83-003418 Gerald Balsam, Howard M. Israel, Et Al. vs. Department Of Health And Rehabilitative Services Status: Closed Recommended Order on Thursday, September 27, 1984.

Summary: Certificate of Need (CON) for substance abuse facility should be granted subject to several restrictions, such as admitting emergency patients without regard to ability to pay etc.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GERALD BALSAM, HOWARD M. ISRAEL, )

LAWRENCE LEVINSON, HERBERT )

SCHWARTZ, and ARNOLD ZAGER, )

)

Petitioner, )

)

vs. ) CASE NO. 83-3418

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

and )

)

FLORIDA MEDICAL CENTER and )

CHARTER MEDICAL-FORT )

LAUDERDALE, INC., )

)

Intervenors. )

_________________________________)

RECOMMENDED ORDER

This cause was heard by R. L. Caleen, Jr., Hearing Officer with the

Division of Administrative Hearings, on May 21-24, 1984, in Fort Lauderdale,

Florida, and on May 30 and 31, and June 1, 1984, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Kenneth G. Oertel, Esquire

646 Lewis State Bank Building

Tallahassee, Florida 32301

For Respondent: James M. Barclay, Esquire

1317 Winewood Boulevard

Building 2, Suite 256

Tallahassee, Florida 32301

For Intervenors: Eric B. Tilton, Esquire

Florida Medical 702 Lewis State Bank Building

Center Tallahassee, Florida 32301

Charter Medical William E. Hoffman, Jr., Esquire

Center, Inc. Richard Shackelford, Esquire

2200 First Atlanta Tower

Two Peachtree Street Northwest

Atlanta, Georgia 30383

Cynthia S. Tunnicliff, Esquire

410 Lewis State Bank Building

Tallahassee, Florida 32301

STATEMENT OF THE ISSUE

Whether Petitioners' application for a certificate of need (CON), to

construct a 100-bed free-standing psychiatric and substance-abuse hospital in

Broward County, Florida, should be granted or denied.

BACKGROUND

Petitioners are a group of health care professionals residing in Broward

County, Florida and engaged in a limited partnership known as Florida

Psychiatric Centers (FPC). Pursuant to Section 381.494, Florida Statutes, and

Chapter 10-5, Florida Administrative Code, they applied to Respondent,

Department of Health and Rehabilitative Services (DHRS), for a CON to build a

100-bed free-standing psychiatric specialty hospital in western Broward County,

Florida. Eighty of the proposed beds are short-term psychiatric; twenty are

short-term substance abuse beds.

On September 29, 1983, DHRS denied the application. After Petitioners

requested a Section 120.57(1) hearing, DHRS forwarded this case to the Division

of Administrative Hearings for assignment of a hearing officer.

Intervenors, Florida Medical Center and Charter Medical-Fort Lauderdale,

Inc. (Charter Medical) have existing or approved short-term psychiatric beds in

Broward County. They were allowed to intervene based on alleged injury-in-fact

they would suffer if Petitioner's application were granted. Both support DHRS's

preliminary free-form denial of the application.

At hearing, Petitioners presented the following witnesses: Linda Susan

Dykes, and FPC employee; Ronald Robert Fieve, M.D., Chief of Research and

Psychiatry, Columbia University, New York, N.Y., a limited partnership in

Florida Psychiatric Centers; John F. Davison, M.D., Director of Emergency

Services for Broward General Hospital, Ft. Lauderdale, Florida, accepted as an

expert in substance-abuse treatment; Howard Mark Israel, psychologist, Ft.

Lauderdale, Florida, accepted as an expert in psychology, Charles Freemena

Longino, Ph.D., Professor of Sociology, University of Miami, Miami, Florida,

accepted as an expert in sociology, particularly with regard to aging, William

J. Serow, Ph.D., Professor of Economics, Florida State University, Tallahassee,

Florida, accepted as an expert in economics and demography, Arnold Stanley

Zager, M.D., psychiatrist, Plantation, Florida, accepted as an expert in

medicine and psychiatry; Rev. Martin Devereauz, Psy. D., psychologist, College

of Boca Raton, Boca Raton, Florida; Marvin Ackerman, licensed clinical social

worker, Hallendale, Florida; H. Bruce Jones, M.D., psychiatrist, Broward County,

accepted as an expert in psychiatry and the practice of psychiatry in Broward

County; Benjamin H. Underwood, Mental Health Administrator, Marietta, Georgia,

accepted as an expert in mental health planning and hospital administration;

Herbert Schawartz, owner, medical employment agency, North Miami Beach, Florida,

accepted as an expert in hospital administration; Evelyn Glasser, Chairperson

Elect, State Advisory Council on Aging and Adult Services, accepted as an expert

in some aspects of aging; Jamie R. Groober, Supervisor of Discharge Planning,

Sough Florida State Hospital; Ronald H. Kurlander, M.D., psychiatrist, Pompano,

Florida, accepted as an expert in psychiatry and the practice of psychiatry in

Broward County; Jeffrey Gross, registered architect, Hollywood, Florida,

accepted as an expert in architecture; James C. Nicholas, Ph.D. Professor of

Economics, Florida Atlantic University, Boca Raton, Florida, accepted as an

expert in economics, land use management, market research, market studies and

growth patterns in Broward County; Alan T. Dzija, management consultant, Coopers

& Lybrand, Atlanta, Georgia, accepted as an expert in feasibility studies for

health care facilities; Homera J. Corteguera, M.D., psychiatrist, Broward

County, accepted as an expert in psychiatry in Broward County; Winifred J.

Schmeling, Executive Vice President for Operations, MGT of America, Tallahassee,

Florida, accepted as an expert in health planning; Gerald James Balsam, M.D.,

psychiatrist, Plantation, Florida, affiliate principal in Florida Psychiatric

Centers, accepted as an expert in psychiatry and the practice of psychiatry in

Broward County; Woodrin Grossman, CPA, partner in Price-Waterhouse, Tampa

office, accepted as an expert in financial analyses and accounting, financial

projections, financial feasibility of health care institutions; Richard E.

Gordon, M.D., teaching psychiatrist, Department of Psychiatry, University of

Florida College of Medicine, Gainesville, Florida, accepted as an expert in

psychiatry, teaching of psychiatry in medical schools, evaluation of the quality

and nature of psychiatric treatment.

Petitioner's Exhibit nos. 1-7, 9-12, 16-18, 18-A, 18-B, 18-C, 18-F, 18-J,

19-H, 20, 21, 21-A, 22, 24-27, 27-H, 28-A, 28-B, 28-C, 28-D, 28-E, 28-F, 28-G,

28-I, 33, 37-A, 37-B, 37-C, 39-41, 56, 57, and 69-71, were received in evidence.

DHRS presented the testimony of Thomas F. Porter and moved Respondent's

Exhibit nos. 1-7 into evidence.

Charter Medical presented the following witnesses: Susan Nathan

Ganzburger, psychiatric social worker, Commissioner, City of Hollywood,

President, Broward County Mental Health Board; Barbara Joann Myrick, Executive

Director, the Chord, Inc., Broward County, Chairperson, District Human Rights

Advocacy Committee; Lawrence Levison, partner in Florida Psychiatric Centers;

Peter Joseph Bibb, Executive Director of Hospital Financial Operations, Charter

Medical Corporation, Macon, Georgia, accepted as an expert in hospital financial

operations and hospital finances; Earnest J. Peters, registered professional

engineer, Peters & Associates, Little Rock, Arkansas, accepted as an expert in

transportation engineering; Ronald T. Luke, Ph.D., president, Research &

Planning Consultants, Austin, Texas, accepted as an expert in health planning

and psychiatric bed need assessments, demography, survey research and community

regional planning; Cynthia Alice Rector, Director of Nursing, Charter-Glade

Hospital, Fort Myers, Florida, accepted as an expert in psychiatric nursing;

Brian David Beatty, Administrator, Charter-Glade Hospital, Fort Myers, Florida,

accepted as an expert in psychiatric hospital administration; by deposition

Robert Beiseigel, Ph.D., psychiatrist, consultant to FPC.

Intervenors' Exhibit nos. 1-25 were received into evidence.

Intervenor Florida Medical Center presented the testimony of David Radtke,

Director, Fort Lauderdale Hospital, Fort Lauderdale, Florida; and Thomas J.

Conrad, consulting firm president, Tallahassee, Florida, accepted as an expert

in health planning.

The transcript of hearing was filed on June 29, 1984. The parties filed

extensive Proposed Findings of Fact and Conclusions of Law, with memorandum, by

August 6, 1984. Their Proposed Findings of Fact, insofar as they are

incorporated herein, are adopted; otherwise, they are rejected as unsupported by

the greater weight of the evidence, or as irrelevant or unnecessary to

resolution of the issue presented.

Based on the evidence adduced at hearing, the following facts are

determined:

FINDINGS OF FACT

I.

The Proposed Psychiatric Hospital

1. Florida Psychiatric Centers (FPC), the applicant, is a partnership

comprised of six general partners; Larry Levinson, Howard Israel, Ph.D.; Arnold

Zager, M.D.; Bruce Jones, M.D.; Gerald Balsam, M.D., and Herbert Schwartz.

Ronald Fieve, M.D., is a limited partner.

2. FPC proposes to construct a 100-bed, free-standing psychiatric facility

on a 10-acre site in the Plantation area of western Broward County.

3. The total project cost, as stated in the application, is $12,039,299 or

approximately $12 million. This figure is based on estimated construction costs

of $80 per square foot. Since Mr. Levinson (a contractor), will build the

facility at cost, and Dr. Jones, another partner, already owns a suitable site,

the project costs should be considerably less. Also, the residential-type

design of the facility means it will cost less to construct than a conventional

hospital. There will be no heavy x-ray equipment, labs, operating rooms, or CAT

Scanners. With industrial revenue bond financing, the project should be able to

be built for under $10 million, reflecting a cost of $60-66 per square foot.

4. The FPC facility is financially feasible. Based on the expected demand

for psychiatric and substance abuse beds in Broward County, coupled with the

unique design and treatment offered by the new facility, FPC can reasonable

expect an occupancy rate of 64 percent and a $160,000 profit during the first

year with an occupancy rate of only 45 percent. It can be financed either

through the issuance of industrial bonds or conventional financing (available at

a rate of 13.75 percent for a 30-year period). The FPC partners are financially

capable of contributing, or raising, any additional equity funds or operating

capital which may be required to build and begin operation of the hospital.

5. Additional factors will contribute to the financial variability of the

FPC hospital. Mr. Levinson, through his other related businesses, will provide

equipment and supplies to the hospital on a discount basis. Dr. Fieve, a

limited partner, can be expected to fill up to 10 beds with research patients,

whose costs would be underwritten by pharmaceutical companies. The four

partners who are local psychiatrists, Drs. Balsam, Israel, Zager, and Jones,

have sizeable local practices; their patients, previously placed in other local

hospitals, can be expected to fill many of the available beds at the new

facility.

6. FPC proposes 20 substance-abuse beds, 40 geriatric psychiatric beds, 25

adult psychiatric beds, and 15 adolescent psychiatric beds, all of which are

short-term.

7. DHRS, in preliminary free-form action, denied the FPC application for

alleged failure to satisfy the standardized bed-need methodology for short-term

psychiatric and substance abuse beds. DHRS did not explicitly evaluate the

quality of psychiatric care being provided by existing facilities or the quality

of care to be offered by the proposed facility.

8. Most patients at the proposed FPC facility will be referred by the

several psychiatrists who are principals, as will as other psychiatrists in the

community. But due to the unique physical design of the facility and its

innovative philosophy and treatment plan, it is expected that many patients from

outlying counties will be referred by their psychiatrists. Moreover, Dr. Fieve,

who practices psychiatry in New York, will refer patients to the proposed

facility.

9. Most patients will be private-pay or Medicare, not indigent or Baker

Act (involuntary) patients. 5.75 percent of gross patient revenues will be

allotted for indigent care. Since this will apply only to 60 beds (40 beds will

be allotted for Medicare patients), the actual percentage expended on indigent

patients rises to 9.5 percent.

10. Only those patients meeting specific criteria will be admitted to the

facility. The primary criteria are that the patients must be voluntary and be

able to function within the hospital's unique open milieu. Patients who are

homocidal or overtly dangerous to others will not be admitted. A patient who,

once admitted, becomes violent or dangerous to others, will be transferred to a

facility with a more controlled and restricted environment. Patients requiring

acute detoxification services will not be admitted.

11. Because the FPC facility will be a free-standing psychiatric hospital,

it will be ineligible for Medicaid reimbursement. This distinction (for

Medicaid reimbursement purposes) between attached and free-standing hospitals,

is a curious, even confounding, one. The basis for it was not explained at

hearing.

12. The FPC facility will charge rates which are competitive, if not lower

than, those charged by other psychiatric hospitals in Broward County.

13. The FPC facility will have an admission policy unique among

psychiatric hospitals in Broward County. Indeed, this policy - less restrictive

than those in force at other hospitals is one of the motivating reasons behind

the new hospital. 1/ Under the FPC admission policy, patients (otherwise

appropriate for admission) will be admitted on evenings and weekends, regardless

of whether the patients' ability to pay can be immediately verified.

14. The FPC facility will serve as a research and training center for

students, interns, and resident psychiatristsaining affiliations will be

actively sought with medical and osteopathic schools. Because of the facility's

unique design, philosophy, and treatment program, it is reasonable to expect

that it will become recognized as a place of innovative treatment for patients

suffering from psychiatric illness or substance abuse.

15. The State Health Plan has no application since it does not address the

need for psychiatric beds in Broward County and the information in the plan is

obsolete. FPC's proposed facility is generally consistent with the District 10

(Broward County) Local Health Plan, although that plan indicates that priorities

should be given applicants proposing to convert under-utilized acute care beds

to psychiatric beds. 2/

16. The physical design, philosophy, and treatment approach of the FPC

facility will provide a needed alternative to the existing and approved

psychiatric facilities in Broward County. The physical design is patterned

after the well known Menninger Clinic, in Minnesota, and is designed to be

conducive to and complement effective psychiatric care. Each of the four

patient groups (geriatric, adolescent, adult, and substance abuse) will be

housed in separate free-standing or home-like "villas". These villas will be

located on a spacious, attractively landscaped 10-acre wooded site, which will

look more like a college campus than a psychiatric hospital. There will be no

locked wards or security guards to restrain patients, who will be voluntary and

free to leave when they please. They will sleep in their villa rooms. All

therapeutic activities will take place on the grounds or in the activity

pavilion. There will also be medical and administrative pavilions and a dining

pavilion, all of which will be connected to the villas by a network of covered

walkways. Patients will freely participate in a spectrum of leisure and

recreational activities which - in themselves - have therapeutic benefits. The

facility will have a jogging track, swimming pool, tennis court, basketball

court, gymnasium, exercise rooms, picnic areas, and a fresh water lake.

Patients will be given maximum freedom of movement in an atmosphere designed to

be aesthetically pleasing and affect patients in a positive way. It will be the

least restrictive environment available in Broward County for providing in-

patient psychiatric care.

17. The philosophy and treatment approach of the FPC facility will be new

and innovative - significantly different from that provided by existing

psychiatric facilities in the county. Diagnosis and treatment activities will

be conducted by integrated, interdisciplinary teams of psychiatrists and health

care professionals. The various patient groupings will receive specialized

psychiatric treatment. The FPC facility will have the only in-patient

specialized psychiatric unit for geriatric patients in the county.

18. This will be the first psychiatric hospital in Broward County designed

and built, from the outset, solely to serve and treat psychiatric patients.

Because of the facility's design and treatment philosophy, patients will be

treated with deference, respect, and trust; it will be a place where patients'

depleted self-confidence and self-esteem can be gently nurtured. The facility's

environment will be hopeful, humane, and - insofar as possible -

deinstitutionalized. Patients will not be warehoused, locked in wards, or

isolated in smoke-filled day rooms with nothing to do but watch television.

Instead, they will be free to engage in a variety of enjoyable and challenging

activities. This is described as the holistic approach to psychiatric

treatment. It provides patients with milieu environmental therapy - which

requires ample space, a variety of engaging activities for patients, and a

positive atmosphere which is neither frightening nor intimidating. Unlike

patients in acute care hospitals, most psychiatric in-patients, who suffer from

acute anxiety or depression, are physically strong and able to actively engage

in leisure and recreational activities. When they are able to do so, they

receive therapeutic benefits; they experience a sense of accomplishment and

self-worth. With positive feelings about themselves, they are more able to face

and cope with their problems. These are critical factors to their recovery and

return to the community. The basic concepts embraced by the FPC facility have

proven successful elsewhere, such as at the Menninger Clinic, Anclote Manor in

Tarpon Springs, Florida, and the Florida Mental Health Institute. But there is

nothing like it in Broward County.

II.

Existing Facilities: Quality

19. Because of insufficient space and physical facilities, no existing or

approved psychiatric hospital in Broward County - whether attached to a general

hospital or free-standing - provides or is capable of providing milieu

environmental therapy. All existing psychiatric hospitals are converted nursing

homes, motels, or hospital wings. Although most admissions are voluntary, all

of the psychiatric wards are locked, except for Ft. Lauderdale Hospital, which

has one unlocked unit. Patients have little freedom of movement. Their access

to the outdoors is limited and there are virtually no outdoor recreational

activities available - although patients are sometimes bussed to nearby beaches

and parks. Because the existing free-standing psychiatric hospitals are "locked

in" by urban development, they cannot easily expand their facilities to provide

outdoor leisure and recreational activities. Even existing parking space is

limited. Patients, for the most part, resign themselves to lying in hospital

beds (despite their physical vigor) or sitting in smoke-filled day rooms where

they do little but watch television. Therapy consists of occasional visits by

their psychiatrists and the administration of psychotropic drugs. This

institutional environment, which can be harsh, unfriendly, and intimidating to

patients, is not conducive to providing the most effective psychiatric care to

patients.

20. Prospective patients are often repelled by these conditions and the

drab, uninviting atmosphere. As a consequence they refuse to admit themselves

to these facilities and their psychiatrists are forced to refer them to

facilities outside of Broward County.

21. Psychiatric patients in existing facilities are not segregated and

treated in accordance with their age or illness groupings. As a result,

adolescents are often mixed with geriatrics - which is not conducive to

providing therapy to either group. Specialized treatment programs are not

systematically developed and provided patient groupings. Although Broward

County has a large and expanding population of people 65 years or older, there

is no specialized treatment program for geriatric patients.

22. No existing or approved psychiatric facility in Broward County serves

as a research or training center for the treatment of psychiatric patients.

There is no evidence that any facility has expended resources for that purpose.

III.

Existing Facilities: Availability and Accessibility

23. The existing psychiatric hospitals in Broward County are regularly

crowded and frequently unavailable for new admissions. These include Hollywood

Pavilion, Broward General Medical Center, Florida Medical Center, and Imperial

Point Hospital. Existing substance abuse facilities, including Humana Hospital,

Starting Place, the See, and the Care Programs at Memorial Hospital and Ft.

Lauderdale Hospital are generally full and have patient waiting lists.

24. Broward General Hospital serves as a central receiving hospital for

acutely disturbed psychiatric patients. As stated by Dr. John Davison, Director

of Emergency Services at Broward General - whose testimony is accepted as

unbiased, credible, and persuasive - there is an urgent need for more

psychiatric beds in Broward County. At Broward General, it typically takes

three days to find a bed for a patient - and there are waiting lists at area

hospitals for private/pay patients. Often patients must be strapped to

emergency room beds and placed in emergency room hallways - where they sometimes

languish for days - because of lack of space at Broward General and other area

hospitals. Such treatment of acute psychiatric patients may actually worsen

their condition and certainly does little to assist in their recovery.

25. Existing psychiatric hospitals which have beds available are often, in

actuality, inaccessible because of financially restrictive admission policies.

They refuse to accept patients until insurance and financial ability to pay can

be verified. In practice, this policy renders their beds unavailable to most

patients (who cannot post immediate cash deposits) during evenings and weekends.

IV.

Need For The FPC Psychiatric Hospital

26. DHRS normally, absent exceptional circumstances, will not issue a CON

unless a need for additional beds is shown by the bed-need formula contained in

Rule 10-5.11(25)(d)(3), Florida Administrative Code. This formula computes

numerical short-term bed-need by calculating the projected population (the

latest mid-range population projected five years into the future by the Bureau

of Economic and Business Research of the University of Florida) and allotting 35

beds per 100,000 persons. (Projected 1988 population for Broward County, one of

the fastest growing counties in Florida, is 1,252,660.) The number of existing

and approved short-term beds is then deducted from the numerical bed need,

yielding the number of any new beds needed.

27. DHRS, in preliminarily applying its bed-need formula, deducted an

incorrect number of "existing and approved" short-term beds. (DHRS relied on

numbers derived largely from figures reported by local hospitals; no independent

verification of the figures was made by DHRS.) Instead, the number of existing

short-term beds established at hearing as reliable is as follows: Florida

Medical Center-58; Hollywood Pavilion-35; and Ft. Lauderdale Hospital-80

(including psychiatric and substance-abuse). Coral Ridge Hospital was

incorrectly assigned 74 short-term psychiatric beds and 12 substance-abuse beds.

In actuality, Coral Ridge has no short-term beds. It offers a unique long-term

care known as "ortho-molecular" treatment to patients, who are drawn from across

the nation and abroad. This treatment, given under the guidance of its medical

director, Dr. Moke Williams, typically continues for a year or more and is given

patients who have not responded to conventional treatment. Few patients at

Coral Ride come from Broward County. Short-term patients who seek admission are

referred to Imperial Point Hospital or other local facilities. Although Coral

Ridge's psychiatric beds are shown on DHRS books as 74 short-term and 12

substance-abuse, the beds are (and have been for sometime) used solely for long-

term treatment. There is no evidence DHRS has taken, or will take, any action

to force Coral Ridge to use its beds for short-term, as opposed to long-term

treatment.

28. DHRS, in initially applying the formula, determined that only 15

additional short-term beds were needed. When the formula is recomputed using

the more correct figures (113 fewer short-term psychiatric beds and 12 fewer

substance-abuse) a 1988 need in excess of 80 short-term psychiatric and 20

short-term substance abuse beds is shown.

29. Apart from the projected need shown by a rigid mathematical formula, a

balanced consideration of the other pertinent criteria of Section 381.494,

Florida Statutes (1983), and Chapter 5-10, Florida Administrative Code,

including accessibility, adequacy, availability, and quality of care of like

existing facilities, indicates that the proposed FPC facility is needed. The

statute and rule being implemented should not be used to prevent construction of

new health care facilities which will provide innovative treatment which is an

alternative to, and of higher quality than, that provided by existing

facilities. This is particularly so when existing facilities, in actuality, are

shown to be regularly filled, have patient waiting lists, and impose restrictive

admission criteria which inflict an unreasonable hardship on those in need of

care. Should construction of the FPC facility be allowed, it is likely that,

through competitive forces, existing facilities will be spurred to improve the

quality of their services. Finally, it has not been shown that, with the

increased 1988 population projection, the financial viability of the existing

facilities will be significantly affected by the construction of the FPC

hospital.

CONCLUSIONS OF LAW

30. The Division of Administrative Hearings has jurisdiction over the

parties and subject matter of this proceeding. 120.57(1), Florida Statutes

(1983).

31. Applications for certificates of need are based on a balanced

consideration of Chapter 10-5, Florida Administrative Code, and the statutory

criteria of Section 381.494(6)(c), Florida Statutes (1983). These criteria

include:

1. The need for the health care facilities and

services and hospices being proposed in relation

to the applicable district plan and state health

adopted pursuant to Title XV of the Public Health

Service Act, except in emergency circumstances

which pose a threat to the public health.

2. The availability, quality of care, efficiency,

appropriateness, accessibility, extent of utili-

zation, and adequacy of like and existing health

care services and hospices in the service district

of the applicant.

3. The ability of the applicant to provide quality

of care.

4. The availability and adequacy of other health

care facilities and services and hospices in the

service district of the applicant, such as out-

patient care and ambulatory or home care services,

which may serve as alternatives for the health

care facilities and services to be provided by

the applicant.

5. Probable economies and improvements in service

that may be derived from operation of joint, co-

operative, or shared health care resources.

* * *

7. The need for research and educational

facilities, including, but not limited to,

institutional training programs and comm-

unity training programs for health care

practitioners and for doctors of osteopathy

and medicine at the student, internship, and

residency training levels.

8. The availability of resources, including

health manpower, management personnel, and

funds for capital and operating expenditures,

for project accomplishment and operation; the

effects the project will have on clinical needs

of health professional training programs in the

service district; the extent to which the ser-

vices will be accessible to schools for health

professions in the service district for train-

ing purposes if such services are available in

a limited number of facilities; the availability

of alternative uses of such resources for the

provision of other health services; and the

extent to which the proposed services will be

accessible to all residents of the service

district.

9. The immediate and long-term financial

feasibility of the proposal.

10. The special needs and circumstances of

health maintenance organizations.

* * *

12. The probable impact of the proposed project

on the costs of providing health services pro-

posed by the applicant, upon consideration of

factors including, but not limited to, the

effects of competition on the supply of health

services being proposed and the improvements

or innovations in the financing and delivery

of health services which foster competition

and service to promote quality assurance and

cost-effectiveness.

13. The costs and methods of the proposed

construction, including the costs and methods

of energy provision and the availability of

alternative, less costly, or more effective

methods of construction.

* * *

(d)1. That less costly, more efficient, or

more appropriate alternatives to such in-

patient services are not available and the

development of such alternatives has been

studied and found not practicable.

* * *

3. In the case of new construction, that

alternatives to new construction, for example,

modernization or sharing arrangements, have

been considered and have been implemented to

the maximum extent practicable.

4. That patients will experience serious

problems in obtaining inpatient care of the

type proposed, in the absence of the proposed

new service.

See Johnson and Johnson, Department of Health and Rehabilitative Services v.

Johnson and Johnson Home Health Care, Inc., __So. 2d __ (Fla. 1st DCA, Opinion

filed March 8, 1984, Case No. AV-441) 6 FALR 2225. When measured by these

criteria, the evidence of record demonstrates that the application at issue

should be granted. The DHRS bed-need formula is satisfied. 3/ Even if the

formula did not show a need for the proposed project, consideration of the

statutory factors including the availability, quality of care, accessibility,

and extent of utilization of like and existing facilities would require the

granting of this application. Moreover, the FPC hospital will serve as a

research and training center, a function not served by existing facilities; will

provide an innovative and improved quality of psychiatric care to in-patients;

will be more accessible and have less restrictive admission criteria than

existing facilities; and, in all likelihood, will spur existing facilities to

improve the quality of their care.

RECOMMENDATION

Accordingly, it is RECOMMENDED that:

1. Petitioner's application to construct a 100-bed free-standing

psychiatric facility (80 short-term psychiatric beds and 20 short-term substance

abuse beds) in western Broward County be granted; and

2. That the certificate of need be expressly conditioned upon fulfillment

of all representations made in the application, as later amended and clarified

at hearing. In particular, the proposed facility must be built on a wooded and

attractively landscaped site of at least 10 acres and, from the outset, contain

the full spectrum of leisure and recreational facilities described. As

promised, the admissions policy must expressly provide that if a physician

determines an emergency patient should be admitted, the patient will be admitted

without delay, regardless of ability to pay and regardless of the time or day.

If, after being admitted, it is determined that a patient lacks ability to pay,

the patient will continue to receive treatment until he or she can be

transferred to an appropriate facility.

DONE and RECOMMENDED this 27th day of September, 1984, at Tallahassee,

Florida.

DONE and ORDERED this 27th day of September, 1984, in Tallahassee, Leon

County, Florida.

___________________________________

R. L. CALEEN, JR., Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the Division

of Administrative Hearings this 27th

day of September, 1984.

ENDNOTES

1/ The FPC partners, who are local psychiatrists, were continually frustrated

and dismayed by the obstacles they faced when attempting to admit patients to

area psychiatric hospitals on weekends or during evening hours. Because the

hospitals could not immediately verify the patient's ability to pay, they would

not be admitted.

2/ Before filing their applications, petitioners asked area hospitals to

convert existing under-utilized acute care beds to psychiatric beds to relieve

over-crowding. The hospitals rejected their request.

3/ Except for the required adjustment to the number of existing and approved

beds, petitioners have not shown, by convincing evidence, that either the

formula or its components are inappropriate for application here.

COPIES FURNISHED:

Kenneth G. Oertel, Esq.

646 Lewis State Bank Bldg.

Tallahassee, FL 32301

James M. Barclay, Esq.

1317 Winewood Blvd.

Bldg. 2, Suite 256

Tallahassee, FL 32301

Eric B. Tilton, Esq.

702 Lewis State Bank Bldg.

Tallahassee, FL 32301

William E. Hoffman, Jr., Esq.

Richard Shackelford, Esq.

2200 First Atlanta Tower

Two Peachtree St., N.W.

Atlanta, FA 30383

Cynthia S. Tunnicliff, Esq.

410 Lewis State Bank Bldg.

Tallahassee, FL 32301

David Pingree, Secretary

Department of HRS

1323 Winewood Blvd.

Tallahassee, FL 32301

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended

Order. All agencies allow each party at least 10 days in which to submit

written exceptions. Some agencies allow a larger period within which to submit

written exceptions. You should contact the agency that will issue the final

order in this case concerning agency rules on the deadline for filing exceptions

to this Recommended Order. Any exceptions to this Recommended Order should be

filed with the agency that will issue the final order in this case.