STATE AGENCY ACTION REPORT
ON APPLICATION FOR CERTIFICATE OF NEED
A. PROJECT IDENTIFICATION
1. Applicant/CON Action Number
The Nemours Foundation/CON #10078
10140 Centurion Parkway North
Jacksonville, Florida 32256
Authorized Representative: David J. Bailey, MD, MBA
(904) 697-4236
Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital/CON #10079
601 East Rollins Street
Orlando, Florida 32803
Authorized Representatives: Ms. Marla Silliman
Ms. Diane Godfrey
(407) 303-9659
2. Service District
Pediatric Cardiac Catheterization Service Planning Area IV which
includes District 7 (Orange, Osceola, Brevard, and Seminole Counties)
and District 9 (Indian River, Martin, Okeechobee, Palm Beach, and
St. Lucie Counties). B. PUBLIC HEARING
A public hearing was not held or requested. However, letters of support
were received by the Agency.
CON Action Numbers: 10078-10079
2
The Nemours Foundation (CON #10078): The applicant submitted 10
unduplicated letters of support with its application. All were signed, nine
had a June 2010 signature date (one was not dated), seven were from
physicians and three were from parents of children treated by Nemours
physicians1.
Of the seven physician support letters, three practice and hold senior
medical staff positions at Nemours Alfred I. DuPont Hospital for
Children, in Wilmington, Delaware, two practice in District 7 (Pediatric
Cardiac Catheterization Service Planning Area IV), one practices in
District 1 (Pediatric Cardiac Catheterization Service Planning Area I) and
one has an academic role at the University of Central Florida. Two of
these physicians practice at Nemours Children‟s Clinic-Orlando and one
practices at Nemours Children‟s Clinic-Pensacola.
These physicians indicate that to transfer a patient to another area for
advanced cardiac services creates an inability to provide patient and
family centered care and that project approval would promote a more
comprehensive service model. They do not indicate the number of
patients they have referred for inpatient pediatric cardiac care.
Deborah German, MD, Dean, University of Central Florida College of
Medicine states that her medical school is partnering with Nemours2.
William Blanchard, MD, FAAP, FACC, FAHA states that for the last five
years he has been the chair of the Florida Department of Health‟s
Division of Childrens‟ Medical Services Cardiac Advisory Council and
that he supports the project.
Three support letters were from family members that had children under
Nemours care. These letters indicate that Nemours provides quality care
and state support for the project.
Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital
(CON #10079): The applicant submitted 48 unduplicated letters of
support with its application. Of these, 47 were signed, 46 had a June
2010 signature date (two were not dated), 39 were from physicians and
nine were from non-physicians3. These letters are described below.
1 CON Application #10078, Attachment F-Letters of Support. These support letters are identical to those submitted with concurrent and companion CON Application #10080. 2 Dr. German provided a similarly worded letter for Florida Hospital‟s CON Application #10079. 3 CON Application #10079, Appendices B, D, E, F, H, and J. These letters are identical to those submitted with CON Application #10081.
CON Action Numbers: 10078 and 10079
3
Of the 39 Florida physician support letters, 32 of these physicians (with
four having a primary academic/research role) practice in District 7
(Pediatric Cardiac Catheterization Service Planning Area IV), five practice
in District 4 (Pediatric Cardiac Catheterization Service Planning Area II)
and two practice in District 6 (Pediatric Cardiac Catheterization Service
Planning Area III).
The majority of letters address the quality of care offered at Florida
Hospital and indicate that continuity of care will improve should the
project be approved. Most indicate that project approval will allow
children to be treated locally and their parents to avoid travel to an
unfamiliar area. Several physicians indicate that referral to existing
pediatric open heart surgery providers creates disruption and
fragmentation of care and additional stress and burden on patients‟
families.
Deborah German, MD, Dean, University of Central Florida (UCF) College
of Medicine states that her medical school is partnering with Florida
Hospital4. Joseph Portoghese, MD, Chief Academic Officer, Florida
Hospital Graduate Medical Education Program states that Florida
Hospital has affiliation as a primary teaching site with the UCF College of
Medicine and the Florida State University College of Medicine. Dr.
Portoghese also states that project approval would help support training
the next generation of physicians.
Four support letters were from Chief Executive Officers of Florida
Hospital affiliate hospitals in Districts 3, 4 and 6. These CEOs state that
their hospitals refer seriously ill pediatric patients to Florida Hospital and
project approval would enhance services within the Florida Hospital
network. Two letters were from parents whose children had pediatric
cardiovascular services in Tampa.
Michael Aubin, Administrator, St. Joseph‟s Children‟s Hospital (District
6, Pediatric Cardiac Catheterization Service Planning Area III) states that
he is aware of Florida Hospital‟s strong and longstanding commitment to
the pediatric population of the Orlando area, including those in need of
cardiology services. He states that Florida Hospital brings both the
expertise of a high volume cardiac surgery program and a dedicated
pediatric team to the proposal. He attributes St. Joseph‟s Hospital‟s
pediatric cardiac surgery success to Dr. James Quintessenza5 and notes
that Dr. Quintessenza will be working with Florida Hospital to help them
4 This physician provided a similarly worded letter of support for the co-batched applicant, CON Application #10078. 5 James Quintessenza, MD, Cardiac Surgical Associates, Congenital Heart Institute of Florida, is one of the 39 Florida physicians who included a letter of support for this project.
CON Action Numbers: 10078-10079
4
reach the same volume and quality outcomes. Mr. Aubin states that he
believes there is sufficient volume to support quality programs at St.
Joseph‟s and Florida Hospital, should the project be approved. Mr.
Aubin emphasizes that pediatric cardiologists and cardiac surgeons
follow patients with congenital defects throughout their life and when
these patients need surgery, they are treated by pediatric cardiovascular
surgeons.
C. PROJECT SUMMARY
The Nemours Foundation (CON #10078) (also referred to as Nemours
or Nemours Children‟s Hospital) proposes to establish a pediatric cardiac
catheterization program at Nemours Children‟s Hospital, located in
District 7, Orange County, Pediatric Cardiac Catheterization Service
Planning Area IV, which includes both Districts 7 and 9. The applicant
filed CON #10080 concurrently with this application for the
establishment of a pediatric open heart surgery program. Nemours
currently operates a children‟s hospital in Wilmington, Delaware and
four children‟s specialty outpatient centers. Three of the outpatient
centers are located in Jacksonville, Orlando and Pensacola. Nemours
Children‟s Hospital is expected to be operational in 2012 and will be a
95-bed facility with a bed complement of 82 acute care, five Level II NICU
and eight Level III NICU beds. The applicant indicates that the cardiac
catheterization (CON #10078) and pediatric open heart (CON #10080)
programs will be operational by the third quarter of 2014. Nemours
expects to perform 250 pediatric cardiac catheterizations during year two
ending September 30, 2016.
It is unclear how the applicant would implement the program with the
proposed start date because section 408.040(2)(a) Florida Statutes,
requires that a CON terminate 18 months after issuance. Rule 59C-
1.018 (2) (a) 2. Florida Administrative Code (F.A.C.), requires that a CON
holder for renovation of an existing structure must, by the date of
termination of the CON, be deemed to have commenced construction and
the project be under continuous construction which must be maintained
per Rule 59C-1.018 (2) (a) 3. a. F.A.C. The applicant‟s Schedule 10
indicates a period of two years from September 30, 2012 (the date the
facility is licensed) to the initiation of service (project start date) of
October 1, 2014.
CON Action Numbers: 10078 and 10079
5
Specific to pediatric cardiac catheterization, Nemours states the center
point of the project will be a hybrid catheterization lab that allows
catheterization procedures and certain cardiac surgeries to be performed
simultaneously in one location. A focus of these pediatric cardiac
services is to shift from invasive open heart procedures to less invasive
hybrid procedures.
The applicant proposes the following conditions:
• Nemours Children‟s Hospital will include its pediatric cardiac
catheterization program in the hospital-wide condition that Nemours
accepted on its approved hospital (CON #9979), Level II NICU (CON
#9978), and Level III NICU (CON #9980) projects for a minimum of 54
percent of patient days to be provided to patients covered by Medicaid
or charity.
• The services described in CON #10078 will not be implemented until
two years following the opening of Nemours Children‟s Hospital.
• As part of the implementation of CON #10078, Nemours Children‟s
Hospital will offer preventive cardiology services including screening,
education and research particularly as it relates to the link between
childhood obesity and cardiac disease.
These conditions are identical to those proposed in concurrent and
companion CON Application #10080.
The total project cost is estimated at $3,944,360. These total project
costs include 2,261 gross square feet (GSF) of renovated space at a cost
of $583,725, with no new construction. Total project costs include:
building, equipment, project development and start-up costs.
Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital
(CON #10079) (also referred to as Adventist or Florida Hospital-Orlando)
proposes to establish a pediatric cardiac catheterization program at the
main campus of Florida Hospital-Orlando, located in District 7, Orange
County, Pediatric Cardiac Catheterization Service Planning Area IV,
which includes both Districts 7 and 9. The applicant filed CON #10081
concurrently with this application for the establishment of a pediatric
open heart surgery program. Florida Hospital-Orlando is a 1,067-bed
not-for-profit general hospital, licensed for 917 acute care beds, 59 adult
psychiatric beds, 10 comprehensive medical rehabilitation beds, 28 Level
II NICU beds and 53 Level III NICU beds. Florida Hospital-Orlando also
operates adult and pediatric kidney transplantation programs, an adult
liver transplantation program, adult and pediatric bone marrow
CON Action Numbers: 10078-10079
6
transplantation programs, and an adult pancreas transplantation
program. Florida Hospital has two CON approved adult transplantation
programs – heart (CON #10026) and lung (CON #10028). Florida
Hospital-Orlando also has a Level II Adult Cardiology program and is a
Primary Stroke Center. In 2010, Florida Hospital became a statutory
teaching hospital. This project and the concurrently submitted CON
Application #10081 are expected to be operational by June 1, 2012.
Florida Hospital expects to perform 174 pediatric cardiac catheterizations
in year two ending May 31, 2014.
The applicant proposes the following conditions:
• Develop comprehensive pediatric and adult congenital heart disease
(CHD) program to include integrated care for the adult population and
consultation and collaboration between adult and pediatric specialists
to improve outcomes for CHD patients.
• Promote research, public education and awareness of congenital heart
disease for both pediatric and adult populations through participation
in the national congenital heart disease registry (as cited in the
Congenital Heart Futures Act by the United States Congress included
in CON Application #10081-Attachment C).
• The applicant commits to a minimum of 40 percent of pediatric
congenital heart disease patient days for a combination of Medicaid,
Medicaid HMO and uncompensated care.
• Sponsor a biannual congenital heart disease symposium in Orlando
to provide ongoing educational opportunities for physicians, nurses
and other health care professionals dealing with the congenital heart
disease population.
• The congenital heart disease program will include a state-of-the-art
hybrid endovascular operating room and a dedicated congenital heart
inpatient unit at Florida Hospital-Orlando.
These conditions are identical to those proposed in concurrent and
companion CON Application #10081.
The total project cost is estimated at $10,000. Total project cost is the
project development cost6.
6 CON Application #10079 references the costs as those in concurrent and companion application CON Application #10081.
CON Action Numbers: 10078 and 10079
7
D. REVIEW PROCEDURE
The evaluation process is structured by the certificate of need review
criteria found in Section 408.035, Florida Statutes. 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 assessing the responses 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 best meet the review criteria.
Section 59C-1.010(3)(b), Florida Administrative Code allows no
application amendment information subsequent to the application being
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 consultant, Steve Love analyzed the
application in its entirety with consultation from the financial analyst
Felton Bradley, who evaluated the financial data, and Architect Scott
Waltz, who reviewed the architectural and schematic drawings. E. CONFORMITY OF PROJECT WITH REVIEW CRITERIA
The following indicate the level of conformity of the proposed project with
the criteria and application content requirements found in Florida
Statutes, sections 408.035, and 408.037; applicable rules of the State of
Florida, Chapter 59C-1 and 59C-2, Florida Administrative Code.
CON Action Numbers: 10078-10079
8
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? Rule 59C-1.008(2), Florida Administrative Code.
In Volume 36, Number 13, dated April 2, 2010 of the Florida
Administrative Weekly, a fixed need pool of zero was published for
additional pediatric cardiac catheterization programs in Service Planning
Area IV for the July 2012 planning horizon.
As of April 2, 2010, Service Planning Area IV had one operational and
one CON approved pediatric cardiac catheterization program. The
operational program is located at Arnold Palmer Medical Center in
Orlando (District 7). St. Mary‟s Medical Center in West Palm Beach
(District 9) has the approved (CON #10054) program. The applicants are
applying for pediatric cardiac catheterization programs in the absence of
published need, with both proposing “not normal” circumstances exist to
support approval of their projects. b. In addition to the published zero fixed need pool, Ch. 59C-1.032,
Florida Administrative Code, outlines the criteria currently in effect for evaluating applications for pediatric cardiac catheterization programs and standards which cardiac catheterization programs must follow:
1. Pediatric cardiac catheterization programs shall be established
on a regional basis. A new pediatric cardiac catheterization program shall not normally be approved unless the number of live births in the service planning area, minus the number of existing and approved programs multiplied by 30,000, is at or exceeds 30,000.
Service Planning Area IV consists of Districts 7 and 9. The
following table shows the number of live births by county in
Districts 7 and 9.
CON Action Numbers: 10078 and 10079
9
Total Resident Live Births by County CY 2008
County
# Live Births
Rates per 1,000 Population
Brevard 5,467 12.4
Indian River 1,373 9.7
Martin 1,280 8.9
Okeechobee 532 13.3
Orange 16,568 14.9
Osceola 4,046 14.7
Palm Beach 15,246 11.8
St. Lucie 3,363 12.2
Seminole 4,643 10.9
Total 52,518 12.1 Source: Florida Department of Health, Office of Vital Statistics Annual Report 2008.
As shown above, the number of live births in Service Planning Area
IV in 2008, according to the Florida Department of Health‟s Office
of Vital Statistics Annual Report 2008, was 52,518. Service Area
IV has one licensed and one CON approved pediatric cardiac
catheterization program. Therefore, 37,482 additional live births
would be required to meet the need threshold in Rule 59C-
1.032(8)(e) F.A.C.
2. Programs catheterizing pediatric patients only shall project a minimum service volume of 150 cardiac catheterizations per year within two years of the initial operation of the program. Programs serving both adult and pediatric patients shall project a program volume of 350 cardiac catheterizations per year.
The Nemours Foundation (CON #10078): The applicant‟s
pediatric cardiac catheterization program is expected to be
operational by the third quarter of 2014. Nemours expects to
perform 250 pediatric cardiac catheterizations in year two ending
September 30, 2016.
Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital
(CON #10079): Florida Hospital projects that it will perform 174
pediatric cardiac catheterizations in year two ending May 31, 2014.
3. Actual inpatient and outpatient migration from one service planning area to another shall be considered in the review of certificate of need applications.
Agency data does not provide insight into patient origin for cardiac
catheterization services; therefore, the applicants discuss patient
origin in terms of pediatric open heart surgery cases. The table
below represents use rates by District 7 (Brevard, Orange, Osceola
CON Action Numbers: 10078-10079
10
and Seminole Counties) pediatric open heart surgery cases for CY
2009, which demonstrates that 41 of 91 (approximately 45.05
percent) District 7 residents out-migrated to other service areas to
obtain needed surgery7.
Hospital of Treatment for District 7 Resident CY 2009 Pediatric Open Heart Surgery Cases
Facility Service Area District 7 Patients
Miami Children‟s Hospital V 1
Arnold Palmer Medical Center IV 50
All Children‟s Hospital III 13
St. Joseph‟s Hospital III 27
Total 91 Source: Florida Center for Health Information and Policy Analysis.
As shown above, Arnold Palmer Medical Center provided 50
pediatric open heart surgery procedures to District 7 residents
during CY 2009. Therefore, the Agency affirms there is
outmigration in this scenario for CY 2009, indicating that
applicable pediatric services were not available or accessible for 41
of 91 (approximately 45.05 percent) of applicable patients in the
area for the period.
c. Special and “Not Normal” Circumstances
The Nemours Foundation (CON #10078) contends that the following
“not normal” circumstances exist to support project approval:
• Florida has no pediatric open heart surgery or cardiac cath program
that is part of an integrated delivery system such as Nemours that
employs an electronic health record (EHR).
• Nemours will develop a cardiac team that only cares for children with
cardiac diagnosis and as such will not be “floated” to other hospital
floors or departments.
• Nemours will offer an integrated model of care that is not currently
available for applicable pediatric patients in the Orlando area. The
applicant compares its integrated (Nemours system) care to Arnold
Palmer Hospital‟s (the existing provider). Arnold Palmer has
community based cardiologists but employs surgeons from Miami
Children‟s Hospital.
7 The Agency utilizes DRGs 216-221 and 228-236, in its 2009 discharge data run, to attain these totals.
CON Action Numbers: 10078 and 10079
11
• Nemours will provide care to patients with complex, often co-morbid
conditions, typically in need of cardiac services. The applicant states
that the Nemours model has the cardiac team participate in the non-
cardiac medical care of any patient with underlying cardiac diagnosis.
• Nemours will provide a cardiology fellowship training program (within
the seven fellowship programs conditioned to in CON #9979, the
original 82-bed acute care project).
• Nemours will bring new opportunities for research in pediatric
cardiology as it relates to the linkage between childhood obesity and
cardiac conditions. The applicant states its cardiologists will bring
this research, outreach, screening, and teaching initiative to the
Orlando and north Florida service area.
• Nemours indicates that its regional network of clinics located in
Pensacola, Jacksonville and Orlando will operate in partnership for
the appropriate referral to the project.
• Nemours contends that its project will reduce outmigration of
applicable pediatric patients from the Orlando area.
Nemours states that medically complex and chronically ill children,
particularly pediatric patients with cardiac disease, are among the most
medically complex of all pediatric patients, often with co-morbidities that
require integrated medical management. Nemours believes it is best
suited to accommodate this need in the area. Childhood obesity is also
highlighted as a major factor that contributes to early death and early
onset of disease. Nemours states its intent to aggressively address
childhood obesity through the project (CON Application #10078, page
#25, Figure 1 and Figure 2). The applicant shows a positive correlation
between childhood overweight, prehypertension and stage I and stage II
hypertension. The applicant also indicates a majority of pediatric cardiac
patients in Florida from July 2008 through December 2009 were under
the age of five years (CON Application #10078, page #30, Exhibit 1 and
2).
Nemours describes statewide pediatric open heart and pediatric cardiac
cath trends during CY 2006 – 2009 using differing DRGs (CON
Application #10078, pages 89-101 and Exhibits 5-16). Nemours provides
a table (Exhibit 21, CON #10078 application, page 109) which indicates
that during CY 2009, its Jacksonville clinic provided 132,903 visits,
Orlando 41,532 visits and Pensacola 35,467 visits. The applicant
indicates that the Pensacola clinic has the only pediatric cardiologists in
Service Area 1 and had 5,202 cardiology clinic visits and 7,982 cardiac
testing visits in 2009. The applicant indicates that its need analysis
considers existing referral patterns but does not provide the number of
its patients that have had pediatric open heart surgery or that it referred
to open heart surgery providers during 2009.
CON Action Numbers: 10078-10079
12
The applicant anticipates drawing applicable pediatric patients from a
large area of northern and central Florida, Pediatric Cardiac
Catheterization Program Service Areas I and II and counties surrounding
Orlando. After Pediatric Cardiac Catheterization Program Service Areas I
and II, the applicant anticipates capturing applicable pediatric patients
from the following six counties: Brevard, Indian River, Orange, Osceola
and Seminole (Pediatric Cardiac Catheterization Program Service
Planning Area IV) and Polk (Pediatric Cardiac Catheterization Program
Service Planning Area III). The applicant does not anticipate capturing
applicable pediatric patients from the following counties: St. Lucie,
Martin or Palm Beach (Pediatric Cardiac Catheterization Program Service
Planning Area IV). This is largely due to the recently approved but not
yet operational program at St. Mary‟s Medical Center in Palm Beach
County. The applicant notes and the Agency confirms that outmigration8
exists from Service Planning Area IV, primarily to Service Planning Area
III. The applicant believes that as a new provider of applicable pediatric
services, the outmigration trend could reverse, due largely to what the
applicant describes as its unique model of care.
The applicant expects to perform 180 pediatric cardiac catheterization
procedures in year one (ending September 30, 2015), 250 procedures in
year two and 298 procedures in year three. The applicant reaches these
totals by estimating a 2.5 percent statewide ratio of pediatric cardiac
catheterization procedures to pediatric open heart surgery procedures.
In assessing how to capture applicable DRGs to account for pediatric
cardiac catheterization and pediatric open heart surgery cases, the
applicant uses the following APR-DRGs: 160-163, 167, 583 and 630.
Nemours indicates that it considers its APR-DRGs to most accurately
reflect open heart procedures but these actually undercount the total
procedures reported to the Agency by existing providers. The applicant
also counts patients up to age 20 as pediatric, whereas for pediatric
cardiac catheterization and pediatric open heart purposes, the Agency
counts patients under age 15. Per the applicant, section 395.003(6),
Florida Statutes justifies counting patients into adulthood for the
8 Ibid.
CON Action Numbers: 10078 and 10079
13
purposes of determining need. Nemours indicates that from July 2008
through June 2009, Arnold Palmer Medical Center discharged 79 of the
154 or 51.3 percent of the pediatric open heart surgery patients in the
applicant‟s expected (Orlando area) catchment counties of Brevard,
Indian River, Orange, Osceola, Polk and Seminole (CON Application
#10078, page #115, Exhibit 26). Similarly, the Agency confirms that for
the 12-month period ending December 31, 2009, Arnold Palmer
discharged 50 of the 91 District 7 residents who sought pediatric open
heart surgery.
Therefore, the Agency and the applicant agree there is outmigration for
this service, primarily to St. Joseph‟s Hospital (Hillsborough County) and
All Children‟s Hospital (Pinellas County). These facilities are located in
Pediatric Cardiac Catheterization Program Service Planning Area III.
As previously stated, the applicant includes Pediatric Open Heart
Program Service Planning Areas I and II, District 7 and Indian River and
Polk Counties in its proposed service area. Nemours presents a detailed
discussion of population trends based on live births for CY 2008 and the
female population aged 15-44 residing in each of the portions of its
proposed service area. This results in projected 102,962 live births,
1,603,018 female population age 15-44, and a 2,205,482 pediatric
population in 2010. The applicant estimates 108,665 live births,
1,692,067 female population age 15-44 and a 2,420,934 pediatric
population in 2015. These result in annual compound growth rates of
1.08 percent (births), 1.09 percent (females 15-44) and 1.88 percent
(pediatric population), per the applicant.
Nemours indicates that its projected market share is based on the need
for continuity of care for the sickest patients, existing referral patterns in
the northern half of Florida, proximity to NCH‟s campus in Orlando,
presence of Nemours-affiliated physicians, especially pediatric
cardiologists and the uniqueness of NCH‟s programs and services. The
applicant contends many of its patients will choose to remain in the
Nemours system because it offers seamless specialty care through its
EHR. The following table shows the applicant‟s projections for its open
heart cases at NCH.
CON Action Numbers: 10078-10079
14
Nemours Children's Hospital Open Heart Surgery Program
Projected Admissions
Actual Projected Year 1 Projected Year 2 Projected Year 3
Nemours Service Sub-Areas July 08 - June 09 ending 9-30-15 ending 9-30-16 ending 9-30-17
Service Area I (Districts 1 & 2)
2008 Service Area Fertility Rate per 1,000 Female pop. 15-44) 64.66 64.66 64.66 64.66
Female Population Age 15-44 Years 283,622 291,640 292,882 294,129
Projected Births 18,338 18,856 18,937 19,017
Service Area Use Rate for Pediatric OHS (per 1,000 live births) 2.84 2.84 2.84 2.84
Projected Pediatric Open Heart Surgery Cases 52 53 54 54
Nemours Children's Hospital Projected Market Share
15.0% 25.0% 30.0%
Projected NCH OHS Cases from Service Area
8 13 16
Service Area II (Districts 3 & 4)
2008 Service Area Fertility Rate per 1,000 Female pop. 15-44) 62.61 62.61 62.61 62.61
Female Population Age 15-44 Years 672,024 741,919 751,726 761,662
Projected Births 42,077 46,453 47,067 47,689
Service Area Use Rate for Pediatric OHS (per 1,000 live births) 4.28 4.28 4.28 4.28
Projected Pediatric Open Heart Surgery Cases 180 199 201 204
Nemours Children Hospital Projected Market Share
12.0% 16.0% 20.0%
Projected NCH OHS Cases from Service Area
24 32 41
Service Area III (District 7 plus Indian River & Polk Counties)
2008 Service Area Fertility Rate per 1,000 Female pop. 15-44) 65.84 65.84 65.84 65.84
Female Population Age 15-44 Years 605,694 658,509 665,993 673,592
Projected Births 39,879 43,356 43,849 44,349
Service Area Use Rate for Pediatric OHS (per 1,000 live births) 3.86 3.86 3.86 3.86
Projected Pediatric Open Heart Surgery Cases 154 167 169 171
Nemours Children Hospital Projected Market Share
20.0% 26.5% 30.0%
Projected NCH OHS Cases from Service Area
33 45 51
Service Area Cases at NCH
65 91 108
In-Migration (at 10%)
7 9 11
Total OHS Cases at Nemours Children's Hospital
72 100 119 Source: CON Application #10078, page 124.
Nemours contends that NCH will draw patients from the southeastern
United States and Central America and that is reasonable to assume that
its in-migration will be more than the projected 10 percent. Nemours‟
indicates that its cardiac catheterization projections are based on a
projected ratio of 2.5 catheterizations to one open heart surgery
procedure. The applicant‟s projected pediatric cardiac catheterization
cases are provided in the table below.
Nemours Children’s Hospital-Orlando
Projected Cardiac Catheterization Cases Years One – Three
Ending September 30, 2015-2017
2015 2016 2017
Projected Pediatric Open Heart Cases 72 100 119
Projected Cardiac Catheterizations 180 250 298 Source: CON Application #10078, page #125, Exhibit 32.
CON Action Numbers: 10078 and 10079
15
Nemours indicates that its projections are conservative because of the
undercount created by use of its APR-DRGs, which it contends is a
subset of the total pediatric open heart patients reported by existing
providers.9 The use rate is 43 percent higher when the total volume of
reported open heart surgery patients is considered, according to the
applicant. Nemours applies this statewide use rate of 23.86 per
thousand population to its 2009 service area population of 2,126,517
and arrives at 507 patients. Applying this use rate to the service area‟s
2016 age 20 and under population of 2,420,934 results in 578 patients
for an incremental demand of 70 cases. Therefore, the applicant
estimates incremental demand will offset a substantial portion of
Nemours‟ total projected case volume resulting in minimal impact on
existing providers. Nemours has an extremely large geographic service
area but its projections may be obtainable should all assumptions hold.
The lack of data about referrals from the applicant‟s existing network
makes their assumptions difficult to assess.
Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital
(CON #10079) contends that “not normal” circumstances exist to
support project approval. Florida Hospital states that project approval is
needed:
• to enhance the transition of care and integration of care for adult
congenital heart patients,
• to complete the continuum of care for congenital heart disease
patients,
• to decrease out-migration from Florida Hospital‟s service area,
• to serve as an extension and regionalization of care by surgeons
and interventionalists of the Congenital Heart Institute of Florida
(CHIF) who currently care for service area patients in Tampa; and
• the existing outmigration represents a sufficient base to support a
program that will not adversely impact existing programs.
The applicant also indicates that the transition of applicable pediatric
patients into adult cardiovascular programs is essential considering that
the pediatric cardiovascular population is now surviving into adulthood
with lifelong cardiovascular illness. Florida Hospital contends that
project approval would lead to an unbroken and unfragmented
continuum of care within the Florida Hospital system which would have
9 The applicant compares the APR-DRG volume of 838 for the 12 months ending June 30, 2009 to the local health council reported procedures count of 1,198, which results in 360 or 30 percent difference to support this contention (CON Application #10078, page 95).
CON Action Numbers: 10078-10079
16
unborn, neonate, childhood and adult cardiac specialist synergies. The
special challenges of the outmigration of this population would be
reduced because patients already being served by specialists at Florida
Hospital and the CHIF physician group would have a continuum of care
closer to home than the current out-migration to the Tampa area.
St. Joseph‟s Hospital, the facility in 2009 that received the most out-
migration by this population supports the project. Also, as a statutory
teaching hospital, Florida Hospital has operational and on-going
continuing education opportunities for physicians, nurses and other
healthcare professionals. Further, Florida Hospital states a continuing
interest in treating the whole person – body, mind and spirit. In this
framework, Florida Hospital maintains an accredited clinical pastoral
education program.
The applicant discusses the rapid growth of pediatric open surgery since
the Agency‟s rule inception in 1990 to 2008. Pediatric open heart
surgery admissions have increased from 545 in 1990 to 1,284 in 2008 or
by almost five percent (4.9 percent) annually over the past 18 years. Live
births have increased from 199,146 in 1990 to 231,235 in 2008
increasing by less than one percent (0.8 percent) annually. This
demonstrates an increased use rate from 2.74 per thousand births in
1990 to 5.55 pediatric open heart surgery (OHS) admissions per
thousand in 2008.
Florida Hospital indicates that its service area will consist of District 7,
and four additional counties (Flagler, Highlands, Lake, and Volusia)
where the applicant has facilities. Florida Hospital applies the 5.55 OHS
use rate per thousand live births to support its contention that there is
sufficient volume among Florida Hospital facilities and other
geographically proximate hospitals that refer neonates to Florida Hospital
to warrant project approval. The applicant indicates that it utilizes a
ratio of two pediatric cardiac catheterizations to one pediatric open heart
surgery case. The following table is presented to support this.
CON Action Numbers: 10078 and 10079
17
Florida Hospital 2009 Potential Pediatric OHS Cases
Hospital Calendar 2009 Florida Hospital deliveries by selected FH locations
Florida Hospital (Orlando) 2,605
Florida Hospital Deland 991
Florida Hospital Waterman 791
Florida Hospital Heartland 978
Winter Park Memorial Hospital 2,327
Florida Hospital Memorial Medical Center 1,207
Florida Hospital Altamonte 1,080
Florida Hospital Celebration 1,603
Total Florida Hospital deliveries 11,582
*Total Referral Hospital Deliveries 6,700
Florida Hospital & Referral Hospital Deliveries 18,282
2009 Florida pediatric OHS use rate/per 1,000 live births 5.55
Projected Florida Hospital & Referral Hospital OHS cases 101
Projected Florida Hospital & Referral Hospital Cardiac Caths 202 Source: CON Application #10079, page 26 from AHCA inpatient data base, MS-DRGs 765-768,
774-775 & DRGs 370-375.
Notes: Projections are stated to represent mothers and to not include multiple births.
*These „referral‟ hospitals are hospitals that are geographically proximate to, and refer high risk
mothers & neonates to Florida Hospital.
Florida Hospital also addresses the 2009 outmigration pattern of
pediatric patients served by partner cardiovascular physicians of CHIF
(which operates in Tampa and Orlando). According to Florida Hospital,
this physician group served 44 of 53 applicable patients (83 percent) in
the Tampa area who had migrated from the four Pediatric Open Heart
Surgery Program Service Planning Area IV counties of Brevard, Orange,
Osceola and Seminole. The CHIF physician group is stated to have
served 18 of 19 applicable patients (95 percent) who migrated from
Flagler, Lake and Volusia (Pediatric Open Heart Surgery Program Service
Planning Area II) and Highlands (Pediatric Open Heart Surgery Program
Service Planning Area III) to the Tampa area for treatment.
Florida Hospital suggests a need for at least three pediatric open heart
surgery and at least three pediatric cardiac catheterization programs in
Pediatric Service Area IV. The applicant reaches this conclusion by
revising the need methodology criteria from 30,000 to 15,000 live births
(CON Application #10079, page #31, Table 6). This is based on the
applicant‟s data showing the use rate has increased from 2.74 per
thousand in 1990 to 5.55 per thousand in 2008 and its contention that
this should be applied to modify the criteria from 30,000 to 15,000 live
births. The applicant also contends that as early as 2000, data indicated
that adult patients exceeded the number of pediatric congenital heart
patients, approximately one third of District 7‟s congenital heart disease
patients out-migrated to Tampa for open heart surgery in CY 2009, the
live birth threshold (30,000) is based on 1990 health care delivery, and
the utilization of pediatric open heart surgery is not correctly defined or
CON Action Numbers: 10078-10079
18
identified in the Agency rule and has been inconsistently reported by
existing providers. However, local health council data reports the
number of procedures reported by the facility; whereas, the Agency‟s
inpatient data base is the discharge DRG which may not reflect a
primary cardiovascular diagnosis.
As previously stated, Florida Hospital‟s projected service area includes
District 7 and Flagler, Highlands, Lake, and Volusia Counties. The
applicant indicates that the service area pediatric (under age 15)
population is projected to increase by 9.3 percent from 639,515 in July
2010 to 699,224 in July 2015. The service area‟s 718,416 female
population age 15-44 is projected to increase by 7.4 percent from
668,659 in July 2010 to 718,416 in 2015. The applicant indicates that
service area live births are projected at the five-year average of 63.5 live
births experienced during CY 2004 through 2008. Florida indicates that
that the projected 718,416 female population with the 63.5 per thousand
birth rate will result in 45,636 live births and an estimated 490 projected
pediatric cardiac catheterization procedures by 2015.
Florida Hospital‟s table 16 indicates that during CY 2009, District 7
residents accounted for 136 pediatric open heart surgery procedures and
the CHIF cardiovascular surgeon group performed 44 of these. Flagler,
Highlands, Lake, and Volusia county residents accounted for 47
procedures with CHIF performing 18 of these. The applicant indicates
that its need projections are based on:
• Ninety percent of CHIF patients residing in the service area will
receive care at Florida Hospital instead of traveling to Tampa.
• Total service area pediatric open heart admissions will increase
consistent with the projected increase in service area deliveries.
• Florida Hospital will capture 15 percent of other service area cases in
year one and 20 percent (actually computes to 18 percent) in year
two.
• Patients residing outside the defined service area will represent five
percent of total admissions.
The following table shows Florida Hospital projections during the first
three years of operation ending May 31, 2012 through May 31, 2014.
CON Action Numbers: 10078 and 10079
19
Florida Hospital Pediatric Open Heart Surgery & Cardiac Catheterization Program
CON #10079 Projected Admissions
CHIF
Other
Subtotal
In-
Migration
Open
Heart
Total
Cath.
Total
2009 Service Area Volume 62 121 183
Projected Year One - Ending May 31, 2012
Projected Service Area Volume 65 128 193
Percent Florida Hospital 90% 15%
Total Year One 58 19 77 4 81 162
Projected Year Two - Ending May 31, 2013
Projected Service Area Volume 66 130 196
Percent Florida Hospital 90% 18%
Total Year Two 59 24 83 4 87 174
Projected Year Three - Ending May 31, 2014
Projected Service Area Volume 67 132 199
Percent Florida Hospital 90% 25%
Total Year Three 60 33 93 6 99 198
Source: CON Application #10079, page 61.
Florida Hospital‟s projections appear to be reasonable. 2. Agency Rule Preferences Does the project respond to preferences stated in Agency rules? See
Chapter 59C-1.032 of the Florida Administrative Code.
Chapter 59C-1.032 of the Florida Administrative Code does not contain
preferences relative to pediatric cardiac catheterization programs.
However, the rule does contain standards the Agency utilizes in
assessing an applicant‟s ability to provide quality care. References to
adult cardiac catheterization programs have been deleted.
a. Scope of Service Ch. 59C-1.032(3), Florida Administrative Code.
(1) Each cardiac catheterization program shall be capable of
providing immediate endocardiac catheter pacemaking in cases of cardiac arrest, and pressure recording for monitoring and to evaluate valvular disease, or heart failure. Applicants for cardiac catheterization programs shall document the manner in which they will meet this requirement.
The Nemours Foundation (CON #10078): Nemours proposes its
services will include but not be limited to temporary pacemakers,
Swan Ganz catheters, pressure recording, stent insertion,
administration of intracoronary thrombolytics, electrophysiology
CON Action Numbers: 10078-10079
20
studies and other innovative techniques as alternatives to open
heart surgery for patients deemed appropriate for these
procedures. The applicant asserts that its program will have the
capability of providing all of the services described above.
Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital
(CON #10079) proposes to provide a full range of pediatric
services, including but not limited to immediate endocardiac
catheter pacemaking and pressure recording for monitoring. The
applicant states that a new state of the art hybrid endovascular
operating room will open in 2012 with capabilities for
catheterization, echocardiography and surgery and will also be
used for pediatric cardiac catheterization and dedicated pediatric
electrophysiology procedures. Florida Hospital‟s pediatric cardiac
catheterization and electrophysiology program will be led by
pediatric cardiologists who are members of CHIF.
(2) A range of non-invasive cardiac or circulatory diagnostic
services must be available within the health care facility itself, including:
(a) Hematology studies or coagulation studies; (b) Electrocardiography; (c) Chest x-ray; (d) Blood gas studies; and (e) Clinical pathology studies and blood chemistry analysis.
The Nemours Foundation (CON #10078): Nemours
proposes to offer each of these studies upon the opening of
its facility in 2012.
Adventist Health System/Sunbelt Inc. d/b/a Florida
Hospital (CON #10079): Florida Hospital states that it
provides all the studies and services listed above. The
applicant also includes current Agency clinical laboratory
licensure, accreditation and a list of Florida Hospital sister
facilities affiliated with Florida Blood Centers, Inc. (CON
Application #10079, Appendix K).
CON Action Numbers: 10078 and 10079
21
(3) At a minimum a cardiac catheterization program shall include: (a) A special procedure x-ray room; (b) A film storage and darkroom for proper processing of
films: (c) X-ray equipment with the capability in
cineangiocardiography, or equipment with similar capabilities;
(d) An image intensifier; (e) An automatic injector; (f) A diagnostic x-ray examination table for special
procedures; (g) An electrocardiograph; (h) A blood gas analyzer; (i) A multi-channel polygraph; and (j) Emergency equipment including but not limited to a
temporary pacemaker unit with catheters, ventilitory assistance devices, and a DC defibrillator.
The Nemours Foundation/CON #10078: Nemours
proposes that it will equip its cardiac catheterization service
to include all of the equipment set forth under this standard.
Adventist Health System/Sunbelt Inc. d/b/a Florida
Hospital (CON #10079): Florida Hospital states that as a
leading provider of cardiovascular services, it already has the
items listed above.
b. Service Accessibility Ch. 59C-1.032(4), Florida Administrative Code.
(1) Hours of Operation. Every cardiac catheterization program
shall have the capability of rapid mobilization of the study team within 30 minutes for emergency procedures 24 hours a day, seven days a week. Applicants for new cardiac catheterization programs shall document the manner in which they will meet this requirement.
The Nemours Foundation (CON #10078): Nemours indicates the
proposed cardiac catheterization and open heart surgery programs
will be available for elective cases at a minimum of eight hours a
day/five days per week and that the programs will have on-call
policies to enable rapid mobilization of the cardiac cath, surgical
and medical support teams for emergency cases as needed.
Emergency call coverage is stated to be available 24 hours per
day/seven days per week and Nemours will mobilize the surgical
and medical support teams as required.
CON Action Numbers: 10078-10079
22
Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital
(CON #10079): Florida Hospital indicates the project‟s call
program will be designed to assure a maximum waiting period of
two hours. Florida Hospital reports an on-call process 24 hours a
day with staff paid two hours for every eight hours on call. Call
response time for pediatric catheterization will be 30 minutes, as it
is for adult cardiac catheterization services.
(2) Underserved Population Groups. Applicants for a cardiac
catheterization program shall indicate the projected number of medically indigent and Medicaid patients to be served annually. Applicants shall indicate their past provision of health services to medically indigent and Medicaid patients.
The Nemours Foundation (CON #10078): The applicant
proposes to condition CON approval on providing a minimum of 54
percent of its patient days to charity and Medicaid patients. In
year two of operations, Nemours expects 56.6 percent of its
pediatric open heart and cardiac catheterization cases to be
Medicaid and Medicaid HMO and 3.6 percent self-pay/other.
Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital
(CON #10079): The applicant proposes to condition CON approval
on providing a minimum of 40 percent of pediatric congenital heart
disease patient days to Medicaid, Medicaid HMO and
uncompensated care. In year two of operations, Adventist expects
58 percent of the facility‟s combined pediatric open heart and
cardiac catheterization patient days will be Medicaid and Medicaid
HMO and 2.0 percent will be self-pay.
c. Service Quality Ch. 59C-1.032(5), Florida Administrative Code.
(1) Accreditation. Any health care facility providing inpatient
catheterization only, or inpatient and outpatient cardiac catheterization, or angioplasty, must be fully accredited by the Joint Commission for special care units, or be accredited by the American Osteopathic Association.
The Nemours Foundation (CON #10078): Nemours reports it will
be accredited by the Joint Commission as soon as it is eligible
following opening and that accreditation will be in place by the
time that the cardiac catheterization program is implemented.
CON Action Numbers: 10078 and 10079
23
Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital
(CON #10079): Florida Hospital provides documentation (CON
Application #10079, Attachment N) of its March 28, 2009
accreditation by the Joint Commission. (2) Availability of Health Personnel. Any applicant proposing to
establish a cardiac catheterization program must document that adequate numbers of properly trained personnel will be available. At a minimum, a team involved in cardiac catheterization consists of a physician, one nurse, and one or more technicians. An applicant for a new cardiac catheterization program shall document that the following staff are available:
(a) A program director, board-certified or board-eligible in
internal medicine, or radiology with subspecialty training in cardiology or cardiovascular radiology; the program director for programs performing pediatric cardiac catheterization shall be board-eligible or board-certified by the Sub-Board of Pediatric Cardiology of the American Board of Pediatrics or the American Osteopathic Association in the area of pediatric cardiology.
The Nemours Foundation (CON #10078): Nemours reports
it will recruit a program director who is board-certified in
internal medicine with subspecialty training in cardiology
and who will be board-eligible or board-certified by the Sub-
Board of Pediatric Cardiology of the American Board of
Pediatrics.
Adventist Health System/Sunbelt Inc. d/b/a Florida
Hospital (CON #10079): Florida Hospital reports that Jorge
McCormack, MD, Clinical Associate Professor at the
University of South Florida and a chief executive officer of
Pediatric Cardiology Associates in St. Petersburg (a CHIF
practice) will serve as program director10. Alfred Asante-
Korang, MD is a board-certified pediatric cardiologist and a
member of CHIF‟s Pediatric Cardiology Associates11. Dr.
McCormack, Dr. Asante-Korang and other CHIF pediatric
cardiologists will provide the medical leadership and
oversight for the proposed program.
10 Dr. McCormack‟s curriculum vitae is provided by the applicant (CON Application #10078, Appendix, O). 11 Dr. Asante-Korang‟s letter of support is included in the application (ibid).
CON Action Numbers: 10078-10079
24
(b) A physician, board-certified or board-eligible in
cardiology, radiology, or with specialized training in cardiac catheterization and angiographic techniques who will perform the examination.
The Nemours Foundation (CON #10078): Nemours states
it will employ at least one physician who is board-certified or
board-eligible in cardiology and with specialized training in
pediatric cardiac catheterization and angiographic
techniques who will perform the examination.
Adventist Health System/Sunbelt Inc. d/b/a Florida
Hospital (CON #10079): Florida Hospital states pediatric
cardiac catheterizations will be performed by one of the
board-certified pediatric cardiologists from CHIF, such as Dr.
Jorge McCormack, Dr. Albert Asante-Korang, or other
qualified CHIF physicians. According to Florida Hospital,
these physicians mostly perform pediatric cardiac
catheterizations at St. Joseph's Hospital in Tampa and All
Children's Hospital in St. Petersburg and are the physicians
that provide the majority of pediatric cardiac catheterizations
for service area residents who leave the Florida Hospital
service area for care.
(c) Support staff, specially trained in critical care of cardiac
patients, with a knowledge of cardiovascular medication and an understanding of catheterization and angiographic equipment;
(d) Support staff, highly skilled in conventional radiographic techniques and angiographic principles, knowledgeable in every aspect of catheterization and angiographic instrumentation, with a thorough knowledge of the anatomy and physiology of the circulatory system;
(e) Support staff for patient observation, handling blood samples and performing blood gas evaluation calculations;
(f) Support staff for monitoring physiologic data and alerting the physician of any changes;
(g) Support staff to perform systematic tests and routine maintenance on cardiac catheterization equipment, who must be available immediately in the event of equipment failure during a procedure;
(h) Support staff trained in photographic processing and in the operation of automatic processors used for both sheet and cine film.
CON Action Numbers: 10078 and 10079
25
The Nemours Foundation (CON #10078): Nemours states
that it will employ physicians and staff trained in each of the
services listed above. The applicant also states it will utilize
the staff at its Delaware facility to assist in training of
cardiac catheterization staff. (See Section 4., c.-Staffing
[CON Application #10078] to account for planned FTEs as
they relate to applicable program staff).
Adventist Health System/Sunbelt Inc. d/b/a Florida
Hospital (CON #10079): Florida Hospital reports that as an
existing adult open heart and adult cardiac catheterization
provider, and Level I pediatric intensive care and Level III
NICU provider, it already has physicians and staff trained in
each of the services listed above. Pediatric cardiac
catheterization support training will be provided at St.
Joseph‟s Hospital in Tampa. (See Section 4., c.-Staffing
[CON Application #10079] to account for planned FTEs as
they relate to applicable program staff).
(i) A Medical Review Committee, which reviews medical
invasive procedures such as endoscopy and cardiac catheterization.
The Nemours Foundation (CON #10078): Nemours will
establish a peer review committee and a procedure review
committee. The committees will review medically invasive
procedures for the continuous implementation of pediatric
cardiac cath and pediatric open heart surgery programs.
Adventist Health System/Sunbelt Inc. d/b/a Florida
Hospital (CON #10079): Florida Hospital states a pediatric
medical review committee will review medically invasive
procedures.
CON Action Numbers: 10078-10079
26
e. Coordination of Services 59C-1.032(6), Florida Administrative Code.
(1) Cardiac Catheterization programs proposed in a facility not performing open heart surgery must submit a written protocol as part of their certificate of need application for the transfer of emergency patients to a hospital providing open heart surgery, which is within 30 minutes travel time by emergency vehicle under average travel conditions.
(2) Cardiac catheterization programs which include the provision of coronary angioplasty, valvuloplasty, or ablation of intracardiac bypass tracts must be located within a hospital which also provides open heart surgery.
(3) Pediatric cardiac catheterization programs must be located in a hospital in which pediatric open heart surgery is being performed.
The Nemours Foundation (CON #10078): Nemours
simultaneously submitted a concurrent and companion application
for the establishment of a pediatric open heart surgery program
(CON #10080).
Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital
(CON #10079): Florida Hospital simultaneously submitted a
concurrent and companion application for the establishment of a
pediatric open heart surgery program (CON #10081).
f. Service Cost 59C-1.032(7), Florida Administrative Code.
Cost data for cardiac catheterization programs, among similar institutions, shall be comparable when patient mix, cost accounting methods, labor market differences and other extenuating factors are taken into account.
The Nemours Foundation (CON #10078): Nemours expects its cardiac
catheterization and open heart surgery programs will be competitive with
other existing providers in the area for the same types of patients when
mix of patients, cost accounting methods, and market factors are
considered. The applicant estimates the average charge per case for year
one, beginning September 30, 2015, will be $42,742. Schedule 7A shows
total patient revenue for the project of $21,454,877 for year three.
Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital (CON
#10079): Florida Hospital states its pediatric cardiac catheterization
services costs and charges have been developed based on the applicant‟s
experience with similar cardiology surgery services, along with being
reasonable and consistent with other Florida providers of pediatric open
CON Action Numbers: 10078 and 10079
27
heart and pediatric cardiac catheterization services. The applicant
estimates an average charge per case for year one, ending May 31, 2013,
to be $194,294 (pediatric open heart and pediatric cardiac cath
combined). Schedule 7A shows total patient revenue for the project of
$50,429,296 for year three.
4. Statutory Review Criteria a. Is need for the project evidenced by the availability, quality of care,
accessibility and extent of utilization of existing health care facilities and health services in the applicant’s service area? ss. 408.035 (1)(a) and (b), Florida Statutes.
Arnold Palmer Medical Center, located in Orlando (District 7), is the only
operational provider of pediatric cardiac catheterization services in
Service Area IV. St. Mary‟s Medical Center in West Palm Beach (District
9) has CON #10054 approved to implement a program.
The chart below demonstrates pediatric cardiac catheterization program
utilization during calendar year 2009:
Pediatric Cardiac Catheterization Program Utilization Data
Calendar Year 2009 Facility by Service Area Total # Procedures
Service Area 1 (Districts 1 & 2)
No Providers 0
Service Area 2 (Districts 3 & 4)
Shands Hospital at the University of Florida 144
Baptist Medical Center/Shands Jacksonville Medical Center 387
Service Area 3 (Districts 5,6 & 8)
All Children‟s Hospital 329
St. Joseph‟s Hospital 489
Service Area 4 (Districts 7 & 9)*
Arnold Palmer Medical Center 260
Service Area 5 (Districts 10 & 11)
Memorial Regional Hospital 143
Jackson Memorial Hospital 494
Miami Children‟s Hospital 410
Total 2,656
Source: Florida Need Projections and Utilization for Cardiac Catheterization Heart Surgery Programs and Transplantation Programs for July 2012 Planning Horizon.
CON Action Numbers: 10078-10079
28
The table below represents the historical utilization reported by Arnold
Palmer Medical Center, Service Area IV‟s pediatric cardiac catherization
provider for the periods specified.
Pediatric Service Planning Area IV Cardiac Catheterization Procedures
Calendar Years 2005-2009- County 2005 2006 2007 2008 2009
Arnold Palmer Medical Center Orange 160 218 245 256 260 Source: Agency for Health Care Administration Pediatric Cardiac Catheterization Program utilization data for years indicated.
Agency data does not provide insight into patient origin for cardiac
catheterization services; therefore, the applicants discuss patient origin
in terms of pediatric open heart surgery cases. The table below
represents use rates by District 7 (Brevard, Orange, Osceola and
Seminole Counties) pediatric open heart surgery cases for CY 2009,
which demonstrates that 41 of 91 District 7 residents out-migrated to
other service areas to obtain needed surgery.
Hospital of Treatment for District 7 Resident CY 2009 Pediatric Open Heart Surgery Cases
Facility Service Area District 7 Patients
Miami Children‟s Hospital V 1
Arnold Palmer Medical Center IV 50
All Children‟s Hospital III 13
St. Joseph‟s Hospital III 27
Total 91 Source: Florida Center for Health Information and Policy Analysis.
As shown above, Arnold Palmer Medical Center provided 50 pediatric
open heart surgery procedures to District 7 residents during CY 2009.
Both co-batched applicants believe sufficient volume exists and a
reduction in outmigration will have minimal to no material impact on the
existing provider (Arnold Palmer Medical Center). The approval of either
project will have some impact on Arnold Palmer. However, it appears
that existing referral patterns promote the exodus of patients to other
areas and approval of either applicant should improve access.
Below is a map that depicts the Pediatric Cardiac Catheterization
Program Service Planning Area IV existing and approved pediatric
cardiac catheterization providers and the locations of the co-batched
applicants‟ proposed facilities.
CON Action Numbers: 10078 and 10079
29
MapPoint 2006
Although neither applicant demonstrates that patients needing this
service were unable to obtain it, Agency data confirms notable
outmigration of patients from Planning Area IV to Planning Area III.
Therefore, access to these services would be improved by a project
CON Action Numbers: 10078-10079
30
approval, especially geographic access in the case of Adventist. As
shown in the table above 41 of 91 (or approximately 45.05 percent) of
District 7‟s pediatric patients in 2009 traveled outside of their home
pediatric service area to receive these procedures. Access to care is
projected to be enhanced more by Nemours. However, this increased
access in volume is slightly off-set by the fact that Adventist projects its
second year of operation to end by May 2014 (as opposed to September
2016 in the case of co-batched applicant Nemours). Adventist commits
to a minimum of 40 percent of pediatric congenital heart disease patient
days for a combination of Medicaid, Medicaid HMO and uncompensated
care. Nemours commits to “include its program in the hospital wide
condition of a minimum of 54 percent of patient days to be provided to
patients covered by Medicaid or charity”.
The Nemours Foundation (CON #10078): Nemours indicates that while
existing pediatric cardiac catheterization and pediatric open heart
provider in Pediatric Service Area IV (Arnold Palmer Medical Center and
CON approved but not yet operational St. Mary‟s Medical Center) meet
many of the health care needs of children in the service area and serve
their immediate communities, these facilities do not offer the pediatric-
only depth and breadth of subspecialty services that Nemours proposes
to offer. Nemours also cites its broader service area (Pediatric Cardiac
Catheterization and Pediatric Open Heart Service Area I and II and
surrounding Orlando counties). The applicant‟s intent is to provide a
more comprehensive pediatric program that is more pediatric specific.
Nemours indicates that several core competencies make it unique in the
care of medically complex and chronically ill children. These include:
• unified hospital and physician practice,
• integrated system of clinical care that is supported by a critical mass
of subspecialty pediatric physicians,
• educational partnerships and programs for teaching and education of
staff, including graduate medical, allied health and nursing
professions,
• pediatric research,
• exclusive pediatric focus at all times,
• all components assembled in one location (applicant refers to Alfred I.
DuPont Hospital for Children in Wilmington, Delaware), under one
strategy,
• endowed financial foundational support that permits the prioritization
of pediatric care,
• comprehensive Electronic Health Record (EHR) and
• data warehouse.
CON Action Numbers: 10078 and 10079
31
Nemours gives particular weight to the value of its EHR program and
states it is nationally recognized for its “medical informatics”, leading to
improved care and fewer medical errors, offering an in-depth description
of the program (CON Application #10078, Attachment E).
The applicant demonstrates that there is significant out-migration by
residents of District 7, many of whom are traveling to Service Planning
Area III for pediatric cardiac care. Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital
(CON #10079) separately addresses availability, quality of care,
accessibility and extent of utilization of existing health care facilities and
health services in the applicant‟s service area.
Availability
Florida Hospital indicates that the majority of patients served by its
program will be patients who previously outmigrated to the Tampa area,
most to St. Joseph‟s Hospital, which has provided a letter of support for
this project12. The applicant also anticipates that the majority of patients
impacted by this project are patients receiving care from CHIF physicians
at St. Joseph‟s Hospital. The applicant indicates that CHIF patients will
represent 60 of its projected 93 service area patients (or 64.52 percent)
during year three.
Quality of Care
Florida Hospital reports performance improvement activities and a
Family Advisory Council (created in 2010), all designed to improve
quality. Recruitment expenses and effort are anticipated to be minimal,
as the applicant coordinates/integrates interventional cardiologists and
cardiovascular surgeons at CHIF, many of whom offered letters of
support. The lead physician to coordinate this project, James
Quintessenza, MD, FACS, includes a 30-page resume for Agency
review13. Florida Hospital also reports extensive experience in the
provision of care to pediatric patients and specifically congenital heart
disease patients. Additionally, the applicant reports thorough
coordination with medical information exchange technology, including
12 Of the two co-batched applicants, CON Application #10081 includes the most extensive letters of support that tie directly with this project, pediatric cardiac surgeons and interventionalists in Tampa and Orlando. 13 CON Application #10079, Appendix O. Dr. James Quintessenza reports receiving his degree in Doctor of Medicine from the University of Florida and is currently Chief of Cardiovascular and Thoracic Surgery, CHIF, holds current Florida medical licensure, along with holding the title Clinical Assistant Professor, Division of Thoracic/Cardiovascular Surgery, Department of Surgery, University of South Florida College of Medicine (1990 to present).
CON Action Numbers: 10078-10079
32
participation in the Central Florida Regional Health Information
Organization (promoting Electronic Medical Records technology), the
Florida Hospital IMPAX Imaging System and the State Health
Information Exchange.
Utilization of Existing Facilities
Service Planning Area IV has one operational program at Arnold Palmer
Medical Center and one program not yet operational (St. Mary‟s Medical
Center). Arnold Palmer Medical Center reported 260 pediatric cardiac
catheterization procedures in 2009.
The applicant demonstrates that there is significant out-migration by
residents of District 7, many of whom are traveling to Service Planning
Area III for pediatric cardiac care.
b. Does the applicant have a history of providing quality of care? Has
the applicant demonstrated the ability to provide quality care? ss. 408.035 (1)(c), Florida Statutes.
Quality of care as presented by each co-batched applicant (CON
Application #10078 and CON Application #10079) is predominantly
the same as that presented in concurrent and companion CON
Application #10080 and CON Application #10081, respectively.
The Nemours Foundation (CON #10078 has CONs approved to
establish a 95-bed Class II Children‟s Hospital in the Lake Nona area of
Orange County, Florida.
The applicant describes itself as a pioneer with recognition by The Joint
Commission for its efforts to measure pediatric health care. Nemours
also states it was a key developer of the National Pediatric Quality
System adopted by The Joint Commission to identify standardized
performance measures for pediatric acute care settings, as other widely
accepted performance measures are focused on adults that are not
applicable to children, showing what the applicant describes as a built-in
adult bias. The applicant provides much discussion throughout the
application on the importance of „best practices‟, evidence based
medicine, electronic health records, as well as its plans to establish the
concurrent and companion programs within a „top tier‟ children‟s
hospital, with an in-depth childrens‟ focus.
CON Action Numbers: 10078 and 10079
33
The applicant provides a list of safety initiatives that it states are not
available through any providers in District 7 and are hallmarks of the
„top tier” services and provisions Nemours intends to bring to the service
area:
• Pedi-QS - The Pedi-QS is the national Pediatric Quality System adopted
by The Joint Commission as a prototype to improve care for children in a
measurable way. CON Application #10078, Attachment M provides a
copy of a letter from The Joint Commission documenting Nemours
participation in the development of the Pedi-QS. Nemours is
collaborating with other national organizations in utilizing this approach
with asthma, medication safety, attention deficit disorder and cystic
fibrosis.
• Nemours Clinical Management Program (NCMP) – The NCMP program
integrates clinical information from various sources into a system of
computerized data, so teams of physicians, clinicians, and information
scientist can identify and then promulgate practices that achieve
superior outcomes. This process transforms data into knowledge with
goal of improving quality of care for all children.
• Nemours Biomedical Research – The mission of Nemours Biomedical
Research is to improve the health of children through translational
research programs that move discoveries rapidly from the lab to bedside
and then to practice and community.
• Electronic Medical Record – The implementation of the Electronic
Medical Record provides another avenue to achieving both clinical
quality and safety. Nemours is at a stage of electronic medical records
that far exceeds most pediatric hospitals. Nemours commitment to
patient safety and the investment in technology, staffing, and training
have produced safety synergies that put Nemours in the forefront of this
area.
The applicant also provides the proposed Quality and Safety Plan for the
project (CON Application #10078, Attachment N).
The applicant demonstrated the ability to provide quality care.
Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital
(CON #10079) states that Florida Hospital has received numerous
accreditations, including from The Joint Commission and the College of
American Pathology Accreditation. Florida Hospital‟s Joint Commission
accreditation is included for Agency review (CON Application #10079,
Appendix N). Other reported accreditations are with the following:
Commission on Cancer of the American College of Surgeons, Family
CON Action Numbers: 10078-10079
34
Medicine Program (Graduate Medical Education by the Accrediting
Council on Graduate Medical Education) and the American College of
Radiology.
Adventist Health System/Sunbelt, Inc. lists receipt of numerous awards
recognizing its high quality of care. These awards were issued to Florida
Hospital or sister facilities in the Florida Hospital network.
HealthGrades Americas 50 Best Hospitals (2010).
HealthGrades Award for Patient Safety Excellence (2010).
HealthGrades Award for Clinical Excellence (2007, 2008 and 2010).
HealthGrades Award for Clinical Excellence-Cardiac Care (2008 and
2009).
HealthGrades Award for Clinical Excellence-Coronary Intervention
(2008 – 2010).
HealthGrades Award for Clinical Excellence-Critical Care (2009 and
2010).
One of America‟s Best Hospitals. Florida Hospital has been
recognized eight years in a row (1999-2007) by U.S. News and World
Report as “One of America‟s Best Hospitals” for clinical specialties
(among these categories are heart and heart surgery [cardiology].
Medicare Leader: Florida Hospital is the largest provider of Medicare
services in the nation (MedPAR Data, 2008).
Hospital of the Future: The Wall Street Journal named Florida
Hospital the “Hospital of the Future” (1999).
Hospital of the 21st Century: Florida Hospital Celebration Health
received the Premier Patient Services Innovator Award as “The Model
for Healthcare Delivery in the 21st Century.
America‟s Heart Hospital: MSNCB named Florida Hospital “America‟s
Heart Hospital”. Florida Hospital performs nearly 15,000 complex
cardiac procedures each year, the most in the nation, and was the
first hospital in the state to be recognized as an accredited chest pain
center by The Society of Chest Pain Centers and Providers (2003).
CON Action Numbers: 10078 and 10079
35
Top Cardiac Center: Modern Healthcare named Florida Hospital one
of the “Top 100 Hospitals for Cardiac Care” (2002).
Leader in Cardiac Research: Florida Hospital is one of the top
hospitals in the nation for patient enrollment in cardiac research
studies.
Top Birthing Center: Fit Pregnancy named Florida Hospital one of the
“Top 10 Best Places in the Country to Have a Baby” (2002).
Teaching Hospital Designation: The Administrative Board of the
Council of Teaching Hospitals and Health Systems (COTH)
unanimously endorsed Florida Hospital for full COTH membership,
distinguishing it as one of the nation‟s teaching hospitals (2006).
Leading Family Practice Residency Program: Florida Hospital has the
largest family practice residency program in Florida and one of the
largest in the nation.
Governor‟s Sterling Award: Florida Sterling Council (2010).
Agency compliant data indicates that for the three-year period ending
June 14, 2010, Florida Hospital14 received 14 substantiated complaints:
three for nursing services; two each for discharge planning and
resident/patient client assessment and one each for falls/injury,
medicine problems/errors/formulary, physician services, pressure sores,
quality of care, resident/patient client neglect and unqualified personnel.
Florida Hospital Zephyrhills (Lic. #4445) received 12 substantiated
complaints: two each for medicine problems/errors/formulary and
patient rights and one each for – administration/personnel, discharge
planning, emergency access, infection control, nursing services, patient
abuse/neglect, quality of care/treatment and restraints/seclusion.
Florida Hospital Wauchula (Lic. #4239) received one substantiated
complaint for quality of care.
Florida Hospital Waterman (Lic. #4409) received seven substantiated
complaints: two for medicine problems/errors/formulary and one each
for the following – administration/personnel, call lights, falls/injury,
quality of care/treatment and resident/patient client assessment.
14 Lic. #4369 includes: Florida Hospital-Orlando, Florida Hospital-East Orlando, Florida Hospital-Kissimmee, Winter Park Memorial Hospital, Florida Hospital-Apopka, Florida Hospital-Celebration Health and Florida Hospital-Altamonte.
CON Action Numbers: 10078-10079
36
Florida Hospital Heartland Medical Center and Florida Hospital Lake
Placid (Lic. #4171) received eight substantiated complaints: two for plan
of care and one each for the following – administration/personnel,
emergency access, falls/injury, nursing services, patent abuse/neglect
and pressure.
Florida Hospital Flagler (Lic. #4465) received three substantiated
complaints, one each for – nursing services, plan of care and pressure
sores.
Florida Hospital Fish Memorial (Lic. #4408) received 13 substantiated
complaints: four for nursing services, two each for pressure sores and
resident/patient client assessment and one each for the following –
discharge planning, emergency access, patient rights, plan of care and
restraints/seclusion.
Florida Hospital Deland (Lic. #4436) received one substantiated
complaint for emergency access.
Florida Hospital Oceanside and Florida Hospital Ormond Beach (Lic.
#4201) had no substantiated complaints.
During the three-year period ending June 14, 2010, Florida Hospital-
Orlando experienced a total of 14 substantiated complaints and for the
three-year period ending July 19, 2010, Florida Hospital network
hospitals experienced a total of 46 substantiated complaints.
c. What resources, including health manpower, management personnel
and funds for capital and operating expenditures are available for project accomplishment and operation? ss. 408.035(1)(d), Florida Statutes.
The Nemours Foundation (CON #10078): The financial impact of this
project will include the project cost of $3,944,360 and year two
incremental operating costs of $5,579,879.
The audited financial statements of The Nemours Foundation for the
periods ending December 31, 2008 and 2009 were analyzed for the
purpose of evaluating the applicant‟s ability to provide the operational
funding, development, and start-up costs necessary to implement the
project as proposed.
CON Action Numbers: 10078 and 10079
37
Short-Term Position:
The applicant‟s current ratio of 1.8 is slightly below average and
indicates current assets are slightly less than two times current
liabilities, an adequate position. The ratio of cash flows to current
liabilities of 0.4 is below average, a moderately weak position. The
working capital (current assets less current liabilities) of $127.0 million
is a measure of excess liquidity that could be used to fund capital
projects. Overall, the applicant has an adequate short-term position.
(See Table below).
Long-Term Position:
The ratio of long-term debt to net equity of 0.5 indicates the applicant
has some equity to borrow against. This is below average and increases
the likelihood that the applicant could acquire additional debt if needed,
a good position. The ratio of cash flow to assets of 4.3 percent is below
average and a moderately weak position. The most recent year had
operating income of $64.8 million, which results in an operating margin
of 9.2 percent. Overall the applicant has a good long-term position. It
should be noted that the applicant is entitled to substantially all of the
income earned by the Alfred I. DuPont Testamentary Trust (Trust) for use
in the performance of its activities. During 2009 and 2008, the applicant
received total distributions from the Trust totaling $94.3 million and
$137.8 million, respectively. These distributions were recognized as
revenue and other support in the audited financial statements. (See
Table below).
Capital Requirements:
Schedule 2 indicates the applicant has capital projects and current
maturities of long-term debt totaling $391.96 million. This includes the
project cost for CON Application #10080 of $4.5 million. In addition, the
applicant is projecting a combined year one operating loss of $1.1 million
for these two projects. The open heart project and cardiac
catheterization project cannot exist without the completion and ongoing
operations of the children‟s hospital. The applicant projects an operating
loss in both years for the children‟s hospital of between $18 and $20
million each year. The applicant would have to fund this operating loss
in addition to the capital projects listed on Schedule 2.
Available Capital:
Funding for this project will come from cash on hand. The audited
financial statements of the applicant for the most recent year show a
cash and current investment balance of $284.4 million and $127.0
million in working capital with a current ratio of 1.8. The audit also
indicated that operating cash flow was $64.9 million with operating
income of $64.8 million with a margin of 9.2 percent. The audit
CON Action Numbers: 10078-10079
38
indicates that the applicant was able to acquire the debt financing for the
children‟s hospital. Of the $363.4 million in temporarily restricted net
assets, $358.8 million is for restricted for the care and treatment of
physically handicapped children in Florida.
Staffing:
The table below shows the applicant‟s projected staffing for years one,
two and three, ending September 30, 2015, 2016 and 2017, respectively.
All staff categories remain the same each year with the following
incremental changes in the ICU RN category: 2015 (10.25 FTEs), 2016
(14.17 FTEs) and 2017 (16.98 FTEs).
The Nemours Foundation
Concurrent/Companion Pediatric Cardiac Catheterization and Pediatric Open Heart Unit
Staffing Patterns
Year 1 Ending
9/30/15
Year 2 Ending
9/30/16
Year 3 Ending
9/30/17
SURGICAL SERVICES
Operating Room Coordinator 1.00 1.00 1.00
Operating Room RNs 4.00 4.00 4.00
Perfusionists 2.00 2.00 2.00
TOTAL 7.00 7.00 7.00
CICU
ICU RNs 10.25 14.17 16.98
ARNP/PA (Shared w/Med/Surg) 6.00 6.00 6.00
Unit Coordinator 1.00 1.00 1.00
Clerk/Aides 4.60 4.60 4.60
TOTAL 21.85 25.77 28.58
MED/SURG (TELEMETRY)
Med/Surg RNs 9.50 9.50 9.50
Clerk Aides 4.60 4.60 4.60
Equip. Tech (shared w/CICU) 1.00 1.00 1.00
Social Worker (shared w/CICU) 1.00 1.00 1.00
Unit Coordinator 1.00 1.00 1.00
TOTAL 17.10 17.10 17.10
CARDIAC REHAB
Exercise Physiologist 1.00 1.00 1.00
TOTAL 1.00 1.00 1.00
OTHER ANCILLARY
Pharmacist 1.00 1.00 1.00
Respiratory Therapist 1.00 1.00 1.00
Nutritionist 1.00 1.00 1.00
TOTAL 3.00 3.00 3.00
CARDIA CATH LAB
RNs 3.00 3.00 3.00
CV Techs 2.00 2.00 2.00
TOTAL 5.00 5.00 5.00
GRAND TOTAL 54.95 58.87 61.68
Source: CON Application #10078, Schedule 6A.
CON Action Numbers: 10078 and 10079
39
Conclusion:
Funding for this project and all capital projects should be available as
needed.
THE NEMOURS FOUNDATION
12/31/2009
12/31/2008
Current Assets $284,362,639
$257,636,072
Cash and Current Investment $171,134,321
$164,860,276
Assets Whose Use is Limited $373,155,457
$95,770,761
Temporarily Restricted Net Assets $363,397,838
$328,228,522
Total Assets $1,507,956,767
$1,126,987,540
Current Liabilities $157,359,591
$82,601,391
Total Liabilities $613,070,744
$382,996,384
Net Assets $894,886,023
$743,991,156
Total Revenues $706,573,024
$664,332,345
Interest Expense $1,211,996
$2,269,623
Excess of Revenues Over Expenses $64,752,483
$29,712,024
Cash Flow from Operations $64,857,456
$73,329,595
Working Capital $127,003,048
$175,034,681
FINANCIAL RATIOS
12/31/2009
12/31/2008
Current Ratio (CA/CL) 1.8
3.1
Cash Flow to Current Liabilities (CFO/CL) 0.4
0.9
Long-Term Debt to Net Assets (TL-CL/NA) 0.5
0.4
Times Interest Earned (NPO+Int/Int) 54.4
14.1
Net Assets to Total Assets (TE/TA) 59.3%
66.0%
Operating Margin (ER/TR) 9.2%
4.5%
Return on Assets (ER/TA) 4.3%
2.6%
Operating Cash Flow to Assets (CFO/TA) 4.3% 6.5%
Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital
(CON #10079): The total financial impact for both programs will include
the project cost of $10,995,614 and year two incremental operating costs
for the two combined programs of $13,382,937. Although these
programs require separate CON applications, the Agency financial review
is based on the combined project as presented by the applicant.
The applicant provided its December 31, 2008 and 2007 audited
financial statements and the December 31, 2009 and 2008 audits for
Florida Hospital Medical Center. The hospital is a division of the
applicant. The applicant did not file its most recent audited financial
statement (December 31, 2009) as defined in Rule 59C-1.008(5)(c),
CON Action Numbers: 10078-10079
40
Florida Administrative Code. A note was enclosed in the application that
the December 2009 audit is currently being prepared. Given the hospital
represents approximately half of the applicant‟s operating results, the
Agency does not believe this omission impairs the Agency‟s ability to
evaluate the hospital‟s financial stability and/or ability to fund this
project.
The audited financial statements of the hospital, for the periods ending
December 31, 2008 and 2009 were analyzed for the purpose of
evaluating the hospital‟s ability to provide the capital and operational
funding necessary to implement the project.
Short-Term Position:
The hospital‟s current ratio of 4.3 is well above average and indicates
current assets are slightly less than four and a half times current
liabilities, a strong position. The ratio of cash flows to current liabilities
of 1.0 is also well above average, and a strong position. The working
capital (current assets less current liabilities) of $949.5 million is a
measure of excess liquidity that could be used to fund capital projects.
Overall, the hospital has a strong short-term position. (See Table below).
Long-Term Position:
The ratio of long-term debt to net assets of 0.7 is above average and may
limit the hospital‟s ability to acquire future debt if necessary. The ratio
of cash flow to assets of 11.6 percent is well above average and a good
position. The most recent year had operating income of $162.5 million,
which results in an operating margin of 8.5 percent. Overall the hospital
has a good long-term position.
Capital Requirements:
Schedule 2 indicates the applicant has $863.6 million in capital projects
including this project.
Available Capital:
The applicant indicates that funding for this project and the entire
capital budget will come from cash on hand. The applicant listed itself
and the hospital as sources to fund the project. As discussed above, the
hospital has working capital of $949.5 million with revenues in excess of
expenses of $162.5 million and cash flow from operations of $300.4
million. It appears that the hospital not only has sufficient funds for this
project, but also has sufficient funding for the entire capital budget of its
parent, the applicant. (See Table 1 immediately below).
CON Action Numbers: 10078 and 10079
41
Staffing: Th e ta b le below s h ows th e a pp lica n t’s p rojected s ta ffin g for yea rs on e, two
a n d th ree, en d in g Ma y 2013 , 2014 a n d 2015 , res pect ively. All s ta ff
ca tegor ies rem a in th e s a m e ea ch yea r with th e followin g in crem en ta l
ch a n ges in th e RN ca tegory: Ma y 2013 a n d 2014 (41 .5 FTEs ) a n d 2015
(42 .1 FTEs ).
Adventist Health System/Sunbelt Inc. d/b/a
Florida Hospital Concurrent/Companion Pediatric Cardiac Cath and
Pediatric Open Heart Unit Staffing Patterns
Year 1 Ending 5/13
Year 2 Ending 5/14
Year 3 Ending 5/15
ADMINISTRATION
Financial/Other 4.4 4.4 4.4
TOTAL 4.4 4.4 4.4
NURSING
R.N.s 41.5 41.5 42.1
TOTAL 41.5 41.5 42.1
ANCILLARY
Physical Therapist 4.2 4.2 4.2
Other: Pharmacist 5.6 5.6 5.6
TOTAL 9.8 9.8 9.8
SOCIAL SERVICES
Other: Social Worker/Educator 3.0 3.0 3.0
TOTAL 3.0 3.0 3.0
GRAND TOTAL
58.7
58.7
59.3
Source: CON Application #10079, Schedule 6A.
Conc lus ion::
Fu n d in g for th is p roject a n d th e en t ire ca p ita l bu dget s h ou ld be a va ila b le
a s n eeded .
CON Action Numbers: 10078-10079
42
CON 10079 - Audited Financial Statements
Applicant
Parent
12/31/09
12/31/08
Current Assets $1,238,097,000
$2,526,342,000
Cash and Current Investment $1,013,882,000
$2,055,912,000
Assets Whose Use is limited $19,988,000
$62,633,000
Total Assets $2,593,778,000
$5,449,068,000
Current Liabilities $288,631,000
$684,234,000
Total Liabilities $1,219,339,000
$3,242,391,000
Net Assets $1,374,439,000
$2,206,677,000
Total Revenues $1,912,318,000
$4,089,897,000
Interest Expense $45,807,000
$112,936,000
Excess of Revenues Over Expenses $162,545,000
$145,795,000
Cash Flow from Operations $300,370,000
$306,393,000
Working Capital $949,466,000
$1,842,108,000
FINANCIAL RATIOS
12/31/09
12/31/08
Current Ratio (CA/CL) 4.3
3.7
Cash Flow to Current Liabilities (CFO/CL) 1.0
0.4
Long-Term Debt to Net Assets (TL-CL/NA) 0.7
1.2
Times Interest Earned (NPO+Int/Int) 4.5
2.3
Net Assets to Total Assets (TE/TA) 53.0%
40.5%
Operating Margin (ER/TR) 8.5%
3.6%
Return on Assets (ER/TA) 6.3%
2.7%
Operating Cash Flow to Assets (CFO/TA) 11.6% 5.6%
d. What is the immediate and long-term financial feasibility of the
proposal? ss. 408.035(1)(f), Florida Statutes.
A comparison of the 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
outcome. These relationships hold true for a constant intensity of service
CON Action Numbers: 10078 and 10079
43
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.
The Nemours Foundation (CON #10078): Comparative data were
derived from hospitals in peer groups that reported data in 2008; the
applicant will be compared to the hospitals in Peer Group 14 (Acute Care
Specialty Hospital Group). Per diem rates are projected to increase by an
average of 3.1 percent per year. The standardized net revenue and cost
per adjusted patient day were adjusted using the average case mix score
for Group 14 (1.5107). Inflation adjustments were based on the new
CMS Market Basket, 1st Quarter, 2010.
Because this is a hospital-based program and cannot stand alone
without the hospital, our review evaluates the combined hospital and
program. We also completed an analysis on a combination of the
hospital, this project and the open heart project (CON Application
#10080). 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. It should be noted that the hospital detailed revenue on a
standalone basis was presented in thousands (1,000s) so the difference
in revenue in the Agency‟s Tables 2 and 3 and the applicant‟s Schedule 8
is due to rounding.
It appears that the applicant understated the number of patient days for
the children‟s hospital on a standalone basis. This became apparent
when the review of revenue and cost per adjusted patient day showed the
applicant‟s values exceeding the maximum by a significant margin.
Understating patient days overstated both net revenue and costs per
adjusted patient day. The applicant is projecting a total occupancy of
37.2 percent and 44.5 percent in year one and two of the project (year
three and four of the hospital). In the CON application for the children‟s
hospital (CONs 9978, 9979, and 9980) reviewed in May 2007, the year
one and year two occupancy was listed as 43.1 percent and 53.9 percent.
It should be noted on Schedule 3 of this application, the applicant
showed year one and two patient days for the children‟s hospital at a
significantly lower level than in CON Applications 9978, 9979, and 9980.
Further, the net revenue per patient day for the open heart program is
projected to be less than the net inpatient revenue per patient day of the
children‟s hospital. This seems unreasonable given the complexity and
high case mix associated with open heart patients. The above items lead
the Agency to conclude that patient days are understated. Below is the
adjusted patient day analysis for reference.
CON Action Numbers: 10078-10079
44
(Cardiac Catheterization)
Projected net revenue per adjusted patient day (NRAPD) of $5,960 in year
one and $5,958 in year two is significantly above the group highest
values of $4,841 and $4,986. NRAPD appears to be overstated. (See
Table 2 immediately below).
(OHS & Cardiac Catheterization)
Projected net revenue per adjusted patient day (NRAPD) of $5,810 in year
one and $5,786 in year two is significantly above the group highest
values of $4,841 and $4,986. NRAPD appears overstated. (See Table 3
immediately below).
(Cardiac Catheterization)
Anticipated costs per adjusted patient day (CAPD) of $7,074 in year one
and $6,830 in year two is significantly above the control group highest
values of $4,132 and $4,256 respectively. The highest level is generally
viewed as the practical upper limit on feasibility. CAPD appears to be
overstated. (See Table 2 immediately below).
(OHS & Cardiac Catheterization)
Anticipated costs per adjusted patient day (CAPD) of $6,870 in year one
and $6,576 in year two is significantly above the control group highest
values of $4,132 and $4,256 respectively. The highest level is generally
viewed as the practical upper limit on feasibility. CAPD appears to be
overstated. (See Table 3 immediately below).
The applicant projects a year two operating loss for the hospital with the
cardiac catheterization program of $17.7 million or 14.6 percent and with
both the cardiac catheterization and open heart program of $17.8 million
or 13.6 percent. As discussed above, the NRAPD and CAPD are
overstated as a result of an understatement of patient days. However,
the level of projected loss is relatively consistent with the original
children‟s hospital CON applications (CONs 9978, 9979, and 9980). In
any event, the Nemours Foundation will likely have to subsidize the
ongoing loss for the foreseeable future.
Conclusion:
The immediate feasibility of this project is dependent on the applicant
funding the ongoing operating losses of the children‟s hospital. This is a
non-traditional applicant in that it exists solely as a result of the last will
and testament of Alfred I. DuPont to provide the types of services
outlined in this application. The applicant receives sizable funding from
annual distributions by the Alfred I. DuPont Testamentary Trust (Trust).
CON Action Numbers: 10078 and 10079
45
These distributions supplement non-profitable operations in order to
meet the primary purpose of the Nemours Foundation. Since this project
appears to be in-line with the primary purpose of the applicant, funding
from the Trust should be available to fund future operating losses as
needed.
TABLE 2 (Cardiac Catheterization)
THE NEMOURS FOUNDATION
CON #10078 Cardiac Cath Sep-16 YEAR 2
VALUES ADJUSTED
2008 DATA Peer Group 14 YEAR 2 ACTIVITY
FOR INFLATION
ACTIVITY PER DAY
Highest Median Lowest
ROUTINE SERVICES 204,404,391 10,085
2,695 321 28
INPATIENT AMBULATORY 0 0
129 25 0
INPATIENT SURGERY 0 0
0 0 0
INPATIENT ANCILLARY SERVICES 0 0
4,874 1,592 122
OUTPATIENT SERVICES 91,108,894 4,495
11,556 4,133 849
TOTAL PATIENT SERVICES REV. 295,513,285 14,581
13,369 9,690 1,963
OTHER OPERATING REVENUE 3,930,000 194
254 80 13
TOTAL REVENUE 299,443,285 14,774
13,421 9,849 1,975
DEDUCTIONS FROM REVENUE 178,689,649 8,816
0 0 0
NET REVENUES 120,753,636 5,958
4,986 3,639 643
EXPENSES
ROUTINE 26,887,292 1,327
655 186 81
ANCILLARY 37,373,004 1,844
1,701 1,023 197
AMBULATORY 0 0
0 0 0
TOTAL PATIENT CARE COST 64,260,296 3,171
0 0 0
ADMIN. AND OVERHEAD 37,384,265 1,845
0 0 0
PROPERTY 36,773,570 1,814
0 0 0
TOTAL OVERHEAD EXPENSE 74,157,835 3,659
2,222 1,539 977
OTHER OPERATING EXPENSE 0 0
0 0 0
TOTAL EXPENSES 138,418,131 6,830
4,256 3,386 2,176
OPERATING INCOME -17,664,495 -872
598 129 -1,080
-14.6%
PATIENT DAYS 13,835
ADJUSTED PATIENT DAYS 20,268
TOTAL BED DAYS AVAILABLE 34,675
VALUES NOT ADJUSTED
ADJ. FACTOR 0.6826
FOR INFLATION
TOTAL NUMBER OF BEDS 95
Highest Median Lowest
PERCENT OCCUPANCY 39.90%
80.2% 58.9% 1.6%
CON Action Numbers: 10078-10079
46
TABLE 3 (OHS & Cardiac Catheterization)
THE NEMOURS FOUNDATION
CON #10078 OHS Sep-16 YEAR 2
VALUES ADJUSTED
2008 DATA Peer Group 14 YEAR 2 ACTIVITY
FOR INFLATION
combined ACTIVITY PER DAY
Highest Median Lowest
ROUTINE SERVICES 195,708,000 8,697
2,695 321 28
INPATIENT AMBULATORY 40,797,151 1,813
129 25 0
INPATIENT SURGERY 0 0
0 0 0
INPATIENT ANCILLARY SERVICES 0 0
4,874 1,592 122
OUTPATIENT SERVICES 91,108,894 4,049
11,556 4,133 849
TOTAL PATIENT SERVICES REV. 327,614,045 14,559
13,369 9,690 1,963
OTHER OPERATING REVENUE 3,930,000 175
254 80 13
TOTAL REVENUE 331,544,045 14,734
13,421 9,849 1,975
DEDUCTIONS FROM REVENUE 201,338,109 8,947
0 0 0
NET REVENUES 130,205,936 5,786
4,986 3,639 643
EXPENSES
ROUTINE 27,383,424 1,217
655 186 81
ANCILLARY 45,925,175 2,041
1,701 1,023 197
AMBULATORY 0 0
0 0 0
TOTAL PATIENT CARE COST 73,308,599 3,258
0 0 0
ADMIN. AND OVERHEAD 37,384,265 1,661
0 0 0
PROPERTY 37,273,010 1,728
0 0 0
TOTAL OVERHEAD EXPENSE 74,657,275 3,318
2,222 1,539 977
OTHER OPERATING EXPENSE 0 0
0 0 0
TOTAL EXPENSES 147,965,874 6,576
4,256 3,386 2,176
OPERATING INCOME -17,759,938 -789
598 129 -1,080
-13.6%
PATIENT DAYS 16,052
ADJUSTED PATIENT DAYS 22,502
TOTAL BED DAYS AVAILABLE 34,675
VALUES NOT ADJUSTED
ADJ. FACTOR 0.7133
FOR INFLATION
TOTAL NUMBER OF BEDS 95
Highest Median Lowest
PERCENT OCCUPANCY 46.29%
80.2% 58.9% 1.6%
Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital
(CON #10079): Comparative data were derived from hospitals in peer
groups that reported data in 2008; the applicant will be compared to the
hospitals in Peer Group 9 (Family Practice Teaching Hospital Group).
Peer Group 9 has a total of five hospitals including the applicant‟s
hospital. Per diem rates are projected to increase by an average of 3.0
percent per year. Inflation adjustments were based on the new CMS
Market Basket, 1st Quarter, 2010.
Gross revenues, net revenues, and costs were obtained from Schedules 7
and 8 in the financial portion of the application. These were compared to
CON Action Numbers: 10078 and 10079
47
the control group as a calculated amount per adjusted patient day. The
applicant presented CON Application #10081 (pediatric open heart) and
CON #10079 (pediatric cardiac catheterization) as a single project.
Therefore, the Agency‟s financial review includes the total impact of both
CON applications.
Projected net revenue per adjusted patient day (NRAPD) of $2,500 in year
one and $2,550 in year two is between the control group median and
highest values of $2,073 and $2,503 in year one, and $2,135 and $2,578
in year two. With net revenues per adjusted patient day falling between
the median and highest values, the facility is expected to consume health
care resources in proportion to the services provided. (See Table below).
The hospital‟s NRAPD in fiscal year 2008 was reported as $2,241. The
difference in the NRAPD reported in 2008 and the year two projected
NRAPD of $2,550 results in an average compound annual increase of
approximately 2.4 percent. This level of increase is lower than the
inflation percentage outlined in the CMS Market Basket, 1st Quarter,
2010, index. Increasing net revenue at a slower rate than inflation is a
conservative assumption and therefore reasonable. Net revenues appear
reasonable.
Projected cost per adjusted patient day (CAPD) of $2,336 in year one and
$2,383 in year two is between the control group median and highest
values of $1,960 and $2,340 in year one, and $2,019 and $2,410 in year
two. With CAPD between the median and highest in the Peer Group,
costs are considered feasible. (See Table below). The hospital‟s CAPD in
2008 was reported as $2,092. The difference in the CAPD reported in
2008 and the year two projected CAPD of $2,383 results in an average
compound annual increase of approximately 2.4 percent. This level of
increase is below the inflation percentage outlined in the CMS Market
Basket, 1st Quarter, 2008, index. Although costs were projected to
increase at a slower rate than inflation, the rate of increase was
consistent with the increase on NRAPD. Therefore, CAPD appear to be
reasonable.
The applicant projects a year two operating gain of $139.8 million or 6.5
percent. This margin is consistent with the margin reported in 2008 for
the hospital. Given the large size of the hospital this project is not likely
to have a material impact on the overall operations and feasibility of the
hospital. Conclusion:
This project appears to be financially feasible as part of the overall
hospital operations and is not likely to have a material impact on the
existing operations of the hospital.
CON Action Numbers: 10078-10079
48
PEDIATRIC OPEN HEART
Adventist Health System
CON # 10079 May-14 YEAR 2 VALUES ADJUSTED
2008 DATA Peer Group 9 YEAR 2 ACTIVITY FOR INFLATION
ACTIVITY PER DAY Highest Median Lowest
ROUTINE SERVICES 6,049,798,307 7,212 1,641 1,264 417
INPATIENT AMBULATORY 0 0 308 283 95
INPATIENT SURGERY 0 0 0 0 0
INPATIENT ANCILLARY SERVICES 0 0 4,562 3,987 2,643
OUTPATIENT SERVICES 2,681,925,729 3,197 2,898 2,261 1,998
TOTAL PATIENT SERVICES REV. 8,731,724,036 10,410 9,229 6,835 6,381
OTHER OPERATING REVENUE 7,405,252 9 94 25 11
TOTAL REVENUE 8,739,129,288 10,419 9,240 6,869 6,405
DEDUCTIONS FROM REVENUE 6,600,116,431 7,869 * * *
NET REVENUES 2,139,012,857 2,550 2,578 2,135 1,863
EXPENSES
ROUTINE 381,399,722 455 453 298 225
ANCILLARY 632,028,771 753 899 676 633
AMBULATORY 105,312,319 126 0 0 0
TOTAL PATIENT CARE COST 1,118,740,812 1,334 0 0 0
ADMIN. AND OVERHEAD 685,391,961 817 0 0 0
PROPERTY 195,067,369 233 0 0 0
TOTAL OVERHEAD EXPENSE 880,459,330 1,050 1,067 903 844
OTHER OPERATING EXPENSE 0 0 0 0 0
TOTAL EXPENSES 1,999,200,142 2,383 2,410 2,019 1,813
OPERATING INCOME 139,812,715 167 149 48 -128
6.5%
PATIENT DAYS 580,672
ADJUSTED PATIENT DAYS 838,799
TOTAL BED DAYS AVAILABLE 798,620 VALUES NOT ADJUSTED
ADJ. FACTOR 0.6923 FOR INFLATION
TOTAL NUMBER OF BEDS 2,188 Highest Median Lowest
PERCENT OCCUPANCY 72.71% 69.6% 51.7% 47.2%
PAYER TYPE PATIENT DAYS % TOTAL
SELF PAY 35,120 6.0%
MEDICAID 82,550 14.2% 19.1% 10.4% 5.7%
MEDICAID HMO 19,919 3.4%
MEDICARE 221,867 38.2% 53.7% 36.4% 25.9%
MEDICARE HMO 52,609 9.1%
INSURANCE 17,348 3.0%
HMO/PPO 129,767 22.3% 46.0% 41.2% 32.2%
OTHER 21,492 3.7%
TOTAL 580,672 100%
CON Action Numbers: 10078 and 10079
49
e. Will the proposed project foster competition to promote quality and cost-effectiveness? ss. 408.035(1)(g), Florida Statutes.
Nemours (CON #10078) & Adventist (CON #10081): General economic
theory indicates that competition ultimately leads to lower costs and
better quality. However, in the health care industry there are several
significant barriers to competition:
Price-Based Competition is Limited - Medicare and Medicaid account for
almost 60 percent of hospital charges in Florida, while HMO/PPOs
account for approximately 35 percent of charges. While HMO/PPOs
negotiate prices, fixed price government payers like Medicare and
Medicaid do not. Therefore price based competition is limited to non-
government fixed price payers. In this case competition is further limited
by the relatively small number of pediatric cardiac catheterization
procedures occurring in Florida.
The User and Purchaser of Health Care are Often Different – Roughly 90
percent of hospital charges in Florida are from Medicare, Medicaid, and
HMO/PPOs. The individuals covered by these payers pay little to none of
the costs for the services received. Since the user is not paying the full
cost directly for service, there is no incentive to shop around for the best
deal. In addition, users are restricted only to the choices included in the
insurance plan. This further makes price based competition irrelevant.
Information Gap for Consumers – Price is not the only way to compete for
patients, quality of care is another area in which hospitals can compete.
However, there is a lack of information for consumers and a lack of
consensus when it comes to quality measures. In recent years there
have been new tools made available to consumers to close this gap.
However, transparency alone will not be sufficient to shrink the
information gap. The consumer information must be presented in a
manner that the consumer can easily interpret and understand. The
beneficial effects of economic competition are the result of informed
choices by consumers.
In addition to the above barriers to competition, a study presented in The
Dartmouth Atlas of Health Care 2008 suggests that the primary cost
driver in Medicare payments is availability of medical resources. The
study found that excess supply of medical resources (beds, doctors,
equipment, specialist, etc.) was highly correlated with higher cost per
patient. Despite the higher costs, the study also found slightly lower
quality outcomes. This is contrary to the economic theory of supply and
demand in which excess supply leads to lower price in a competitive
market. The study illustrates the weakness in the link between supply
CON Action Numbers: 10078-10079
50
and demand and suggests that more choices lead to higher utilization in
the health care industry as consumers explore all alternatives without
regard to the overall cost per treatment or the quality of outcomes.
Conclusion:
Due to the health care industry‟s existing barriers in consumer-based
competition, this project will not likely foster the type competition
generally expected 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(1)(h), Florida Statutes; Chapter 59A-3, Florida Administrative Code.
The Nemours Foundation (CON #10078): The applicant proposes to
establish a new pediatric cardiac catheterization program at Nemours
Children‟s Hospital. The new program would convert shell space in a
surgical suite into a cardiac operating room with an adjoining perfusion
room. Additionally, in support of the new service, the applicant proposes
to convert four medical-surgical patient rooms into four CICU patient
rooms. Information relating to this unit is included in the review of
concurrent and companion CON Application #10080.
The new cardiac catheterization lab proposed to be built with the surgical
suite appears to meet all requirements. The project narrative indicated
that the design and construction will meet all applicable codes. A
complete listing of applicable codes and dates of the codes will be
required for future submissions.
The cost estimate for construction appears to be reasonable, but
additional costs are anticipated as the CICU will require redesign for
code compliance issues.
The schedule for construction from the time of building permit to final
inspection is reasonable.
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.
CON Action Numbers: 10078 and 10079
51
Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital
(CON #10079): The applicant proposes to establish a new open heart
pediatric cardiac catheterization program on its main campus, Florida
Hospital-Orlando. The project involves the renovation of existing spaces
to accommodate the new service.
The proposed new cardiac services would be done in an existing
cardiovascular operating room (CVOR) that is being modified to
accommodate a hybrid operating room. The hybrid operating room
appears to satisfy the code requirements of both a CVOR and a cardiac
catheterization lab. An adjacent operating room is also being renovated
into a sub-sterile room and storage areas supporting the new hybrid
operating room.
In support of the new service, the applicant proposes a 16-bed
cardiovascular intensive care unit (CVICU). The unit is well laid out with
two central nursing stations in addition to the nurse subs-stations
located to provide a visual observation of all beds. The unit is positioned
at the end of a wing, eliminating the need for through traffic as required
by code. All required elements for a critical care unit are provided and
appear to be adequately sized and conveniently located. All patient
rooms are private and meet the required size requirements. Each patient
room is provided with an attached toilet room and at least 10 percent of
the patient rooms are accessible as required. Patient rooms three and 11
may need to be relocated to meet the current code requirement for
providing an exterior view.
The project narrative indicated that the design and construction will
meet all applicable codes. A complete listing of applicable codes and
dates of the codes will be required for future submissions.
The cost estimate for construction includes the costs for the hybrid
operating room (cardiac catheterization lab), the CVOR and CVICU. The
cost for all renovations appears to be reasonable, but some additional
costs may be incurred from providing an exterior view for the interior
patient rooms. It does not appear that the changes will have a
significant impact on the project costs.
The schedule for construction from the time of building permit to final
inspection is reasonable.
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.
CON Action Numbers: 10078-10079
52
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(1)(i), Florida Statutes.
We do not have payer source data for pediatric cardiac catheterization.
DRG data obtained from the Florida Center for Health Information and
Policy Analysis indicates that Florida Hospitals reported 710 pediatric
open heart surgery procedures in CY 2009 (see table below).
Florida Pediatric Open Heart Surgery Discharges DRGs 216-221 & 228-236
Calendar Year 2009 Facility
Total Procedures
Total
Medicaid/ Medicaid HMO
& Charity Care Procedures
Percent Medicaid, Medicaid HMO &
Charity Care
Total Patient Days
Medicaid/ Medicaid HMO & Charity
Care Days
Percent
Medicaid/Medicaid HMO & Charity
Care
Shands Hospital at UF 93 58 62.37% 1,637 1,268 77.46%
Baptist Medical Center/Shands Jacksonville
56
25
44.64%
709
273
38.50%
All Children’s Hospital 103 64* 62.14% 1,264 849 67.17%
St. Joseph’s Hospital 124 66 53.23% 1,455 905 62.20%
Arnold Palmer Medical Center 76 46 60.53% 935 635 67.91%
Memorial Regional Hospital 64 32 50.00% 411 226 54.99%
Jackson Memorial Hospital 46 23 50.00% 670 330 49.25%
Miami Children’s Hospital 148 70 47.30% 1,917 1,231 64.21%
Total 710 384 54.08% 8,998 5,717 63.54%
Source: Center for Health Information and Policy Analysis. *All Children’s Hospital was the only provider that reported charity care (68) days in calendar year 2009.
As shown above, 54.08 percent of the state‟s total pediatric open heart
surgery procedures and 63.54 percent of the total pediatric open heart
surgery patient days were provided to Medicaid, Medicaid HMO and
charity care patients during CY 2009.
The Nemours Foundation (CON #10078): Nemours does not have a
hospital in Florida. The applicant states it provides care to all patients
accessing its services, whether hospital or physician, regardless of
financial status. Nemours conditions project approval to the project
being included in its hospital-wide condition (CON #9979), Level II NICU
(CON #9978), and Level III NICU (CON #9980) minimum of 54 percent of
patient days to be provided to patients covered by Medicaid, Medicaid
HMO or charity care. For the 12-month period ending June 2009, the
CON Action Numbers: 10078 and 10079
53
applicant states that for its catchment area, the payer mix was 58.0
percent Medicaid/Medicaid HMO and 4.7 percent was self-pay, charity
and KidCare. The Agency confirms that for the 12-month period ending
December 31, 2009, 54.95 percent of Pediatric Open Heart Surgery
Service Planning Area IV residents received applicable procedures
through Medicaid/Medicaid HMO.
Schedule 7A shows that the applicant projects Medicaid at 40.0 percent,
Medicaid HMO at 12.0 percent and self-pay/other at 6.0 percent of the
pediatric cardiac catheterization programs‟ year one patient days. For
year two, the estimate is Medicaid at 39.7 percent, Medicaid HMO at
11.8 percent and self-pay/other at 5.9 percent. The applicant projects
Medicaid at 40.2 percent, Medicaid HMO at 12.2 percent and self-pay/
other at 4.9 percent of year three‟s total patient days.
The applicant‟s combined pediatric open heart and pediatric cardiac
catheterization year one patient days are projected at 42.4 percent
Medicaid, 14.5 percent Medicaid HMO and 3.5 percent self-pay/other.
Year two for the combined programs is 42.3 percent Medicaid, 14.3
percent Medicaid HMO and 3.6 percent self-pay/other. For year three,
the estimate is Medicaid at 42.3 percent, Medicaid HMO at 14.5 percent
and self-pay/other at 3.1 percent. Notes to schedule 7A indicate self
pay/other includes KidCare, CHAMPUS and other government payers
and that indigent care and bad debt are deducted from the self-
pay/other revenue.
Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital (CON
#10081): Florida Hospital has a history of serving the Medicaid
population and the medically indigent. The applicant proposes to
condition CON approval to provide a minimum of 40 percent of pediatric
congenital heart disease patient days to Medicaid, Medicaid HMO and
uncompensated care. Florida Hospital‟s provision of Medicaid and
charity care compared to the District 7 average is presented below.
Florida Hospital & District 7 Medicaid and Charity Care
FY 2008 Applicant
Medicaid & Medicaid
HMO Days
Gross Charity
Percentage of Charges
Combined Medicaid & Charity
Care
Florida Hospital 16.9% 7.4% 24.3%
District 7 Average 16.6% 5.1% 21.7% Source: Fiscal Year 2008 AHCA Actual Hospital Budget Data.
CON Action Numbers: 10078-10079
54
Schedule 7A shows that the applicant projects Medicaid at 38.0 percent,
Medicaid HMO at 20 percent and self-pay at 2.0 percent of the combined
pediatric open heart and pediatric cardiac catheterization programs‟ total
annual patient days during the first three years of operation.
F. SUMMARY
The Nemours Foundation (CON #10078) proposes to establish a
pediatric cardiac catheterization program at Nemours Children‟s Hospital
in Orlando, Florida. The applicant filed CON #10080 concurrently as a
companion with this application for the establishment of a pediatric open
heart surgery program. Nemours Children‟s Hospital is expected to be
operational in 2012 and will be a 95-bed facility with a bed complement
of 82 acute care, five Level II NICU and eight Level III NICU beds. The
applicant projects this project and the concurrently submitted CON
Application #10080 to be operational by the third quarter of 2014.
However, it is unclear how the applicant would implement the program
with the proposed start date because section 408.040(2)(a) Florida
Statutes, requires that a CON terminate 18 months after issuance. Rule
59C-1.018 (2) (a) 2. F.A.C. requires that a CON holder for renovation of
an existing structure must, by the date of termination of the CON, be
deemed to have commenced construction and the project be under
continuous construction which must be maintained (Rule 59C-1.018 (2)
(a) 3. a. F.A.C.). The applicant‟s Schedule 10 indicates a period of two
years from September 30, 2012 (the date the facility is licensed) to the
initiation of service (project start date) of October 1, 2014.
Nemours states the center point of the project will be a hybrid
catheterization lab that allows catheterization procedures and certain
cardiac surgeries to be performed simultaneously in one location. A
focus of these pediatric cardiac services is to shift from invasive open
heart procedures to less invasive hybrid procedures.
The applicant proposes the following conditions:
• Nemours Children‟s Hospital will include its pediatric cardiac
catheterization program in the hospital-wide condition that Nemours
accepted on its approved hospital (CON #9979), Level II NICU (CON
#9978), and Level III NICU (CON #9980) projects for a minimum of 54
percent of patient days to be provided to patients covered by Medicaid
or charity.
CON Action Numbers: 10078 and 10079
55
• The services described in CON #10078 will not be implemented until
two years following the opening of Nemours Children‟s Hospital.
• As part of the implementation of CON #10078, Nemours Children‟s
Hospital will offer preventive cardiology services including screening,
education and research particularly as it relates to the link between
childhood obesity and cardiac disease.
The total project cost is estimated at $3,944,360. The project involves
2,261 gross square feet (GSF) of renovation at a cost of $583,725. Total
costs include: building, equipment, project development and start-up
costs. Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital
(CON #10079) proposes to establish a pediatric cardiac catheterization
program at the main campus of Florida Hospital-Orlando. The applicant
filed CON #10081 concurrently with this application for the
establishment of a pediatric open heart surgery program. Florida
Hospital-Orlando is a 1,067-bed not-for-profit general hospital, licensed
for 917 acute care beds, 59 adult psychiatric beds, 10 comprehensive
medical rehabilitation beds, 28 Level II NICU beds and 53 Level III NICU
beds. Florida Hospital-Orlando also operates adult and pediatric kidney
transplantation programs, an adult liver transplantation program, adult
and pediatric bone marrow transplantation programs, and an adult
pancreas transplantation program. Florida Hospital has two CON
approved adult transplantation programs – heart (CON #10026) and lung
(CON #10028). Florida Hospital-Orlando also has a Level II Adult
Cardiology program and is a Primary Stroke Center. In 2010, Florida
Hospital became a statutory teaching hospital. This project and the
concurrently submitted CON Application #10081 are expected to be
operational by June 1, 2012.
The applicant proposes the following conditions:
• Develop comprehensive pediatric and adult congenital heart disease
(CHD) program to include integrated care for the adult population and
consultation and collaboration between adult and pediatric specialists
to improve outcomes for CHD patients.
• Promote research, public education and awareness of congenital heart
disease for both pediatric and adult populations through participation
in the national congenital heart disease registry (as cited in the
Congenital Heart Futures Act by the United States Congress included
in CON Application #10081-Attachment C).
CON Action Numbers: 10078-10079
56
• The applicant commits to a minimum of 40 percent of pediatric
congenital heart disease patient days for a combination of Medicaid,
Medicaid HMO and uncompensated care.
• Sponsor a biannual congenital heart disease symposium in Orlando
to provide ongoing educational opportunities for physicians, nurses
and other health care professionals dealing with the congenital heart
disease population.
• The congenital heart disease program will include a state-of-the-art
hybrid endovascular operating room and a dedicated congenital heart
inpatient unit at Florida Hospital-Orlando.
The total project cost is estimated at $10,000. Total project cost is the
project development cost.
After weighing and balancing all applicable review criteria, the following
relevant factors are listed with regard to the establishment of a pediatric
cardiac catheterization program in Pediatric Service Planning Area IV.
Need:
There is a zero fixed need pool for an additional pediatric cardiac
catheterization program in Service Planning Area IV. The co-batched
applicants are applying in the absence of published need, based on
perceived special and “not normal” circumstances which the applicants
discuss extensively.
Although neither applicant demonstrates that patients needing this
service were unable to obtain it, Agency data confirms notable out-
migration from Service Planning Area IV to Service Planning Area III.
Therefore, access to these services would be improved by a project
approval.
The approval of either project will have some impact on Arnold Palmer
Medical Center‟s existing program. However, it appears that existing
referral patterns promote the exodus of patients to other areas and
approval of either applicant should improve access.
The Nemours Foundation (CON #10078): Nemours proposes to serve
the relatively large geographic area of north and central Florida, (Service
Areas I and II), District 7, Indian River County, and Polk County (Service
Planning Area III).
CON Action Numbers: 10078 and 10079
57
Nemours demonstrates that there is significant out-migration by
residents of District 7, many of whom are traveling to Service Planning
Area III for pediatric cardiac care. The applicant believes that the
outmigration trend could reverse, due largely to what Nemours describes
as its unique model of care. Nemours counts patients up to age 20 as
pediatric patients, whereas the Agency counts patients under age 15.
The applicant expects to perform 250 pediatric cardiac catheterizations
during year two ending September 30, 2016. However, the lack of data
about referrals from its existing network make Nemours‟ assumptions
difficult to assess. Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital
(CON #10079) states that its service area will consist of District 7,
Flagler, Lake and Volusia Counties (Service Planning Area II), and
Highlands County (Service Planning Area III).
Florida Hospital indicates that its program will integrate and synergize
pediatric and adult cardiovascular patients, as congenital heart disease
is described as often times a lifelong illness where seamless transitional
care from childhood into adulthood improves health outcomes.
The applicant demonstrates that there is significant out-migration by
residents of District 7 to Service Planning Area III. Florida Hospital
indicates that many of these are Florida Hospital patients treated by
CHIF and the project will allow them to remain in Service Area IV for
pediatric cardiac care.
Florida Hospital expects to perform 174 pediatric cardiac catheterizations
during year two ending May 31, 2014.
Quality of Care:
The Nemours Foundation (CON #10078): Nemours Children‟s Hospital
is expected to be operational in 2012.
The applicant demonstrated the ability to provide quality care. Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital
(CON #10079) provides numerous state and national recognitions and
honors/awards to attest to its quality initiatives and accomplishments.
Agency complaint data indicates a total of 14 confirmed complaints for
the three-year period ending June 14, 2010. A single complaint may
capture more than one complaint category and Florida Hospital Orlando
CON Action Numbers: 10078-10079
58
has seven hospitals on its license. The complaint categories are: nursing
service (three complaints), discharge planning (two complaints),
resident/patient client assessment (two complaints) and falls/injury,
medicine problem/errors/formulary, physician services, pressure sores,
quality of care, resident/patient client neglect, and unqualified personnel
(one complaint each).
The applicant is a quality care provider.
Financial/Cost:
The Nemours Foundation (CON #10078): Funding for this project and
all capital projects should be available as needed.
The immediate feasibility of this project is dependent on the applicant
funding the ongoing operating losses of the children‟s hospital.
Since this project appears to be in-line with the primary purpose of the
applicant, funding from the Alfred I. DuPont Testamentary Trust should
be available to fund future operating losses as needed.
Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital
(CON #10079): Funding for this project and the entire capital budget
should be available as needed.
This project appears to be financially feasible as part of the overall
hospital operations and is not likely to have a material impact on the
existing operations of the hospital. Medicaid/Indigent Care:
The Nemours Foundation (CON #10078): Nemours conditions its
program to be included in its hospital-wide condition (CON #9979), Level
II NICU (CON #9978), and Level III NICU (CON #9980) projects for a
minimum of 54 percent of patient days to be provided to patients covered
by Medicaid, Medicaid HMO or charity care.
The applicant‟s combined pediatric open heart and pediatric cardiac
catheterization year one patient days are projected at 42.4 percent
Medicaid, 14.5 percent Medicaid HMO and 3.5 percent self-pay other.
Year two for the combined programs is 42.3 percent Medicaid, 14.3
percent Medicaid HMO and 3.6 percent self-pay/other. Notes to
Schedule 7A indicate self pay/other includes KidCare, CHAMPUS and
other government payers and that indigent care and bad debt are
deducted from the self-pay/other revenue.
CON Action Numbers: 10078 and 10079
59
Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital
(CON #10079): Florida Hospital conditions for a minimum of 40 percent
of pediatric congenital heart disease patient days for a combination of
Medicaid, Medicaid HMO and uncompensated care.
Schedule 7A shows that the applicant projects Medicaid at 38.0 percent,
Medicaid HMO at 20 percent and self-pay at 2.0 percent of the combined
pediatric open heart and pediatric cardiac catheterization programs‟ total
annual patient days during the first three years of operation.
Architectural:
The Nemours Foundation (CON #10078): The project narrative
indicates that the design and construction will meet all applicable codes.
The cost estimate for construction appears to be reasonable, but
additional costs are anticipated as the CICU will require redesign for
code compliance issues.
The schedule for construction from the time of building permit to final
inspection is reasonable.
Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital
(CON #10079): The project narrative indicates that the design and
construction will meet all applicable codes.
The cost estimate for construction appears to be reasonable, but some
additional costs may be incurred from providing an exterior view for the
interior patient rooms. It does not appear that the changes will have a
significant impact on the project costs.
The schedule for construction from the time of building permit to final
inspection is reasonable.
CON Action Numbers: 10078-10079
60
G. RECOMMENDATION
Approve CON #10079 to establish a pediatric cardiac catheterization
program at the main campus of Florida Hospital-Orlando, located in
District 7, Orange County, Pediatric Cardiac Catheterization Service
Planning Area IV. The total project cost is $10,000.
CONDITIONS:
• Develop comprehensive pediatric and adult congenital heart disease
(CHD) program to include integrated care for the adult population and
consultation and collaboration between adult and pediatric specialists
to improve outcomes for CHD patients.
• Promote research, public education and awareness of congenital heart
disease for both pediatric and adult populations through participation
in the national congenital heart disease registry (as cited in the
Congenital Heart Futures Act by the United States Congress included
in CON Application #10081-Attachment C).
• The applicant commits to a minimum of 40 percent of pediatric
congenital heart disease patient days for a combination of Medicaid,
Medicaid HMO and uncompensated care.
• Sponsor a biannual congenital heart disease symposium in Orlando
to provide ongoing educational opportunities for physicians, nurses
and other health care professionals dealing with the congenital heart
disease population.
• The congenital heart disease program will include a state-of-the-art
hybrid endovascular operating room and a dedicated congenital heart
inpatient unit at Florida Hospital-Orlando.
Deny CON #10078.
CON Action Numbers: 10078 and 10079
61
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:
James B. McLemore Health Services and Facilities Consultant Supervisor Certificate of Need
Jeffrey N. Gregg Chief, Bureau of Health Facility Regulation