C. Penley, Esquire

Greenberg Traurig, P.A.

101 East College Avenue

Post Office Drawer 1838


For Plantation General Hospital Limited Partnership d/b/a

Plantation General Hospital:

Stephen A. Ecenia, Esquire

R. David Prescott, Esquire

Craig Miller, Esquire

Rutledge, Ecenia and Purnell, P.A.

119 South Monroe Street, Suite 202

Post Office Box 551


Martin B. Goldberg, Esquire

Rachel E. Kaufman, Esquire

Lorelei J. Van Way, Esquire

Lash & Goldberg LLP

100 Southeast 2nd Street, Suite 1200

Miami, Florida 33131

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For the Agency for Health Care Administration:

Lorraine Marie Novak, Esquire

Daniel A. Johnson, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3


STATEMENT OF THE ISSUE

Whether Certificate of Need (CON) Application No. 10235,

filed by Plantation General Hospital Limited Partnership, d/b/a

Plantation General Hospital (PGH) to establish a 200-bed

replacement, acute care hospital in Davie, Broward County,

Florida, Agency for Health Care Administration (AHCA or Agency)

acute care District 10, satisfies, on balance, the applicable

statutory and rule review criteria.

PRELIMINARY STATEMENT

In the August 2014 batching cycle for hospital beds and

facilities, PGH filed a CON application to establish a 200-bed

replacement acute care hospital on the campus of

Nova Southeastern University (NSU) in Davie, Broward County,

Florida, AHCA District 10. The replacement, acute care

hospital, is to replace the existing Plantation General

Hospital, a 264-bed acute care hospital located in Plantation,

Florida.

On December 5, 2014, the Agency issued its State Agency

Action Report (SAAR) preliminarily approving PGH’s CON

Application No. 10235.

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On December 23, 2014, South Broward Hospital District,

d/b/a Memorial Healthcare System (MHS), and Cleveland Clinic

Health System Nonprofit Corporation, d/b/a Cleveland Clinic

Hospital (CCH), timely filed petitions challenging the Agency's

preliminary decision.

The Agency referred the petitions to the Division of

Administrative Hearings (DOAH) on January 8, 2015, whereupon the

undersigned was assigned to conduct a formal administrative

hearing and issue a recommended order in the consolidated cases.

Pursuant to notice, the final hearing was scheduled for

August 17-19, 21, and 24-26; September 14-17; October 15, 16,

19, and 30; and November 13, 2015, in Tallahassee, Florida.

Prior to commencement of the final hearing, the parties filed a

Joint Pre-Hearing Stipulation (PHS) containing several

stipulated facts. To the extent relevant, those stipulated

facts have been incorporated herein.

The final hearing commenced as scheduled on August 17,

2015, and concluded on November 13, 2015.

At the final hearing, PGH presented the testimony of the

following: Randall W. Gross, CEO and corporate representative

of PGH, an expert in hospital administration; Michael G. Joseph,

president of HCA East Florida Division, an expert in hospital

and healthcare administration; Maryellen Rutan, a registered

respiratory therapist and clinical manager for the

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cardiopulmonary department at PGH; Pamela Gordon, a registered

nurse and director of med-surg and telemetry at PGH; Deborah K.

Anglemeyer, a registered nurse and chief nursing officer at PGH,

an expert in nursing and nursing administration; Harry Moon,

M.D., a plastic and reconstructive surgeon at Himmarshee

Surgical Partners in Ft. Lauderdale; Ilya Chern, M.D., emergency

department medical director and chief of the medical staff at

PGH, an expert in emergency medicine; Mitchell Stern, M.D.,

medical director for the neonatal intensive care unit at PGH;

Alberto Marante, M.D., an expert in medicine and pediatric

critical care medicine; George L. Hanbury, II, Ph.D., president

and CEO of NSU; Kenneth Priest, an expert in healthcare

architecture; Clinton Russell, assistant vice-president (VP) of

Construction at HCA; Daniel J. Sullivan, an expert in healthcare

planning and healthcare finance; Katherine M.T. Platt, an expert

in healthcare planning and finance; and Darryl Weiner, an expert

in healthcare finance.

PGH offered the following deposition transcripts and

exhibits which were admitted into evidence: Exs. 62 (R. Bass);

63 (A. Padmanabhan); 64 (C. Yelverton); 65 (C. Paterson);

66 (D. Hunter); 67 (E. DeLaune); 68 (E. Zeiders);

69 (G. Margules); 70 (H. Powell); 71 (K. Whitehurst);

72 (K. Lord-Strulovic); 73 (M. Rutherford); 74 (N. Gareau);

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75 (R. Puglisi); 76 (O. Delgado); 77 (T. Price); 78 (W. Bliss);

79 (D. Zaren); 80 (K. Hetlage); 81 (L. Carpenter);

82 (M. Doyle); and 83 (Z. Ross).

PGH Exhibits 2-3, 5-9, 11, 13, 14, 17-20, 22-28, 30,

31.1-31.147, 31.150, 31A, 35-38, 50, 57-59, 60.1-60.14, and

60.16-60.28 were admitted into evidence. The following PGH

Exhibits were received into evidence over objection: 10, 29,

and 32-34.

AHCA presented the testimony of Marisol Fitch, an expert in

healthcare planning and certificate of need.

AHCA’s Exhibit 1 was admitted into evidence.

MHS presented the testimony of the following: Laurie Scott

Barron, M.D., an expert in obstetrics and gynecology; Hugo J.

Finarelli, Jr., Ph.D., an expert in healthcare planning;

David M. Smith, Senior VP and chief financial officer for MHS,

an expert in healthcare finance; Ellison Stearns, III,

Fire Chief, City of Plantation, an expert in emergency medical

services; and Charles Michelson, an expert in healthcare

architecture.

MHS offered the following deposition transcripts and/or

excerpts which were admitted into evidence: Ex. 9-11 (D.

Davis); 12-15 (W. Graney); 220-1 (R. Gross–-68:8-25, 69:1-21,

95:3-13); 220-2 (K. Priest–-161:8-11); 220-4 (I. Chern–-61:1-

62:12); 220-5 (M. Joseph–-7:25-10:23, 119:15-120:6); 220-6

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(G. Hanbury-–35:21-44:3, 52:8-52:24, 86:4-86:25, 89:15-90:10);

220-7 (D. Anglemyer–-80:10-81:13, 82:4-8, 82:12-83:11, 86:7-10);

220-9 (M. Rutan–-56:12-16); 220-10 (J. Alcure); 220-11 (A.

Marante–-48:17-24, 49:20-23, 51-7-10); 220-12 (M. Stern–-13:19-

14:2, 29:20-30:11); 220-13 (P. Gordon–-64:3-65:7, 100:21-101:4,

102:19-103:6); 220-15 (K. Platt–-25:16-42:15, 73:14-75:10,

96:21-97:9, 115:18-118:19, 120:11-121:2, 216-19-217:1, 218:1-9,

221:15-25, 226:3-8, 227:12-18); and 220-17 (S. Marks).

MHS’s Exhibits 1-4, 16-18, 20, 33, 35, 40, 42-45, 47, 49,

51-53, 56-68, 98, 114, 147, 149, 157-159, 161, 169, 212, 216-1,

217-1, 218-4, 218-7, 218-10, and 220-8 were admitted into

evidence. The following MHS Exhibits were received into

evidence over objection: 21-30, 32, 70, 71, 74, 75, 77, 90, 120

and 222.

CCH presented the testimony of: Patricia Greenberg, an

expert in health planning, hospital financial analysis and

financial feasibility; and James R. “Skip” Gregory, an expert in

hospital architecture and construction planning.

CCH’s Exhibits 7-11, 13, 14, 16, 17, 21, 22, 25, 26.13,

26.14, 27, 30-32, 34, 35, 37, 38, 41, and 42 were admitted into

evidence. CCH Exhibits 1, 4, 26.02-26.09, 26.11, and 26.12 were

received into evidence over objection.

The parties’ Joint Exhibits 1-4, 7, 8, 11 and 12 were

admitted without objection.

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The Transcript (volumes 1 through 27) of the final hearing

was filed with DOAH on November 23, 2015. The parties were

directed to file their proposed recommended orders on or before

January 11, 2016. An extension was granted to January 20, 2016.

On January 20, 2016, the parties timely filed their

Proposed Recommended Orders, each of which has been carefully

considered in the preparation of this Recommended Order.

All citations are to the 2015 Florida Statutes unless

otherwise noted.

FINDINGS OF FACT

I. The Parties

A. The Applicant

1. PGH is an affiliate of Hospital Corporation of America

(HCA). PGH operates as part of HCA’s East Florida Division

(EFD). EFD is comprised of 14 hospitals, 12 surgery centers,

6 diagnostic imaging centers and a regional laboratory, along

with other related services. HCA, through EFD, operates four

hospitals in Broward County: PGH, Westside Regional Medical

Center (WRMC), University Hospital & Medical Center

(University), and Northwest Medical Center (NW). (PHS, ¶ 9)

2. PGH opened in 1966 and is a 264-bed Class I general

hospital comprised of 209 acute care beds, 24 inpatient adult

psychiatric beds, 13 Level II neonatal intensive care unit

(NICU) beds, and 18 Level III NICU beds. PGH is located at

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401 Northwest 42nd Avenue, Plantation, Broward County, Florida.

(PHS, ¶ 10)

B. Memorial Healthcare System

3. MHS was established by the Florida Legislature in 1947

as an independent special taxing district for the specific

purpose of providing healthcare services to residents of Broward

County. The District is governed by a seven-member Board

appointed by the Governor. MHS operates five hospitals in

Broward County: Memorial Regional Hospital (MRH), which

includes the Joe DiMaggio Children’s Hospital; Memorial Regional

Hospital South (MRH-S); Memorial Hospital West (MHW); Memorial

Hospital Pembroke (MHP); and Memorial Hospital Miramar (MHM).

(PHS, ¶. 11)

C. Cleveland Clinic Hospital

4. CCH is the Florida campus of the Cleveland, Ohio-based

Cleveland Clinic. It is a not-for-profit, multi-specialty,

fully integrated medical center which operates under a closed

staff model and provides medical diagnosis and treatment for all

types of complex illnesses. CCH is licensed for 155 acute care

beds and is home to 250 physicians representing 50 medical

specialties and sub-specialties who provide high quality care to

its patients and are integrally involved in research and

teaching. (PHS, ¶ 12)

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5. The Weston campus houses two separate entities:

(1) Cleveland Clinic Florida Health System Non-Profit

Corporation; and (2) Cleveland Clinic Florida (a non-profit

corporation). Cleveland Clinic Health System Non-Profit

Corporation is the actual hospital which is integrated with

Cleveland Clinic Florida. Cleveland Clinic Florida is a multi-

specialty physician group practice. All of the hospital’s

physicians must be board-certified. (PHS, ¶ 13)

6. Cleveland Clinic operates South Florida’s largest non-

university, physician-graduate training center. Education has

been an integral component of Cleveland Clinic’s mission since

its inception in 1921. During the past three full, and a

portion of a fourth, academic years, CCH has trained 1,419

medical students from 20 universities across the country and

world. (PHS, ¶ 14)

D. The Agency for Health Care Administration

7. AHCA is the state health planning agency charged with

administering the CON program pursuant to the Health Facility

and Services Development Act, section 408.031-408.0455, Florida

Statutes. AHCA is responsible for the coordinated planning of

healthcare services in the state. To carry out its

responsibilities for health planning and CON determination, AHCA

maintains a comprehensive health care database, with information

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that health care facilities are required to submit, such as

utilization data. § 408.033(3), Fla. Stat. (PHS, ¶ 15)

8. AHCA conducts its health planning and CON review based

on “health planning service district[s]” defined by statute.

§ 408.032(5), Fla. Stat. Relevant in this case is District 10,

which consists of the entirety of Broward County, Florida.

Fla. Admin. Code R. 59C-2.100(3)(j). (PHS, ¶ 16)

II. The Proposal

9. PGH proposes to replace its existing physical plant

with a new facility 4.7 miles away, on the campus of NSU, in zip

code 33328.

10. The proposed hospital is planned as a five-story

facility, which will be initially licensed for a total of

200 beds, with the capability for future expansion. The

facility will incorporate the one-story freestanding emergency

department, which is currently operated on the NSU campus as a

licensed offsite emergency department of WRMC. (PHS, ¶ 17)

11. PGH’s need argument is based on the contention that

the existing hospital’s physical plant has made it increasingly

difficult to provide patients with the care they deserve, that

renovation is not feasible, and that relocation is the only

reasonable option. Moreover, according to PGH, it has become

increasingly difficult to continue to provide a safe, efficient,

therapeutic, and effective environment for the delivery of

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healthcare to patients. The facility’s deficiencies,

significant cost to renovate, lack of space on the existing

campus to build a replacement facility, and the benefits of a

new hospital facility are the primary reasons that PGH’s current

facility needs to be replaced, according to PGH.

12. The replacement facility would offer the same services

as the current facility, including obstetrics and Level II

and III NICU. PGH will continue to offer services at its

current location through a freestanding emergency department

(“FSED”). The composition of the medical staff will not be

affected by the proposal.

13. Finally, PGH points to the added benefit of HCA’s and

PGH’s collaboration with NSU, which is outlined in agreements

executed between the parties. An HCA affiliate already operates

an FSED on the NSU campus that will become the emergency

department (ED) of the replacement facility. PGH will wholly

own and operate the replacement facility, and PGH will

participate in NSU’s various educational missions, such as

graduate medical education, student rotations, residencies, and

research. PGH and NSU hope the hospital can evolve into a

regional community resource as a research and teaching hospital.

III. Background

14. When PGH opened in 1966, the delivery of healthcare

services and patient expectations were drastically different

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than they are today. Despite numerous renovations and updates

over the years, PGH’s physical plant lags behind modern

healthcare facilities in size, patient privacy safeguards,

patient, physician, and staff amenities, design and layout, and

aesthetics. As a result, PGH’s physical plant presents

healthcare providers with daily challenges to providing high

quality care.

15. PGH’s existing facility is approximately 221,555

square feet, or 839 square feet per bed. Today’s typical acute

care hospital averages between 2,000 and 2,200 square feet per

bed, or 138% to 162% larger than PGH. The facility’s low size

ratio per bed is primarily due to the existence of semi-private

rooms, plus the inadequate sizes of the ICU’s, ED exam rooms,

operating rooms, pharmacy, post anesthesia care unit, and pre-op

and storage areas.

16. Compounding the challenges of an undersized physical

plant, advances in technology have increased the size of patient

beds and the amount and size of the equipment that patients

require. Whereas patient beds in the 1980s came equipped with

just a handrail, patient beds are now equipped with more

features to aid care, which has increased the bed footprint.

Because the beds and equipment take up more space, patient

rooms, hallways, elevators, and other patient care areas at PGH

are significantly more crowded today than they were when the

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hospital was constructed in 1966. These issues cause a host of

patient safety, privacy, infection control, patient experience,

and staff safety issues that PGH hopes to address with a

replacement facility.

17. Michael Joseph, president of the HCA EFD, made the

decision to replace PGH based upon his extensive experience as a

hospital administrator, along with his intimate knowledge of

PGH’s physical plant and campus. HCA engaged a senior health

care architect, Ken Priest of Gresham Smith & Partners (“GSP”),

to assess the scope of PGH’s physical plant deficiencies and to

determine if PGH could be replaced with a modern facility in

accordance with current standards and codes. After evaluating

PGH in June 2014, Mr. Priest identified the areas where PGH’s

physical plant did not meet current minimum codes and standards

(the “GSP Assessment”).

IV. PGH’s Physical Plant Deficiencies

A. Acute Care/Medical Surgical and Telemetry Units

18. The majority of patient rooms at PGH are semi-private,

a design feature that is outdated based on today’s standards and

patient expectations. As compared to semi-private rooms,

private rooms offer better infection control, less noise, more

privacy, and are generally preferable in acute care hospitals,

except in areas such as a Behavioral Health Unit, where semi-

private rooms may be beneficial to patient care.

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19. Each PGH room requires two beds and twice the amount

of equipment and nurses (plus visitors) in a room that is

physically half as small as today’s typical private room. The

beds in these rooms are so close that patients lying in their

beds can literally hold hands with each other. This pronounced

lack of space causes caregivers to crowd past each other to

reach their patients.

20. The bathrooms within the semi-private rooms are small

and contain only a toilet. Since sinks are not located in the

bathrooms, patients cannot wash their hands before exiting the

bathroom. The bathroom doors cannot be closed if the patient is

hooked to an IV poll or other equipment, or needs assistance

from a nurse. In those situations, the patient must use the

restroom with the door open, allowing noises and smells to

emanate therefrom, causing patient humiliation and

embarrassment.

21. Patients must leave their rooms and walk down the

public corridor to use a coed communal shower. Communal showers

in hospitals are unusual. The communal showers must be cleaned

after every use, which creates significant logistical problems.

Nurses report that patients feel belittled having to walk in a

gown down a public corridor to a shared shower.

22. The lack of space also erodes patient privacy. PGH

nurses conduct shift reports at the bedside in order to help the

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patient better understand their care and provide the patient

with the opportunity to ask questions. With patients in such

close proximity, nurses often must censor their comments and

inquiries so that the roommate is not privy to every detail of

the condition and care of the other patient.

23. For safety reasons, when medications are administered,

the nurse elicits confidential information from the patient and

provides the patient with details on the medication. Thus,

anytime Patient A is given medication, Patient B becomes privy

to Patient A’s name, date of birth, illness, medication name,

and side effects Patient A may soon be experiencing.

24. Due to the facility’s age, PGH patient rooms do not

have compressed air or vacuum, considered basic requirements in

a modern healthcare facility. Nurses and therapists must carry

a portable suction to patients, or use a compressor for patients

with chronic obstructive pulmonary disease. The portable

vacuums are not as strong as in-wall vacuums and require more

effort to operate.

25. The walled oxygen hookup is split with a Y adapter,

instead of having one adapter for each patient. If both

patients in a room are experiencing respiratory issues, a manual

resuscitator must be readily available. Because of the single

oxygen adapter, a patient experiencing the more acute

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respiratory issue may have to be placed with a patient that does

not require use of the Y adaptor.

B. Neonatal Intensive Care Unit (NICU)

26. The NICU was constructed in 1996 in an open-ward style

common at that time, but it does not meet current minimum

standards and codes. Other than periodic paintings, there have

been no renovations or updates to the unit. The beds are

tightly spaced together, roughly four to five feet apart, with

counter space, outlets, gas jacks, and other equipment behind

the babies. The NICU is approximately half the current

recommended size and lacks adequate room for physicians and

staff to work between the patients’ beds. Further, it also

lacks toilets, sinks, the required headwall length for medical

gasses, adequate storage space, a sufficient number of outlets

for necessary medical equipment, and direct sunlight.

27. Over time, caregivers have realized that a cramped,

loud environment is not conducive to the development of

newborns. That realization, and the increase in equipment

necessary for newborn care, has caused the significant increase

in the square footage per bed required for a modern NICU. For

instance, ventilators that once were placed on countertops near

patient beds now compete for that space with computers required

to input and access electronic patient records. As a result,

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the ventilators may be placed on mobile stands next to the beds,

further crowding the area.

28. Recognizing that the environment in which care is

received affects a newborn’s development, NICU caregivers seek

to provide space for parents to visit their baby 24 hours a day,

as opposed to just one or two hours. However, because of the

space limitations at PGH, there is only room for one chair next

to a newborn’s bed, making it difficult for more than one parent

to visit at a time. Other family members are often forced to

wait in the nine-person waiting room, which spills over into the

halls during peak visiting hours.

29. Studies have shown “kangaroo care” leads to better

newborn growth, shorter stays in the NICU, and overall healthier

babies than those newborns who do not receive the care.

Kangaroo care requires a parent to lay in a recliner with their

shirt off while their newborn child rests on their bare skin.

Due to space limitations, PGH only has room for a limited number

of recliners and the accompanying curtain that must be draped

around it to protect the parent’s privacy. PGH has to routinely

turn away parents wishing to provide their child with “kangaroo”

care due to lack of space.

30. The lack of space in the NICU also limits privacy. A

mother nursing her baby can see and hear the care another baby

is receiving, and privacy curtains placed between beds do little

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to shield a visitor from the sights and sounds of care provided

to a child in the next bed. If a mother is breast feeding her

child and the child in the next bed requires medical attention,

the breast-feeding mother must leave the room because of the

lack of space in the area.

31. The space limitations limit the PGH NICU director’s

participation in clinical studies, because such studies often

require the use of extra equipment. A new facility would allow

the NICU department to partake in more clinical studies.

32. Despite the space limitations, PGH is providing safe

and effective NICU services that meet the standard of care.

However, that level of care must be attained through unnecessary

risks created by the physical plant limitations, and a new

facility would help to remove barriers to more modern, efficient

care.

C. ICU (Pediatrics and Adult)

33. The GSP Assessment found the pediatric and adult

intensive care units are deficient in a number of areas when

compared to today’s minimum standards and codes. Both ICUs are

open-ward style units with beds separated by curtains; there is

one isolation room in the adult ICU and two isolation rooms in

the PICU. The curtains surrounding the beds form cubicles that

are all undersized, and the headwalls cannot support medical

gasses. The adult ICU has two sinks for eight patients, and

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both the ICU and PICU lack bathrooms, requiring patients to use

bedside commodes. The majority of the beds do not have access

to sunlight.

34. To satisfy today’s standards, the cubicles need to be

larger and the curtains replaced with hard walls and breakaway

glass. Current standards and codes require a toilet and sink in

each hard walled room. Current minimum codes require at least

20 square feet of storage per bed, but the pediatric and adult

ICUs each have less than 50 total square feet of storage. In

any event, PGH does not have the space to support the

renovations needed to bring the facility up to current

standards.

35. From a clinical perspective, physicians, nurses, and

other caregivers are significantly cramped for space to work

around the patients in the ICUs. ICU patients require more

equipment at their bedside because they are in critical

condition.

36. In the PICU, bedside monitors, ventilators,

defibrillators, carts, intubation boxes, and other equipment

take up valuable space in the undersized unit. The beds are in

such close proximity that two caregivers cannot stand between

them without brushing up against one another, and staff is often

required to move equipment to get to patients.

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37. The physical plant deficiencies, namely the lack of

space and cubicle curtains, reduce the type of equipment and

procedures that can be housed and performed in the PICU.

38. Family interaction is extremely important to the

child’s care. In the PICU, families have almost no space to

interact with their children and no privacy if they do. Only

two family members are permitted to visit their child, but they

are not permitted to stay overnight due to the lack of space.

Modern style PICUs are equipped with private hard walled rooms

that allow parents and other family members to stay with the

child overnight. The small family waiting room is shared with

the NICU and seats only five people.

39. Physicians and staff in the ICU and PICU are required

to work harder to achieve high quality care, and patients are

exposed to safety concerns that otherwise would not exist in a

modern ICU or PICU.

40. CCH and Memorial’s suggestion that PGH could expand

the ICU by simply renovating the classrooms across the corridor

is unreasonable as it would divide the unit. One side would

remain ‘as is’ while the other would be renovated. New nursing

stations would need to be created across the corridor, which

would strain communication and require full staffing at the

nursing station regardless of the number of patients.

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D. Emergency Department (ED)

41. PGH’s ED treats 65,000 patients annually in 25 exam

rooms, or 2,600 patients per exam room–-significantly higher

than the current industry standard of 2,000 patients per exam

room.

42. PGH’s ED volume has more than doubled since the late

1990s. In an effort to accommodate the increase, PGH has

undergone three major expansions and renovations.

43. The first expansion project converted storage space

into a small pediatric ED, which permitted the space previously

used for pediatric patients to be used for adult patients.

Second, PGH converted the ED director offices into a pharmacy

area so physicians could store medications for immediate use.

Finally, PGH renovated the patient registration area into a

discharge area, which is now being used for both triage and

discharge.

44. Even with these limited expansions, the ED is

extremely overcrowded, and two to three times smaller than

modern EDs with similar patient volumes. Every available space

that can be used for patient care is being used. Patients are

treated in hallway beds and chairs everyday due to the lack of

space. The chairs and beds that line the hallway are even

numbered in the ED computer system to keep track of the

patients. There is almost no way to ensure patient privacy when

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a physician or nurse is communicating information to the

patient, and patients in the chairs are required to wear masks

to prevent the spread of infectious disease. Linen carts are

now kept in the hallway because there is no storage. These

issues are uncommon at EDs in other hospitals.

45. Meeting national safety goals at the PGH ED comes at

an incredible cost and risk to the patients, physicians, and

staff. Patients regularly leave the ED against medical advice

because they refuse to be treated in a chair and, predictably,

PGH’s ED national satisfaction scores are extremely low due to

the treatment patients receive in hallways and chairs and the

lack of privacy.

46. The GSP Assessment found other deficiencies in the ED

including: the ED’s decontamination shower is located on a wall

outside of the hospital, and a curtain must be used to shield a

patient undergoing the decontamination process from public view;

the trauma room is 192 square feet, whereas current code

requires a minimum of 250 square feet; five fast track cubicles

are used as exam rooms, which are smaller than what minimum code

currently requires for an exam room; there is no public corridor

that connects the ED to the rest of the hospital, so members of

the public must be escorted by staff through the ED if they wish

to visit the cafeteria or another area of the facility, or they

must exit the ED at the rear of the hospital and walk outside to

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the main entrance; and part of the ED does not have an eight-

foot corridor.

47. Further expansion of the ED outside the current walls

is not possible because it would cut off a necessary access

route around the hospital for emergency vehicles, emergency

evacuations, and access to all parts of the physical plant.

Expansion inside the hospital is also not an option. The

adjacent radiology department needs to remain next to the ED so

patients are not transported far for tests. Moreover, the

department is built with lead walls, which would be difficult to

build through. The adjacent nuclear medicine and ultrasound

departments’ use of isotones raises a number of issues which

prevent the unit from being reasonably relocated in another part

of the hospital.

E. Pre-Op/Recovery

48. The pre-op holding area has four bays separated by

curtains. Space is very limited and there is virtually no

patient privacy. This area is physically separate from the

operating rooms (ORs), so patients have to be rolled through

public corridors after they are prepped for surgery. The pre-op

holding area and ORs cannot be moved closer to each other

because there is no physical space.

49. Space in the recovery area is also tight, and on busy

days (a couple times per week), PGH uses it for overflow. The

25

waiting room for the unit is small, and family members must be

escorted into the hallway for conversation with clinicians to

help ensure more privacy.

F. Operating Rooms/C-Section Suites

50. The six ORs are original to the facility and at

383 square feet, are almost half the size of ones built today.

One OR is so small it was converted into storage space. Space

is very tight in the five ORs that are utilized, and has become

tighter over time as the technology and equipment used for

surgery has expanded.

51. The small size of the ORs affects the scheduling of

procedures, especially surgeries that require use of a da Vinci

robot, since the device can only be housed in one of the ORs,

wedged in the corner of the operating room, and operated by a

physician whose back is against the OR wall. Most hospitals

have large television monitors mounted on the OR wall so the

entire surgical team can see the robotic operation in real time.

However, PGH must instead use a smaller monitor on a portable

tower. Procedures requiring more than one surgeon cannot be

performed in OR 2 or 3, because infection control policies would

be compromised due to the small size of those ORs.

52. The small size of the ORs also makes accommodating

certain surgical procedures nearly impossible, thereby limiting

the services PGH can offer. For instance, PGH does not have the

26

space for laparoscopic and robotic equipment that certain

specialists and neurosurgeons use, and some physicians will not

perform certain procedures at PGH because of the OR’s physical

limitations.

53. Expanding the ORs would require the neighboring

radiology department to be removed from the hospital. In order

to renovate the ORs, operations – which average 400 per month –

would have to be suspended until the renovation was complete.

G. Obstetrics ER Triage; Labor & Delivery/Women’s Pavillion

54. PGH has a high risk maternal OB program. The current

physical plant does not provide sufficient space for OB/ER

triage. Patients presenting to PGH in labor are evaluated in

the OB/ER triage area on the first floor, a 20-by-30 foot room

with three or four stretchers separated by curtains. Patients

are asked sensitive questions about subjects such as exposure to

sexually transmitted diseases, their frequency of sexual

intercourse, and patterns of vaginal bleeding. With stretchers

separated only by curtains, there is virtually no privacy to

discuss these issues. The department has insufficient space

nearby to expand or renovate.

55. The perinatal unit is housed in the same wing as the

OB/ER triage and labor and delivery units on the first floor.

The rooms are extremely small, fitted with only a sink, a fetal

monitor, a chair, and a small toilet that pulls out from

27

underneath the sink. The rooms do not have enough space for the

equipment required to take care of high risk mothers. During

emergencies, patients are moved to a labor and delivery room

because the perinatal unit rooms are too small to enable

practitioners to provide emergency care. There is not adequate

space to renovate or expand the unit.

56. After a child is born, the mothers and babies are

transported to the women’s pavilion on the second floor, where

most of the postpartum beds are doubled up in semi-private

rooms. PGH populates the private postpartum beds first, and

then fills the semi-private rooms with one patient each.

However, the average daily census is such that patients are

regularly required to share a room. PGH routinely loses OB

patients to other facilities that are able to guarantee private

rooms to mothers. Expanding the area would necessitate the

unwieldy proposition of mixing postpartum patients with medical-

surgical patients, including male patients, and require the

purchase and installation of a high cost security system.

H. Facility-Wide Problems

57. The pharmacy is located on the third floor and

separated from the sterile compounding area by a common hallway,

causing daily operational inefficiencies. The pharmacy’s

location is distant from the critical care areas such as the ED,

OR, and labor and delivery. The problems with the pharmacy

28

cannot be remedied by simply closing the public corridor that

separates the two sides. Merging both sides would necessitate

relocating the entire pharmacy.

58. Exacerbating the inefficiencies of the pharmacy’s

location is the lack of a pneumatic tube delivery system, which

is vital for the efficient operation of a hospital. Trimming

even seconds off the time medicine is transported to the ED can

be the difference between life and death. PGH has one four-

inch, one-directional pneumatic tube system running one-way to

the ED. Modern hospitals utilize six-inch tube systems that

enable multi-directional transportation of supplies to and from

all areas of the hospital. It would be nearly impossible to

install a multi-station pneumatic tube system at PGH due to

floor-to-floor heights, which are short by today’s standards.

59. Asbestos is generally found in facilities built prior

to the mid-1980s. During previous renovation attempts, PGH has

found asbestos in the drywall compound, ductwork insulation, the

mastic of the floor, and the vinyl tile and sheet vinyl on the

floor. Asbestos must be abated if exposed, and any attempts to

bring PGH’s physical plant up to current code would potentially

expose significant amounts of asbestos.

60. PGH’s application stated that mold was present in all

exterior walls covered by vinyl. PGH’s architect, Mr. Priest,

testified that the mold was “extensive.” However, a subsequent

29

thorough review of PGH found only one small area of mold which

was remediated immediately. At the time of the final hearing,

no mold existed at PGH.

61. At just under two parking spaces per bed, PGH’s

available parking is woefully inadequate. Although PGH

satisfies current minimum standards and codes, these standards

do not take into account outpatient volumes, employees,

physician staff, medical office building personnel, and peak

operating hours. A facility PGH’s size should have three to

three-and-a-half parking spaces per bed.

62. Despite the challenging conditions described by PGH’s

witnesses, the hospital remains a top performer among EFD

hospitals. PGH recently led all 13 EFD hospitals in efficiency

metrics for more than two years, including first case “on time”

starts and physician turnaround. In 2012, PGH also received

HCA’s President’s Challenge Award for Surgical Growth due to an

increase of 24% in that service line. PGH recently expanded its

General Surgery, Orthopedics, Pediatric Plastics, and Robotics

surgical cases by 22%, 130%, 400% and 236%, respectively, an

increase of 860 cases in two years.

63. PGH attained 95% excellence in 2012 and 97% excellence

in 2013 on Physicians Perception Surveys relating to surgical

services, and has been able to recruit physicians from competing

facilities, including those specializing in pediatric plastics,

30

pediatric orthopedics, oncology GYN, urologic/GYN, general

surgery, pediatric ENT, and robotic GYN.

64. PGH has received the Joint Commission’s Gold Star Seal

of Approval for its prematurity program and operates a Joint

Commission certified stroke center. The Joint Commission named

PGH as one of the nation’s top performers on key quality

measures.

65. PGH provides a high quality of care to its patients —

care that is on par with that of other Broward County hospitals.

Despite the physical plant problems and limitations, patient

safety is not compromised at PGH.

66. Ultimately, while the physical plant makes it more

difficult for physicians, nurses, and staff at PGH to provide

safe, quality care, those hurdles are being overcome through the

efforts of the individuals at PGH to provide excellent care to

patients. A new facility would not result in “better” care for

patients, but would make the jobs of the physicians, nurses, and

staff easier and less stressful.

V. The Proposed Relocation to NSU

67. For over 12 years, NSU’s president, Dr. George

Hanbury, has championed his vision to build a 21st century

“academical village” on the NSU campus. His vision would bring

together practice and theory through a state-of-the-art teaching

and research hospital.

31

68. Dr. Hanbury originally approached the North Broward

Hospital District (NBHD) to help achieve his vision. Together,

NSU and NBHD filed two separate applications to develop a

hospital on the NSU campus. Other Broward County hospitals,

including WRMC, opposed the projects. AHCA ultimately denied

the applications. Neither application was the subject of a DOAH

proceeding.

69. Dr. Hanbury approached NBHD at least two more times.

NBHD declined. Having failed with NBHD, and not intent on

giving up on his vision, Dr. Hanbury reached out to Mr. Joseph,

whom he had never met. When Dr. Hanbury asked Mr. Joseph

whether HCA, which had been the biggest opponent of NSU’s

efforts to build a hospital, would be interested in joining

forces, HCA decided to take Dr. Hanbury up on his offer.

70. It was, in fact, Dr. Hanbury who initially suggested

relocating PGH to NSU. However, Mr. Joseph decided that the

application would instead involve the development of a new (as

opposed to replacement) 100-bed hospital. That application was

submitted by HCA subsidiary East Florida Hospital (EFH) in 2013.

Existing hospitals opposed the application, and AHCA initially

denied it in late 2013. HCA challenged AHCA’s decision. In the

meantime, Dr. Hanbury again tried to convince Mr. Joseph to

relocate PGH to NSU.

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71. Ultimately, EFH dismissed its petition challenging the

denial of its application. Instead, PGH filed a new application

to relocate PGH to the NSU campus, a driving distance of

approximately 6.7 miles from the existing PGH. That

application, CON Application No. 10235, is at issue in this

proceeding.

72. An “articulation agreement” between HCA and NSU

establishes the parameters of the proposed project. It does not

bind HCA to any aspirations for developing a teaching or

research hospital.

73. The proposed 200-bed hospital would be located on the

NSU campus adjacent to an existing FSED on a 9-acre parcel owned

by NSU and University Associates, Ltd. (UA). The NSU Site is

south of a major east-west artery, Interstate 595, and is

adjacent to University Drive. The closest hospital to the NSU

Site is HCA's WRMC.

VI. Statutory and Rule Review Criteria

74. The framework for consideration of PGH’s proposed

project is dictated by the statutory and rule criteria that apply

to general hospital CON applications. The applicable statutory

review criteria, as amended in 2008 for general hospital CON

applications, are as follows:

(a) The need for the health care facilities

and health services being proposed.

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(b) The availability, accessibility, and

extent of utilization of existing health care

facilities and health services in the service

district of the applicant.

* * *

(e) The extent to which the proposed

services will enhance access to health care

for residents of the service district.

* * *

(g) The extent to which the proposal will

foster competition that promotes quality and

cost-effectiveness.

* * *

(i) The applicant’s past and proposed

provision of health care services to Medicaid

patients and the medically indigent.

§ 408.035(1), (2), Fla. Stat. (identifying review criteria that

apply to general hospital applications).

75. AHCA has not promulgated a numeric need methodology to

calculate need for new hospital facilities. In the absence of a

numeric need methodology promulgated by AHCA for the project at

issue, Florida Administrative Code Rule 59C-1.008(2)(e) applies.

This rule provides that:

The applicant is responsible for

demonstrating need through a needs assessment

methodology which must include, at a minimum,

consideration of the following topics, except

where they are inconsistent with the

applicable statutory and rule criteria:

34

a. Population demographics and dynamics;

b. Availability, utilization and quality of

like services in the district, subdistrict or

both;

c. Medical treatment trends; and

d. Market conditions.

76. Rule 59C-1.030 also applies. This rule elaborates on

“health care access criteria” to be considered in reviewing CON

applications, with a focus on the needs of medically underserved

groups such as low income persons.1/

A. Section 408.035(1)(a): The need for the health care

facilities and services being proposed.

77. PGH demonstrates the need to replace its existing

physical plant with a new facility on the NSU campus because:

(i) it is impractical for PGH to replace its facility in place

or on site, and it is more cost effective and efficient to build

a replacement facility on the NSU campus; (ii) the proposed

location will improve the distribution of services within

Broward County and particularly southern Broward County, and

enable PGH, as a safety net provider, to operate in a more

efficient manner, and enhance the overall access to care for all

segments of the population, especially those least able to pay;

and (iii) locating the hospital on the NSU campus would create a

community hospital that is directly involved with a relatively

35

large teaching and research university in developing teaching

programs.

i. It is impractical for PGH to replace its facility in

place or on site, and more cost effective and efficient to

build a replacement facility on the NSU campus.

78. When certain thresholds are reached, older hospital

facilities can no longer be improved; they must be replaced.

This conclusion was confirmed by Mr. Priest when he visited PGH

to determine if his conceptual drawings to replace PGH in-place

(i.e., fully renovate and expand the existing plant to conform

to current standards and codes) could be implemented.

79. Replacing PGH in-place would require: the

construction of a new bed tower, because the existing hospital

structure cannot withstand vertical expansion; privatization of

all rooms; expansion of the ED and ORs; and construction of a

new 200-story parking garage. The entire second floor and most

of the third floor would need to undergo major renovations, with

other various units of the hospital being relocated to make room

for the renovations and required expansions.

80. Mr. Priest did not recommend replacing PGH in-place

for several valid reasons. Renovation, while serving patients,

would have to be phased, creating a lengthy construction period

while working around operational departments within the

hospital. Additionally, phasing of a large-scale renovation

takes much longer to complete than constructing a new facility,

36

and disruption of services is unavoidable. During a recent

renovation of the third floor, surgery in the OR was stopped

“many times” because the noise from the construction was so loud

staff in the OR could not communicate. Even if a prolonged

renovation period was feasible, the existing facility lacks

space to increase the departments that should be expanded to

meet current needs, let alone future needs. HCA estimated the

total construction cost of this renovation option to be

$254,517,726, plus the revenue lost by the suspension of

services during the renovation.

81. Alternatively, Mr. Priest developed a rough conceptual

plan to build an on-site 225 bed replacement facility across the

street from PGH’s existing campus, which was modeled after a new

hospital GSP designed in Virginia. To accommodate this

facility, PGH must purchase four parcels of land adjacent to the

existing hospital, as well as terminate a 100-year ground lease

and demolish a medical office building on another parcel to

construct the facility. This approach assumes the four parcels

are for sale and could be reasonably acquired, which is entirely

speculative. Parking would have to be spread out in four

different lots on the campus, including two that would be across

the street from the hospital. This option of replacing on site

also does not accommodate any opportunity for future bed or

service expansion. The estimated total construction cost of

37

this conceptual replacement is $219,000,000. However, this cost

does not include demolishing the existing facility and MOB

across the street, or the cost to purchase the four parcels,

even if they were for sale.

82. Petitioners assert that while PGH’s facility is

smaller than hospitals built today, it is no different from

other hospitals of similar age that require occasional

renovations to update and modernize the facility. According to

Petitioners, renovations to increase patient areas and create

private rooms are possible, and options may exist that would

allow PGH to renovate or build a new facility on-site.

Petitioners’ arguments in this regard are not persuasive.

83. A replacement facility on the NSU campus offers the

best alternative. The facility will have five stories and all

private rooms except for the psychiatric unit. The facility is

specifically designed to incorporate functions associated with

the planned teaching relationships with NSU. Furthermore, many

operational efficiencies achieved through the design of the new

hospital would not be possible even with extensive renovations

to PGH’s existing plant. The NSU replacement facility is

designed with enough shelled-in space to accommodate future

expansion, including vertical expansion, and expansion within

the 12-acre site. HCA estimated a total construction cost of

$220,400,000, plus a $21 million parking garage. These

38

estimates are comparable to other new hospitals currently under

construction by HCA.

84. From a health planning, operations, and architectural

perspective, replacing PGH’s facility is preferable to

renovating the old one. A new facility solves the physical

plant problems, can be accomplished without disruption to

services during renovation, provides room to expand in the

future, and does so at a price comparable to the other two

options.

ii. The proposed location will improve the distribution of

services within Broward County, particularly southern

Broward County, and enable PGH, as a safety net provider,

to operate in a more efficient manner, and enhance the

overall access to care for all segments of the population,

especially those least able to pay.

85. PGH’s current location is well served geographically

with over 1,000 beds in four hospitals. WRMC, Florida Medical

Center, and Broward Health Medical Center (“BHMC”), create a

ring around PGH to its west, north, and east. Currently, the

city of Plantation has two hospitals - WRMC, an HCA affiliated

facility, and PGH. Because of the proximity of the

four hospitals, all have service areas that overlap to some

extent. In considering the overlapping service areas of these

existing hospitals, PGH does not have the highest market share

in any zip code in its service area, including its home zip code

of 33317.

39

86. PGH is a safety net hospital, serving a high volume of

Medicaid and charity patients, particularly in PGH’s obstetrics

and neonatal programs. Broward County’s two other major safety

net hospitals are BHMC, located near the coast in eastern

Broward County, and MRH, in southwest Broward.

87. By contrast, there is a dearth of hospitals around

PGH’s proposed new location on the NSU campus. Thus, PGH’s

relocation there would improve the geographic distribution of

services and safety net providers in Broward County. The

relocation would also provide a comprehensive neonatal provider

in a more accessible site, thereby improving the distribution of

NICU services within the county.

88. PGH is currently the closest acute care facility to

BHMC, another major provider of NICU services in the district.

A hospital on the NSU campus would provide Broward County

residents with more efficiently distributed hospital services

than continuing operations at PGH’s current location.

89. Financially, PGH is in a very weak position, operating

at a negative cash flow for a number of years. In 2013, PGH’s

operating margin was negative $15,658,702, second to last in

Broward County.

90. PGH’s financial difficulties are further exacerbated

by the fact that it competes against two different hospital

taxing systems that receive public funds to operate their

40

facilities. Meanwhile, PGH provides the majority of women’s and

children’s services in Broward County without taxpayer support.

91. PGH’s ability to compete in the Broward County market

has been further hampered by recent investments in women’s and

children’s services by publicly funded hospitals. PGH’s

physical plant deficiencies have played a role in PGH’s

diminished competitive position.

92. A replacement facility will enable PGH to operate more

efficiently. For example, PGH’s projected 2019 average daily

census (ADC) of 147 in its 200-bed hospital is a more

appropriate use of resources compared to its 2013 ADC of 118 in

its 264-bed facility. The relocation is also projected to

slightly improve PGH’s payor mix. While PGH projects it will

serve slightly more Medicaid, Medicare, and self-pay/charity

patients in 2019 than it did in 2013, its commercial payor mix

is projected to rise by 3%, which will improve PGH’s financial

situation. This improved financial position and new physical

plant will ensure sustainable profits in the future for PGH,

allowing it to remain a vital part of Broward County’s safety

net structure.

iii. Locating the hospital on the NSU campus would create

a regional community resource as a teaching and research

hospital.

93. The relocation of PGH to the NSU campus would create

an opportunity to enhance the delivery of healthcare services in

41

Broward County. The site on the NSU campus offers the potential

for PGH, in collaboration with NSU, to become a research and

teaching hospital over time that can serve as a regional

community resource. Bringing the hospital to the NSU campus,

where specialized healthcare programs already exist, will allow

opportunities for the incubation and incorporation of enhanced

healthcare resources and medical benefits for the residents of

Broward County and beyond.

94. PGH’s relocated hospital will serve as the anchor for

NSU’s “academical village,” a part of NSU’s campus that will

integrate the hospital with a hotel and conference center,

retail and residential facilities, and the NSU clinics. The

clinical services offered at PGH will be enhanced by the

academic efforts and research that will serve as the cornerstone

of the collaboration between PGH and NSU. Approximately 30% of

the NSU clinical patients already come from the area surrounding

PGH’s current location.

95. NSU also plans to add a College of Allopathic Medicine

in 2017 to complement its College of Osteopathic Medicine, and

recently opened an $80 million, 215,000 square foot

Collaborative Research Center (“CRC”). The CRC emphasizes

research, technology incubation, and collaboration via the

Florida Lambda Rail Network (FLR), a 100 gigabyte super-high-

42

speed fiber optic based research and education network operated

by all the doctoral research universities in Florida.

96. For the foregoing reasons, the applicant satisfies the

statutory need criterion, which weighs heavily in favor of

approval of the application.

B. Section 408.035(1)(b): The availability, accessibility, and

extent of utilization of existing health care facilities and

health services in the service district of the applicant.

97. District 10 currently has an ample number of acute

care beds. Ninety percent of Broward County’s residents can

access an acute care hospital within 30 minutes.2/ There are no

capacity constraints limiting access to acute care hospital

services in the District.

98. The average occupancy for acute care beds at Broward

County hospitals for calendar year 2014 was less than 50%, with

the highest being 81.68%. All but three hospitals were

operating below 70% occupancy.

i. Service Area Description

99. The PGH proposed primary service area (“PSA”) consists

of 11 zip codes: 33311, 33313, 33312, 33024, 33317, 33325,

33314, 33328, 33319, 33324, and 33068.3/

The PGH PSA is expected

to account for approximately 75% of the admissions to the

proposed replacement facility. The proposed secondary service

area (“SSA”) consists of six main zip codes and others: 33351,

33322, 33309, 33323, 33330, and 33321.4/ The SSA is projected to

43

produce the remaining approximately 25% of the proposed

replacement facility’s admissions.

100. PGH’s health planners appropriately identified the

PGH service area by analyzing population data, PGH’s service

area population data, historical utilization of PGH patients by

zip code, use rates, patient origin data, the location of PGH,

the location of the proposed replacement facility, the location

of other hospitals, major roadways, and market shares.

ii. Service Area Population

101. PGH examined population growth to determine demand

for services in the proposed location. PGH’s proposed service

area had a population of 695,254 in 2014 and is projected to

reach 735,166 in 2019, a growth of 5.74%. Broward County as a

whole is expected to grow only 2.79% over that same time period.

The area around the proposed replacement facility is projected

to grow faster than the area around PGH’s current campus.

102. The age-65-and-older population is projected to grow

at a significantly faster rate than the overall population, from

98,502 in 2014 to 117,810 in 2019, an increase of 19.9%. The

65-and-older age cohort utilizes inpatient hospital services at

a higher rate than any of the other age cohorts.

103. PGH’s proposed service area is diverse and will only

become more so by 2019. The African American population of the

proposed service area is expected to grow by 5.21% between 2014

44

and 2019. The African American population in zip code 33328,

the site of PGH’s replacement hospital, is expected to grow by

10.11% over that same period. The Asian population is projected

to grow significantly by 2019, with an increase in population of

12.55%. The proposed service area’s white population is

expected to decline 1% between 2014 and 2019. The Hispanic

population in the proposed service area is projected to grow

significantly, from 172,335 in 2014 to 204,356 in 2019, an

increase of 18.58%.

104. In addition, the NSU student body is large and

diverse, and NSU is training health professionals of various

races, ethnic groups, and nationalities.

iii. Economic Development Trends

105. The area around the proposed site is experiencing an

upward economic development trend, both in terms of

infrastructure and roadways. Interstate 595 is currently

undergoing a $2 million improvement project and the

Fort Lauderdale-Hollywood International Airport is expanding

with the addition of a runway.

iv. Projected Utilization and Market Share

106. Projecting a service area for a hospital is a

function of two numbers — market share and total discharges —

for each zip code from which the proposed facility will

discharge patients. This analysis is performed on a zip code by

45

zip code basis up to a certain percentage of discharges, whether

it be 75%, 80%, or any other percentage. The remaining

discharges from the facility are then grouped together to

determine the facility’s total projected discharges.

107. Once these assumptions are in place, the remaining

process for defining the service area simply involves a

mathematical calculation. In that sense, the facility’s

projected market share in each zip code, the projected total

inpatient discharges for each zip code, and the projected total

discharges for a facility, drive the entire service area

analysis. Those assumptions also drive the impact analysis,

both in terms of impact on patients and on competing hospitals,

because where the facility expects to obtain its patients in

large part determines those issues.

108. PGH’s health care planners reasonably grouped the

11 zip codes in PGH’s proposed PSA and the six main zip codes in

the SSA into three categories: closer to the new location,

farther from the new location, and equidistant to the new and

current location. The closer zip codes include: 33024, 33314,

33325, 33328, and 33330; the farther zip codes include: 33068,

33309, 33311, 33313, 33319, 33321, 33322, and 33351; and the

equidistant zip codes include: 33312, 33317, 33323, and 33324.

These 17 zip codes account for 86% of PGH’s projected

discharges.

46

109. PGH assumed 2013 use rates would remain constant and

applied those use rates to the future population projections to

calculate the total market size and demand for PGH’s four

different service lines. To project the proposed replacement

facility’s market shares, PGH assumed there would be some growth

in market share for the closer zip codes, some attrition in

market share in the farther zip codes, and relatively equal

market shares in the equidistant zip codes. The projections

show no significant change in overall market share for PGH in

medical-surgical, NICU, OB, and adult psychiatric services.

110. In 2019, PGH projected 9,783 total discharges from

the service area, with 2,292 from the closer zip codes,

2,335 from the equidistant zip codes, and 5,156 from the farther

zip codes. Of these, 6,062 are medical-surgical discharges,

2,262 are OB, 676 are NICU, and 783 are psychiatric.

111. PGH’s service area analysis is reasonable. PGH’s

market shares take into account PGH’s historical utilization in

a particular zip code, the existence of any providers that offer

similar services, and patient travel patterns. Because PGH is

an existing facility and does not have a dominant market share

in any of the zip codes it currently services, it is not

projected to become a dominant provider in zip codes where there

are already established providers. For example, zip code 33325

was included in PGH’s projected service area because there is no

47

hospital in zip code 33325. Patients would not be traveling

away from a prominent hospital to come to a new PGH hospital,

and PGH has historically drawn a significant number of patients

from that area. Interstate 595 and West Broward Boulevard

provide direct access from zip code 33325 to PGH’s new location.

112. Similarly, zip code 33021 and 33026 were not included

in PGH’s projected service area because PGH’s historical market

share in those zip codes is minimal, in part because of the

strong presence of prominent hospitals in those markets. In

33021, MRH operates a regional perinatal intensive care center,

which provides prenatal care to at-risk mothers who carry

children likely to require NICU services. JDCH also provides

some of the same services that PGH does. In 33026, MHW is a

large tertiary facility that has a strong reputation and

provides the same services that PGH offers.

113. In criticizing the PGH service area, CCH unreasonably

minimized the impact that high-risk OB and NICU services have on

PGH’s proposed service area. About one-third of PGH patients

are NICU or OB patients, so these two services will heavily

influence the shape of PGH’s service area. PGH draws from a

geographically broader patient base because high-risk OB and

NICU services are not offered at every hospital in Broward

County. Even with the relocation, PGH will likely be the most

48

proximate option for patients seeking NICU and high-risk OB

services in much of northern Broward County.

114. The market shares projected by PGH in the northern

zip codes of the proposed PSA are reasonable because the

hospitals between the northern zip codes and PGH’s proposed

location do not offer OB services, so patients seeking those

services would necessarily bypass those facilities to travel to

PGH. PGH receives a high percentage of patients from zip code

33068, and the Florida Turnpike provides a direct route within

33068 to the proposed location. PGH’s reputation and its

physician relationships will continue to draw patients from the

northern zip codes.

115. MHS and CCH argue that, despite PGH’s historically

strong market share in 33068, it should not be included in the

proposed service area. However, inconsistently, they also

assert that zip codes 33021 and 33026 should be included,

despite PGH’s low existing market share and the presence of

intervening facilities located between those zip codes and the

NSU campus that offer many of the same services as PGH

(including one hospital which is almost three times the size of

PGH). The challengers’ position is further undercut by CCH’s

suggestion that six southwestern zip codes – which are as far

away from the proposed location as the northern ones – should

have been included in PGH’s proposed service area.

49

116. The Petitioners’ arguments notwithstanding, ample

persuasive evidence supports the application of constant use

rates over declining use rates as a reasonable method in which

to calculate PGH’s projected market shares and utilization.

Utilization of PGH’s OB, neonatal, and psychiatric services are

all on an upward trend, and AHCA data show increases in

utilization of acute care/medical-surgical beds for CCH and

every MHS facility from 2014’s first to fourth quarters.

Further, every MHS facility experienced growth in overall

utilization from fiscal year 2014 to fiscal year 2015. Of note

was a substantial 3.1% increase in utilization for MRH

and MRH-S, and a 10% increase in utilization for MHP, which

exceed the growth rate of the South Broward Hospital District

system. Similarly, CCH’s patient days and occupancy percentage

have risen from 43,205 (76.37%) in 2011 to 46,081 (81.45%) in

2014.5/

117. PGH’s proposed service area was also criticized for

being geographically unbalanced, but this phenomenon is not

uncommon for existing facilities. The SA’s for all five MHS

facilities are not geographically balanced, nor are those

hospitals centrally located within the PSA.

118. For the foregoing reasons, the applicant satisfies

this statutory criterion, which weighs in favor of application

approval.

50

C. Section 408.035(1)(e): The extent to which the proposed

services will enhance access to health care for residents of the

service district.

i. Access Factors

119. Access to services includes geographic and economic

access, as well as access within a facility, access to

technology, access to services, and medical treatment trends.

Improvement of access to better technology and up-to-date

standards and practices are part of enhancing access to

residents of the service district.

120. PGH’s replacement facility will create a new point of

access to modern, state-of-the-art healthcare services for

residents of the service district.

121. PGH’s replacement facility will increase access to

services through an enhanced physical plant that also creates a

better environment for patients, employees, and medical staff.

Providing patients a therapeutic and healing environment

enhances access because the facility will have a modern design,

larger rooms with showers, and efficiently configured spaces.

122. Petitioners’ argument that lower income residents

would be better served by continuing to go to the current

facility is not persuasive, particularly in light of PGH’s

physical plant issues. While a very small segment of lower

income residents may have difficulty getting transportation to

the new site, the vast majority will not. In a one-month survey

51

of all persons (visitors and patients) who came to PGH, 98%

reported that they used their own vehicle to get to the

hospital. Few residents arrive for urgent or emergent care via

public transportation.

123. The historical utilization in the service area

demonstrates that residents currently travel to a number of

different hospitals. PGH is not a major provider of services to

the residents in Plantation and the area immediately proximate

to the hospital. While PGH’s greatest market share is in

obstetrics and neonatal services, even in those service lines

PGH is not the dominant provider in any of the zip codes it

serves. Although PGH maintains a strong market position for

OB services, it provides less than one quarter of the OB care in

the service area: further evidence that patients are willing to

travel for OB services.

124. Given that so many other hospitals are already being

selected by residents of the proposed service area, the

challengers’ assertion that PGH is abandoning those residents by

moving its facility to Davie is not persuasive.

125. Relocating PGH to the NSU campus will not affect NICU

services in northern Broward County because: (i) BHMC, which

offers NICU services, is accessible; (ii) other hospitals offer

NICU services in the north; and (iii) spreading NICU providers

geographically is preferable to having them clustered.

52

126. Moving PGH to Davie would improve the distribution of

NICU services within Broward County. PGH is currently the

closest acute care facility to BHMC, another major provider of

NICU services in the district. Broward General has the capacity

and availability to handle additional NICU patients if patients

chose to go there instead of the new PGH site. Relocating PGH

more centrally and slightly south to the Davie area provides a

comprehensive NICU provider in a more accessible site to more

patients in the region.

127. The PGH Level III NICU is a tertiary service to which

babies are transferred from other hospitals. Moving the service

to the new site will have no impact on patients who are

transferred to the unit, nor will it adversely impact the

quality of NICU care these patients receive. To the contrary,

the new facility will enhance the quality of care and services

available to neonates.

128. Similarly, relocating PGH’s psychiatric and Baker Act

services will not impact patient access to those services. PGH

currently has a small market share of psychiatric services and

there are other Baker Act receiving facilities in the northern

part of Broward County. The only Baker Act receiving facility

in southern Broward County is MRH. Thus, moving PGH improves

the distribution of psychiatric and Baker Act services in

53

southern Broward County by creating a second provider within

that geography.

ii. Geographic Access

129. For 11 of the 17 zip codes, the replacement facility

will provide a material improvement in the geographic access for

residents. The driving distances from the center of each of the

17 zip codes in PGH’s service area to the proposed new location

increased a maximum of 8.8 miles from the 33311 zip code and

decreased 9.3 miles from the 33330 zip code.

130. Although there is a small diminution in the

geographic access of some residents in zip code 33311, those

residents still have reasonable access to services.

iii. Access to Emergency Services

131. In keeping with its role as a safety net provider,

PGH will develop a FSED at its current location to ensure that

patients in its existing neighborhood will continue to have

access to emergency hospital services. Development of the FSED

will create a second point of access and help to decompress

PGH’s current ED, which is overcrowded.

132. Patients presenting at the FSED will have access to a

modern ED and will not be forced to receive treatment in

hallways or chairs as they currently do at PGH. (See FOF

Nos. 41-47). The improved access to emergency services at PGH’s

FSED, in addition to a new ED on the site of the replacement

54

facility, increases access to emergency services for residents

located close to PGH’s current site, as well as its proposed new

location, and the District as a whole.

133. The challengers’ assertion that PGH’s proposal will

not enhance access to emergency services is rejected. Because

of its current location on the edge of Plantation, PGH is not

the closest hospital to the majority of the city’s six EMS

stations. WRMC, an HCA affiliate, is the closest to four of the

city’s six EMS stations and receives 75% of the city’s EMS

patients. PGH is the most proximate ED to only one EMS station

and receives just 20 to 25% of the city’s EMS patients. The

city’s emergency patients are also transported to CCH,

Florida Medical Center, Broward General, and MHW.

134. While the Plantation fire chief expressed concern

that there would be an increased burden to the City of

Plantation’s EMS system due to the potential increase in the

number of intra-facility transports from the FSED at PGH’s

current site to the new location, his concerns are not well-

founded. Intra-facility transfers are typically handled by the

private ambulance services, not the City of Plantation EMS

units.

135. The fire chief did not testify that any potential

increase in travel times would affect patient safety. He also

failed to present any data regarding the travel times in the

55

area when the transport is an emergency code 3, which

necessitates the use of sirens and lights.

136. Based on the totality of the credible evidence, it is

concluded that access to emergency services will be enhanced for

residents of the District if this application is approved.

iv. Economic Access

137. PGH’s provision of services to Medicaid, Medicare,

and self-pay/charity patients is noteworthy within both Broward

County and the state. PGH is financially accessible in its

current location and will continue to be financially accessible

when it replaces and relocates its facility to the NSU campus.

138. In 2013, 45.7% of PGH’s services were provided to

Medicaid and Medicaid managed care patients, and 12.2% to self-

pay/uninsured. In 2013, MHS provided 15.1% of its care to

Medicaid patients and CCH only 2.0%.

139. PGH is the largest provider of Medicaid NICU

services: among PGH (67%), MHM (29%), MHW (39%), and MRH (52%).

HCA affiliated facilities in Broward County, including PGH,

provide a larger percentage of Medicaid services to NICU

patients (67.8%) than do MHS facilities (42.2%). CCH does not

provide OB or NICU services.

140. Broward County HCA hospitals provide a significantly

larger percentage of Medicaid services to OB patients (59.8%)

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than MHS (40.1%). Of PGH’s OB patients, 80% are Medicaid

patients.

141. Broward County HCA hospitals provide a larger

percentage of Medicaid services to psychiatric patients (28.5%),

as well as self-pay patients (24.5%), than MHS facilities (16.4%

and 11.0%, respectively). PGH provides a high percentage of

care to Medicaid and Medicare psychiatric patients (56%),

whereas a significant percentage of MRH’s psychiatric patients

are covered by commercial insurance. Accordingly, relocating

PGH’s psychiatric and Baker Act services to the NSU campus will

likely enhance economic access for lower income residents.

142. Among facilities in the proposed service area, PGH

serves the largest percentage of Medicaid patients (68%) and

also has the smallest percentage of commercial patients (16%).

Thus on a comparative basis, PGH is clearly financially

accessible to indigent populations.


this statutory criterion which weighs in favor of application

approval.

D. Section 408.035(1)(g): The extent to which the proposal

will foster competition that promotes quality and cost-

effectiveness.

144. MHS is the dominant provider of acute care hospital

services in south Broward County. This is the result of a

number of factors, including MHS’s decision to provide services

57

and facilities not otherwise available to underserved

populations. While the dominant provider of hospital services

in the area, there is no evidence to suggest that MHS is

inappropriately using its market power in south Broward County

to drive up the costs of, or otherwise impede access to, quality

health care services.

145. PGH’s proposed location, although technically within

the North Broward Hospital District, is near the northern

boundary of the SBHD. Consequently, the proposed location

improves geographic distribution and the competitive balance in

the county, and will serve as an appropriate and available

alternative to MHS.

146. Relocation will increase competition in the south

Broward area, lead to a more efficient provision of services in

the area, and potentially lower rates for Medicare and Medicaid

managed care providers as a result of the increased competition.

147. Medicaid managed care providers support the approval

of the application because it will afford them a more

geographically diverse network of providers for their patients,

and an option other than the SBHD. In addition, introducing a

competitive alternative will increase the number of benefit

options in the marketplace and enhance access and choice for

residents in the community.

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148. In addition to the benefits of increased competition

for managed care providers, PGH’s relationship with NSU will

provide the potential for researchers and clinicians to make

advances in the provision of health care, and provide a lasting

benefit to the community.

149. For the above reasons, the applicant satisfies this

criterion, which weighs in favor of application approval.

E. Section 408.035(1)(i): The applicant’s past and proposed

provision of health care services to Medicaid patients and the

medically indigent; Rule 59C-1.030(2): the “Health Care Access

Criteria”

150. As noted, PGH has a laudable history of providing

healthcare services to Medicaid recipients, uninsured/self-pay

patients, and the indigent. PGH’s projections confirm that it

will continue to be a highly accessible facility to those

patients.

151. Upon relocation to the NSU campus, PGH will remain a

high provider of Medicaid services, in large part due to PGH’s

robust provision of OB and NICU services. Although MHS’s

planner contended that access to services for the lower income

residents of zip codes 33311 and 33313 will be diminished, he

did not quantify the number of residents that would be unable to

access services, and provided no evidence to support his opinion

that those residents “don’t drive to the current location.”

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152. PGH generated 1,378 OB and NICU discharges from zip

codes 33311, 33312, and 33313 for the year ending June 2014. In

its new location, PGH reasonably projects it will generate

1,178 OB and NICU discharges from those three zip codes in 2019,

a difference of 200 discharges. Of those 200, 171 are

OB discharges and 29 are NICU.

153. PGH is the most proximate facility to zip code 33311

in terms of straight line distance to the center of the zip

code, yet ranks second in market share (18.29%) to Broward

General (43.71%). In 33312, PGH is the second most proximate

facility and again ranks second in market share (14.9%) to

Broward General (39.91%); MRH has the third highest market share

(13.64%). In zip code 33313, PGH is the second most proximate

provider and ranks second in market share (18.67%) behind North

Shore Medical Center; Broward General ranks third (18.30%) and

WRMC ranks fourth (15.96%). Thus, the historical utilization

for those three zip codes clearly demonstrates that all

residents of those zip codes, including Medicaid patients, will

continue to have adequate access to services when PGH relocates.

154. The findings of facts Nos. 137-143 also apply to this

criterion.


this statutory criterion, which weighs in favor of approval of

the application.

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VII. Adverse Impact

156. At the outset, the undersigned notes that hospital

market shares are not static, but fluctuate with competition.

No hospital is entitled to a specific or historic market share

free from competition.

157. In this instance, the applicant is an existing

facility with existing market share. Therefore, adverse impact

is unlike new hospital projections, where impact is theoretical

and reliant on capturing new market share from existing

providers.

158. PGH’s projections demonstrate minimal, if any, impact

and in some cases growth in utilization for existing providers.

PGH is not a new facility that must necessarily take volume from

existing providers, nor is it opening up new service lines.

Therefore, the impact on existing providers is a function of

small shifts in market share based on the location of each zip

code cluster in relation to PGH’s proposed location on the

NSU campus.

159. When year-end discharges for June 2014 are compared

with PGH projections for 2019 (the second year of operation for

the replacement facility), there is no anticipated reduction in

volume of medical-surgical patients for any hospital in PGH’s

proposed service area. Examining all service lines, PGH

reasonably projects CCH’s utilization to grow by 217 discharges

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(a 2.22% growth in discharges); MRH by 191 (0.60%); MHP by 130

(2.25%); MHM by 9 (0.10%); MHW by 146 (0.67%); and MRHS by 12

(0.77%).

160. PGH’s financial expert credibly testified that the

217 discharges gained would increase CCH’s contribution margin

by $1,819,796. The 491 cases MHS is projected to gain in 2019

will equate to an increase in contribution margin of $3,679,680.

161. MHS’s “medium impact” scenario projected MHS to lose

1,091 discharges in 2019, representing only a 1.55% decline in

discharges for the entire system. However, these projections

were based on declining use rates and no population growth,

which are not reasonable bases for the analysis. MHS’s

calculations contain a dramatic decrease in the projected

operating margin and total margin for 2016 through 2020 that is

unsupported by MHS’ historical financial performance and

continuing strong financial position.

162. CCH’s projections that CCH will lose 395 to 558

medical-surgical discharges to PGH in 2020, costing CCH

$3.3 million to $4.8 million in net income each year is not

persuasive. These projections assume PGH will achieve

significant market shares in zip codes 33326, 33331, 33028,

33026, 33025, and 33027, instead of the northern zip codes in

PGH’s proposed service area. These six zip codes are part of

PGH’s in-migration, and are situated southwest of PGH’s proposed

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service area. These six zip codes are as far to the southwest

of PGH’s proposed location as the zip codes in PGH’s service

area to the northeast that CCH’s planner contends will not have

access to the replacement hospital.

163. CCH’s patient loss projections are not reasonable,

particularly due to the presence of intervening facilities

between the six southern zip codes that provide services similar

to PGH, and PGH’s low historical market share in those zip

codes. Patients traveling from the north would bypass the

hospitals on the way to the proposed new location because they

do not offer the women’s services that PGH does.

164. CCH’s assumption that PGH will maintain its

psychiatric beds and some medical-surgical beds at its current

location is not credited. This unsupported assumption accounts

for 45 to 63 of the lost discharges projected by CCH. Contrary

to CCH’s position, the CEO of PGH and the president of the EFD

both confirmed PGH’s intent, as stated in the application, to

relocate its psychiatric beds, along with all other services, to

the campus of NSU.

165. Even if CCH’s projection of 395 lost cases is

accepted, it was unclear whether CCH’s contribution margin

considered both direct and indirect costs. CCH also did not

provide outpatient data, and thus incorrectly assumed the

percent of variable expenses for outpatient services was exactly

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the same as the percent of variable inpatient services. In any

event, the CCH planner’s projection of a loss of $3 million to

$5 million, while significant, would not materially impact CCH’s

operations.

166. PGH also provided an impact analysis which assumed no

population growth and constant use rates, and thus no increase

in the demand for services in the district. Under that

analysis, CCH would lose 81 discharges, a negative 0.83% impact,

MHM 44 (-0.48%), MHP 284 (-4.90%), MHW 380 (-1.74%), MRH 456

(-1.42%), and MRH-S 9 (-0.57%). Even under this implausible

scenario, where the population does not grow, PGH’s relocation

would not have a material impact on CCH or any of the MHS

facilities.

167. As a teaching and research hospital, CCH provides

high-end, complex tertiary, and quaternary services to not only

Broward County residents, but on a regional basis and beyond.

CCH expressed concern that when the relocated PGH evolves into an

Academic Medical Center, it will directly compete with CCH on

that level as well. Even if true, the resulting impact cannot

now be measured since it is too remote in time, and speculative.

Furthermore, the majority of the types of tertiary and quaternary

services now provided by CCH would require CON review and

approval before they could be implemented by PGH. Accordingly,

64

CCH would have an opportunity to administratively challenge those

additions through the CON review and appeals process.

168. PGH provided the most reasonable assessment of the

anticipated impact its relocation to the NSU campus will have on

CCH and the MHS facilities. That impact will be minimal, and

does not mitigate for denial of the application.

CONCLUSIONS OF LAW

169. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding. §§ 120.57(1) and 408.039(5)(b), Fla. Stat.

170. In order for an existing health care facility to have

standing to intervene in a CON proceeding, it must show that it

will be “substantially affected” by approval of the CON

Application at issue. § 408.039(5), Fla. Stat.

171. MHS and CCH each proved, by a preponderance of the

evidence, that it has standing to participate as a party in this

proceeding.

172. PGH, as the applicant, has the burden of proving, by

the preponderance of the evidence, entitlement to a CON. Boca

Raton Artificial Kidney Ctr., Inc. v. Dep’t of HRS, 475 So. 2d

260 (Fla. 1st DCA 1985); § 120.57(1)(j), Fla. Stat.

Balancing the Applicable Statutory and Rule Criteria

173. The award of a CON must be based on a balanced

consideration of all applicable statutory and rule criteria.

65

Balsam v. Dep’t of HRS, 486 So. 2d 1341 (Fla. 1st DCA 1986).

“[T]he appropriate weight to be given to each individual

criterion is not fixed, but rather must vary on a case-by-case

basis, depending upon the facts of each case.” Collier Med.

Ctr., Inc. v. Dep’t of HRS, 462 So. 2d 83, 84 (Fla. 1st DCA

1985).

174. An administrative hearing involving disputed issues

of material fact is a de novo proceeding in which the

administrative law judge independently evaluates the evidence

presented. Fla. Dep’t of Transp. v. J.W.C. Co., 396 So. 2d 778,

787 (Fla. 1st DCA 1981); § 120.57(1), Fla. Stat. The Agency’s

preliminary decision on a CON application, including its

findings in the SAAR, is not entitled to a presumption of

correctness. Id.

175. Generally, health care planning should not be done on

an institution-specific basis. See Amisub (North Ridge Hosp.),

Inc. v. Ag. for Health Care Admin., Case Nos. 94-1012, 94-1016,

94-1017, and 94-1018 (Fla. DOAH Mar. 17, 1995, ¶ 145; Fla. AHCA

June 9, 1995); St. Joseph's Hosp. v. Dep't of HRS, Case No. 86-

1542 (Fla. DOAH Sept. 8, 1987, ¶ 67; Fla. DHRS Dec. 15, 1987),

aff'd, 536 So. 2d 346 (Fla. 1st DCA 1988); Morton F. Plant Hosp.

Ass'n, Inc. v. Dep't of HRS, Case Nos. 83-1275, 84-0296, and 84-

0699 (Fla. DOAH Mar. 27, 1985; DHRS Oct. 4, 1985)("The purpose

of the Certificate of Need law is not only to eliminate

66

unnecessary duplication of health services, but also to

rationally examine alternative methods of achieving health

goals, 'and to aid in their achievement through the most

effective means possible within the limits of available

resources.' Section 381.493(2), Florida Statutes." RO ¶ 39),

aff'd, 491 So. 2d 586 (Fla. 1st DCA 1986).

176. The undersigned notes that this is the first

CON application for a replacement general hospital that has been

contested since the Florida Legislature eliminated several CON

review criteria that had previously been considered. See

Ch. 2008-29, Laws of Florida. Even under the more comprehensive

review criteria previously in place, the Agency has historically

granted applications for replacement hospitals under facts and

circumstances similar to those presented here. Fla. Health

Sciences Ctr., Inc., d/b/a Tampa Gen. Hosp. v. Ag. for Health

Care Admin., Case No. 08-0614CON (Fla. DOAH Aug. 8, 2011, ¶ 324-

25; Fla. AHCA Dec. 8, 2011); See also Morton Plant Hosp. Ass’n,

Inc., d/b/a North Bay Hosp. v. Ag. for Health Care Admin., Case

No. 02-3232CON (Fla. DOAH Mar. 19, 2004; Fla. AHCA May 19,

2004); HCA Health Servs. of Fla., Inc., d/b/a Oak Hill Hosp. v.

Ag. for Health Care Admin., Case No. 02-0454CON (Fla. DOAH

Dec. 24, 2002; Fla. AHCA Feb. 21, 2003); Mem’l Healthcare Group,

Inc., d/b/a Mem’l Hosp. Jacksonville v. Ag. for Health Care

Admin., Case No. 02-0447CON (Fla. DOAH Feb. 5, 2003; Fla. AHCA

67

Apr. 11, 2003); Flagler Hosp. v. Dep’t of HRS, Case No. 84-0236

(Fla. DOAH Feb. 25, 2985; Fla. AHCA May 29, 1985); Fla. Health

Sciences Ctr., Inc., d/b/a Tampa Gen. Hosp. v. Ag. for Health

Care Admin., Case No. 08-0614 CON (Fla. DOAH Aug. 8, 2011; Fla.

AHCA Dec. 8, 2011).

177. In 2004, Community Hospital was approved to build a

replacement facility approximately five miles away from its

existing hospital, despite being both the only provider of OB

services and the largest provider of Medicaid and indigent care

in its AHCA subdistrict. Morton Plant, RO ¶ 2, 3, and 12.

Community Hospital’s medical-surgical rooms were almost all

semi-private with no showers or tubs, and its ward-style ICU

units posed significant privacy, security, safety, and health

concerns, and impaired the hospitals ability to effectively

compete. Morton Plant, RO ¶¶ 16-19.

178. Community Hospital’s physical plant deficiencies were

documented in a Facility Condition Assessment which detailed the

architectural, mechanical, and electrical problems with the

hospital’s existing physical plant. Id. RO ¶ 28. Unlike the

opponents here, challengers of Community Hospital’s application

provided architectural schematic design alternatives for

Community Hospital to be expanded and replaced on site. Id. RO

¶ 101. The ALJ noted AHCA’s recognition of “[t]he problems

inherent in replacing an outdated hospital on-site,” and found

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renovations and on-site replacement to be impractical and not

cost-effective. Id. RO ¶ 116-17

179. In Oak Hill, Brooksville Regional’s application for a

replacement facility 2.7 miles east of its current location was

approved even though it was opposed by the City of Brooksville

and the facility was only 18 years old at the time. Oak Hill,

RO ¶¶ 8-10. Findings included inadequate space that compromised

patient privacy in various areas, including the ED and surgical

suite, and spaces that were not big enough for modern equipment.

Id. RO ¶ 46. The ALJ based his recommended approval on the

cost-effectiveness of replacement over renovation, and

Brooksville Regional’s ability to better compete in the new

location. Id. RO ¶¶ 81-82.

180. The only contested replacement hospital applications

which resulted in a recommendation of denial involved co-batched

applications that were reviewed with another application that

was approved. See Morton Plant Hosp, supra; Florida Health

Sciences Ctr., supra.

181. In Morton Plant (discussed above), Community

Hospital’s replacement application was recommended over

North Bay’s because North Bay’s physical plant was in good

shape, while Community Hospital’s was in need of replacement.

Morton Plant, RO ¶ 117. In Tampa General, South Bay Hospital

sought to build a replacement facility in close proximity to

69

St. Joseph’s Hospital’s proposed satellite hospital. During the

pendency of AHCA’s review for both 2007 batching cycle CON

projects, AHCA approved St. Joseph’s previous 2005 application

for the same satellite hospital. The ALJ denied South Bay’s

project, concluding it would “result in the duplication of

[general acute care, non-tertiary hospital services] in the

service area by placing two facilities virtually across the

street on Big Bend Road.” Tampa General, RO ¶ 367. (PGH

Ex. 31, pg. 146-47, 149)

182. The established precedents involving CON review of

applications for replacement facilities confirm that

consideration of the “need” for a proposed replacement general

hospital is different than assessing the need for a new general

acute care hospital. Tampa General, RO ¶¶ 287-318 and 330. PGH

is an existing health care provider in the District and the

overall “need” for the hospital was demonstrated when it was

first licensed. PGH will continue as an existing hospital

provider in the District if the replacement facility is

approved. A replacement hospital applicant, like PGH, can

demonstrate need for the replacement by comparing it to

expansion or renovation of the existing hospital. In this

regard, institution specific factors can be relevant to the

analysis. Id. RO ¶ 334.

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183. MHS questioned the sincerity of PGH’s assertions

about the condition of its physical plant, noting that quality

of care at the hospital has not been compromised. However, in

order to warrant the approval of a replacement facility, a

hospital need not reach the point where the physical plant

constraints are of such magnitude that patient safety or care is

compromised.

184. Here, PGH has convincingly established a need to

replace its existing physical plant. The deficiencies that

plague the facility do not provide patients with adequate

privacy, and expose patients and healthcare providers to

unnecessary risks and potentially delayed care. The outdated

design of the patient rooms and overall facility makes it

increasingly difficult for PGH to compete with the more up-to-

date hospitals in the District, especially in the OB services

market, on which PGH heavily relies.

185. Renovating or replacing the facility in-place is an

impractical endeavor that will necessarily lead to the

disruption of services, which will further strain PGH’s dismal

financial position. Building a replacement facility on-site is

equally impractical considering neither PGH nor HCA owns the

only land on which to build. Both options are merely band-aids

and do not give a safety net provider, such as PGH, the

foundation required to exist and grow in the future.

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186. Constructing a replacement facility on the campus of

NSU is the most cost-efficient and prudent option, and the

better one for patients. It will enable PGH, as a safety net

provider, to better compete with modern hospitals and improve

its financial position. AHCA has recognized that stabilizing

the financial condition of safety net providers such as PGH, or

any hospital that provides Medicaid and indigent services at

levels similar to PGH, weighs in favor of application approval.

Mem’l Healthcare Group, Inc., d/b/a Mem’l Hosp. Jacksonville v.

AHCA and Shands Jacksonville Med. Ctr., Inc., DOAH Case No. 12-

0429 (Fla. DOAH Dec. 7, 2012, ¶ 146; Fla. AHCA Apr. 10, 2013)

(internal citations omitted).

187. While not a significant factor in the approval of the

application, the benefit to the community that will inure

through the relationship between PGH and NSU cannot be ignored.

188. PGH’s relocation to the NSU campus will enhance

access for residents of the current and proposed service area by

providing a new physical plant. The modern amenities of PGH’s

new hospital will significantly enhance the availability and

quality of services when compared to its current facility. PGH

will be able to offer more specialty services within its current

service lines, and the relationship with NSU will attract

quality healthcare providers to the area. The replacement

facility will also create an additional healthcare access point

72

for residents of the District, and the FSED that will remain on

PGH’s current site will ensure emergency services in the area

remain as available as they are today. Competition will also

increase in the southern Broward County area and lead to

enhanced access to services by way of more favorable

reimbursement rates for managed care providers participating in

the State Medicaid plan.

189. While some residents near PGH’s current location may

experience decreased geographic access to PGH’s services,

patients seeking OB and NICU services, two of PGH’s busiest

service lines, already opt to travel to more distant facilities

for those services. The limited decreased geographic access for

a small number of residents of the proposed service area does

not warrant denial of the project when balanced against the

other criteria.

190. PGH persuasively established need for its proposed

replacement hospital. On the whole, access will be enhanced

through a new physical plant and an additional services access

point. While the impact on CCH and the MHS facilities may be

sufficient enough to establish standing, the impact will not

significantly impair their operations, and is not a factor that

mitigates for denial of the application.

73

RECOMMENDATION

Based on the forgoing Findings of Fact and Conclusions of

Law, it is

RECOMMMENDED that the Agency for Health Care Administration

enter a final order approving CON Application No. 10235 with the

conditions as proposed in the application.

DONE AND ENTERED this 1st day of April, 2016, in

Tallahassee, Leon County, Florida.

S

W. DAVID WATKINS

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 1st day of April, 2016.

ENDNOTES

1/ See Memorial Healthcare Group, Inc. v. AHCA, Case No. 12-

0429CON (Fla. DOAH Dec. 7, 2012, at ¶ 36; Fla. AHCA April 10,

2013); See Lee Memorial Health Sys. v. AHCA, Case No. 13-2508CON

and 13-2558CON (Fla. DOAH Mar. 28, 2014, at ¶ 30; Fla. AHCA

Apr. 22, 2014).

2/ The Agency does not have a travel time standard rule with

respect to access to acute care services. See generally

Wellington Reg. Med. Ctr., Inc., d/b/a Wellington Reg. Med. Ctr.

v. Ag. for Health Care Admin., Case Nos. 05-2352CON, 05-2594CON,

and 05-2753CON (Fla. DOAH Apr. 5, 2007, ¶ 110 and 354-58; Fla.

74

AHCA Aug. 9, 2007, at 27, 34-35), aff'd, 5 So. 3d 26 (Fla. 4th

DCA 2009)(On the same day, the court affirmed the two companion

cases arising from this administrative proceeding. Wellington

Reg. Med. Ctr., Inc. v. Ag. for Health Care Admin., 4 So. 3d 21

(Fla. 4th DCA 2009), and JFK Med. Ctr. Ltd. P'ship v. Ag. for

Health Care Admin., 4 So. 3d 1245 (Fla. 4th DCA 2009)). In Oak

Hill, it was found that "[t]he acute care travel time goal is to

have most residents able to reach [general acute care hospital

services] within 30 minutes." Oak Hill, RO ¶ 33.

3/ PGH’s proposed primary service area did not change from what

was presented in the application. A sorting or scrivener’s

error caused one of the zip codes in the PSA to be listed in the

SSA. A correction of the exhibit on page 93 of the application

was provided by PGH and explained at hearing by Ms. Platt. The

zip codes that constitute the primary service area as stated in

the application are the same as the corrected exhibit admitted

at hearing. Mathematical corrections to a CON are not

impermissible amendments. HCA Health Services of Florida, Inc.,

d/b/a Oak Hill Hospital v. Ag. for Health Care Administration,

Case No. 02-0454 CON (Fla. DOAH Dec. 24, 2002, ¶ 79; Fla. AHCA

Feb. 21, 2003).

4/ The more than 300 “other” zip codes included in the SSA

includes patients from around the area and out-of-state patients

based on PGH’s historical patient origin.

5/ Both CCH and MHS anticipate increased demand for hospital

services as evidenced by expansion projects planned by both

organizations. Those projects are identified in documents

considered by the parties to be confidential strategic planning

and marketing documents, and are therefore not specifically

identified herein.

COPIES FURNISHED:

F. Philip Blank, Esquire

GrayRobinson, P.A.

Suite 600

301 South Bronough Street


(eServed)

75

Lorraine Marie Novak, Esquire




(eServed)

R. David Prescott, Esquire



Post Office Box 551


(eServed)

Michael J. Cherniga, Esquire





(eServed)

Sonya C. Penley, Esquire





(eServed)

Stephen A. Ecenia, Esquire



Post Office Box 551

Tallahassee, Florida 32302-0551

(eServed)

D. Ty Jackson, Esquire

GrayRobinson, P.A.

301 South Bronough Street, Suite 600



(eServed)

George N. Meros, Jr., Esquire

Gray Robinson, P.A.



(eServed)

76

Daniel A. Johnson, Esquire


Mail Stop 3

2727 Mahan Drive


(eServed)

Martin B. Goldberg, Esquire

Lash & Goldberg LLP



(eServed)

Rachel E. Kaufman, Esquire

Lash & Goldberg LLP



(eServed)

Lorelei J. Van Wey, Esquire

Lash & Goldberg LLP



(eServed)

Kevin Michael Marker, Esquire


Mail Stop 3

2727 Mahan Drive


(eServed)

Richard J. Shoop, Agency Clerk




(eServed)

Elizabeth Dudek, Secretary




(eServed)

77

Stuart Williams, General Counsel




(eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.

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