STATE AGENCY ACTION REPORT CON APPLICATION FOR …STATE AGENCY ACTION REPORT CON APPLICATION FOR...

STATE AGENCY ACTION REPORT

CON APPLICATION FOR CERTIFICATE OF NEED

A. PROJECT IDENTIFICATION

1. Applicant/CON Action Number:

Pasco-Pinellas Hillsborough Community Health System, Inc./ CON #9975 2400 Bedford Road Orlando, Florida 32803

Authorized Representatives: Michael Schultz, President & CEO AHS Florida Region and Diane Godfrey, Regional Director AHS Florida Region

(407) 303-7933 BayCare of Southeast Pasco, Inc./CON #9977 16331 Bay Vista Drive Clearwater, Florida 33760

Authorized Representative: Steve Mason, President & CEO

(727) 820-8002

2. Service District/Subdistrict

District 5/Subdistrict 2 (Eastern Pasco County)

B. PUBLIC HEARING

No public hearing was requested regarding the proposed projects to establish new acute care hospitals in Pasco County. In addition to letters of support submitted by each applicant for its respective project (discussed below), two letters opposing the establishment of a new acute care hospital in Pasco County were received timely by the Agency. One of the two letters was from the Chief Executive Officer (K. Gillette) of Community Hospital of New Port Richey

CON Action Numbers: 9975 and 9977

2

and the other was by the Chief Executive Officer (S. Rector) of Regional Medical Center Bayonet Point. Attached to the letters was an analysis prepared by Richard A. Baehr & Associates regarding need for a new hospital in Pasco County. Capsulated in its executive summaries and conclusions, each analysis offers common themes arguing against a need for a new acute care hospital. The analysis indicates that population growth does not support an additional hospital; the approval of another new hospital to serve some portion of this population is premature and that the project will not improve access to any population, including the medically indigent population. With Community Hospital of New Port Richey relocating to the Trinity area and the new St. Joseph’s Hospital North facility, the two are likely to jointly serve some of the same population now served by existing facilities that this is a market share that will change substantially after the new facilities become operational and approving an additional hospital to serve largely the same area where relative underutilization has been the norm is premature. The opposers believe any approval should be delayed until already approved facilities are in use and utilization can be re-evaluated. Further, the opposers challenge that any significant geographic barriers would be appreciably lifted by CON #9975’s or CON #9977’s proposal or that a meaningful Medicaid or charity care population could better access acute care under the proposals than is already being planned to be served given the current hospital arrangement in the area. It is noted that Pasco-Pinellas Hillsborough Community Health System, Inc. has agreed to provide 12 percent of its patient days to Medicaid, charity and other uncompensated patients annually and BayCare of Southeast Pasco, Inc. has agreed to provide 12 percent of its patient days to Medicaid, Medicaid HMO and charity/indigent patients annually. The fiscal year (FY) 2005 Medicaid provision by the existing District 6, Subdistrict 2 facilites are 10.0 percent Medicaid/Medicaid HMO and 4.2 percent charity/medically indigent patients1. Pasco-Pinellas Hillsborough Community Health System, Inc. (CON #9975): Approximately 141 unduplicated and largely form-type letters of support were submitted by Pasco-Pinellas Hillsborough Community Health System, Inc. for the proposed project to establish a new acute care hospital in Pasco County. Letters of support were received from physicians (91 letters) and others (50 letters) including Florida state legislators as follows: the Honorable A. Joyner (District 18), Florida Senate; the Honorable V. Crist (District 12), Florida Senate; the Honorable R. Schenck (District 44), Florida House; the Honorable J. Legg

1 2005 Hospital Financial Data, AHCA Financial Analysis Unit


3

(District 46), Florida House; the Honorable P. Nehr (District 48), Florida House and the Honorable W. Weatherford (District 61), Florida House. In addition to writing in support of CON #9975, Representatives Legg, Nehr and Weatherford also submit letters of support for co-batched applicant BayCare of Southeast Pasco, Inc. Eight letters of support were submitted by a local chamber of commerce - the Greater Wesley Chapel Chamber of Commerce. Travel distances are discussed in some of the letters of support, with physicians indicating that area patients travel from 30 to 45 minutes to the nearest hospitals. Many of the physicans offering support are not from Pasco County: thirty-seven physicians have offices in Tampa and 17 were from Lutz; eighteen physicians practice in Wesley Chapel; one in Zephyrhills and one in New Port Richey. The applicant indicates that a significant number of its medical staff members practice and reside in the Wesley Chapel service area2. However, this is not verified by physician support letters which show the highest single number of physicans that support the project have Tampa practice addresses (37 of 91). The applicant states it has a longstanding history and positive relationships with, among others, educational institutions such as the University of South Florida (USF) and community colleges3; however, USF letters of support are for co-batched applicant Baycare of Southeast Pasco, Inc, not this applicant and there are no community college letters of support included in the application. BayCare of Southeast Pasco, Inc. (CON #9977): Approximately 323 unduplicated and largely form-type letters of support and 15 signatures by petition were submitted for the proposed project to establish a new acute care hospital in Pasco County. These letters and petition signatures in support of the project were arranged primarily in the following order with key supporters noted: former secretary of the Florida Department of Health (R. Francios) - (one letter); president and executive staff of the University of South Florida (USF) - (four letters), members of the United States House of Representatives (two letters), members of the Florida House of Representatives (six letters); chairperson and member of the Pasco County Board of County Commissioners (two letters); member of the Pinellas County Board of County Commissioners (one letter); director of the Pasco County Health Department (D. Johnson) - (one letter); various business leaders (40 letters); numerous physicians (34 letters); BayCare team members (92 letters); community residents (140

2 Ibid, page# 2. 3 Ibid, page #9.


4

letters); and 15 petition signatures. U.S. House of Representative members that offered support are the Honorable C. W. (Bill) Young (10th District, Florida) and the Honorable G. M. Bilirakis (9th District, Florida). Florida’s 10th congressional district represents largely Pinellas County while the 9th represents parts of Hillsborough and Pinellas but also the western portion (gulf side) of Pasco County. Florida House of Representative members who offered support are as follows: Honorable T. Anderson (District 45); Honorable J. Legg (District 46); Honorable P. Nehr (District 48); Honorable J. Frishe (District 54); Honorable W. Weatherford (District 61) and Honorable R. Glorioso (District 62). In addition to CON #9977, Representatives Legg, Nehr and Weatherford also submit letters of support for co-batched applicant Pasco-Pinellas Hillsborough Community Health System, Inc. (Pasco-Pinellas Hillsborough Community Health System, Inc.). Of note among the business leader letters was support from the president and chief executive officer of the H. Lee Moffit Cancer Center & Research Institute (W. Dalton) and the executive director of the Gulfcoast North Area Health Education Center (J. Lazzara). An incidental number of letters were either not signed or not dated. Most of the business leader letters had addresses in the Tampa-Clearwater area with the following exceptions: Wesley Chapel (two letters); Land O’Lakes (two letters); Dade City (one letter); Hudson (one letter); Port Richey (one letter) and San Antonio (one letter). Some of the 34 physician letters had addresses in the Lutz area with the following exceptions: Zephyrhills (13 letters); Wesley Chapel (10 letters) and Dade City (one letter). Of the BayCare of Southeast Pasco, Inc. team member letters, this is the approximate major Pasco County breakdown: Wesley Chapel (29 letters); Land O’Lakes (23 letters) and Dade City (two letters). Of the 140 community resident letters here is the approximate major Pasco County breakdown: Wesley Chapel (31 letters); Land O’ Lakes (23 letters); Zephyrhills (16 letters); Dade City (six letters); New Port Richey (two letters) and Port Richey (one letter). Letters received in support of this project also indicate that travel times for area residents is between 30 to 45 minutes to the nearest hospital. Letters were in two major form-type groupings. The largest group of form-type letters stressed certain common themes of contention for need: area growth, reputation of the applicant and generally the value and benefit of having a teaching hospital in the planned service area. The other group of form letters is by employees of the applicant’s parent, BayCare Health Systems, Inc.(BayCare), their years with the applicant and the advantages to having a BayCare facility in the planned service area.

C. PROJECT SUMMARY

Pasco-Pinellas Hillsborough Community Health System, Inc. (CON #9975) proposes to establish Wesley Chapel Hospital, a Class I 80-bed


5

acute care hospital in Pasco County, District 5, Subdistrict 2. The application is a joint venture between Adventist Health System Sunbelt Healthcare Corporation (Adventist) and University Community Hospital, Inc. (UCH). The applicant indicates that it will provide non-tertiary, including obstetric and pediatric services, in the proposed hospital.4 The applicant proposes the following conditions: ● The applicant will provide 12 percent of total patient days to Medicaid,

charity and other uncompensated patients, combined. ● The applicant will purchase two (2) neonatal transport isolettes for

use in effecting sophisticated inter-facility transport of suspected high-risk neonates. One isolette will be stationed at Wesley Chapel Hospital (Wesley Chapel Hospital) and the other will be stationed at University Community Hospital (UCH)-Medical Center. Condition conformance will be satisfied by providing a copy of the isolette purchase agreement upon initiation of services at Wesley Chapel Hospital.

● Via an executed transfer agreement between the applicant and UCH-Medical Center, UCH will provide a trained and certified neonatal transport team, part of the UCH Women’s Center neonatal staff, to assure safe transport of babies requiring such transfer from Wesley Chapel Hospital to UCH-Medical Center. Condition conformance will be satisfied by providing the Agency an executed copy of the transfer agreement upon initiation of services at Wesley Chapel Hospital.

● The applicant will contribute $500,000 during the first seven years of operation of Wesley Chapel Hospital to the PALS (Prospective Allied Health Scholarships) program which encourages and assistants high school students to graduate from two-year programs in allied health sciences.

● Any written clinical agreement between UCH and the University of South Florida (USF) College of Medicine will be extended to the proposed Wesley Chapel Hospital to the extent allowable under the agreement. Condition conformance will be measured via UCH supplying the Agency with an affidavit indicating compliance.

● The applicant will assist to establish a Federally Quality Health Center (FQHC) site in Wesley Chapel, facilitating procurement of office space and physican recruitment.

● The applicant will contribute $200,000 to Pasco County to purchase fire/rescue equipment for the Wesley Chapel area. A condition of $100,000 will be made when the first building permit is issued for the

4 Ibid, page# 27


6

medical office complex and another $100,000 contribution will be made when building permit for the hospital is issued.

The projected total project cost is $121,017,163. Total construction costs are projected at $59,880,000 and the project would involve 184,000 gross square footage (GSF) of new construction. BayCare of Southeast Pasco, Inc. (CON #9977) is applying to establish University Hospital5, a Class I 130-bed acute care hospital in Pasco County, District 5, Subdistrict 2. The applicant describes the BayCare Health System, Inc. as a joint operating agreement that includes three community health alliances including the following facilities: Mease Hospital - Countryside (District 5, Subdistrict 3)6, Mease Hospital – Dunedin (District 5, Subdistrict 3)7, Morton Plant Hospital (District 5, Subdistrict 3)8, Morton Plant North Bay Hospital (District 5, Subdistrict 1)9, St. Anthony’s Hospital (District 5, Subdistrict 4)10, St. Joseph’s Hospital [including two other facilities – Children’s Hospital and Women’s Hospital] - (District 6, Subdistrict 1)11, and South Florida Baptist Hospital in Plant City (District 5, Subdistrict 1)12. The applicant offers Appendix C which documents the written agreement between the University of South Florida and BayCare Health, Inc. (a public post-secondary institution in the State University System and the latter a not-for-profit corporation). According to the application, the hospital will be a teaching hospital.13 BayCare states14 the facility will offer non-tertiary, including obstetric and non-specialty pediatric (this will exclude neonatal intensive care and normal newborns) services at the proposed hospital.

5 CON #9977, Appendix C, page # 4. University Hospital is a name used for convenience. The appendix states that BayCare of Southeast Pasco, Inc and USF shall jointly determine the name of the hospital. 6 Mease Hospital – Countryside (License #4378/Cerificate #3140) is licensed for 290 acute care beds, five NICU II beds and five NICU III beds. 7 Mease Hospital – Dunedin (License #4378/Certificate #3140) is licensed for 143 acute care beds and 30 skilled nursing unit beds. 8 Morton Plant Hospital (License #4064/Certificate #2399) is licensed for 609 acute care beds, 54 adult psychiatric beds, 14 child psychiatric beds, 10 NICU II beds and is a Baker Act receiving facility. 9 Morton Plant North Bay Hospital (License #4216/Certificate #3285) is licensed for 102 acute care beds and 20 CMR beds. 10 St. Anthony’s Hospital (License #4215/Certificate #3123) is licensed for 315 acute care beds, 30 skilled nursing unit beds, 50 adult psych beds and is a Baker Act receiving facility. 11 St. Joseph’s Hospital (License # 4292/Certificate #2902) is licensed for 799 acute care beds, 42 adult psychiatric beds, 15 NICU II beds, 27 NICU III beds and is a Baker Act receiving facility. 12 South Florida Baptist Hospital-Plant City (License # 4056/Certificate #2338) is licensed for 132 acute care beds and 15 skilled nursing unit beds. 13 CON #9977, page #4 14 Ibid, page# 23


7

The applicant proposes the following conditions: ● A total of 12 percent of patient days will be provided to Medicaid,

Medicaid HMO and charity/indigent patients. • The proposed project will construct a teaching hospital in

collaboration with the University of South Florida (USF) for the purpose of providing opportunities for education of medical students, residents, and fellows and for allied health care professionals.

The projected total project cost is $308,207,156. Total construction costs are projected at $165,808,049 and the project would involve 476,820 gross square footage (GSF) of new construction.

D. REVIEW PROCEDURE

The evaluation process is structured by the certificate of need review criteria found in Section 408.035, Florida Statutes and rules of the State of Florida, Chapters 59C-1 and 59C-2, Florida Administrative Code. These criteria form the basis for the goals of the review process. The goals represent desirable outcomes to be attained by successful applicants who demonstrate an overall compliance with the criteria. Analysis of an applicant's capability to undertake the proposed project successfully is conducted by evaluating the responses and data provided in the application and independent information gathered by the reviewer.

Applications are analyzed to identify strengths and weaknesses in each proposal. If more than one application is submitted for the same type of project in the same district (subdistrict), applications are comparatively reviewed to determine which applicant(s) best meet the review criteria.

Rule 59C-1.010(3)(b), Florida Administrative Code, prohibits any amendments once an application has been deemed complete. The burden of proof to entitlement of a certificate rests with the applicant. As such, the applicant is responsible for the representations in the application. This is attested to as part of the application in the Certification of the Applicant.

As part of the fact-finding, the health services and facilities consultant Steve Love analyzed the application with consultation from the financial analyst Ryan Fitch who reviewed the financial data; architect Scott Waltz who evaluated the architecturals and the schematic; and Chief of Health Facility Regulation, Jeff Gregg who acted as advisor.

E. CONFORMITY OF PROJECT WITH REVIEW CRITERIA


8

The following indicate the level of conformity of the proposed project with the review criteria and application content requirements found in Sections 408.035, and 408.037, and applicable rules of the State of Florida, Chapters 59C-1 and 59C-2, Florida Administrative Code.

1. Fixed Need Pool

a. Does the project proposed respond to need as published by a fixed

need pool? Or does the project proposed seek beds or services in excess of the fixed need pool? Ch. 59C-1.008(2), Florida Administrative Code.

Certificate of Need (CON) regulations do not contain an acute care bed need methodology. Therefore, no fixed need pool was published for acute care beds in District 5, Subdistrict 2, Eastern Pasco County. Acute care beds may be added at any existing acute care hospital at any time unless that hospital is located in a statutorily defined “low growth county”15. In 2007, the only county in Florida to meet the CON definition of low-growth was Escambia County.

15 Section 408.036 (1)(g), Florida Statutes: A low-growth county is defined as a county that has: (1) A hospital with an occupancy rate for licensed acute care which has been below 60 percent for the previous five years; (2) Experienced a growth rate of 4 percent or less for the most recent three-year period for which data are available, as determined using the population statistics published in the most recent edition of the Florida Statistical Abstract; (3) A population of 400,000 or fewer according to the most recent edition of the Florida Statistical Abstract; and (4) A hospital that has combined gross revenue from Medicaid and charity patients which exceeds $60 million per year for the previous two years.


9

b. If no Agency policy exists, the applicant will be 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 or rule criteria: • Population demographics and dynamics; • Availability, utilization and quality of like services in the district,

subdistrict or both; • Medical treatment trends; and • Market conditions. The following map illustrates the area discussed throughout this report, proximate existing facilities and proposed locations of the two co-batched applicants:


10

Area Map with Existing Facilities and Proposed Sites

Source: Microsoft MapPoint: NOTE: Due to MapPoint configuration distortion, CON #9977 (BayCare) is misrepresented in the map. BayCare’s proposed site is more northern on Bruce B. Downs Boulevard, it is North of State Road 54 and the location is more representative of what the map defines as the Tampa Park Area (but immediately West of Bruce B. Downs Boulevard), slightly closer to and more Southwest (rather than South-Southwest as it appears in the map) of the Wesley Chapel Hospital (CON #9975) site

1. Proposed Wesley Chapel Hospital (Joint Venture – Adventist [Florida Hospital] and University Community Hospital) 2. Proposed BayCare Southeast Pasco Hospital 3. Brandon Regional Hospital 4. Community Hospital of New Port Richey (new site) 5. Florida Hospital Zephyrhills 6. Pasco Regional Medical Center 7. St. Joseph's Hospital 8. St. Joseph's North Hospital (new satellite) 9. Tampa General Hospital 10.Town & Country Hospital 11. University Community Hospital (UCH) 12. UCH-Carrollwood


11

Regarding the availability of acute care beds in the service area, the acute care bed inventory in Subdistrict 2, which contains a portion of Pasco County16, has remained at 259 beds since July of 2003.

Acute Care Bed Inventory District 5, Subdistrict 2

July 2001 through June 2006 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 Acute Care Bed Count 243 259 259 259 259

Source: Florida Hospital Bed Need Projections & Service Utilization by District, for the above indicated years (July 2001 through June 2006). Over the past five years acute care occupancy has averaged around 50 percent during this same time period:

District 5 Subdistrict 2 Acute Care Bed Utilization

July 2001 though June 2006 Facility

2001 -2002

2002 -2003

2003 -2004

2004 - 2005

2005 - 2006

Five Year Average

Florida Hospital Zephyrhills

64.50%

62.11%

56.01%

56.22%

58.44%

59.46%

Pasco Regional Medical Center

42.49%

39.23%

37.93%

39.18%

40.82%

39.93%

Subdistrict 2 Average Occupancy

53.50%

50.67%

46.97%

47.70%

50.27%

49.82%

Source: Florida Hospital Bed Need Projections & Service Utilization by District, for the above indicated years (July 2001 through June 2006). More recent data reported to the Agency, but not yet published, indicates an increase in occupancy for calendar year (CY) 2006:

District 5 Subdistrict 2

Facilities/Bed Counts and Occupancy Calendar Year 2006 Facility

Acute Care Beds

Occupancy 1/06-12/06

Florida Hospital Zephyrhills 139 65.79% Pasco Regional Medical Center 120 41.54% Subdistrict 2 Bed Total and Average Occupancy 259 54.55%

Source: Calendar Year 2006 data reported to the Agency, but not yet published No existing District 5 Subdistrict 2 acute care facility has submitted notification of intent to add acute care beds. The following chart graphically illustrates this five-year occupancy trend from June 2001 through July 2006.

16 Section 59C-2.100 (3)(e)2., Florida Administrative Codes defines subdistrict 5-2 as consisting of the eastern portion of Pasco County lying within Census County Divisions 005, 010, 015, and 030.


12

District 5/Subdistrict 2 Acute Care Bed Occupancy

0.00%

10.00%20.00%

30.00%

40.00%

50.00%60.00%

70.00%

2001 -2002 2002 -2003 2003 -2004 2004 - 2005 2005 - 2006

Five Year Period

Per

cent

Occ

upan

cy

Florida Hospital Zephyrhills Pasco Regional Medical CenterSubdistrict 2 Average Occupancy

Source: Florida Hospital Bed Need Projections & Service Utilization by District for above indicated years. As illustrated above, acute care beds are available in the service area at both facilities. However, a high percentage of Pasco County residents are out-migrating to Hillsborough County facilities. As will be discussed later in this section of the report, over 50 percent of Pasco County residents living in the ZIP code areas prosped to be both applicants primary service areas are out-migrating. Both applicants contend that population growth in the area supports need for an additional acute care facility in the eastern portion of Pasco County. Population growth estimates are presented by both applicants for their primary and secondary service areas: Pasco-Pinellas Hillsborough Community Health System, Inc. (CON #9975) presented population estimates for its proposed Wesley Chapel primary service area (PSA), which consists of ZIP codes 33543, 34639, 33576, 33541 and 33544 to increase from 89,141 in 2006 to 113,397 in 2011, or by 27.2 percent. These estimates are based on population projections from Claritas, Inc. according to the applicant. The application further indicates the Pasco County portion of ZIP code 33559 is also part of the PSA17. However, the applicant’s color coding arrangement does not distinguish that ZIP code 33559 absorbs any of Pasco County18. In the applicant’s proposed secondary service area

17 CON #9975, page#12 18 Ibid, page #13


13

(SSA) consisting of the northern portion of Hillsborough County in ZIP codes 33549, 33559 and 33647 growth estimates during this time frame are slightly less at 24 percent, from 67,630 or 83,874. The applicant’s map indicates some of ZIP code 33549 is in Pasco County. BayCare of Southeast Pasco, Inc. (CON #9977) presented population estimates for its proposed PSA which includes the residents of a seven-mile radius from it proposed site. Although ZIP codes were not used to define this area, using a map submitted by the applicant,19 it appeared to consist of all or portions of the following ZIP codes: 33543, 33544, 33549, 33559, 33647, 34631 and 34639. ZIP codes 33549, 33559 and 33647 are located in northern Hillsborough County. ZIP codes 33543, 33544, 3463120, and 34639 are located in eastern Pasco County. This applicant also uses Claritas population projections and states that its PSA population is estimated to increase from 105,480 to 138,134, or by 31 percent, from 2006 to 2011. Following is a comparison of proposed service area population projections increases21 from both co-batched applicants based on Claritas data for selected age cohorts between 2006 and 2011:

Comparison of Pasco-Pinellas Hillsborough Community Health System, Inc -Florida Hospital Wesley Chapel, Inc. (CON #9975) and BayCare of Southeast

Pasco, Inc. (CON #9977) Proposed Service Area Population Projections Between 2006 and 2011

Age Cohort

CON #9975 SA Estimated Increase

CON #9977 SA Estimated increase

15-44 20.2% 22.1% 45-64 32.3% 43.9% 65+ 41.9% 58.5% Total – All Age Cohorts 25.8% 31.0%

Source: CON #9975, page 15 and CON #9977, page 47 The above table indicates both applicants show the highest growth in the 65+ age group, followed by 45-64 age group and then the slowest growth of the three is among the 15-44 age group. This would include the majority of women of child bearing age. CON #9975 estimates the patient days payer mix of approximately 76.9 percent (both Medicare and other managed care combined). CON #9977 estimates the patient days payer mix of approximately 77.0 percent (both Medicare and other managed care combined.). The difference is in each applicant’s

19 CON #9977, page 40. 20 It is noted that from the map provided by the applicant showing the seven-mile radius, a geographically small portion of ZIP code 34631 is shown. However, the applicant notes on page 38 that its service area consists of seven ZIP codes, so this ZIP code is included in all Agency analys.— 21 Both primary and secondary service area populations are considered for CON #9975.


14

arrangement of payers. CON #9975 anticipates 43.5 percent Medicare patient days and 33.4 percent other managed care. CON #9977 anticipates 32.0 percent Medicare patient days and 45.0 percent other managed care. There is overlap in the applicants’ proposed service areas:

Proposed Service Area ZIP Codes

Proposed Wesley Chapel Hospital CON 9975

Proposed BayCare of SE Pasco Hospital

CON 9977 PSA 33543 33543

33544 33544 34639 33549 33541 33559 33576 33647

SSA 33549 34649 33559 34639 33647

Source: CON #9975 and CON #9977

BayCare of Southeast Pasco expects to primarily serve a larger area than the joint venture proposed under CON #9975 by Florida Hospital and University Community Hospital. When the combined primary and secondary service areas are considered for CON #9975, although the geographic area is larger and include more of the same ZIP codes proposed by BayCare, population is not projected to increase at as high a percentage between 2006 and 2011. Although there are some differences in the geographic area each applicant expects to serve, as shown in the ZIP code chart above, the proposed locations of these two projects are within approximately 3.50 miles of each other. Both applicants expect to serve the same Wesley Chapel area of eastern Pasco County. Agency population estimates are projected on a county-wide basis and therefore, are not available for the service area, which consists of the eastern portion of Pasco County. The table below reflects the county, district overall (which includes Pinellas County) and the state overall population projections, as of January 1 of each stated year.


15

Pasco County, District 5 and State

Population Growth Percentages for January 2002 to January 2007 Year-by-Year (Discreet and Not Aggregated)

Total Population 2002 2003 2004 2005 2006 2007 Pasco County 1.024 1.036 1.038 1.043 1.039 1.031 District 1.011 1.014 1.014 1.015 1.015 1.014 Florida 1.021 1.023 1.026 1.024 1.022 1.022

Source: Population Estimates, as published September 2006

Population Growth Rates

0.990

1.000

1.010

1.020

1.030

1.040

1.050

2002 2003 2004 2005 2006 2007

Years

Gro

wth

by

Perc

enta

ge

Pasco County Distritct 5 State

Source: Agency population data published September 2006 The graph immediately below indicates that in the next five years, Pasco County is projected to continue to grow at a faster rate than the district and in four of the next five years faster than the state, with the state matching Pasco County’s growth rate in 2010.

Pasco County, District 5 and State Population Growth Percentages for January 2008 to January 2012

Year-by-Year (Discreet and Not Aggregated) Total Population 2008 2009 2010 2011 2012 Pasco County 1.026 1.023 1.020 1.023 1.023 District 1.013 1.012 1.011 1.012 1.012 Florida 1.022 1.021 1.020 1.019 1.019

Source: Population Estimates, as published September 2006


16

Population Growth Rates

1.000

1.005

1.010

1.015

1.020

1.025

1.030

2008 2009 2010 2011 2012

Years

Gro

wth

by

Per

cent

age

Pasco County Distritct 5 State

Source: Agency population data published September 2006 Both applicants have shown that population growth is expected in their proposed service areas and that the growth in the elderly population, the population that generally has higher acute care admissions, is greater than the percentage of total population growth. Regarding the service area market, two new facilities have been approved to serve a portion of eastern Pasco County. Community Hospital (to be renamed Trinity Medical Centre), is currently located in the western portion of Pasco County and has been approved under CON #9539 to move. In its proposal to relocate, that facility expects to provide services to the Land O’ Lakes area of the county. A second recently approved facility in Hillsborough County, St. Joseph’s North, expects to provide services to the Lutz area. The two co-batched applicants include ZIP codes 33549 (Lutz) and 34639 (Land O’ Lakes) in their overall service areas. There is apparent overlap between the proposed service areas discussed above and the two recently approved new hospitals proposed to serve this area. Either CON #9975 or CON #9977, if approved, could impact these two approved but not yet licensed facilities. The following table illustrates the ZIP codes proposed by the co-batched applicants, as well as the ZIP codes proposed in CON #9610 for St. Joseph’s Hospital North and CON #9539 for the replacement of Community Hospital of New Port Richey (now to be named Trinity Medical Centre):


17

Proposed ZIP Codes CON Approved St. Joseph’s Hospital

North CON #9610

Proposed Wesley Chapel

Hospital CON #9975

Proposed BayCare of SE Pasco

CON #9977

CON Approved Community Hospital of New Port Richey-Trinity

Medical Center CON #9539

33549 Lutz –

Hillsborough

33541 Zephyrhills

Pasco 33543

Wesley Chapel - Pasco 34639

Land O’ Lakes - Pasco

33556

33543 Wesley Chapel

Pasco 33544

Wesley Chapel - Pasco 34690

33612

33544 Wesley Chapel

Pasco 33549

Lutz - Hillsborough 34691

33613

33549 Lutz -

Hillsborough 33559

Lutz -Hillsborough

33618

33559 Lutz

Hillsborough 33647

Tampa - Hillsborough

33624

33576 San Antonio

Pasco 34639- Land O’ Lakes

Pasco

33625 33647 Tampa

34631 Not listed by US Post

Office

33626

34639 Land O’ Lakes

Pasco

34639 Land O’ Lakes

Pasco

Source: Applicant proposals. Note: Secondary Service Areas are listed and city designations are from the United States Postal Service website: http://zip4.usps.com/zip4/citytown_zip.jsp

Both co-batched applicants propose to serve ZIP code 33549, a ZIP code St. Joseph’s Hospital North expects to serve and both propose to serve ZIP code 34639, a ZIP code both St. Joseph’s Hospital North and Community Hospital of New Port Richey-Trinity expect to serve. Four of BayCare of South East Pasco’s proposed service area ZIP codes are located in Pasco County. Land O’ Lakes is more western than the others. Five of the proposed Wesley Chapel ZIP codes are in Pasco County, with one in Zephyrhills, where Florida Hospital Zephyrhills is located. The following table illustrates the distance in miles between the existing facilities and proposed sites:


18

Distance in Miles – Existing Facilities and Proposed Sites

Community Hospital of New Port Richey (new site-Trinity Medical Centre)

Florida Hospital-Zephyrhills

Pasco Reg. MC

Proposed Wesley Chapel Hospital -Adventist and University Community

Proposed BayCare Hospital of SE Pasco

St. Joseph's North Hospital North

UCH-Carrollwood

Univer. Comm. Hosp. (UCH)

Community Hospital of New Port Richey (new site), Trinity, Florida 36.7 38.4 24.5 21 15.9 25.6 24.5 Florida Hospital-Zephyrhills 36.7 7.1 12.2 15.7 27.9 34.3 24 Pasco Regional Medical Center 38.5 7.1 14.4 17.9 29.8 36.2 29.4 Proposed Wesley Chapel Hospital (Adventist and Univ. Community) 24.7 12.2 14.4 3.5 16 22.4 15.6 Proposed BayCare Hospital of SE Pasco 21.2 15.7 17.9 3.5 12.1 18.9 12.1 St. Joseph's North Hospital (new site), Lutz, Florida 15.9 27.9 29.8 16 12.1 8.6 9.8

UCH-Carrollwood 25.6 34.3 36.2 22.4 18.9 8.6 8.5 University Community Hospital (UCH) 24.5 24 29.4 15.6 12.1 9.8 8.5

Source: Mapquest The Wesley Chapel Hospital (Adventist and University Community Hospital joint venture) site is approximately 16.0 miles to St. Joseph’s Hospital North and approximately 24.5 miles to Trinity Medical Centre (new relocation site for Community Hospital of New Port Richey). The nearest licensed and operational acute care hospital to the Wesley Chapel Hospital site is Florida Hospital-Zephryhills; it is approximately 12.2 miles distant. The BayCare of SE Pasco site is approximately 12.5 miles to St. Joseph’s Hospital North and approximately 21.0 miles to Trinity Medical Centre (new site for Community Hospital of New Port Richey). The nearest licensed and operational acute care hospital to the BayCare of S.E. Pasco site is University Community Hospital; it is approximately 12.1 miles distant. Both applicants cite population growth, traffic congestion and the centrality of its proposed site as evidence of need for the project. As stated earlier and in more detail later in this section, only CON #9975 referenced a documented traffic study (by Diaz Pearson & Associates); however, the study was not included in the application for Agency review. Housing developments in this market are discussed by both applicants. It is notable the co-batched applicants produce considerable variance in


19

planned residences based on their planned service areas. Pasco-Pinellas Hillsborough Community Health System, Inc. estimates 99,63922 housing units in its PSA with an increase of 46,949 residents by 2011, whereas co-batched applicant Baycare of Southeast Pasco, Inc. estimates 55,00023 yet to be built residences with an increase of 32,65424 residents in its seven-mile radius service area. While the difference in population is relatively close considering that Pasco-Pinellas Hillsborough Community Health System absorbs additional ZIP codes if its secondary service area is considered, the difference in housing units is relatively dramatic, considering that these two co-batched applicants share six ZIP codes, the majority of their service areas. An increase of 14,295 residents should not result in an additional 44,639 housing units. Pasco-Pinellas Hillsborough Community Health System leans heavily on housing growth as defined by developments of regional impact (DRI) and master unit planned developments (MUPDs)25 to justify its need contention. Both applicants contend that the population growth discussed above is translating to worsening traffic congestion, as highway capacity is outstripped, and plans for new roads or expansions of existing roads have not kept pace. This traffic congestion is stated to be a barrier to health care access. Pasco-Pinellas Hillsborough Community Health System acquired a travel time study, stating it sought the services of traffic engineers at Diaz Pearson and Associates26. A table is provided27 to indicate that by 2012, the time to travel to the hospital that currently serves this ZIP code area (University Community Hospital) from the Wesley Chapel area of eastern Pasco County ranges from 29.6 minutes (from ZIP code 33559) to a maximum of 80.8 minutes (from ZIP code 33541). Pasco-Pinellas Hillsborough Community Health System goes further to indicate that by 2012, five of the six ZIP codes in its PSA “will not be within 25 to 30 minutes of an acute care hospital”28.

22 Ibid, page# 15 23 CON #9977, page# 44 24 Ibid, page# 62 25 CON# 9975, page# 15 26 Ibid, page# 23 27 Ibid, page# 26 28 Ibid


20

Wesley Chapel Projected Drive Times Minutes from Certain ZIP Codes to Existing and Approved Hospital Sites 2012

Population Based ZIP Code Centroids

Hospital Site

33541 Zephyrhills ZIP code*

33543 Wesley Chapel

ZIP Code

33544 Wesley Chapel

ZIP Code

33559 Lutz ZIP

Code

34639 Land

O’Lakes ZIP

Code

33576* San

Antonio ZIP

Code Proposed Site for CON #9975 w/in approx. 3.50 miles of proposed site for CON #9977

35.6

14.6

7.5

17.4

24.0

21.2 UCH- Medical Center 80.8 47.0 68.9 29.6 33.0 37.4 Florida Hospital – Zephyrhills 18.0 37.6 48.9 50.9 56.5 40.3 Pasco Regional MC 33.1 40.4 35.4 50.5 51.8 27.2 St. Joseph’s Hospital - Tampa 98.7 77.6 70.5 57.9 83.6 70.0 St. Joseph’s – North (CON 9610)

70.0

54.8

47.7

30.1

26.4

45.1

Trinity Medical Centre (CON 9539)

91.2

75.9

76.2

51.3 47.6

66.3

Tampa General Hospital 95.3 78.2 71.1 55.7 61.0 68.6 UCH - Carrollwood 97.0 80.0 68.7 68.6 64.8 66.3

Source: CON #9975, page 26 referencing Diaz Pearson and Associates, March 15, 2007 study, modified to include BayCare information and CON numbers Note: ZIP Codes 33541 and 33576 are not listed by BayCare of Southeast Pasco in its proposed service area. The other four ZIP codes, are however in BayCare’s proposed area.

In its application29, it is stated that, “Diaz Pearson projected future drive times based on Florida Department of Transportation counts of current and expected traffic loads in conjunction with roadway capacity, algorithms and information regarding proposed upgrades”. The applicant included neither a copy of the study, nor a definition for “proposed upgrades”. During a site visit to the proposed locations of both projects, Agency staff noted traffic conjestion, with frequent stops and some wait times, along major roadways at a non-peak hour (around 2:30 to 3:00 p.m.). Pasco-Pinellas Hillsborough Community Health System, Inc (CON #9975) plans to construct Wesley Chapel Hospital to the East of the Intersection of I-75 and the State Road 54 exchange, approximately adjacent to but on the Northern side of State Road 54, at approximately the main entrance to the Sandlebrook Resort, Wesley Chapel, Florida 33543. The location is also described as just off State Road 54 and just to the West of Tupper Road30. The applicant states that by placing a facility near the two major north-south transportation corridors in the area, Interstate-75 and Bruce B. Downs Boulevard, availability and accessibility to health care would improve for area residents. The applicant states that additional emergency department capacity is needed in eastern Pasco County, and includes a letter31 from the

29 Ibid 30 CON #9975, page #8 31 Ibid, Tab# 8


21

emergency services director of Pasco County to Florida Hospital Zephyrhills addressing a county-wide lack of emergency medical services (EMS) units due to holding of patients at all five county hospital emergency departments (EDs). No information or protocol was offered to show that hospitals have responded to and made efforts to address this challenge. The applicant states that residents in its planned service area (PSA) currently travel for work, shopping and health care to Tampa32 It further states residents are bypassing existing subdistrict facilities (Florida Hospital-Zephyrhills and Pasco Regional Medical Center) to seek hospital care in Hillsborough County33. The applicant also states that some Zephyrhills patients will continue to travel to Tampa for care despite the presence of the Wesley Chapel Hospital should the CON be awarded (though no number of patients or likely percentage is offered). As shown below, the majority of patients in the applicants proposed service area (which includes protions of northern Hillsborough County) were discharged from Hillsborough County facilities including University Community’s two hospitals and BayCare system hospitals.

CON #9975 - Non-Tertiary Discharges from All Eight Service Area ZIP Codes 33541, 33543, 33544, 33549, 33559, 33576, 33647, 33639

July 2005 Through June 2006 District County Facility Discharge %

6 Hillsborough University Community Hospital 45.73% 6 Hillsborough St. Joseph’s Hospital 23.04% 6 Hillsborough Tampa General Hospital 8.49% 5 Pasco Florida Hospital-Zephyrhills 7.17% 6 Hillsborough University Community Hospital –Carrollwood 2.64% 5 Pasco Pasco Regional Medical Center 2.61% 6 Hillsborough H Lee Moffitt Cancer Center & Research Institute Hospital 1.86% 6 Hillsborough Brandon Regional Hospital 1.14%

Total 92.68% All Others 7.32% Source: Florida Center for Health Information and Policy Analysis NOTE: Data were from all 8 ZIP codes in proposed service area including those in central Pasco and northern Hillsborough Counties Non-tertiary patients residing in the proposed service area were discharged most frequently (45.73 percent) from the applicant’s affiliate (and sponsoring member), University Community Hospital. Co-batched applicant BayCare of Southeast Pasco, Inc’s facility, St. Joseph’s Hospital, experienced the second highest rate of discharges for this population (23.04 percent). Both facilities are located in Hillsborough County. There were a total of 17,367 acute non-tertiary discharges from the applicant’s proposed service area, which includes east and central Pasco

32 Ibid, page# 22 33 Ibid, page# 23


22

and northern Hillsborough Counties, during the 12-month period ending June 2006 that accounted for 74,469 patient days. Of those 17,367 total discharges, 7,662 patients (44.12 percent) were residents of Hillsborough, not Pasco County. Hillsborough County residents accounted for 37,698 of the total patient days or 50.62 percent. The chart below illustrates Pasco County only discharges and patient days. CON #9975 – Discharges and Patient Days from Applicant’s Pasco County Portion

of Service Area in ZIP Codes 33541, 33543, 33544, 33576, 34639 July 2005 though June 2006

Hospital Hospital County # Discharges Patient Days All Children’s Pinellas 72 509 Brandon Hillsborough 83 244 Community Hospital Pasco Subdist 1 29 135 Florida Hospital Zephyrhills Pasco Subdist 2 2,509 8,895 Lakeland Polk 51 212 Mease Countryside & Dunedin Pinellas 52 212 Morton Plant Pinellas 41 101 Morton Plant North Bay Pasco Subdist 1 10 43 H. Lee Moffitt Hillsborough 163 750 Pasco RMC Pasco Subdist 2 1,097 3,587 Regional MC Bayonet Point Pasco Subdist 1 28 135 St. Joseph’s Hillsborough 1,552 5,853 Tampa General Hospital Hillsborough 581 2,812 Town and Country Hillsborough 42 122 University Community Hospital Hillsborough 2,937 11,284 University Community Hospital -Carrollwood Hillsborough 163 604 Other Hospitals Not Applicable 295 1,273 Total Not Applicable 9,705 36,771 Pasco County Residents not seeking health care from Subdistrict 2 Eastern Pasco County Hospitals

Not Applicable

6,099

24,289 Source: Florida Center for Health Information and Policy Analysis NOTE: This chart provides discharges and patient days for five of the eight ZIP codes described by the applicant as its service area.

Approximately 62.84 percent of Pasco County residents (from the applicant’s planned service area) migrated to non-Pasco County facilities (mostly Hillsborough County) for inpatient services. Of the 9,705 Pasco County residents in the Pasco portion of the applicant’s service area that received inpatient services, 6,099 of them received those services at non-Pasco County hospitals. 3,606 Pasco County residents in these ZIP codes obtained services from the two Pasco County facilities Florida Hospital-Zephyrhills and Pasco Regional Medical Center. The applicant expects to continue to serve some portion of these out-migrating residents in the proposed new facility.

The applicant expects to achieve an average daily census in the proposed 80-bed acute care hospital of 56 by its third year of operation with occupancy at 70 percent. As noted earlier, the applicant expects to capture some portion of the 62.84 percent out-migrating patients. The applicant’s Schedule 5 projections show the following:


23

Wesley Chapel Hospital Projected Utilization

80-bed Acute Care Hospital Year 1 (2011) Year 2 (2012) Year 3 (2013) Discharges 2,350 3,670 5,103 Patient Days 9,418 14,717 20,478 Average Daily Census 25.8 40.3 56.1 Occupancy 32% 50% 70% Source: CON #9975, Schedule 5 The top two providers of obstetric (OB) care to these residents are the two co-batched applicants in their affiliate hospitals. OB34 Discharges in ZIP Codes 33541, 33543, 33544, 33549, 33559, 33576, 33647,

34631 & 34639 July 2005 through June 2006

Hospital

# Acute Beds

Discharges

University Community Hospital 430 46.33% St. Joseph’s Hospital 799 30.46% Tampa General Hospital 754 7.46% Florida Hospital Zephyrhills, Inc. 139 6.88% Pasco Regional Medical Center 120 2.93% Brandon Regional Hospital 305 2.18%

Other Hospitals 3.76% TOTAL 2,547 100.00% Source: Florida Center for Health Information and Policy Analysis

Regarding the anticipated payer market and availability of beds and services to the medically indigent population, the applicant states that the sponsoring members Adventist Health System Sunbelt Healthcare Corporation and University Community Hospital, Inc. each have on-going policies and procedures for serving all patients in a non-discriminatory fashion, including those in financial need. The applicant reports35 $169,473,929 Medicaid and charitable deductions in fiscal year (FY) 2005. The applicant goes further to state it will maintain a commitment at the Wesley Chapel Hospital to serve the medically underserved. While the applicant claims that University Community Hospital, Inc. (UCH) plays a role as a safety-net provider, it is noted that according to Agency records, UCH is not classified as a Disproportionate Share Hospital (DSH) by the Medicaid program. Of the sponsoring members, Adventist and University Community Hospital, their individual Medicaid and charity care percentages should be noted. The typical Adventist (a total of nine facilities statewide) facility provision was 7.3 percent during FY 2005, whereas the subdistrict’s average provision was 10.0 percent. It is recognized that the sponsoring member Adventist’s Florida Hospital-Zephyrhills had a 10.5 percent Medicaid during FY 2005. Also, the other sponsoring member,

34 Includes all discharges in DRGs 370-384 35 Ibid, page# 86, Table 30


24

University Community Hospital, had a Medicaid percentage of 9.7 percent for the same period. The applicant states that the proposed facility (Wesley Chapel Hospital) would provide health care without regard to a patient’s financial status. The applicant shows that it expects the following percentage of patient days by payer type:

Percentage of Patient Days Year Ending12/31/2013

Medicaid 8.90% Medicaid HMO 0.00% Medicare 43.50% Medicare HMO 0.00% Commercial 4.10% Other Mgd. Care 35.40% Self Pay 8.20% Source: CON #9975, Schedule 7A, Year 3 As the chart above illustrates, the applicant intends to primarily serve patients in the Medicare category and next primary the “other managed care” category, third being Medicaid patients and running close to that, self-pay. Medicare patients are not typically restricted in their choice of hospital. This differs from co-batched applicant Baycare of Southeast Pasco, Inc. in that this applicant will primarily serve Medicare, whereas Baycare of Southeast Pasco, Inc intends to primarily serve “other managed care”. Regarding other market trends including availability of medical staff, this applicant states that there is a physician shortage36, in this area and indicates a willingness to enter into necessary arrangements to ensure appropriate physician and other specialist coverage at Wesley Chapel Hospital. The U.S. Department of Health and Human Services (DHHS) has classified the entirety of Pasco County as a Health Professional Shortage Area (HPSA) for primary care37. This physican shortage is further confirmed by the Florida Department of Health (DOH), Office of Health Professional Recruitment38, stating a last HPSA primary care designation date of November 18, 2005, with a HPSA score of eight. This indicates that while a shortage is recognized, the shortage is relatively minimal. Currently the highest HPSA primary care shortage score in Florida is 18 in Franklin County. Currently, the DHHS Bureau of Health Professions would not consider a primary care HPSA score of eight to be sufficient to place a National Health Service Corps (NHSC) scholar,

36 Ibid, page# 87 37 http://hpsafind.hrsa.gov/HPSASearch.aspx 38 http://www.doh.state.fl.us/workforce/recruit1/shortdesig.html


25

indicating that DHHS finds most other areas in Florida and in the nation to be in greater need of NHSC physican placement. Although no acute care access standard is suggested or supported with quality of care reviews regarding access to care by either applicant, it is evident that growth in this area, which is projected to continue, has resulted in traffic congestion that currently restricts access to acute care hospital services for Wesley Chapel area residents. In CON #9610, St. Joseph’s Hospital North is approved to establish a 150-bed hospital. CON #9610 included nine ZIP codes, two of which will overlap with the CON #9975 proposal. These are ZIP codes 33549 in Lutz and 34639 in Land O’ Lakes. It is noted that the applicant has also proposed another Lutz ZIP code 33559, which is near the proposed St. Joseph North site. Based on population totals presented by CON #9975, presuming St. Joseph Hospital North’s projections are met, by 2011; St. Joseph’s Hospital North will be serving approximately 34.61 percent of the population that CON #9975 is proposing to serve. Co-batched applicant, BayCare in CON #9977 does not list the ZIP codes it plans to serve, it simply states there are seven and the planned service area is within a seven mile radius of the hospital site. The applicant, in CON #9977 provides a population of 138,134 within its seven mile radius, by 2011. In reviewing CON #9977 and its Exhibit E (BayCare Southeast Pasco Hospital), presuming that St. Joseph’s Hospital North’s projections can be met, by 2011, St. Joseph’s Hospital North will be serving approximately 31.22 percent of the population that co-batched applicant, BayCare in CON #9977 is planning to serve. As shown at the beginning of this section, 16 acute care beds have been added to this service area within the past five years while occupancy levels, despite a higher rate of population growth that is projected in the


26

next five years, remains on average below 60 percent in existing subdistrict beds. With projected population growth and the expected capturing of a portion of the out-migrating Pasco County residents that are currently receiving services at University Community Hosptal, the applicant could reach occupancy projections of 70 percent by 2013. BayCare of Southeast Pasco, Inc. (CON #9977) plans to locate the proposed new hospital in the Seven Oaks39 development of Wesley Chapel, geographically to the Southeast of the intersection of I-75 and State Road 54, on the West side of the Bruce B. Downs Boulevard, approximately three to four miles toward the South (toward Hillsborough County). This location is approximately 3.50 miles from the proposed site of co-batched applicant Pasco-Pinellas Hillsborough Community Health System, Inc (CON #9975). The applicant indicates ZIP codes 33543, 33544, 33549, 33559, 33647, 34639 and 34631 on its map on page 40 of the CON application as its service area. As the applicant did not actually list the ZIP codes, these were the ZIP codes most readily apparent to the Agency in reviewing the service area map on page 40 of the application. According to the application, the hospital will be a teaching hospital40 as defined under section 408.07(45) Florida Statutes41. Considerable emphasis is placed on the value of establishing a teaching hospital in the subdistrict that is affiliated with USF College of Medicine to expand its residency program rather than need for additional acute care beds in the area. Although the applicant’s affiliate, St. Joseph’s Hospital North, will not be physically located in eastern Pasco County, it will be located in northern Hillsborough. As discussed earlier and shown on maps above, the St. Joseph’s Hospital North campus, will be a new facility located in the southwest portion of both applicant’s proposed service area. The applicant does not discuss why this proposed facility, rather than the CON approved St. Joseph’s North facility, would better address USF’s residency program needs. Letters of support from USF indicate that its mission is to support rural areas in Pasco County. Prior to the omissions deadline, a meeting was held with BayCare Health Systems, Inc. President and CEO, Steve Mason, the Elizabeth Dudek, Deputy Secretary of the Agency’s Division of Health Quality Assurance and Certificate of

39 Ibid, page #15. 40 CON #9977, page #4 41 "Teaching hospital" means any Florida hospital officially affiliated with an accredited Florida medical school which exhibits activity in the area of graduate medical education as reflected by at least seven different graduate medical education programs accredited by the Accreditation Council for Graduate Medical Education or the Council on Postdoctoral Training of the American Osteopathic Association and the presence of 100 or more full-time equivalent resident physicians. The Director of the Agency for Health Care Administration shall be responsible for determining which hospitals meet this definition. .


27

Need unit reviewer, Steve Love. During the course of the meeting, the deputy secretary inquired as to why St. Joseph’s Hospital-North could not be viable teaching hospital site. The BayCare representative stated the St. Joseph’s Hospital North facility was too far along and that an explanation would be included in the application. However, this information was not included in the application. The applicant is proposing to establish a 130-bed acute care hospital. To become a teaching hospital, there must be 100 full-time resident physicians. Assuming the applicant can meet all of the statutory requirements to become a teaching hospital, it would take an undetermined number of years and additional filled beds before it could apply under this statute. The applicant acknowledges that this 130-bed proposal that expects to affiliate with the University of South Florida, would not meet the requirements to become a teaching hospital shortly after opening and that it would be a number of years before it could even apply to become a teaching hospital. Teaching hospitals have also played a critical role in providing services to lower-income populations. The relatively small size of the Pasco County population and the relatively small size of its lower income population would minimize the safety net function of the teaching hospital. The applicant states that the “vast majority” of acute care patients in its seven ZIP code service area seek inpatient services in Hillsborough County42. It further states these patients “elect to travel” to Hillsborough County rather than seek care Pasco County facilities even though there are no access restrictions at Pasco County hospitals43. It is noted that a portion of the applicant’s service area is located in Hillsborough County and so patients are traveling within the county in which they live to obtain services. BayCare believes it will reduce the out-migration of Pasco County residents who are leaving Pasco County to obtain services in Hillsborough County by virtue of its existing relationship with patients, many of whom currently seek care in BayCare facilities in Hillsborough County44. It expects a greater draw of patients because of its relationship with the University of South Florida (USF)45.

42 CON #9977, page #53 43 Ibid, page #54 and 89 44 Ibid, page #39 45 Ibid, page #70


28

The following table illustrates the majority of facilities from which service area residents were discharged from July 1, 2005 through June 30, 2006 and each facility’s share of total service area resident discharges:

CON #9977 - Discharges by Facility from All Seven Service Area ZIP Codes 33543, 33544, 33549, 33559, 33647, 34639 and 34631

June 2005 Through July 2006 District County Facility %

6 Hillsborough University Community Hospital 37.90% 6 Hillsborough St. Joseph's Hospital 18.70% 5 Pasco Florida Hospital Zephyrhills 16.67% 6 Hillsborough The Tampa General Hospital 7.61% 5 Pasco Pasco Regional Medical Center 6.79% 6 Hillsborough H. Lee Moffit Cancer Ctr & Research Inst. Hospital 1.91% 6 Hillsborough University Community Hospital At Carrollwood 0.98%

Total 90.56% All Others 9.44%

Source: Florida Center for Health Information and Policy Analysis. NOTE: Data were from all 7 ZIP codes in proposed service area including those in central Pasco and northern Hillsborough Counties. ZIP code 34631 had not patient days and is not recognized on the U.S. Postal Services website as a ZIP code. With the slight variation in proposed ZIP code areas, discharge data is similar to that discussed above under CON #99745 for Pasco-Pinellas Hillsborough Community Health System, Inc. and shows that 23.46 percent of the residents of these Pasco and Hillsborough County ZIP codes are treated in Pasco County facilities. 18.70 percent of the discharges are from a facility affiliated with the applicant, while 54.57 percent are from a hospital affiliated with co-batched applicant. There were a total of 13,319 acute non-tertiary discharges from the applicant’s proposed service area, which includes east and central Pasco and northern Hillsborough Counties, during the 12-month period ending June 2006 that accounted for 57,669 patient days. Of those 13,319 total discharges, 7,064 patients (53.04 percent) were residents of Hillsborough, not Pasco County. Hillsborough County residents accounted for 12,757 of the total patient days or 22.12 percent. The chart below illustrates Pasco County only discharges.


29

CON #9977 – Discharges and Patient Days from Applicants Pasco County Portion of Service Area in ZIP Codes 33543, 33544, 34639

July 2005 through June 2006 Hospital Hospital County # Discharges Patient Days All Children’s Pinellas 63 475 Brandon Hillsborough 63 195 Community Hospital Pasco Subdist 1 28 133 Florida Hospital Zephyrhills Pasco Subdist 2 787 2,668 Lakeland Polk 18 52 Mease Countryside & Dunedin Pinellas 43 164 Morton Plant Pinellas 35 77 Morton Plant North Bay Pasco Subdist 1 5 26 H. Lee Moffitt Hillsborough 116 516 Pasco RMC Pasco Subdist 2 285 882 Regional MC Bayonet Point Pasco Subdist 1 27 125 St. Joseph’s Hillsborough 1,367 5,159 Tampa General Hospital Hillsborough 449 2,068 Town and Country Hillsborough 37 111 University Community Hospital Hillsborough 2,557 9,721 University Community Hospital –Carrollwood

Hillsborough 149 567

Other Hospitals Not Applicable 226 1008 Total Not Applicable 6,255 23,947 Pasco County Residents not seeking health care from Subdistrict 2 Eastern Pasco County Hospitals

Not Applicable

5,183

20,397 Source: Florida Center for Health Information and Policy Analysis NOTE: This chart provides discharges and patient days for three of the seven ZIP codes described by the applicant as its service area. Approximately 82.86 percent of Pasco County residents (from the applicant’s planned service area) migrated to non-Pasco County facilities (mostly Hillsborough County) for inpatient services. Of the 6,255 Pasco County residents in the planned service area that received inpatient services, 5,183 of them received those services at non-Pasco County hospitals. 1,072 Pasco County residents in these ZIP codes obtained services from the two Pasco County facilities, Florida Hospital-Zephyrhills or Pasco Regional Medical Center. This indicates an 82.86 percent out-migration rate for acute non-tertiary discharges. The applicant expects to achieve a 70 percent occupancy in the 130 proposed beds in its third year of operation, 2013. As noted earlier, the applicant expects to capture some portion of the percent out-migrating patients. Occupancy projections provided in Schedule 5 indicate the following:

BayCare of Southeast Pasco Projected Utilization 130-bed Acute Care Hospital

Year 1 (2011) Year 2 (2012) Year 3 (2013) Patient Days 18,980 28,470 33,215 Occupancy 40% 60% 70% Source: CON #9977, Schedule 5


30

This applicant proposes 50 more acute care beds to serve essentially the same geographic location as co-batched applicant Pasco-Pinellas Hillsborough Community Health System, Inc. and therefore requires more patient days be captured to reach the same 70 percent occupancy rate projections by 2013:

Wesley Chapel Hospital Projected Utilization 80-bed Acute Care Hospital

Year 1 (2011) Year 2 (2012) Year 3 (2013) Patient Days 9,418 14,717 20,478 Occupancy 32% 50% 70% Source: CON #9975, Schedule 5 As noted earlier, historic utilization and projected population trends do not suggest that occupancy expected by either applicant can be reached without capturing out-migrating Pasco County residents. Regarding other market trends including availability of medical staff, the applicant indicates that the most important difference between this application and that of co-batched applicant, Pasco-Pinellas Hillsborough Community Health System is its the affiliation with USF and its medical and allied health programs. It is noted that other State University System post-secondary schools, The University of Central Florida and The Florida International University, have both received legislative approval to establish medical schools. It is probable that residency slots will continue to be a challenge in the midst of increasing medical school programs. Although the applicant suggests that improved care due to its affiliation with USF will result with the approval of this project, this has not been clearly shown. BayCare projects a higher number of patient days from managed care plans than does co-batched applicant, Pasco-Pinellas Hillsborough Community Health System. The applicant provides discussion that an approval of its proposal would enhance local competition46. The applicant states it has a smaller market share of this market (with University Community Hospital having the greatest discharging originating from the service area) and also that the applicant has no affiliate hospital in Pasco County (with Florida Hospital-Zephyrhills belonging to Adventist). However, in light of the applicant’s approved facility approximately 10 miles away, and serving some of the same population, it is not clear that this proposal would improve local competition. Access improvement to the medically indigent is also discussed. The average Medicaid provision for the applicant’s facilities was 14.4 percent during FY 2005, which is above the average provision for Subdistrict 2

46 Ibid, page# 99


31

during this time. The subdistirct average was 10.0 percent. Charity care provisions from the applicant’s facilities were 3.7 percent, which is below the subdistrict average of 4.2. The applicant is proposing to provide a combined Medicaid and charity percentage of 12.0 percent, which would be below the average combined provision for this service area, that being 14.2 percent. This is also true for the co-batched applicant, a combined Medicaid, charity and uncompensated care percentage of 12.0 percent, which would be below the average combined provision for this service area, that being 14.2 percent. The applicant’s charts and graphs stressed population growth and did not address poverty or income data. Both applicants propose conditions that are below the subdistrict’s combined Medicaid and charity care percentage of 14.2 percent. The State’s Department of Health website47, provides the following information regarding income and poverty. Income, Poverty and Uninsured Data by County in District 5 and Statewide

as of 2000 Pasco

County Pinellas County

Statewide

Percent of total population below poverty 10.7 % 10.0 12.5 Percent of families below poverty level 7.6 6.7 9.0 Median Household Income $32,969 $37,111 $38,819 Percent of adults with no health care coverage* 17.7% 17.3% 18.7% Source: Florida Department of Health; Office of Planning, Evaluation and Data Analysis * 2002 Behavioral Risk Factors Surveillance Telephone Survey conducted by the Florida Department of Health, Bureau of Epidemiology. Overall, 34,551 adults were randomly selected statewide and interviewed for the survey; about 500 adults were surveyed in each county. As shown above, more adult residents in Pasco County had healthcare coverage than did adult residents on average in the state, in 2000 even though the median household was lower. There are fewer residents below the poverty level in Pasco County than in the state. The applicant shows that it expects the following percentage of patient days for the following payer types:

47 http://www.floridacharts.com/charts/mapp_report.aspx


32

Percentage of Patient Days by Payer

Year Ending 12/31/2013

Medicaid 8.00% Medicaid HMO 2.00% Medicare 26.00% Medicare HMO 6.00% Commercial 4.00% Other Mgd. Care 45.00% Self Pay 5.00% Other Payers 3.00% Source: CON #9977, Schedule 7A, Year 3

As the chart above illustrates, the applicant intends to primarily serve patients in the “other managed care” category and traditional Medicare patients (combined around 71 percent). This differs from co-batched applicant Pasco-Pinellas Hillsborough Community Health System, Inc., which intends to primarily serve Medicare. While limited access to managed care might be a reason the applicant expects to capture more of the out-migrating Pasco County residents, the applicant did not demonstrate any reason (such as managed care or other limitations or restrictions) why patients are seeking services outside Pasco County. A review of managed care organizations who report to the Agency indicates that both Pasco Regional Medical Center and Florida Hospital Zephyrhills contract with Medicaid, Medicare and commercial managed care providers. Regarding managed care penetration in Pasco County, as of 2002, the latest year for which data was available, the following managed care providers had penetration in Pasco County for Medicare: United Healthcare, 35.4 percent; Humana Medical Plan, 45.5 percent and Well Care HMO, 19.2 percent. The following managed care providers had penetration in Pasco County for Medicaid: Physician Health Care Plans, 36.0 percent; AvMed, 12.1 percent; Humana Medical Plan, 3.8 percent; Well Care HMO 27.0 percent and Healthease of Florida, 21.1 percent. Each applicant essentially based need discussions on a relatively central location within Pasco County, the expected growth of a segment of the Pasco County population, what each believes are potential problems accessing care due to traffic and roadway conditions and the out-migrating Pasco County residents. This segment of the population is expected to continue to grow and a rate higher than the state. Traffic conjestion in this area was confirmed by Agency staff on a site visit to


33

both proposed hospital locations. There is sizable out-migration for non-tertiary acute care services by Pasco County residents of the proposed service areas to Hillsborough County hospitals. In CON #9977 BayCare states that it believes its reputation alone will retain some patients in Pasco County, but University Community Hospital is the Hillsborough County hospital experiencing the most use by Pasco County residents. Either project can reasonably expect to capture a portion of this out-migration. Pasco-Pinellas Hillsborough Community Health System, Inc. (CON #9975) can reasonably expect to capture a greater percentage of this out-migrating population as more area residents are seeking services at University Community Hospital.

2. Agency Rule Criteria

The Agency does not currently have adopted preferences or Rule criteria relating to acute care beds. The acute care rule was repealed as a result of statutory changes made on July 1, 2004 and the repeal was effective April 21, 2005.

3. Statutory Review Criteria a. Is need for the project evidenced by the availability, quality of care,

efficiency, accessibility and extent of utilization of existing health care facilities and health services in the applicant's service area? ss. 408.035(1), (2), (5) and (7), Florida Statutes. District 5, Subdistrict 2 had 259 licensed acute care beds with an occupancy rate of 50.27 percent during the most recent 12-month period of reported data: July 2005 through June 2006. This leaves 129 acute care beds available for occupancy on any given day. There are no approved unlicensed beds in Subdistrict 2. As discussed above under section E.1., population growth has continued on a year over year basis. The two co-batched applicants include ZIP codes captured in CON #9539 as part of the primary service area for the approved Community Hospital of New Port Richey-Trinity (Trinity Medical Centre) and CON #9610 as part of the primary service area for the approved St. Joseph’s Hospital North. Either of the two proposed projects could impact these approved but not yet licensed facilities. Although both applicants have existing facilities currently serving the area and will be impacted with the establishment of a new hospital, each claims the area can support a new acute care hospital.


34

Pasco County residents are largely out-migrating to University Community Hospital in Hillsborough County. There is also out-migration to St. Joseph’s Hospital in Hillsborough County. Both applicants believe that they will capture these out-migrating patients. BayCare indicates that its proposal will improve access to managed care. However, both applicants’ parents are already major competitors in this market and are not considered “new entrants” into the market. Additionally, BayCare’s affiliate St. Joseph’s Hospital will be opening a new facility in part of each applicant’s proposed service area. While both co-batched applicants predicate on conditions to serve approximately the same percentage of Medicaid and charity patients, in FY 2005, BayCare and its affiliates provided 18 percent Medicaid and charity compared to the Adventist and UCH affiliates’ 10.4 percent Medicaid and charity care. Both co-batched applicants propose Medicaid and charity percentages that are less than the average of the subdistrict’s facilties (FY 2005). Each applicant has included Hillsborough County ZIP code areas in its proposed service area. There is significant Pasco County resident out-migration to largely University Community Hospital and St. Joseph’s Hospital. Pasco County residents are electing to travel to Hillsborough County for services primarily at University Community Hospital and St. Joseph’s Hospital. Access to those out-migrating Pasco residents may be improved with an approval of one of the two hospitals that currently largely serves this out-migrating Pasco County population.

b. Does the applicant have a history of and demonstrate the ability to provide quality care? ss. 408.035(3), 408.035(12), Florida Statutes.

Each co-batched applicant has provided materials that were reviewed concerning quality care and both demonstrated (through their applicable parent) the ability to provide quality care. Each co-batched applicant operates facilities in Florida and has shown the ability to provide quality care. This is evidenced through Agency records shown below. • Agency complaint information regarding confirmed complaints • Risk adjusted data and percentage comparisons from the Agency’s CompareCare

Agency records indicate Pasco-Pinellas Hillsborough Community Health System, Inc. Wesley Chapel Hospital’s sponsoring members (Adventist and University Community Hospital, Inc.) have received seven confirmed complaints of EMTALA and co-batched applicant BayCare, eight. Each applicant has also received a number of non-EMTALA complaints confirmed, all having been verified for the three year period ending April 5, 2007. This data is offered in greater detail by chart below.


35

Hospital Confirmed Compliant Totals for Affiliate Facilities of

Adventist and University Community Hospital April 5, 2004 through April 5, 2007

Hospital Complaint

Florida Hospital

(excluding FHZ)

Total = 22

Florida Hospital -

Zephyrhills (FHZ)

Total = 8

Univ. Commun. Hospital

Total = 15

Univ. Commun. Hospital -

Carrollwood Total = 5

Administrative 1 0 1 0 Chapter 394 Baker Act 0 1 0 0 EMTALA 2 1 3 1 Discharge Planning 1 0 2 0 Falls/Injury 1 1 0 1 Infection Control 1 0 0 0 Lack of Assessment 0 1 0 0 Lack of Supervision 1 0 0 0 Life Safety Code 1 0 0 0 Medical Records/ Charting 1 1 0 0 Medicine Prob/Errors/Formulary 1 0 3 0 Nursing Service 2 0 2 0 Patient Abuse/Neglect 0 0 0 0 Patient Care 5 1 2 2 Patient Rights 1 0 0 0 Patient Test Management 1 0 0 0 Plan of Care 1 0 1 1 Restraints 1 2 1 0 Physical Plant 1 0 0 0

AHCA Complaint Review Records

Hospital Confirmed Compliant Totals for Affiliate Facilities of BayCare Health Systems, Inc.

April 5, 2004 through April 5, 2007

Hospital Complaint

St.

Joseph’s Hospital

Total = 9

St.

Anthony’s Hospital

Total=13

Morton Plant

Hospital

Total=19

Morton Plant

Hospital- North Bay

Total=11

Administrative 0 0 1 1 EMTALA 2 0 4 2 Inappropriate Discharge 0 0 0 1 Infection Control 1 0 0 0 Lack of Assessment 0 0 2 1 Lack of Supervision 0 0 0 1 Medical Services 0 1 2 0 Medical Records/ Charting 0 0 1 0 Medicine Prob/Errors/Formulary 2 0 0 1 Nursing Service 1 0 0 0 Operating Outside Scope of License 0 2 0 0 Patient Abuse/Neglect 1 0 3 0 Patient Care 1 4 2 2 Patient Rights 1 2 4 0 Plan of Care 0 0 0 1 Restraints 0 0 0 1 Sanitation 0 3 0 0 Staffing 0 1 0 0

AHCA Complaint Review Records

Florida CompareCare Selected Risk Adjusted Readmission and Risk

Adjusted Mortality Rates


36

Ages 18 and Older -January 2005 through December 2005 Hospital

Readmission Rate*

Acute Myocardial Infarction

(Heart Attack)*

Adult Open Heart

Provider

Acute Stroke*

Primary Stroke Center

Pneumonia* Statewide

3.66%

6.66%

Not Applicable

8.90%

Not Applicable

5.15%

FL Hospital- Orlando 2.88% 5.44% Yes 7.81% Yes 6.57% Florida Hosp- Zephyrhills 3.76% 8.65% Yes 3.06% / ↓ No 3.74% St. Joseph’s Hospital 3.76% 6.87% Yes 8.89% Yes 5.70% Tampa General 4.03% 9.22% / ↑ Yes 9.34% Yes 6.81% University Comm. Hosp. 3.85% 7.01% Yes 9.48% Yes 7.69% / ↑ University Comm. Hospital-Carrollwood

3.41%

■

No

7.82%

No

3.89%

The percentage rates reported on this page reflect each hospital's unique population, and should not be compared between hospitals. Instead, it is strongly recommended to compare each hospital on the basis of whether their rates are "as expected", "lower than expected", or "higher than expected". * Each hospitalization included in the 'total hospitalizations' was looked at to see if it resulted in a later

readmission. Readmission status was based on whether the person was readmitted to the same hospital or a different hospital within 30 days of discharge regardless of medical condition or procedure category. If the readmission occurred at a different facility, the readmission rate is counted against the original hospital’s admission. The readmission may be for an unrelated diagnosis or injury. For a fair comparison between hospitals, the information has been adjusted to take into account that some hospitals take care of patients who are sicker than the "average" patient. A low readmission rate at the hospital you are considering may indicate that the hospital is effective in caring for a patient's problems so that additional hospital care is not needed in most cases. A low rate may also indicate the care given to a patient after they leave the hospital is effective in preventing a return to the hospital. Please remember that these readmissions are for any reason and not always related to the patient’s initial diagnosis or procedure.

↓ Lower than expected – fewer deaths than expected given how sick the patients were. ↑ Higher than expected – more deaths than expected given how sick the patients were. ■ Less than 30 cases Note: Agency “CompareCare” data states readmission rates on a risk adjusted basis as well as risk adjusted mortality percentages for major causes of death. Methodologies are offered for mortality rates to access how lower than expected (↓) and how higher than expected (↑) death rates are determined.


37

Florida CompareCare Overall Surgical Infection Prevention Measures

Ages 18 and Older April 2005 through March 2006

Hospital

Surgery Patients Who Received Antibiotic(s) One Hour Before Incision (when appropriate)*

Surgery Patients Whose Preventative Antibiotic(s) are

Stopped Within 24 Hours After Surgery (when appropriate)**

US Average 75% 70% To 10% Nationwide 94% 96% Statewide 79% 66% Florida Hospital- Orlando Not Reported Not Reported Florida Hospital- Zephyrhills

77% (of 300 patients)


St. Joseph’s Hospital



Tampa General

79% (of 1,906 patients)

66% (of 1,771 patients)

University Community Hospital



University Community Hospital-Carrollwood



* Antibiotics are medicines to prevent and treat infections. Research shows that surgery patients who get antibiotics within the hour before their operation are less likely to get wound infections. Getting an antibiotic earlier, or after surgery begins, is not as effective. This shows how often hospitals make sure surgery patients get antibiotics at the right time. When comparing hospitals for this measure higher percentage are better.

** While the likelihood of infection after surgery can be reduced by giving patients preventative antibiotics, taking these antibiotics for more than 24 hours after routine surgery is usually not necessary and can increase the risk of side effects such as stomachaches, serious types of diarrhea, and antibiotic resistance (when antibiotics are used too much, they may not work anymore). There are exceptions - for example, where the surgical site has been contaminated (making the surgery not routine). Talk to your doctor if you have questions about how long you should take antibiotics after surgery. When comparing hospitals for this measure higher percentage are better.

Pasco-Pinellas Hillsborough Community Health System, Inc. (CON #9975): As a newly formed entity, Pasco-Pinellas Hillsborough Community Health System, Inc. has no operating history; however, its supporting members do. These members have combined in a joint venture between Adventist Health System Sunbelt Healthcare Corporation (Adventist) and University Community Hospital, Inc. (UCH). Both entities have operational affiliate facilities and each entity is discussed singly below. UCH states its hospitals are fully accredited by JCAHO48 and the applicant states UCH received the JCAHO “Gold Seal” in 2005. An inexhaustive list of awards and recognitions is listed in the application49. It indicates it is a three hospital, 763-bed not-for-profit community hospital system and that it is committed to being the predominant providers of inpatient and outpatient health care services to Hillsborough, Pasco, Pinellas and surrounding counties. This sponsoring member announces six “Centers of Excellence” in detail in the

48 CON #9975, page# 69 49 Ibid, Vol.#1, page #71 and Vol.#2, Tab# 11


38

application50: Pepin Heart and Vascular Institute; The Women’s Center; Pediatric Care Center; Center for Cancer Care; Diabetes Care Institute and The Orthopedic Center. For the three-year period ending March 29, 2007, UCH received 15 confirmed complaints: three for EMTALA; three for medicine problems/errors/formulary; two for patient care; two for discharge planning; two for nursing service; one for restraints; one for plan of care and one for administrative. For this same three-year period, UCH at Carrollwood received five confirmed complaints: two for patient care; one for EMTALA; one for fall/injury and one for plan of care. Adventist states it includes 17 facilities in five AHCA districts (including Florida Hospital-Zephyrhills) and states it has acute care hospitals in ten states with 38 acute care hospitals51. It claims its flagship hospital as Florida Hospital-Orlando and over 1,900 acute care beds spread among seven locations in the state. It further claims to have the largest family practice residency program in Florida. It lists numerous awards and recognitions in the application52. The applicant states that Pasco-Pinellas Hillsborough Community Health System, Inc.-Wesley Chapel Hospital will adopt the policies, procedures and protocols consistent with the sponsoring members’ programs.53

For the three-year period ending March 29, 2007, Florida Hospital54 received 22 confirmed complaints: five for patient care; two for EMTALA; two for nursing service and one each for patient rights, medicine problems/errors/formulary, falls/injury, restraints, plan of care, administrative, life safety code, lack of supervision, physical plant, infection control, medical records/charting, patient test management and discharge planning. Because seven facilities are licensed with number 4369, these complaints cannot be separated according to the appropriate facility.

50 CON# 9975, Vol.#2, Tab# 4 51 Ibid, page# 71 52 Ibid, page# 71 and 72 53 Ibid, page# 73 54 License #4369 and Certificate #3334 includes: Florida Hospital, Florida Hospital of East Orlando, Florida Hospital of Kissimmee, Winter Park Memorial Hospital, Florida Hospital Apopka, Florida Hospital Celebration Health and Florida Hospital Altamonte.


39

Florida Hospital Zephyrhills55 received eight confirmed complaints: two for restraints and one each for falls/injury, patient care, Chapter 394 Baker Act, EMTALA, lack of assessment and medical records/charting. Florida Hospital Wauchula56 received no confirmed complaints. Florida Hospital Waterman57 received three confirmed complaints, one each for EMTALA, discharge planning and nursing service. Florida Hospital Heartland Medical Center58 and Florida Hospital Lake Placid59 received five confirmed complaints: three for patient care, one for discharge planning and one for lack of assessment. Florida Hospital Flagler received two confirmed complaint, one for untrained/unqualified staff and one for plan of care. Florida Hospital Fish Memorial60 received three confirmed complaints, one each for EMTALA, patient care and operating outside scope of license. For this same three-year period, Florida Hospital Deland61 received zero confirmed complaints. Florida Hospital Oceanside62 and Florida Hospital Ormond Memorial63 received seven confirmed complaints: two for medicine problems/errors/formulary and one each for patient care, EMTALA, nursing service, sanitation and failure to report incident.

The prior confirmed complaint table is representative of some affiliate facilities (belonging to the parent) and will not mirror all facilities listed above. BayCare of Southeast Pasco, Inc. (CON #9977) states that the applicant is a newly formed corporation and does not have a history of providing care, but is part of the larger BayCare Health System, Inc. (BayCare), “….whose nine area hospitals and other facilities and services

55 License #4445 and Certificate #3161 56 License #4239 and Certificate #2266 57 License #4409 and Certificate #2927 58 License #4171 and Certificate #3361 (Florida Hospital –Heartland Medical Center and Florida Hospital –Lake Placid share the same license and certificate numbers) 59 Ibid 60 License #4408 and Certificate #3219 61 License #4436 and Certificate #3288 62 License #4201 and Certificate #3134 (Florida Hospital- Oceanside and Florida Hospital- Ormond Memorial share the same license and certificate numbers) 63 Ibid


40

have a long and substantial history of providing quality care”64. The applicant states that the nine area BayCare hospitals have full JCAHO accreditation and other accreditations 65. The applicant states these recognitions are current for 2006. An inexhaustive list of some recognitions having been received by the parent include the following: “National Top 100” for the eighth year in a row for cardiac care, being one of only four hospitals in the nation to receive the 2006 Solucient 100 awards (Morton Plant Hospital) and the J. D. Power and Associates for service excellence under the Distinguished Hospital Program (St. Joseph’s Hospital). For the three-year period ending March 29, 2007, St. Joseph’s Hospital66 and St. Joseph’s Women’s Hospital67 received nine confirmed complaints: two for EMTALA; two for medicine problems/errors/formulary and one each for patient care, patient abuse/neglect, infection control, patient rights and nursing service. St. Anthony’s Hospital68 received 13 confirmed complaints: four for patient care; three for sanitation; two for operating outside scope of license; two for patient rights and one each for medical services and staffing. Morton Plant Hospital69 received 19 confirmed complaints: four for EMTALA; four for patient rights; three for patient abuse/neglect; two for patient care; two for nursing service; two for lack of assessment and one each for medical records/charting and administrative. Morton Plant North Bay Hospital70 received 11 confirmed complaints: two for patient care; two for EMTALA and one each for restraints, administrative, plan of care, lack of supervision, medicine problems/errors/formulary, lack of assessment and inappropriate discharge. Mease Hospital Dunedin71 and Mease Hospital Countryside72 received 10 confirmed complaints: four for patient care and one each for patient

64 CON #9977, page# 92 65 Ibid, page# 92 - 94 66 License #4292 and Certificate #2902 (St. Joseph’s Hospital and St. Joseph’s Hospital for Women share the same license and certificate numbers) 67 Ibid 68 License #4215 and Certificate #3123 69 License #4064 and Certificate #2399 70 License #4216 and Certificate #3285 71 License #4378 and Certificate #3140 (Mease Hospital-Dunedin and Mease Hospital-Countryside share the same license and certificate numbers) 72 Ibid


41

abuse/neglect, lack of supervision, pressure sores, medical records/charting, discharge planning and weight loss. South Florida Baptist Hospital73 received two confirmed complaints: one was for restraints and one was for medicine problems/errors/formulary. The prior confirmed complaint table is representative of some affiliate facilities (belonging to the parent) and will not mirror all facilities listed above.

c. What resources, including health manpower, management

personnel, and funds for capital and operating expenditures, are available for project accomplishment and operation? ss. 408.037(6), Florida Statutes. Pasco-Pinellas Hillsborough Community Health System, Inc. (CON #9975) is applying to establish an 80-bed acute care hospital in District 5, Subdistrict 2, Pasco County. The financial impact of the project will include the project cost of $121,017,163 and operating costs in year two of $51,525,866. The audited financial statements of the applicant were reviewed to assess the financial position as of the balance sheet date and the financial strength of its operations for the period presented. The applicant is a development stage company with $10,000 in net assets as of March 1, 2007. The applicant has two corporate members, Adventist Health System Sunbelt Healthcare Corporation (Adventist) and University Community Hospital, Inc. (UCH). As of the date of the audit, the members were negotiating an operating and management agreement. According to our conversations with the applicant’s representatives, the members would be represented equally on the board of the applicant. Letters from both corporate members were submitted and indicated that the cash portion of the project costs would be funded by the members. As a development stage company, the applicant will likely have to rely on the financial position of the member companies to obtain debt financing. The applicant submitted the audited financial statements of Adventist for the periods ending December 31, 2004 and 2005 and UCH for the periods ending September 30, 2004 and 2005. The members’ audited financial statements were analyzed for the purpose of evaluating the members’ ability to acquire and provide the capital and operational funding necessary to implement the project.

73 License #4056 and Certificate #2338


42

Short-Term Position – Adventist: The current ratio of 2.9 is well above average and indicates current assets are almost three times current liabilities, a good position. The ratio of cash flows to current liabilities of 0.7 is average, an adequate position. The working capital (current assets less current liabilities) of $1.7 billion is a measure of excess liquidity that could be used to fund capital projects. Overall, Adventist has a good short-term position. (See Table below). Short-Term Position – UCH: The current ratio of 1.4 is below average and indicates current assets are almost one and a half times current liabilities, a moderately weak but adequate position. The ratio of cash flows to current liabilities of 0.6 is slightly below average and an adequate position. The working capital (current assets less current liabilities) of $37.3 million is a measure of excess liquidity that could be used to fund capital projects. Overall, UCH has a moderately weak but adequate short-term position. (See Table below). Long-Term Position - Adventist: The ratio of long-term debt to net assets of 1.2 indicates long-term debt is greater than equity. This is well above average and a weak position. The ratio of cash flow to assets of 10.4 percent is slightly above average and an adequate position. The most recent year had revenue in excess of expenses of $251.4 million, which resulted in a margin of 5.4 percent. Overall, Adventist has an adequate long-term position. (See Table below). Long-Term Position - UCH: The ratio of long-term debt to net assets is 0.9 is well above average and a weak position. The ratio of cash flow to assets of 14.3 percent is above average and a good position. The most recent year had $9.2 million of revenues in excess of expenses, which resulted in a margin of 2.4 percent. Overall, UCH has a moderately weak but adequate long-term position. (See Table below). Capital Requirements: Schedule 2 indicates the applicant has capital projects totaling $148.9 million. In addition, the applicant is projecting a year one and year two operating loss of $9.1 million and $2.3 million for this project respectively. The applicant will also have to fund the operating losses until profitability can be reached.


43

Available Capital: The applicant indicates that funding for this project will come from a combination of debt and equity financing ($76 million in tax-exempt revenue bonds with the remainder coming from the corporate members). The applicant provided a letter dated April 9, 2007, from Ziegler Capital Markets Group (Ziegler). The letter indicates that Ziegler is prepared to serve as underwriter for the tax-exempt bond issue for this project based on its review of the project and prior relationship with corporate member Adventist. The audited financial statements of the members show a combined cash and current investment balance of $2.14 billion with $1.78 billion in working capital. Although both members have a high level of debt relative to equity, the cash flow from operations ($716.9 million combined) and the operating cash flow to assets and liabilities ratios for both applicants are solid. A solid cash flow stream would be attractive to lenders and would allow both members to, either separately or together, acquire additional debt financing on behalf of the applicant if needed. Staffing: The applicant, Pasco-Pinellas Hillsborough Community Health System, Inc.-Wesley Chapel Hospital (Wesley Chapel Hospital), indicates that it will be assisted in recruitment by the sponsoring members – Adventist and UCH. The USF College of Nursing is also listed as a staff resource. The applicant’s parent states it has long-standing relationships with have increased affiliations with local universities and community colleges. However, no letters of support to affirm this claim are in the application. Adventist states it has recruited personnel for Pasco County from job fairs in Buffalo, Detroit, New Orleans and other major U.S. cities74. As stated previously while this applicant predicates under conditions that it will provide $500,000 to the PALS (Professional Allied Health Scholarship) Program, it is co-batch applicant BayCare that has a letter of support from the regional AHEC. The applicant identifies PALS as Prospective Alumni Scholarship Program75 There are no retention incentive programs, such as sign-ons, salary bonuses, benefits packages or other related retention mechanisms stated. Schedule 6A of the application indicates that year one of the project would entail 234.7 full-time equivalents (FTEs), with 79.9 being RNs, zero LPNs, zero nurse’s aides and 24.3 listed as “Other” in the nursing category. The applicant allocates zero FTEs for a medical director, zero FTEs for physicians and 1.0 FTEs for “Other” in the physician category. There are 41.0 FTEs under “Other” administration, 51.3 FTEs for “Other”

74 CON #9975, page #77 75 Ibid, page #78


44

ancillary and 3.2 FTEs for “Other” social services. Year two indicates a total of 300.8 FTEs, with 106.3 being RNs, zero LPNs, zero nurse’s aides and 2.8 listed as “Other” in the nursing category. The applicant allocates zero FTEs for a medical director, zero FTEs for physicians and 1.0 FTEs for “Other” in the physician category. There are 54.4 FTEs under “Other” administration, 66.5 FTEs for “Other” ancillary and 4.3 FTEs for “Other” social services. In the third year (ending December 31, 2013), the following staff is projected: a total of 374.1 FTEs, with 133.1 being RNs, zero being LPNs and zero being nurses' aides. The applicant allocates zero FTEs for a medical director, zero FTEs for physicians and 1.0 FTEs for “Other” in the physician category (this is the same for each of the three years). There are 67.7 FTEs under “Other” administration, 84.0 FTEs for “Other” ancillary and 5.6 FTEs for “Other” social services.

CON #9975 PASCO-PINELLAS HILLSBOROUGH COUMMUNITY HEALTH SYSTEM MEMBERS

UCH Adventist 9/30/2005 12/31/2005 Current Assets $132,695,654 $2,650,796,000

Cash and Current Investment $30,932,868 $2,105,390,000

Total Assets $411,680,257 $6,322,325,000

Current Liabilities $95,371,135 $907,442,000

Total Liabilities $248,526,799 $3,849,357,000

Net Assets $162,849,521 $2,472,968,000

Total Revenues $379,950,424 $4,637,202,000

Interest Expense $6,188,834 $131,050,000

Excess of Revenues Over Expenses $9,225,398 $251,443,000

Cash Flow from Operations $59,038,075 $657,900,000

Working Capital $37,324,519 $1,743,354,000

FINANCIAL RATIOS 9/30/2005 12/31/2005 Current Ratio (CA/CL) 1.4 2.9

Cash Flow to Current Liabilities (CFO/CL) 0.6 0.7

Long-Term Debt to Net Assets (TL-CL/NA) 0.9 1.2

Times Interest Earned (NPO+Int/Int) 2.5 2.9

Net Assets to Total Assets (TE/TA) 39.6% 39.1%

Operating Margin (ER/TR) 2.4% 5.4%

Return on Assets (ER/TA) 2.2% 4.0%

Operating Cash Flow to Assets (CFO/TA) 14.3% 10.4%

Based on the financial strength of its corporate members, the applicant should have access to funding for this project and all capital projects and working capital as needed.


45

BayCare of Southeast Pasco, Inc. (CON #9977) is applying to establish a 130-bed acute care hospital in District 5, Subdistrict 2, Pasco County. The financial impact of the project will include the project cost of $308,207,156 and operating costs in year two of $95,909,714. The audited financial statements of the applicant were reviewed to assess the financial position as of the balance sheet date and the financial strength of its operations for the period presented. The applicant is a development stage company with $101,586 in net assets as of December 31, 2006. The applicant’s sole corporate member is BayCare Health Systems, Inc. (Parent). The applicant submitted the Audited Financial Statements of the parent for the periods ending December 31, 2005 and 2006. The parent’s audited financial statements were analyzed for the purpose of evaluating the parent’s ability to acquire and provide the capital and operational funding necessary to implement the project. Short-Term Position: The parent’s current ratio of 1.1 is below average and indicates current assets are slightly greater than current liabilities, a moderately weak but adequate position. The ratio of cash flows to current liabilities of 0.8 is slightly above average, an adequate position. The working capital (current assets less current liabilities) of $67.5 million is a measure of excess liquidity that could be used to fund capital projects. Overall, the parent has a moderately weak but adequate short-term position. (See Table below). Long-Term Position: The long-term debt to equity ratio of 0.6 is average and indicates long-term debt is less than equity, an adequate position. The cash flow to assets ratio of 10.8 percent is slightly above average and an adequate position. The most recent year had excess revenues over expenses of $173.8 million, which resulted in a margin of 9.6 percent. Overall, the parent has a good long-term position. (See Table below). Capital Requirements: Schedule 2 indicates the applicant has $308.2 million in capital projects. In addition, the applicant is projecting a combined year one and two operating loss of $19 million for this project. The applicant would have to fund this operating loss in addition to the capital projects listed on Schedule 2. Available Capital: The applicant indicates that funding for this project will come from a combination of a bond issue ($154 million) and cash and land from the parent company. The audited financial statements of the parent for the most recent year show a cash and current investment balance of $34.9


46

million and $67.5 million in working capital with a current ratio of 1.1. The audit also indicated that operating cash flow was $345.7 million with revenues in excess of expenses of $173.8 million with a margin of 9.6 percent. The parent reported a beneficial interest in the net assets of Foundations in the amount of $107.6 million. The applicant provided a letter from Morgan Stanley stating that, based on current market conditions and credit position of the parent; it is highly confident that the parent will be able to fund the debt portion of the project through issuance of publicly offered tax-exempt revenue bonds. The cash flow from operations ($345.7 million) and the operating cash flow to assets and liabilities ratios for the parent are solid. A solid cash flow stream would be attractive to lenders and would increase the likelihood that the applicant would be able to obtain the debt financing necessary with the support of the parent. Staffing: The applicant states that a staffing resource base of management, finance, operations, planning, information systems and clinical professionals, including physicians and other paraprofessional health care providers, is already recruited, trained and in place at BayCare’s other acute facilities and will be available to provide support to the proposed hospital76. There are no retention incentive programs, such as sign-ons, salary bonuses, benefits packages or other related retention mechanisms stated. Schedule 6A of the application indicates that year one of the project would entail 287.6 full-time equivalents (FTEs), with 98.5 being RNs, zero being LPNs and 43.2 being nurses’ aides. In this category, an additional 8.7 FTEs are listed as “Other”. The applicant does not allocate any FTEs for physicians, but does indicate 32.0 FTEs for “Other” administration, 43.8 FTEs for “Other” ancillary and 3.0 FTEs for “Other” social services. Year two indicates a total of 402.4 FTEs, with 151.4 being RNs, zero being LPNs and 66.9 being nurses' aides. Again, no FTEs are allotted for physicians, but 40.7 FTEs are indicated for “Other” administration, 14.9 FTEs for “Other” nursing, 55.9 FTEs for “Other” ancillary and 4.4 FTEs for “Other” social services. In the third year (ending December 31, 2013), the following staff is projected: a total of 458.2 FTEs, with 175.0 being RNs, zero being LPNs and 75.3 being nurses' aides. Again, no FTEs are allotted for physicians, but 48.9 FTEs are indicated for “Other” administration, 16.3 FTEs for “Other” nursing, 68.3 FTEs for “Other” ancillary and unchanged from the prior year is 4.4 FTEs for “Other” social services.

CON #9977

76 CON #9977, page #97


47

BAYCARE HEALTH SYSTEMS, INC. 12/31/2006 12/31/2005 Current Assets $527,950,000 $481,828,000

Cash and Current Investment $34,887,000 $9,426,000

Beneficial Interest in Foundation $107,570,000 $97,223,000

Total Assets $3,188,510,000 $2,742,805,000

Current Liabilities $460,496,000 $404,582,000

Total Liabilities $1,468,142,000 $1,254,938,000

Net Assets $1,720,368,000 $1,487,867,000

Total Revenues $1,806,899,000 $1,733,813,000

Interest Expense $35,050,000 $27,304,000

Excess of Revenues Over Expenses $173,766,000 $145,902,000

Cash Flow from Operations $345,716,000 $189,830,000

Working Capital $67,454,000 $77,246,000

FINANCIAL RATIOS 12/31/2006 12/31/2005 Current Ratio (CA/CL) 1.1 1.2

Cash Flow to Current Liabilities (CFO/CL) 0.8 0.5

Long-Term Debt to Net Assets (TL-CL/NA) 0.6 0.6

Times Interest Earned (NPO+Int/Int) 6.0 6.3

Net Assets to Total Assets (TE/TA) 54.0% 54.2%

Operating Margin (ER/TR) 9.6% 8.4%

Return on Assets (ER/TA) 5.4% 5.3%

Operating Cash Flow to Assets (CFO/TA) 10.8% 6.9%

Assuming the parent company will be able to obtain the debt financing discussed in the below analysis, funding for this project and all capital projects should be available as needed.

d. What is the immediate and long-term financial feasibility of the proposal? ss. 408.035(6), Florida Statutes. A comparison of each applicant’s estimates to the control group values provides for an objective evaluation of financial feasibility (the likelihood that the services can be provided under the parameters and conditions contained in Schedules 7 and 8), and efficiency (the degree of economies achievable through the skill and management of the applicant). In general, projections that approximate the median are the most desirable and balance the opposing forces of feasibility and efficiency. In other words, as estimates approach the highest in the group, it is more likely that the project is feasible because fewer economies must be realized to achieve the desired outcome. Conversely, as estimates approach the lowest in the group, it is less likely that the project is feasible because a much higher level of economies must be realized to achieve the desired


48

outcome. These relationships hold true for a constant intensity of service through the relevant range of outcomes. As these relationships go beyond the relevant range of outcomes, revenues and expenses may either go beyond what the market will tolerate or may decrease to levels where activities are no longer sustainable. Pasco-Pinellas Hillsborough Community Health System, Inc. (CON #9975) has stated that the new hospital will serve patients in the following ZIP codes: Primary (Pasco County) – 33541, 33543, 33544, 34639, 33576, and 33559 and Secondary (Hillsborough County) – 33549, 33647, and 33559. Case mix data, using patients discharged from short-term acute care hospitals was tested in the indicated ZIP codes during 2005, excluding DRGs for services not provided and DRGs discharged from long-term care hospitals. The computed case mix index for these cases was 1.1641. Therefore, based on the range of services offered, number of beds and estimated patient days, as well as the computed case mix index; the applicant will be compared to the hospitals in Group 2. Per diem rates are projected to increase by an average of 3.7 percent per year. Inflation adjustments were based on the new CMS Market Basket, 1st Quarter, 2007. Gross revenues, net revenues, and costs were obtained from Schedules 7 and 8 in the financial portion of the application. These were compared to the control group as a calculated amount per adjusted patient day. Projected net revenue per adjusted patient day (NRAPD) of $1,901 in year one and $1,955 in year two is between the control group median and highest values of $1,686 and $2,499 in year one and $1,739 and $2,576 in year two. With net revenues falling between the median and highest level, the facility is expected to consume health care resources in proportion to the services provided. (See Table below).


49

Anticipated costs per adjusted patient day (CAPD) of $2,468 in year one exceeds the highest value in the peer group of $2,422. The highest level is generally viewed as the practical upper limit on efficiency. Anticipated CAPD in year two of $2,046 is between the control group median and highest values of $1,616 and $2,497 in year two. With projected cost between the median and highest value in the control group, the year two cost appears reasonable. (See Table below). The applicant is projecting a decrease in CAPD between year one and year two of approximately 17 percent. It should be noted that this application is for a new acute care hospital. The first year of operation has a below average occupancy rate. The low occupancy rate decreases economies of scale and as the occupancy rate increases, CAPD would be expected to decrease. The year two projected operating loss for the project of $2.3 million computes to an operating margin per adjusted patient day of a negative $91 which is between the control group median and lowest values of a positive $86 and a negative $263. The applicant is projecting a $5.3 million gain or 7.5 percent operating margin by the end of the third year with both NRAPD and CAPD falling between the peer group median and highest values in year three.


50

PASCO-PINELLAS HILLSBOROUGH COUMMUNITY HEALTH SYSTEM CON #9975 Dec-12 YEAR 2 VALUES ADJUSTED 2005 DATA Peer Group 2 YEAR 2 ACTIVITY FOR INFLATION ACTIVITY PER DAY Highest Median Lowest ROUTINE SERVICES 18,952,724 753 1,550 639 329 INPATIENT AMBULATORY 0 0 351 130 55 INPATIENT SURGERY 0 0 0 0 0 INPATIENT ANCILLARY SERVICES 91,213,705 3,622 5,926 3,081 1,415 OUTPATIENT SERVICES 77,991,634 3,097 6,572 2,658 1,494 TOTAL PATIENT SERVICES REV. 188,158,063 7,472 13,366 6,419 4,110 OTHER OPERATING REVENUE 338,685 13 99 8 1 TOTAL REVENUE 188,496,748 7,486 13,389 6,425 4,124

DEDUCTIONS FROM REVENUE 139,273,578 5,531 0 0 0 NET REVENUES 49,223,170 1,955 2,576 1,739 1,398

EXPENSES ROUTINE 12,263,504 487 352 255 182 ANCILLARY 12,679,450 504 846 539 408 AMBULATORY 0 0 0 0 0 TOTAL PATIENT CARE COST 24,942,954 991 0 0 0 ADMIN. AND OVERHEAD 15,001,469 596 0 0 0 PROPERTY 11,581,443 460 0 0 0 TOTAL OVERHEAD EXPENSE 26,582,912 1,056 1,344 735 571 OTHER OPERATING EXPENSE 0 0 0 0 0 TOTAL EXPENSES 51,525,866 2,046 2,497 1,616 1,381

OPERATING INCOME -2,302,696 -91 341 86 -263 -4.7% PATIENT DAYS 14,717 ADJUSTED PATIENT DAYS 25,181 TOTAL BED DAYS AVAILABLE 29,200 VALUES NOT ADJUSTED ADJ. FACTOR 0.5844 FOR INFLATION TOTAL NUMBER OF BEDS 80 Highest Median Lowest PERCENT OCCUPANCY 50.40% 98.8% 57.9% 35.3%

PAYER TYPE PATIENT

DAYS % TOTAL SELF PAY 1,207 8.2% MEDICAID 1,298 8.8% 21.0% 9.5% 1.9% MEDICAID HMO 0 0.0% MEDICARE 6,385 43.4% 81.4% 62.7% 45.3% MEDICARE HMO 0 0.0% INSURANCE 606 4.1% HMO/PPO 5,221 35.5% 29.0% 16.3% 4.8% OTHER 0 0.0% TOTAL 14,717 100%


51

Assuming the applicant will be able to meet its patient day and payer mix assumptions, this project appears to be financially feasible. BayCare of Southeast Pasco, Inc. (CON #9977) has stated that the new hospital will serve patients primarily located in seven ZIP codes in the seven-mile radius from the proposed site of the hospital. The applicant did not specifically list the ZIP codes used. We were able to clearly identify six ZIP codes within the seven-mile radius (ZIP codes: 33544, 34639, 33559, 33647, 33543, and 33549). Case mix data, using patients discharged from short-term acute care hospitals was tested in the service area during 2005, excluding DRGs for services not provided and DRGs discharged from long-term care hospitals. The computed case mix index for these cases was 1.1422. It should be noted that the applicant has indicated that it plans on becoming a teaching hospital with collaboration with the University of South Florida (USF). Because the applicant will not meet the teaching hospital designation over the two-year projection period, it would not be appropriate to compare the projections to the teaching hospital group. Therefore, based on the range of services offered, number of beds and estimated patient days, as well as the computed case mix index; the applicant will be compared to the hospitals in Peer group 2. Per diem rates are projected to increase by an average of 3.7 percent per year. Inflation adjustments were based on the new CMS Market Basket, 1st Quarter, 2007. Gross revenues, net revenues, and costs were obtained from Schedules 7 and 8 in the financial portion of the application. These were compared to the control group as a calculated amount per adjusted patient day. Projected net revenue per adjusted patient day (NRAPD) of $1,906 in year one and $1,963 in year two is between the control group median and highest values of $1,655 and $2,452 in year one and $1,706 and $2,528 in year two. With net revenues falling between the median and highest level, the facility is expected to consume health care resources in proportion to the services provided. (See Table below).


52

Anticipated costs per adjusted patient day (CAPD) of $2,420 in year one exceeds the highest value in the peer group of $2,377. The highest level is generally viewed as the practical upper limit on efficiency. Anticipated CAPD in year two of $2,021 is between the control group median and highest values of $1,586 and $2,450 in year two. With projected cost between the median and highest value in the control group, the year two cost appear reasonable. (See Table below). The applicant is projecting a decrease in CAPD between year one and year two of approximately 17 percent. It should be noted that this application is for a new acute care hospital. The first year of operation has a below average occupancy rate. The low occupancy rate decreases economies of scale and as the occupancy rate increases, CAPD would be expected to decrease. The year two projected operating loss for the project of $2.8 million computes to an operating margin per adjusted patient day of a negative $58 which is between the control group median and lowest values of a positive $86 and a negative $263. The applicant is projecting a $4.5 million gain or 4.0 percent operating margin by the end of the third year with both NRAPD and CAPD falling between the peer group median and highest values in year three.


53

BAYCARE OF SOUTHEAST PASCO, INC. CON #9977 Dec-12 YEAR 2 VALUES ADJUSTED 2005 DATA Peer Group 2 YEAR 2 ACTIVITY FOR INFLATION

ACTIVITY PER DAY Highest Median Lowes

t ROUTINE SERVICES 40,932,154 863 1,521 627 323 INPATIENT AMBULATORY 0 0 345 127 53 INPATIENT SURGERY 0 0 0 0 0 INPATIENT ANCILLARY SERVICES 163,728,614 3,450 5,815 3,023 1,388 OUTPATIENT SERVICES 135,903,707 2,864 6,449 2,608 1,466 TOTAL PATIENT SERVICES REV. 340,564,475 7,177 13,115 6,299 4,033 OTHER OPERATING REVENUE 569,400 12 98 8 1 TOTAL REVENUE 341,133,875 7,189 13,138 6,304 4,046

DEDUCTIONS FROM REVENUE 247,998,566 5,226 0 0 0 NET REVENUES 93,135,309 1,963 2,528 1,706 1,371

EXPENSES ROUTINE 13,149,575 277 345 250 179 ANCILLARY 31,342,907 661 830 529 400 AMBULATORY 0 0 0 0 0 TOTAL PATIENT CARE COST 44,492,482 938 0 0 0 ADMIN. AND OVERHEAD 23,361,145 492 0 0 0 PROPERTY 28,056,087 591 0 0 0 TOTAL OVERHEAD EXPENSE 51,417,232 1,084 1,319 721 561 OTHER OPERATING EXPENSE 0 0 0 0 0 TOTAL EXPENSES 95,909,714 2,021 2,450 1,586 1,355

OPERATING INCOME -2,774,405 -58 341 86 -263 -3.0% PATIENT DAYS 28,469 ADJUSTED PATIENT DAYS 47,453 TOTAL BED DAYS AVAILABLE 47,450 VALUES NOT ADJUSTED ADJ. FACTOR 0.5999 FOR INFLATION

TOTAL NUMBER OF BEDS 130 Highest Median Lowes

t PERCENT OCCUPANCY 60.00% 98.8% 57.9% 35.3%

PAYER TYPE PATIENT

DAYS % TOTAL SELF PAY 1,537 5.4% MEDICAID 2,391 8.4% 21.0% 7.2% 1.9% MEDICAID HMO 541 1.9% MEDICARE 7,516 26.4% 81.4% 55.9% 45.1% MEDICARE HMO 1,708 6.0% INSURANCE 1,082 3.8% HMO/PPO 12,840 45.1% 38.6% 23.9% 6.7% OTHER 854 3.0% TOTAL 28,469 100%


54

Assuming the applicant will be able to meet its patient day and payer mix assumptions, this project appears to be financially feasible.

e. Will the proposed project foster competition to promote quality and cost-effectiveness? ss.408.035(7), Florida Statutes. As noted earlier, both co-batched applicants currently operate facilties in the service area and both currently serve a large portion of the patient population living in the proposed service area. Neither project will foster competition to promote quality and cost effectiveness.

f. Are the proposed costs and methods of construction reasonable? Do they comply with statutory and rule requirements? ss. 408.035(10), Florida Statutes; Ch 59A-3 or 59A-4 Florida Administrative Code.

Pasco-Pinellas Hillsborough Community Health System, Inc. (CON #9975) proposes to build a three-story 80-bed Class I acute care hospital in Wesley Chapel, Florida. Included in the licensed bed count are 36 medical/surgical beds, eight labor/delivery/recovery/post-partum beds, 12 critical care beds and 24 progressive care beds. All beds are located in private rooms with attached toilet/shower rooms. The typical patient toilet/shower room appears to meet size and clearance requirements for accessibility. The narrative indicates that 10 percent of each type of patient room will be accessible. All patient rooms as designed exceed the minimum size requirements. The first floor of the facility contains the emergency department, an adjacent imagining suite, operating rooms and associated preparation and recovery spaces, food service facilities, public spaces, administrative areas and support spaces. An atrium and two landscaped courtyards are provide as landmarks to improve way-finding in the sprawling first floor and to provide natural lighting to interior building areas. The layout of this floor is well thought out and very functional. All required support spaces appear to have been provided and logically placed. It is assumed that all required clearances will be provided. The emergency department is well located with separate public and emergency personal entrances. The decontamination room should be relocated as remotely as possible from any other building entrance as required by the current Guidelines for Design and Construction of Health Care Facilities. The conveniently located imaging suite is adjacent to emergency department and the operating room suite. All required spaces appear to have been provided. The operating rooms and support space are well laid out to minimize travel distance between recovery beds and the ORs.


55

The “L” shaped second floor contains the medical/surgical beds and the obstetrics unit. The medical/surgical patient rooms are arranged in two linear wings with central support spaces. This proven layout minimizes travel distances by allowing access to the support rooms from both sides. The mother-baby unit is also located on this floor. The patient spaces are arranged at the buildings perimeter with support space on the interior. This unit consists of LDRP rooms, C-section rooms, a nursery and support spaces. Public access to the medical/surgical units and the mother-baby unit are provided by a central spine anchored by the building’s two elevators. The linear third floor contains a critical care nursing unit and a progressive care nursing unit. These units are arranged similarly to the medical/surgical unit below with a linear support core serving patient rooms on either side. There is some confusion regarding the construction type being proposed. The plans indicate type II (222) and the narrative indicates Type I (3,3,2). Either type exceeds minimum code requirements for the occupancy, size and height of the building. The plans indicate that the building will be sprinklered and comply with current codes, such as the Florida Building Code and Life Safety Code. The narrative indicates that the windows will be protected from debris impact with hurricane shutters recessed into the soffit. Two diesel powered electrical generators will be provided to backup the critical and life safety braches of the facility’s electrical system. It is anticipated that other disaster preparedness requirements will be addressed as project is developed. The projected construction costs are within the range expected for a high-end new hospital. The proposed schedule for permitting and construction activities appears to be reasonable. The plans submitted with this application appear to provide all required spaces and meet or exceed the minimal code requirements. Additional details and minor modifications will be necessary as project progresses. Overall the proposed hospital is well designed. Attention to way finding and natural lighting should help to create a warm less institutional feeling facility. The structural bays have been designed to maximize flexibility as the facility grows and renovates.


56

The architectural review of the application shall not be construed as an in-depth effort to determine complete compliance with all applicable codes and standards. The final responsibility for facility compliance ultimately rests with the owner. BayCare of Southeast Pasco, Inc. (CON #9977) proposes to construct a new acute care teaching hospital consisting of 476,820 GSF situated on a 35-acre parcel of land. The facility would be supported by both Bay Care Health System and the University of South Florida. The immediate plans include 130 licensed beds, but the facility plans on adding up to 170 additional beds in the future as the need arises.

It is proposed that the building be designed and constructed to meet Leadership in Energy and Environmental Design (LEED) and Green Guide for Heathcare criteria. There is no indication of what level of LEED standards the project will attempt to achieve, but there are stated goals of improving the interior environment, the protection of the well being of the surrounding community and to minimize the impact on the health of the global community.

The room complement will be made up of all private rooms and have a bed configuration of 92 medical/surgical beds, 24 critical care beds (six designated for transitional care), and 14 post-partum (labor/delivery) beds. An additional 20 observation beds will be dispersed throughout the facility. The design of the observation rooms is similar to the patient rooms allowing for a quick conversion to licensed beds. All bed rooms appear to be to be handicapped accessible.

The functions of the proposed hospital are to be located in a four-story facility of protected, non-combustible construction that will be fully sprinklered and are defined as follows: • Ground Floor: Food services and dining, materials management,

sterile processing, housekeeping, IT, bio-med and other services that commonly need access to a delivery dock.

• First Floor: Public lobby, administration/registration, emergency department, imaging department, rehabilitation and cardio/pulmo/ neuro unit.

• Second Floor: Surgical and interventional imaging suites, pre-op and

recovery, critical care unit and the main lab. • Third Floor: Medical/surgical nursing unit, pharmacy, social work,

and mechanical space.


57

• Fourth Floor: Two medical/surgical nursing units and a mother baby/baby unit.

There are three public elevators and five patient/services elevators that provide the vertical transport in the facility. This arrangement provides a good circulation flow that limits the amount of cross-traffic between staff, patients and the general public. The emergency department has a separate ambulance and walk-in entrance that are easily recognizable. The decontamination room should be relocated to be as remote as possible from any other building entry. Also the imaging department is too far from the emergency department.

The operating room and large pre-op and post-op areas appears to meet all design code requirements. The operating rooms are arranged along two service cores and sub-sterile rooms are provided for half of the ORs. A more direct connection between the PACU and the operating suite is preferred, but the layout does restrict public access to the connector to emergency egress by providing direct access to the CCU from dedicated elevators. The staff lockers could be located closer to the OR suite, but appear to meet code requirements.

The CCU is served by two nurse stations that have good visual control of a majority of the CCU rooms. All the required service and support functions are adjacent to the nurse station for staff efficiency. The unit is adjacent and convenient to the surgical recovery area.

The 92 medical/surgical bed areas and 20 observation bed areas are supported by nurse stations that contain all of the support areas required. Isolation rooms are provided as required by code.

Overall, the proposed project, as submitted, is functional and efficient. There are some issue such as the proximity of the imagining department to the emergency department which should be resolved before the project progress further. The used concept for public circulation is intriguing and could aid way finding by limiting area to be accessed by the public.

The applicant states the construction will conform to all current applicable building codes, including the National Fire Protection Association codes and the requirements of the Florida Building Code.


58

The construction cost of $348 per square foot is a little high but does include increased costs associated with the design and construction of a green building. Typically higher first costs associated with LEED certified buildings are offset with lower life cycle cost. Even if the additional costs are not fully recouped financially the benefit to all of mankind from a more efficient building is worth the difference and the practice should be encouraged. The construction schedule from building permit approval to final survey is appropriate for this project.

The plans submitted with this application were schematic in detail with the expectation that they will necessarily be revised and refined during the design development (preliminary) and contract document stages. The architectural review of the application shall not be construed as an in-depth effort to determine complete compliance with all applicable codes and standards. The final responsibility for facility compliance ultimately rests with the owner.

g. Does the applicant have a history of providing health services to Medicaid patients and the medically indigent? Does the applicant propose to provide health services to Medicaid patients and the medically indigent? ss. 408.035(11), Florida Statutes. The following chart illustrates the levels of Medicaid (including Medicaid HMO) and charity care in applicant facilities, compared to Subdistrict 2 average and the district average during fiscal year (FY) 2005 (the most recent year for which data is available):


59

Medicaid77 and Indigent Provision Percentages for Applicant Facilities and non-applicant District 5 Subdistrict 2 Facility FY 2005

Applicant CON # District Facility Medicaid

Charity Care Total

9975 D6 †University Community Hospital 9.7 2.9 12.6

9975 D6 University Community Hospital - Carrollwood 6.0 2.5 8.5

9975 D3 †Florida Hospital Waterman 9.6 1.2 10.8

9975 D4 †‡Florida Hospital Deland 6.0 3.2 9.2

9975 D4 †Florida Hospital Ormond Memorial and Oceanside 5.8 1.9 7.7

9975 D4 †‡Florida Hospital Fish Memorial 3.4 2.7 6.1

9975 D4 ‡Florida Hospital Flagler 3.2 3.3 6.5

9975 D5 S2 †‡Florida Hospital Zephyrhills 10.5 3.7 14.2

9975 D6 †Florida Hosp. Heartland Medical Center & ‡Lake Placid 8.7 2.3 11.0

9975 D6 Florida Hospital Wauchula 2.3 1.0 3.3

9975 D7 †‡Florida Hospital (7 facilities included) 15.8 6.1 21.9

9977 D5 Mease Hospital -Dunedin & Countryside 8.8 1.5 10.3

9977 D5 †‡Morton Plant North Bay Hospital 7.6 4.0 11.6

9977 D5 †‡Morton Plant Hospital 13.2 2.5 15.7

9977 D5 ‡St. Anthony's Hospital 15.0 2.8 17.8

9977 D6 †‡St. Joseph's Hospital & St. Joseph's Women's Hospital 24.7 5.1 29.8

9977 D6 †South Florida Baptist Hospital 16.9 6.0 22.9

D5 S2 Pasco Regional Medical Center 9.5 4.6 14.1

Applicant Weighted Average CON #9975 11.9 4.3 16.4

Applicant Weighted Average CON #9977 17.2 3.6 20.8

WeightedAverage for District 5 Subdistrict 2 10.2 4.0 14.2 † Facility maintains an obstetric program ‡ Facility maintains a psychiatric program Source: 2005 Hospital Financial Data, AHCA Financial Analysis Unit.

Pasco-Pinellas Hillsborough Community Health System, Inc. (CON #9975) states that the proposed facility would have the same policies and practices as the sponsoring members – Adventist and UCH, as the applicant, Pasco-Pinellas Hillsborough Community Health System, Inc.-Wesley Chapel Hospital is a newly formed entity and has no history. However, Florida Hospital- Zephyrhills (FHZ) is an affiliate of sponsoring member Adventist. In 2005, FHZ provided 10.5 percent Medicaid and 3.7 charity care, for a total of 14.2 percent. This is par with the subdistrict’s total which was also 14.2 percent. All affiliates of the sponsoring members, Adventist and UCH provided a total of 10.4 percent patient days to Medicaid and charity care in 2005. Projected revenues on the applicant’s Schedule 7A indicate that operating year one (ending December 31, 2013) would provide a payer

77 Includes Medicaid and Medicaid HMO patient days.


60

mix of 8.2 percent self-pay and 8.9 percent combined Medicaid and Medicaid HMO, for a total of 17.1 percent combined self-pay, Medicaid and Medicaid HMO. These percentages are not indicated to change for year two or year three of operations. Year one indicates a charity care deduction from revenue of $4,261,036 increasing to $6,961,848 for year two and $10,126,532 for year three. In comparison to co-batched applicant Baycare of Southeast Pasco, Inc., in the first year and second year, this applicant’s projections of charity deductions from revenue are less than one-third that of Baycare of Southeast Pasco, Inc. and well under half that of Baycare of Southeast Pasco, Inc. for year three. The applicant has proposed a condition for the provision of care to Medicaid, charity and uncompensated patients to total 12 percent. BayCare of Southeast Pasco, Inc. (CON #9977) states that the BayCare Health System, Inc. (BayCare), “…has a long and well-established commitment of providing care to all patients in need, including Medicaid patients and medically indigent patients”78. The applicant states that BayCare related hospitals provided approximately $135 million in community benefits during the year ending December 31, 2006. BayCare states it is a joint operating agreement between three Community Health Alliances (CHAs), the CHA is listed between the following: Morton Plant Mease Health Care; St. Anthony’s Health Care and St. Joseph’s-Baptist Health Care. The applicant details79 community participation in a wide variety of health screenings, volunteerisms, faith-based/church presentations and service sites, cash and in-kind contributions, fitness, free clinic services, patient and family advocacy and other topics. Separately identified are the contribution made and activities among the following CHA members: Morton Plant Mease Health Care; St. Anthony’s Health Care; St. Joseph’s-Baptist Health Care; South Florida Baptist Hospital and the South Florida Baptist Hospital Foundation. It is noted that the last three (St. Joseph’s-Baptist Health Care; South Florida Baptist Hospital and the South Florida Baptist Hospital Foundation) are stamped as draft with no explanation. The applicant states that similar levels of community benefit are expected to be achieved through the proposed BayCare Southeast Pasco Hospital as are achieved by other BayCare related facilities and affiliates. As shown above, the average Medicaid provision for the applicant’s facilities was 14.4 percent during FY 2005. Charity care provisions from the applicant’s facilities were 3.7 percent.

78 CON #9977, page #104 79 Ibid and Appendix F – Community Partnerships, Services, Support Groups and Events


61

Projected revenues on the applicant’s Schedule 7A indicate that operating year one would provide a payer mix of five percent self-pay and 10 percent combined Medicaid and Medicaid HMO. Three percent is “other payers”. A total of 15 percent is reached when self-pay, Medicaid and Medicaid HMO are combined. These percentages are not indicated to change for years two or three of operations. Year one indicates a charity care deduction from revenue of $13,446,235 increasing to $20,774,433 for year two and $24,963,944 for year three. In comparison to co-batched appliant Pasco-Pinellas Hillsborough Community Health System, Inc., in the first year and second year, this applicant’s projections of charity deductions from revenue are around tripling that of PPHCH and well over twice that of Pasco-Pinellas Hillsborough Community Health System, Inc. in the third year. The applicant proposes a condition for the provision of 12.0 percent of patient days to Medicaid and charity care patients combined.

F. SUMMARY Pasco-Pinellas Hillsborough Community Health System, Inc. (CON #9975) is applying to establish Wesley Chapel Hospital, an 80-bed acute care hospital in eastern Pasco County, District 5, Subdistrict 2. This is a joint venture between two previously competitive entities: Adventist Health System Sunbelt Healthcare Corporation (Adventist) and University Community Hospital, Inc. (UCH). They intend to serve primarily residents in the Southeastern portion of Pasco County and secondarily a contiguous portion of northern Hillsborough County. The Pasco-Pinellas Hillsborough Community Health System, Inc. Wesley Chapel Hospital site is to be located on the Northern side of State Road 54, across the street from the Saddlebrook Resort, Wesley Chapel, Florida 32543 The applicant proposes the following conditions: • The applicant will provide 12 percent of total patient days to Medicaid,



● Via an executed transfer agreement between the applicant and UCH-Medical Center, UCH will provide a trained and certified neonatal


62

transport team, part of the UCH Women’s Center neonatal staff, to assure safe transport of babies requiring such transfer from Wesley Chapel Hospital to UCH-Medical Center. Condition conformance will be satisfied by providing the Agency an executed copy of the transfer agreement upon initiation of services at Wesley Chapel Hospital.



● The applicant will assist to establish a Federally Quality Health Center (FQHC) site in Wesley Chapel, facilitating procurement of office space and physican recruitment.

● The PHCHS will contribute $200,000 to Pasco County to purchase fire/rescue equipment for the Wesley Chapel area. A condition of $100,000 will be made when the first building permit is issued for the medical office complex and another $100,000 contribution will be made when building permit for the hospital is issued.

The projected total project cost is $121,017,163. Total construction costs are projected at $59,880,000 and the project would involve 184,000 gross square footage (GSF) of new construction. BayCare of Southeast Pasco, Inc. (CON #9977) is applying to establish BayCare Southeast Pasco Hospital (Baycare of Southeast Pasco, Inc), a 130-bed acute care hospital in Pasco County, District 5, Subdistrict 2. The proposed Baycare of Southeast Pasco, Inc. facility would be located near the intersection of I-75 and State Road 54, approximately three to four miles toward the South from the northernmost point of the Bruce B. Downs Boulevard, in a development called “Seven Oaks”. The applicant proposes the following conditions: ● A total of 12 percent of patient days will be provided to Medicaid,

Medicaid HMO and charity/indigent patients. • The proposed project will construct a teaching hospital in

collaboration with the University of South Florida (USF) for the purpose of providing opportunities for education of medical students, residents, and fellows and for allied health care professionals.


63

The projected total project cost is $308,207,156. Total construction costs are projected at $165,808,049 and the project would involve 476,820 gross square footage (GSF) of new construction. After weighing and balancing all relevant criteria, the following issues are presented: Need/Special Circumstances: Numeric need for acute care services is not published by the Agency. It is the applicant’s responsibility to demonstrate need based on population demographics and dynamics; availability, utilization and quality of like services in the district, subdistrict or both; medical treatment trends; and market conditions or some other identified special circumstances. Both applicants present the following relatively similar contentions regarding need for an additional acute care facility in Pasco County: rapid population growth in a segment of the population (the Greater Wesley Chapel area); the central location of each proposed facility to better serve the area, future traffic and roadway issues and out-migration. Roadways are currently conjested, population is expected to grow at a higher rate than the state as a whole, and there is sizable out-migration of Pasco County residents to the two co-batched applicant Hillsborough County facilities. BayCare of Southeast Pasco, Inc. stressed improvement in care because of its proposed affiliation with the University of South Florida’s (USF’s) colleges of medicine, nursing and public health. BayCare advised that its intention was to eventually become a statutorily defined teaching hospital. The appcilant acknowledges that it will be a number of years before it can seek to apply to become a teaching hospital under s. 408.07(45), Florida Statutes. Data available to the Agency but not yet published indicate that for the year ending December 31, 2006 occupancy has increased to 54.55 percent, the highest occupany of any period for at least the last five years. Though population has grown over the past several years, demand for acute care beds has not had a direct linear correlation, in some years, demand at Pasco facilities has declined. Agency population data indicate Pasco County will continue to grow through 2012 and is growing at a faster rate than District 5 overall and faster than the state as a whole.

The out-migration of Pasco County residents from the proposed ZIP codes is notable. BayCare of Southeast Pasco, Inc. proposed that its reputation and current Pasco County resident usage of its Hillsborough


64

County affiliate facilities would likely reduce out-migration. Pasco-Pinellas Hillsborough Community Health System, Inc. sponsoring member University Community Hospital, Inc. currently serves the highest percentage of out-migrating Pasco County residents and can expect to continue to serve some portion of Wesley Chapel residents now seeking care in Tampa at the proposed facility. Access to out-migrating Pasco County residents may be improved with the establishment of a new hospital in the Wesley Chapel area. Both applicants propose to provide obstetric services and obstetric patients out-migrating from this proposed ZIP codes area is notable. Pasco-Pinellas Hillsborough Community Health System, Inc. sponsoring member University Community Hospital, Inc. currently serves the highest percentage of out-migrating obstetric residents. With the establishment of St. Joseph’s Hospital North, which is expected to serve the Lutz population, market shares will be somewhat equal between both competing applicants. Neither project will introduce a new provider to compete in this market.

Quality of Care: Both applicants have demonstrated their ability to provide quality care. Medicaid/charity care: Both applicants have a history of providing care to the medically indigent and both have agreed to condition award of the CON upon providing approximately the same level of care to this population in their respective proposed facilities. BayCare agrees to provide 12 percent of its patient days in the 130-bed facility to the medically indigent and Pasco-Pinellas Hillsborough Community Health System, Inc. proposed to provide 12 percent of its patient days in the 80-bed facility to the medically indigent. Both proposals are for percentages slightly below the subdistrict average.


65

Financial Feasibility: Pasco-Pinellas Hillsborough Community Health System, Inc. (CON #9975): Based on the financial strength of the sponsoring members (Adventist and University Community Hospital, Inc.), the applicant should have access to funding for this project. The project appears to be financially feasible. Assuming the applicant will be able to meet its patient day and payer mix assumptions. BayCare of Southeast Pasco, Inc. (CON #9977): Assuming the parent company (BayCare Health Systems, Inc., a.k.a BayCare) will be able to obtain debt financing as is described in the application, the applicant should have access to funding for this project. The project appears to be financially feasible assuming the applicant will be able to meet its patient day and payer mix assumptions. Architectural Analysis: Pasco-Pinellas Hillsborough Community Health System, Inc. (CON #9975) plans to construct a Class I 80-bed acute care hospital in Wesley Chapel, Florida, approximately 3.5 miles from co-batched applicant, Pasco Pinellas Hillsborough Community Health System, Inc. The projected construction costs are within the range expected for a high-end new hospital. The proposed schedule for permitting and construction activities appears to be reasonable. Overall the proposed hospital is well designed and structural bays have been designed to maximize flexibility as the facility grows and renovates.

BayCare of Southeast Pasco, Inc. (CON #9977) proposes to construct a Class I 130-bed acute care teaching hospital 3.5 miles from co-batched applicant, Pasco Pinellas Hillsborough Community Health System, Inc. The immediate plans include 130 licensed beds, but the facility plans on adding up to 170 additional beds in the future as the need arises. It is proposed that the building be designed and constructed to meet Leadership in Energy and Environmental Design (LEED) and Green Guide for Heathcare criteria. There is no indication of what level of LEED standards the project will attempt to achieve, but there are stated goals of improving the interior environment, the protection of the well being of the surrounding community and to minimize the impact on the health of the global community.


66

The construction cost of $348 per square foot is a little high but does include increased costs associated with the design and construction of a green building.

G. RECOMMENDATION

Approve CON #9975 to establish an 80-bed acute care hospital in east Pasco County. The total project cost is $121,017,163. Total construction costs are $59,880,000 and the project would involve 184,000 gross square footage (GSF) of new construction. CONDITIONS: • The applicant will provide 12 percent of total patient days to Medicaid,



● Via an executed transfer agreement between the applicant and UCH-Medical Center, UCH will provide a trained and certified neonatal transport team, part of the UCH Women’s Center neonatal staff, to assure safe transport of babies requiring such transfer from Wesley Chapel Hospital to UCH-Medical Center. Condition conformance will be satisfied by providing the Agency an executed copy of the transfer agreement upon initiation of services at Wesley Chapel Hospital.



● The applicant will assist to establish a Federally Quality Health Center (FQHC) site in Wesley Chapel, facilitating procurement of office space and physician recruitment.

● The PHCHS will contribute $200,000 to Pasco County to purchase fire/rescue equipment for the Wesley Chapel area. A condition of $100,000 will be made when the first building permit is issued for the


67

medical office complex and another $100,000 contribution will be made when building permit for the hospital is issued.

Deny CON #9977.


68

AUTHORIZATION FOR AGENCY ACTION

Authorized representatives of the Agency for Health Care Administration adopted the recommendation contained herein and released the State Agency Action Report.

DATE: Karen Rivera Health Services and Facilities Consultant Supervisor Certificate of Need Elizabeth Dudek Deputy Secretary, Division of Health Quality Assurance

STATE AGENCY ACTION REPORT CON APPLICATION FOR …STATE AGENCY ACTION REPORT CON APPLICATION FOR...

Documents

Transcript of STATE AGENCY ACTION REPORT CON APPLICATION FOR …STATE AGENCY ACTION REPORT CON APPLICATION FOR...