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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.


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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.


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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.


(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


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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.


• 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.


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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.


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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.


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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.


(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


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.


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• 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.


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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.


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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.


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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)






Nemours Children Hospital Projected Market Share

12.0% 16.0% 20.0%


24 32 41

Service Area III (District 7 plus Indian River & Polk Counties)






Nemours Children Hospital Projected Market Share

20.0% 26.5% 30.0%


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.


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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.


(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).


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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.


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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


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.


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



Total Year Two 59 24 83 4 87 174

Projected Year Three - Ending May 31, 2014



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


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.


(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).


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.


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.


22


(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.


(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.


23


(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.


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).


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.


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.


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).


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.


Hospital (CON #10079): Florida Hospital states a pediatric

medical review committee will review medically invasive

procedures.


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).


(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


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


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


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.


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.


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


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.


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).


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.



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.


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.


(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


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).


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.


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.


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


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.


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%


(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),


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).


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 .


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


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.


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)


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).


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)


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


PERCENT OCCUPANCY 39.90%

80.2% 58.9% 1.6%


46

TABLE 3 (OHS & Cardiac Catheterization)


CON #10078 OHS Sep-16 YEAR 2

VALUES ADJUSTED

2008 DATA Peer Group 14 YEAR 2 ACTIVITY

FOR INFLATION

combined ACTIVITY PER DAY


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


TOTAL BED DAYS AVAILABLE 34,675

VALUES NOT ADJUSTED

ADJ. FACTOR 0.7133

FOR INFLATION

TOTAL NUMBER OF BEDS 95


PERCENT OCCUPANCY 46.29%

80.2% 58.9% 1.6%


(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


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.


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.


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


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%


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


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.


51


(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 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.


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


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.


54


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.


• 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.


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.












56







disease population.




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).


57

Nemours demonstrates that there is significant out-migration by


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.


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


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.


(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.


59


(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.


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.




(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.




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:
















disease population.




Deny CON #10078.


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

state agency action reportahca.myflorida.com/mchq/con_fa/batching/pdf/10079.pdfstate agency action...

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