STATE AGENCY ACTION REPORT

STATE AGENCY ACTION REPORT ON APPLICATION FOR CERTIFICATE OF NEED

A. PROJECT IDENTIFICATION

1. Applicant/CON Action Number

Baptist Hospital, Inc./CON #9973 1000 West Moreno Street Pensacola, Florida 32501

Authorized Representative:

David W. Sj?berg (850) 434-4011

2. Service District/Subdistrict

District 1/Subdistrict 1 (Escambia & Santa Rosa Counties)

B. PUBLIC HEARING

A public hearing was requested by Santa Rosa Medical Center. The hearing was held by Mr. Mike Hill, the Executive Director of the Northwest Florida Health Council, Inc., from approximately 11:00 a.m. to 11.30 a.m., Central Standard Time, on Thursday, April 26, 2007. The location of the public hearing was 9 Harrison Ave., Panama City, Florida 32402. The following organizations were represented: Sacred Heart Health Systems1 (Sacred Heart) represented by Ms. Denise Barton; Santa Rosa Medical Center ( Santa Rosa MC) represented by Mr. Geoffrey Smith and Mr. M. Pete Gandy and West Florida Hospital2 represented by Mr. Dennis Taylor. All attendees presented testimony opposing Baptist Hospital Inc.'s proposal to establish a 96-bed acute care hospital at 9400 University Parkway in Pensacola through the transfer of 96 acute care beds at its existing Pensacola facility located at 1000 West Moreno Street. No one presented testimony in support of the project. A brief summary of the hearing is described below.

A 34 page opposition summary was provided by Dennis Taylor (of West Florida Hospital), with 17 exhibits; this was prepared by Richard A.

1 Sacred Hearth Hospital, operated by Sacred Heart Health Systems is classified as a Disproportionate Share Hospital (DSH), while the applicant, Baptist Hospital, is not. This is relative to fiscal year 2006-2007.

CON Action Number: 9973

Baehr & Associates. Santa Rosa MC's M. Pete Gandy presented eight consecutive pages of opposition. Ms. Denise Barton presented a seven page document with seven slides on behalf of Sacred Heart.

The speakers are presented below in the order in which they were heard.

The first opponent to speak against the project was Mr. M. Pete Gandy on behalf of Santa Rosa. Mr. Gandy states this is the applicant's fourth attempt to establish an acute care facility in an area with a surplus of acute care beds and low occupancy in all nearby hospitals. Santa Rosa MC further believes no new or formerly unsubmitted but material information is presented by the applicant to warrant approval. Mr. Gandy notes that West Florida Hospital is less than a three-minute drive from the applicant's proposed site and that hospital has occupancy below 30 percent3 and approximately 300 empty beds on any given day. The opponent further states that projections of utilization are not reasonable. Payer mixes are stated to be in some cases better for the applicant's existing operations than some other hospitals in the area. Mr. Gandy argues that competition would not be enhanced if the project is approved but does not elaborate on this point; and the project would have substantial adverse impact on Santa Rosa MC. The provision of charity care is discussed in brief, offered as an explanation for why services to the indigent, uninsured and underinsured are being provided by Santa Rosa MC and approval would not likely improve the circumstances for the low-income population. Mr. Gandy states that Santa Rosa MC is the only provider of obstetric services in the area and believes this and other services it provides would be threatened should the application be approved. According to the opponent's financial analysis, approval would result in an annual loss of $2.4 million and that in addition, the nursing shortage in the area would likely be worsened by the approval. Believing that sign-on bonuses might be used by the applicant as an incentive to attract qualified nursing staff, Mr. Gandy states that Santa Rosa MC might suffer even greater nursing shortfalls where there is already a nursing shortage.

The second opponent to speak was Mr. Dennis Taylor representing West Florida Hospital. This opponent states the project is located approximately one mile north of West Florida Hospital and is in agreement with the comments of Santa Rosa MC. Mr. Taylor testifies that West Florida Hospital believes the area is highly competitive with three Level II trauma centers relatively near each other4. West Florida

3 A less than 30 percent occupancy rate at WFH is confirmed by Agency records (Florida Hospital Bed Need Projections & Service Utilization by District) published 01/26/07, for the 12 months ending June 2006. 4 According to page #30, Table 11 of A Comprehensive Assessment of the Florida Trauma System, published February 1, 2005 by the University of South Florida, there are three Level II trauma centers in the Pensacola area. These three centers, combined, have the lowest trauma volume (552 compared to a statewide average of 1,783) and the highest trauma centers per one million residents (3.2 centers compared to a statewide average of

2

CON Action Number: 9973

Hospital has an occupancy rate of around 34 to 35 percent5. In addition to nursing staff, Mr. Taylor expresses concern over shortages in other allied health professional along with physicians6. Physician specialists in the hospital setting are mentioned as particularly in demand. Approval of the project might worsen this situation. Mr. Taylor states that Escambia County has a projected growth rate of around 1.5 percent per year but no data source was stated7.

Ms. Denise Barton spoke on behalf of Sacred Heart and supports the comments of the first two speakers regarding an already competitive market in the Escambia County area. Ms. Barton states the applicant's project would place it in a more affluent area and thereby is designed to improve its financial position and ease its uncompensated care load (as shown later in this report, this statement by Sacred Heart is in fact affirmed by the applicant). Sacred Heart states the applicant has increased its market share in acute care discharges from around 32.6 percent to 34.5 percent, without adding any beds; this has been since the applicant's last application to establish a second hospital in Pensacola. The applicant's financial position is stated by this opponent to be improved, particularly the applicant's cash investments, cash-onhand, net income and operating margin. Ms. Barton also states that Baptist Hospital, Inc.'s operating margin is very good, all the above indicating an improved financial position over time for Baptist Hospital, Inc. Staff in the Agency's Financial Analysis Unit indicate that the

1.23 centers) of any trauma region in the state. Language on page #29 of the literature specifically states that the trauma-center-per-population is nearly three times higher in the area (Escambia County) than in the state average..."due to the misdistribution of trauma centers in Escambia County". 5 A less than 30 percent occupancy rate at WFH is confirmed by Agency records (Florida Hospital Bed Need Projections & Service Utilization by District) published 01/26/07, for the 12 months ending June 2006. 6 According to the Florida Department of Health, Division of Planning, Evaluation and Data Analysis at '07', the number of licensed physicians to 100,000 residents statewide is 279, in Escambia County, the ratio is 233 to 100,000 residents. However, it should be noted that the number of licensed physicians reported does not account for practitioner specialties, with or without admitting privileges at any given hospital(s), licensed to practice but not in fact practicing, or practicing but not necessarily full-time. 7 According to Agency records (Population Estimates) published September 2006, Escambia County has experienced a growth rate in the last five years (for the period ending July 2006) of approximate 0.42 percent. This lower growth rate than stated by the opponent may be due in part to a population decline between 2004 and 2005 and only 0.11 percent growth between July 2005 and July 2006.

3

CON Action Number: 9973

applicant's fund balance has improved each year for the past four years.8 This is expected for each year in which a profit is realized, no matter how small or how low the rate of profit growth. Sacred Heart's fund balance has also grown. The operating margin of Baptist Hospital has fluctuated over the past four years as has Sacred Heart's. It is noted that West Florida's operating margin has consistently gone down each year since 2002.

There being no additional speakers and no further comments, Mr. Hill declared the hearing closed at approximately 11:30 a.m., Central Standard Time, Thursday, April 26, 2007.

Letters of Opposition

In addition to testimony and written materials presented at the public hearing, the Agency received letters of opposition from both Santa Rosa MC and Sacred Heart dated April 9 and April 18, 2007, respectively. These opposition letters essentially restate what opposers presented at the public hearing, described above.

Letters of Support

Appendix O of the application includes approximately 87 support letters. The approximate breakdown of the letters is as follows: community residents (approximately 45 letters); physicians (approximately 19 letters); community organizations (approximately 17 letters); local elected officials (four letters) and administrative/dental practitioners (two letters).

Elected officials that offer support are as follows: Pensacola City Council (J. Nobles) and two board members of the Board of County Commissioners of Escambia County (G. Robinson and M. Young, the latter being the vice chairperson). The fourth and last elected official to provide written support is a member of the Santa Rosa County School Board (E. Gray). Baptist Hospital's reputation, history of serving the medically needy, high quality and their understanding that the project would relocate beds to a fast growth area of Greater Pensacola were all factors in their support of the project.

Of the 19 physician letters, five were not dated. One of the physician letters states the relocation of beds will strengthen Baptist's financial

8 For the four-year period ending September 30, 2006, a brief look at the applicant's fund balances (equities over liabilities) received and accepted by the Agency, indicates a rise in each of the four years; the most recent fund balance (2006) was approximately $108.4 million. This was both the most recent and the highest fund balance for the prior four years. The lowest fund balance was approximately $84.4 million (2003). The applicant's poorest operating margin was in 2006, approximately $1.9 million; its best operating margin was in 2005, approximately $11.7 million.

4

CON Action Number: 9973

position so that it can continue to serve the uninsured and the lowincome population (this claim is restated repeatedly by the applicant in the body of the application). This letter was submitted by the director of the applicant's emergency department physician group. Most of the physician letters are of a form-letter variety and in summary state the move of beds will bring "good competition", will strengthen the hospital's financial base and that quality will be extended from Baptist Hospital (downtown Pensacola) to the Baptist Medical Park location (north Pensacola area).

Of the 17 community leader letters of support, two are not dated, three are by attorneys and only one seems to be by a health care or health care-related provider, that being from Health First Network. The context of the letters is generally similar to that of the physician letters.

For the largest group of support letters (45 by community residents) there are two notable characteristics ? 23 are not dated and 20 show no place of residence. The letters state generalized support of the project.

C. PROJECT SUMMARY

Baptist Hospital, Inc. (CON #9973) is a not-for-profit 435-bed Class I hospital located at 1000 West Moreno Street in Pensacola9. Baptist is parented by Baptist Health Care Corporation and has 367 acute care beds, 42 adult inpatient psychiatric beds, and 26 child/adolescent inpatient psychiatric beds.

The applicant proposes to relocate 96 of its existing, licensed acute care beds from its downtown campus (1000 West Moreno Street) to the location of the Baptist Hospital Medical Park (9400 University Parkway). The proposed 96 acute beds will consist of two 32-bed units for general medical/surgical patients, an 18-bed critical care unit, and a 14-bed intermediate care unit.

The applicant proposes the following conditions:

The proposed new hospital will be located at Baptist Hospital, Inc.'s Baptist Medical Park campus, at 9400 University Parkway, Pensacola, Florida 32514.

9 At the time of application submission, the Baptist hospital was licensed for 492 beds; 367 acute, 42 adult psychiatric, 28 child/adolescent psychiatric and 57 hospital-based skilled nursing. In March of 2007, Baptist submitted a hospital licensure application to delicense 57 hospital-based skilled nursing beds. Two sets of pro formas were submitted by Baptist; one for the 96 acute bed satellite hospital and one for a 495-bed hospital. The total facility bed count is an apparent error. .

5

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download