REPORT TO THE SUBCOMMITTEE ON EXECUTIVE REORGANIZA TION A ND GOVERNMENT RESEARCH COMMITTEE ON GOVERNMENT OPERA TIONS UNITED STATES SENATE Planning, Construction, And Use Of Medical Facilities In The Jacksonville, Florida, Area 8- 167966 BY THE COMPTROLLER GENERAL OF THE UNITED STATES /_~-~ AUG. 27. i17 COMPTROLLER GENERAL OF THE UNITED STATES WAIHINOTON. D.C. tUe" B- 167966 Dear Mr. Chairman: This is our report on the results of our review of the planning, construction, and use of medical facilities in the Jack- sonville, Florida, area. The review was made in response to your request of September 18, 1969. The responsible Federal, State, and local health organiza- tions have not been given an opportunity to formally examine and comment on this report, although most of the matters were dis- cussed with their representatives during the review. We plan to make no further distribution of this report un- less copies are specifically requested, and then we shall make distribution only after your agreement has been obtained. Sincerely yours, o Comptroller General of the United States The Honorable Abraham A. Ribicoff Chairman, Subcommittee on Executive Reorganization and Government Rese arch Committee on Government Operations United States Senate 50TH ANNIVERSARY 1921-1971 Contents DIGEST 1 CHAPTER 1 INTRODUCTION 4 Hill-Burton program 4 Jacksonville area health complex 5 Other health planning organizations 5 2 PLANNING AND CONSTRUCTION OF HOSPITALS 8 Planned changes in hospital bed capacity 10 Overstatement of bed needs in 1970 State plan 12 Adjustments to use rate 12 Adjustments for Medicare benefi- ciaries 13 Adjustment for tourists 13 Utilization of existing hospital beds 17 Lack of control by planning agencies over construction of hospitals and skilled-nursing-care facilities 19 Hospitals in neighboring counties 20 Planned changes in hospital bed ca- pacity 21 3 PLANNING AND CONSTRUCIION OF SKILLED.- NURSING-CARE FACILITIES 24 Planned changes in bed capacity of skilled-nurs'ng-care facilities 25 Occupancy rates of skilled-nursing-care facilities 27 Overstatement of bed needs in 1970 State plan 28 4 COORDINATION AMONG HCOPITALS IN PLANNING AND SHARING MEDICAL SERVICES 30 Similar specialized services and equip- ment available at hospitals 30 Use of specialized medical equipment 31 CHAPTER Role of council in controlling services provided by hospitals 34 Role of State agency in controlling ser. vices provided by hospitals 35 5 SCOPE OF REVIEW 37 ABBRMYATIOS FHA Federal Hous ing Administration GAO General Accounting Office HEW Department of Health, Education, and Welfare PHS Public Health Service '.'OMPTROLLER GENERAL'S REPORT PLANNING, CONSTRUCTION, AND USE ''0 THE SUBCOMMITTE' ON OF MEDICAL FACILITIES IN THE 4''XE'CUTIIVE HEORGANIZAT'ION JACKSONVILLE, FLORIDA, AREA AND GOVERNMENT RESEARCH B-167966 COMMITTEE ON GOVERNMENT OPERATIONS 1INIrTED S1TATES SENATE DIGEST WHY THE REVIEW WAS MADE At the request of the Chairman, Subcommittee on Executive Reorganization and Government Research, Senate Committee on Government Operations, the General Accounting Office (GAO) examined into the coordination among Fed- eral and State agencies and local health organizations in planning and constructing acute-care hospitals and skilled-nursing-care facilities in certain metropolitan areas. GAO also reviewed the extent to'which certain medical facilities and ser- vices were shared among hospitals. The reviews were made in Baltimore, Maryland; Cincinnati, Ohio; Denver, Colorado; Jacksonville, Florida; San Francisco, California; and Seattle, Washington. These areas were selected on the basis of geographic distri- bution and the levels of Federal financial participation in the construc- tion of hospital and skilled-nursing-care facilities. GAO did not review the quality of care being provided by hospitals and skilled-nursing-care facilities. This report presents the results of GAC's review in the Jack- sonville area. Federal, State, and local health organizations have not been given an opportunity to formally examine and comment on the contents of this re- port. FINDINGS AND CONCLUSIONS Background The Bureau of Community Medical Facilities in the Flordia Department of Health and Rehabilitative Services (State agency) administers grants made under title VI of the Public Health Service Act (42 U.S.C. 291), commonly known as the Hill-Burton program, by the Public Health Service (PHS) of the Department of Health, Education, and Welfare (HEW) for construction and modernization of hospitals and other medical facilities. 'ihe State agency annually prepares a plan setting forth an estimate of the number of acute-care hospital beds and skilled-nursing-care beds needed for 5 years in the future. Although GAO verified the mathematical accuracy of the State agency's computation of future bed needs, an evaluation was I not made of the appropriateness of the methodology prescribed by PHS for use by the State planners in determining future bed needs. (See pp. 4 and 37.) Need for hospital bed8 According to the 1970 State plan, Duval County (which consists mainly of the city of Jacksonville) will need 2,510 hospital beds by 1974. The capacity of non-Federal hospitals in Duvai County at December 31, 1969, was 637 fewer beds than the projected need. By 1974 the capacity, as estimated by GAO on the basis of plans for future construction, will about equal the projected need. (See p. 8.) Although the State agency used the PHS formula in computing hospital bed needs, it made adjustments to its computations that were not inaccordance with PHS regulations. Had the State somputed its needs without these ad- justments, the projected need by 1974 would have been 1,847 beds, or 663 fewer beds than shown as needed in the State plan. GAO noted that such adjustments were not made in computing bed needs for the 1971 State plan. (See p. 12.) Federal financing can be made available for the construction of a medical facility only if the State agency issues a certificate of need for the proposed facility. The certificate of need must be based on a comparison of the current bed capacity of facilities inservice or under construction with the projected need as shown in the State plan. Consequently an over- stated estimate of future bed needs may lead to Federal financial assis- tance for the construction of facilities not actually needed. (See p. 16.) Four hospitals, containing 788 beds and involving $3'.8 million in Federal grants ($3 million) and mortgage insurance ($28.8 million) are under con- struction or planned for construction in Duval County. Because the need for hospital beds in Duval County as shown in the 1969 and 1970 State plans was overstated, Federal financial assistance has been made available for construc- tion of these hospitals for which a need would not have been determined had the future bed need been determined in accordance with the PHS formula. (See p. 16.) The State agency established individual counties or groups of counties in Florida as service areas rather than followed PHS regualtions which re- quired that in establishing service areas consideration be given to loca- tions where hospital patients lived and obtained their hospital care and where medical manpower was readily available. (See p. 20.) Duval County hospitals have medical specialists and specialized equipment which are not available in the hospitals in the neighboring counties. Many hospital patients who reside in the six counties neighboring Duval County receive their care in Duval County hospitals. Hospitals in the neighboring counties are experiencing low occupancy rates. Therefore it appears that the six counties and Duval County should be combined into one service area for planning purposes. (See p. 20.) 2 Need foi SkiZZed-nursing-care beds According to the 1970 State plan, Duval County will need 1,379 skilled- nursing-care beds by 1974. The capacity of skilled-nursing-care facili- ties in Duval County at December 31, 1969, was 1,247 beds. By 1'74 the capacity, as estimated by GAO on the basis of plans for future construc- tion, will be about 1,897 beds, or about 518 more beds than the projected need. (See p. 24.) The 1970 State plan did not include 548 beds in facilities which did not conform to Hill-Burton construction standards in the inventory of skilled- nursing-care beds that would be available to meet the projected bed re- quirements by 1974. These facilities complied with State and local licensing and safety requirements. (See pp. 28 and 29.) PHS regulations, however, require that such beds be considered in determin- ing whether the number of bed spaces in facilities in operation or under construction is sufficient to meet future bed requirements. Had the 1970 State plan recognized these beds, the plan would have shown that the bed capacity of skilled-nursing-care facilities as of December 31, 1968, exceeded the projected need in 1974 by 307 beds rather than showed a need for 241 additional beds. Exclusion of nonconforming beds in comput- ing bed capacity to meet estimated needs in the 1970 State plan resulted in the issuance of certificates of need by the State agency for the con- struction of additional skilled-nursing-care facilities. Federal financial assistance later was approved for the construction of these facilities. (See pp. 24 and 29.) Sharing of medical equipment and services Seven non-Federal h3spitals in Duval County (each with over 100 beds) gen- erally provide the same types of specialized medical services, such as neurosurgery, and have similar medical equipment. At each of these hospi- tals, neither the volume of work nor the number of patients was sufficient to utilize fully the available equipment. Low utilization of equipment re- sults in higher charges for each unit of service. GAO believes that State planning organizations should make detailed studies to determine the po- tential for sharing specialized medical services and that the State agency should know what services are available and needed before it approves new projects for an area. (See pp. 30 to 36.) Recent legislation--Public Law 91-296--increases Federal financial partici- pation in projects involving the sharing of health services. It should pro- vide hospitals which are seeking Federal grant funds with incentive to share services. 3 CHAPTER 1 INTRODUCTION HILL-BURTON PROGRAM Title VI of the Public Health Se-vice Act (42 U.S.C. 291), commonly known as the Hill-Burton program, authorizes the Public Health Service to make graunts to States for the construction of medical facilities. PHS, under the Hill- Burton program, requires each State to designate a single agency to administer the program and to prepare a State plan annually, projecting for each designated service area of the State the need for medical facilities and comparing that projected need with the resources expected to exist. Pursuant to Florida law, the Bureau of Community Medi- cal Facilities was designated as the State agency respon- sible for administering the Hill-Burton program. The State agency annually prepares a plan setting forth an estimate of the number of acute-care hospital beds and skilled- nursing-care beds needed for the ensuing 5 years. Separate estimates are made for each service area. The basic data used by the State agency to estimate the need for hospitals and skilled-nursing-care facilities sists of current and projected population data furnishedcon- by the Bureau of the Census and hospital and skilled-nursing- care-facility utilization data, expressed in terms of patient-days during the most recent year, furnished by facilities. The PHS guidelines for preparing the State the plan do not require that PHS; Veterans Administration; or military facilities, or the days of care that were rendered in these facilities, be considered in the planning process. To arrive at an estimated average daily census of pa- tients, the State agency multiplies the projected popula- tion by the current use rate (the number of days of irpa- tient care in the most recent year for each 1,000 population) and divides the result by 365. The resulting average daily census is divided by 80 percent for hospitals and 90 percent for skilled-nursing-care facilities to arrive at an estimate of beds needed, assuming an 80-percent occupancy rate for hospitals and a 9 0-percent occupancy rate for 4 skilled-nursing-care facilities. This provides an estimated 20- or 10-percent vacancy rate to meet emergencies. ALi ex- tra 10 beds are added to the estimated number of hospital beds needed as an additional precaution to ensure that emer- gency patients can be treated. JACKSONVILLE AREA HEALTH COMPLEX The State agency has divided the State into 58 service areas, primarily on a county basis. According to PHS regu- lations, a service area is: "The geographic territory from which patients come or are expected to come to existing or pro- posed hospitals *** or medical facilities ***." Duval County is considered to be a service area by the State agency. The six counties which neighbor Duval County constitute five service areas. There are 11 hospitals, including a facility operated by the U.S. Navy, and 13 skilled-nursing-care facilities in Duval County. In the neighboring six counties, there are five hospitals and six skilled-nursing-care facilities. The map on page 6 shows the location of the hospitals in the Jacksonville area. Generally there are two types of nursing-care facili- ties: (1) those which provide care for convalescent or chronic-disease patients requiring skilled nursing care and which are under the general direction of persons licensed to practice medicine or surgery in the State and (2) those which provide domiciliary care. Only the facilities pro- viding skilled nursing care qualify for Hull-Burton grants. Our review included only those facilities providing skilled nursing care. OTHER HEALTH PLANNING ORGANIZATIONS In accordance with the Hill-Burton legislation, the Governor of Florida appointed a State Hospital Advisory Council. Its membership includes representatives of non- governmental organizations or public agencifs concerned with the construction, operation, or utilization of hospitals 5 MAP OF HOSPITALS IN JACKSONVILLE AREA N GgO_ NASSAU COUNTY O GEORGIA I ,'~ DUVAL COUNTY IBAKER COUNTY D I o UNION COUNTIY S. U ' IIT U- N MEMRST. JOHNS COUNTY 6) EMRA HS IT CLAY COUNTY E 0 to I1~ so 4o sCALE or MILES I , 1. DUIVAL MEDICAL CENTER 10. DOCTOR'SHOSPITAL 2 ST. LUKE'S HOSPITAL 1. U.S. NAVY HOSPITAL 3 METHODIST HOSPITAL 12 ED FRAZER MEMORIAL HOSPITAL 4 HOPE HAVEN CHILDRENS HOSPITAL 13 HUMPHREY'S MEMORIAL HOSPITAL 5 E.APTIST MEMORIAL HOSPITAL 14 BRADFORD COUNTY HOSPITAL 6 MEMORIAL HOSPITAL 15 CLAY MEMORIAL HOSPITAL 7 BEACHES HOSPITAL 16, FLAGER HOSPITAL 8 RIVERSIDE HOSPITAL 17. UNION COUNTY HOSPITAL 9 ST VINCENT HOSPITAL (UNDER CONSTRUCTION) 6 and other facilities and representatives of consumers fa- miliar with the need for services provided by the facili- ties. The council meets at least once each year to con- sider the annual revisions in the State plan and the con- struction schedule of projects proposed under the plan. Public Law 89-749, approved November 3, 1966, created the Partnership for Health Program which introduced the concept of comprehensive health planning. Under this new type of planning, it is envisioned that both providers and consumers of health services will participate in identify- ing health needs and resources, establishing priorities, and recommending courses of action. The Bureau of Comprehensive Health Planning, Division of Administrative Services, Florida Department of Health and Rehabilitative Services, is responsible for administer- ing and -oordinating comprehensive health planning at the State level. The Health Planning Couincil of the Jacksonville Area, inc., is the comprehensive health planning agency for Jack- sonville. Its service area encompasses northeast Florida-- Duval, Baker, Bradford, Clay, Nassau, and St. Johns counties. The council, incorporated by the State as a nonprofit cor- poration in 1963, is a voluntary organization. The council, at its outset, devoted its efforts to studying the manner in which such medical facilities as hospitals and nursing homes should be expanded, taking into consideration hospital and nursing home utilization trends and demographic (popula- tion) characteristics of the Jacksonville area. In October 1968 the council was designated as the area- wide comprehensive health planning agency. It expanded its planning efforts and established the objectives of ensuring that residents have adequate health-care facilities and of securing the highest quality of care consistent with econ- omy. 7 CHAPTER 2 PLANNING AND CONSTRUCTION OF HOSPITALS According to the 1970 State plan prepared by the State agency, Duval County will need 2,510 hospital beds by 1974. The bed capacity of non-Federal hospitals in Duval County as of December 31, 1969, was 1,873 beds, or 637 fewer beds than the projected need. We estimate that, if current plans of hospital officials are carried out, the total bed capac- ity by 1974 would be increased to 2,518 beds, or eight beds in excess of the need as projected in the State plan. Although the State agency used the PHS formula in com- puting hospital bed needs for use in the State plan, it made adjustments to its computations that were not in accordance with PHS regulations. Had the State agency computed future bed needs in Duval County in accordance with the PHS for- mula, the projected need for 1974 would have been 1,847 beds, rather then 2,510 beds. Four hospitals, containing 788 beds and involving $31.8 million in Federal grants ($3 million) and mortgage insurance ($28.8 million), are under construction or planned for construction in DIcal County. Because the need for hos-. pital beds in Duval County as shown in the 1969 and 1970 State plans was overstated, Federal financial assistance has been made available for construction of these hospitals for which a need would not have been determined had the future bed need been determined in accordance with the PHS formula. Of the 10 non-Federal hospitals in Duval County, five had 399 beds in use or available for use that did not con- form to Hill-Burton construction standards. Most of the 399 beds did not conform because the buildings in which the beds were located were not constructed of fire-resistant materials or did not meet other safety requirements of the Hill-Burton construction standards. One of the five hospitals, containing 29 of these beds, was operating under a provisional State license pending 8 completion of a replacement facility. The remaining four hospitals complied with State licensing and safety require- ments. One of these four hospitals, containing 202 noncon- forming beds,was to be replaced by a new facility which was under construction at the time of our fieldwork. According to the State plan, the remaining nonconforming beds would require modernization to conform to Hill-Burton standards. PHS regulations require that suct nonconforming beds be considered in determining whether the number of beds in fa- cilities in operation or under construction are sufficient to meet future bed requirements. The State plan included these beds as being available to meet current and future patient-care needs. The State agency established individual counties or groups of counties in Florida as service areas rather than related the establishment of service areas to the locations where large numbers of hospital patients lived and where med- ical manpower was readily available, as required by PHS. Studies of patients receiving care in Duval County hos- pitals showed that a large number of these patients lived in the six counties neighboring Duval County. Five of these counties have hospitals which had experienced low occupancy rates. In the other neighboring county, which at the time of our fieldwork did not have a hospital, Federal assistance has been obtained for the construction of a 25-bed hospital. (See p. 22.) 9 PLANNED CHAIGES IN HOSPITAL BED CAPACITY In accordance with PHS regulations, the State agency in preparing the State plan does not consider platmed in- creases or decreases in bed capacity but considers only ad- ditional capacity under construction. Therefore we inter- viewed hospital officials and local planning officials to determine plans for increasing or decreasing hospital bed capacity. We were informed that six of the 10 hospitals in Duval County planned to increase their total bed capacity by 645 beds by 1974. Three of the six hospitals were constructing, or planned to construct, additional facilities which would increase their total bed capacity by 366 beds. Another hospital was planning to convert 50 existing beds from skilled-nursing-care beds to use for acute-care beds. The remaining two hospitals were constructing new facilities which would have a capacity of 460 beds and which would re- place facilities containing 231 beds, or a net increase of 229 beds. Following is our analysis of the projected changes in bed capacity--planned and under construction--in Duval County for the period 1970 to 1974. Bed capacity Increase Projected Increase Projected at 12-31-69 in beds bed capacity in bed capacity Hospital (note a) durina 1970 at 12-31-70 1971-74 by 1974 St. Vincent 341 b 379 38 - 379 Baptist Mamoriel 391 256 647 647 Djval Medical Center 202 1 54 356 356 St. Luke's 238 310 72 d 310 Riverside 159 . 159 - 159 Methodist 164 - 164 -164 Hope Haven Childrens 80 . 80 80 Beaches 69 - 69 69 Memorial 200 200 50- 250 Doctor's f 29 75 104 - 104 1.873 595 268 50 2.518 aBased on State agency's statistics and informa ion. bUnder construction as of December 31, 1970. cExisting 202-bed hospital to be replaced by a hospital with a capacity of 356 acute-care beds. Preliminary plane call for the existing hospital to be converted to a skilled- nursing-care facility. dFacilities for 72 beds completed in June 1970. aSkilled-nursing-care beds to be converted for use as acute-care beds. fExisting 29-bed hospital to be replaced by a hospital with a capacity of 104 beds. 10 Of the five hospitals in Duval County for which new or additional facilities were under construction or were plan- ned for construction, four received Federal financial as- sistance in the form of Hill-Burton grants or Federal Hous- ing Administration (FHA) mortgage insurance. Esti- Federal mated assis- Hospital cost tance TXIe of assistance (millions) Baptist Memorial $34.7 $25.0 FHA mortgage insurance Duval Medical Cen- ter 14.7 1.5 Hill-Burton grant St. Luke's 5.2 1.5 Hill-Burton grant Jacksonville Gen- eral (note a) 4.2 3.8 FHA mortgage insurance Total $58.8 $31.8 aName of proposed new 104-bed osteopathic hospitalwhich is to replace 29-bed Doctor's Hospital. The U.S. Navy operates a 463-bed general hospital in Duval County. This facility provides medical service to active duty military personnel and their dependents and to retired military personnel and their dependents. These per- sonnel constitute about 37 percent of the estimated popula- tion of 500,000 of Duval County. Hospital officials told us that there were no plans to change the capacity of the hospital. OVERSTATEMENT OF BED NEEDS IN 1970 STATE PLAN Although the State agency used the PHS formula in com- puting hospital bed needs, it made adjustments to its com- putations that were not in accordance with PHS regulations. The 1970 State plan shows that Duval County will need 2,510 beds by 1974; however, if future needs had been computed solely on the basis of the PHS formula, the projected need would have been 1,847 beds by 1974, or 26 fewer beds than the 1,873 beds that were available at December 31, 1969. Three adjustments made by the State agency in computing fu- ture bed needs in Duval County are discussed below. Adiustments to use rate PHS regulations state that a service area's use rite (number of days of patient care each year for each 1,000 people) is the best measure of use for planning purposes. PHS regulations provide that a use rate be based on the most current hospital use experience available. In computing bed needs for Duval County, the State agency applied the use-rate data for calendar year 1968, the most current data available at the time the State plan was prepared. In preparing the State plan, however, the State agency increased the 1968 use rate by 23 percent for all ser- vice areas in Florida, including Duval County. This in- crease in the use rate was based on State-wide data which showed that the hospital use rate throughout Florida had in- creased by 23 percent during the period 1963-68. Over the same period, however, the use rate for Duval County had in- creased by only 11 percent. The State agency had made use- rate adjustments annually from 1966. The chief of the State agency informed us that he be- lieved that en adjustment in the use rate was needed. He explained that, because the use rate increased by 23 per- cent from 1963 to 1968, it was reasonable to assume that this increase in hospital use would continue. He said, how- ever, that, in preparing future State plans, the State agency would consider adjusting the use rate for each ser- vice area on the basis of each service area's experience, rather than on the basis of State-wide experience. 12 The State agency, in estimating future bed needs for inclusion in the State plan each year, is required by PHS to use the most current hospital use data to compute a use rate. A change in the use rate of a service area from the previous year's rate would change the estim' :ed future bed require- ments in the new State plan. Therefore the adjustment to the use rate for Duval County in the 1970 State plan re- sulted in an overstatement of future bed requirements in the plan. We were informed by a PHS official that the adjustment of the use rate had been deleted from the formula used in computing bed needs for the 1971 State plan. Adjustments for Medicare beneficiaries The projected need for beds was increased by 10 percent to meet the anticipated needs of persons aged 65 or over who were eligible for Medicare benefits. The 10-percent increase was used for the 1967 and 1968 State plans because sufficient statistics were not avail- able at the time these plans were prepared to forecast the increased need as a result of the Medicare program. From July 1966, however, Medicare patients have been using Flor- ida hospitals and the impact of the program was reflected in hospital use data. Therefore adjustments to the State plans for 1969 and 1970 to provide for Medicare patients did not seem appropriate. The chief of the State agency agreed that the 10-percent adjustment was no longer needed since Medicare patient-days were already included in hospital patient-days. This adjustment was not made in computing bed needs for the 1971 State plan. Adjustment for tourists The State agency added about one million tourists, or an increase of about 14.5 percent, to the State's projected resident population in estimating bed needs. Although the addition of tourists appears to have increased estimated bed needs, it actually had the opposite effect, because it 13 caused the projected area use rate to be less than it would have been if the tourists had not been included. The inclusion of tourists in population data appears to have been contrary to title VI of the Public Health Ser- vices Act, as amended in 1964 by section 3(a) of Public Law 88-443 which provides that the State plan set forth the num- ber of general hospital and long-term-care beds for inpatient care of persons residing in the State. Inasmuch as Florida tourists generally are residents of other States, they are therefore included in the resident populations used by those States in computing bed needs. Also PHS regulations provide that the projected popula- tion of all service areas in a State not be more than the projected State-wide population estimate furnished by PHS, except as may be required by (1) exclusion of large popula- tion groups served by facilities not included in the State plan (i.e., Indians served by PHS facilities) and (2) ad- justment for State border areas which serve an interstate population group. The adjustment for tourists was not made in computing bed needs for the 1971 State plan. A comparison of bed needs for Duval County by 1974 for the 1970 State plan, as determined by using the State agency method and the PHS formula, is shown below. 14 State agency PHS method formula Area use rate--1968: (1) Duval County Hospital patient-days--1968 477,218 477,218 (2) Duval County population (thousands)--1968 a b 544 .6 500.5 (3) Duval County area use rate (per thousand) (1) ; (2) 876 953 Projected area use rate--1974: (4) State-wide patient-days per thousand population--1968 1,034 (5) State-wide patient-days per thousand population--1963 841 (6i Percentage increase in State-wide patient- days per thousand population 23 (7} Duval County projected area use rate--1974: 876 x 123 percent 1,077 953 x 100 percent 953 Projected average daily census--1974: (8) Projected area use rate 1,077 953 (9) Projected population (thousands)--1974 b 6 16 .1a 562.3 (10) Projected average daily census (8) x (9) i 365 1,818 1,469 Projected bed need--1974: (11) Projected average daily census 1,818 1,469 (12) Percent occupancy 80 AO (13) Additional beds for programming purposes 10 10 a'¶\ Projected bed need (11) i (12) i (13) 2,282 1,847 .ercent increase in bed need for Medicare patients 10 (16) Additional beds for Medicare patients 228 (17) Total projected bed need 2,510 1,847 aTncludes tourist population and population, except active duty military personnel, supported by the Navy hospital. bExcludes tourist population but includes population, except active duty military personnel, supported by Navy hospital. We discussed the 1970 State plan with the Associate Regional Program Director, PHS, who stated that the bed needs shown in the plan were overstated due to adjustments to the use rate and adjustments for Medicare beneficiaries and tourists. He said that the bed needs were so overstated that the plan's effectiveness as a planning document was lost and that it was possible for nearly any project sponsor to obtain a certificate of need for the construction of a hospital. 15 The Associate Regional Program Director informed us that he had met with the chief of the State agency to dis- cuss these adjustments. He informed us also that, in pre- paring the 1971 State plan, the State agency had deleted the three adjustments--for use rate, for Medicare beneficiaries, and for tourists. If the State agency had continued to make these adjustments, the bed need in future State plans would have been overstated. Federal financial assistance, in the form of Hill- Burton grants, FHA mortgage insurance, or Small Business Ad- ministration loans, can be made available for the construc- tion of a medical facility only if the State agency issues a certificate of need for the proposed facility. The deci- sion to issue a certificate of need is based on a comparison of the existing bed capacity of facilities (in service and under construction) with the projected need as shown in the State plan. As stated previously, four hospitals, containing 788 beds and involving Federal assistance of $31.8 million, are under construction or planned for construction in Duval County. Because the need for hospitals in Duval County as shown in the State plans for 1969 and 1970 has been overstated due t, the adjustments made by the State agency, Federal finan- cial assistance has been made available for the construction of four hospitals in Duval County (see p. 11) which, had the future bed need been determined in accordance with the PHS formula, would not have been needed according to the State plan. 16 UTILIZATION OF EXISTING HOSPITAL BEDS The average occupancy rate for nine of the 10 non- Federal hospitals in Duval County for the period October 1, 1968, to Setember 30, 1969, was abort 82 percent. Data was not available for the remaining hospital. A local planning official advised us that a desirable level of occupancy was 90 percent for hospitals of 100 beds or more and 80 percent for hospitals of fewer than 100 beds. PHS guidelines pre- scribe an occupancy factor of 80 percent for use in computing the number of beds required in a service area. The following table shows the bed capacity and the occu- pancy rates of the non-Federal hospitals in Duval County. Average Capacity at occupancy rate December 31, 1969 (note a) Licensed Survey Licensed Survey Hospital (note b) (note c) capacity capacity St. Vincent 361 341 87.7% 92.8% Baptist Memorial 400 391 81.7 83.6 Duval Medical Center 256 202 69.1 87.6 St. Luke's 239 238 88.7 89.1 Riverside 159 159 69.9 69.9 Methodist 174 164 75.9 80.5 Hope Haven Childrens 72 90 54.1 48.7 Beaches 68 69 54.3 53.5 Memorial 310 200 (d) (d) Doctor's 29 29 58.8 58.8 2 068 1 873 77.8 81.8 Based on occupancy statistics for the period October 1, 1968, to Sep- tember 30, 1969. At the time of our fieldwork, these were the most recent statistics available. bLicensed beds represent the maximum number of beds that the State authorized the facility to use. CSurvey beds represent the available capacity as determined by the State agency by applying PHS formula. This determination is based primarily on a minimum requirement standard of square footage of usable floor space for each bed. Minimum required square footage is defined as 100 square feet for each bed in a single room and at least 80 square feet for each bed in a multibed room. dNew facility which began operation in May 1969. 17 As shown in the above table, certain hospitals in County are experiencing relatively low occupancy Duval rates--less than 80 percent. If current plans of hospital officials carried out, total bed capacity in Duval County are will be in- creased to 2,518 beds, or 671 more beds than the need that would have been projected in the State plan if the State agency had computed future bed requirements in accordance with the PHS formula. Since the estimate of future bed needs for Duval County in the State plan was overstated due to the adjustments, however, the State plan showed that there was a substantial need for additional hospital bed spaces in Duval County. Therefore organizations which sought Federal assistance for the construction of medical facilities re- ceived certificates of need from the State agency. As shown on page 11, four hospitals in Duval County, which new or additional facilities were being constructed for were planned for construction, received Federal or assistance in the form of Hill-Burton grants or FHA mortgage insurance. Facilities excess to needs result in underutilization of facilities, and underutilization generally results in higher operating costs for each patient-day. Since the Gov- ernment reimburses hospitals and skilled-nursing-cart ities under the Medicare and Medicaid programs, the facil- Govern- ment can be expected to share in the higher operating costs. Newly constructed hospitals can affect substantially the occupancy rate of existing hospitals. For example, hospitals, Baptist Memorial and Methodist, experienced two stantial decline in their occupancy rates when Memorial a sub- Hos- pital, a 200-bed facility, opened in May 1969. During the 12-month period prior to the opening of Memorial Hospital, Baptist Memorial had an occupancy rate of 93.9 percent. occupancy rate of Baptist Memorial Hospital. declined The to 86.3, however, during the first year that Memorial Hospital was open. The occupancy rate of Methodist Hospital during the same 12-month period prior to the opening of Memorial Hos- pital was 85.6 percent. During the first year of operation of Memorial Hospikal, the occupancy rate of Methodist pital dropped to 72.1 percent. Hos- Further, dring the 6-month period July to December 1970, Memorial Hospital had a 92.9-percent occupancy rate while the occupancy rates of Baptist Memorial and Methodist Hospitals dropped to 74.1 percent and 62.2 percent, respec- tively. We noted that Baptist Memorial had obtained an FHA- insured loan to finance the construction of a facility that would provide 256 additional bed spaces. This facility was under construction at the time of our fieldwork. In view of the declining occupancy rates the hospital experienced since the opening of Memorial Hospital, it is reasonable to assume that the occupancy rate of Baptist Memorial will fur- ther decline after the addition of 256 bed spaces. LACK OF CONTROL BY PLANNING AGENCIES OVER CONSTRUCTION OF HOSPITALS AND SKILLED-NURSING-CARE FACILITIES The only direct control over the construction of hos- pitals and skilled-nursing-care facilities that is available to State agencies applies to facilities to be constructed with Federal assistance, in that, before such assistance can be furnished, a certificate of need must be issued by the State agency. (See p. 16.) If a proposed project is to be financed privately and if its design and specifications meet State construction standards, the State agency cannot disapprove the project even though the facilities will be excess to projected needs. Also the Health Planning Council of the Jacksonville Area, Inc., which is responsible for comprehensive health planning at the local level, has no effective means of preventing construction of facilities excess to projected needs; it can only recommend that construction not be undertaken and attempt to persuade project sponsors to curtail construc- tion plans. 19 BOSPITALS IN NEIGHBORING COUNTIES There are six counties neighboring Duval County which constitute five separate service areas in the Florida State plan. Bradford, Clay, Nassau, and St. Johns Counties represent a service area, and Baker and Union each Counties rep- resent one service area. (See p. 6.) Most of the towns in the six neighboring counties are within 45 miles of Jackson- ville. Also the Duval County hospitals have medical ists and specialized equipment which are not availablespecial- in the hospitals in neighboring counties. Studies made by the council of hospital patients showed that a large number of patients living in the coun- ties neighboring Duval County received care in Duval County hospitals. In each of five neighboring counties, hospitals were experiencing low occupancy rates. In the sixth county, Union County, a 25-bed hospital was under construction the time of our fieldwork. This hospital was at financed pri- marily with Federal funds. Federal, State, and local health officials informed us that faciiities in counties could serve the medical needs of the adjacent people in- tended to be served by the new hospital and expressed as to whether Union County had, or could get, doubt the resources to staff and operate the new hospital. PHS regulations require that the State agency lish service areas on the basis of (1) locations estab- of hospi- tal patients' homes, (2) availability of medical manpower, (3) distance and travel time to hospitals, and (4) the so- cioeconomic, demographic, trade, and transportation teristics of the areas. The regulations also charac- provide that county boundaries not be used to define service areas un- less they represent the most logical areas for planning health facilities and services. Studies conducted by the council showed that, for the 12-month period ended June 1969, 53 percent of the resi- dents of Baker County who were hospitalized in the county area (Duval, Baker, Bradford, Clay, Nassau, six- St. Johns) surveyed by the council went to Duval and County hospitals. During this same period, the occupancy the Ed Fraser Memorial Hospital in Baker County rate for was only 20 22 percent. Further, during the same period, 41 percent of the residents of Clay County who were hospitalized in the six-county area went to Duval County hospitals. The occu- pancy rate during this period for the Clay Memorial Hospi- tal in Clay County was 59 percent. The following table shows the bed capacity and the oc- cupancy rates for the five hospitals in the counties neigh- boring Duval County. Average occupancy rate Capacity at (note a) De~mber 3 -j969 Licensed Survey County Hospital Liceased Survev capacitv caD8citx Baker Ed Fraser Memorial 25 25 20.5 20.5 Bradford Bradford County 50 50 66.3 66.3 Clay Clay Memorial 60 60 65.6 65.6 Nassau Humphrey's Memorial 53 56 54.4 51.5 St. Johns Flager 131 122 70.1 75.2 aBased on occupancy statistics for the period July 1, 1969, to June 30, 1970. Planned changes in hospital bed capacity A new hospital was under construction in a neighboring county at the time of our fieldwork. Further, plans were being formulated for the construction of two new hospitals and for the conversion of an existing hospital for use as a skilled-nursing-care facility. Following is an analysis of planned changes in bed capacity in the six counties neigh- boring Duval County. 21 Bed capac- Increase Projected Increase or Projected ity at in beds bed capac- decrease (-) 12-31-69 bed during ity at in beds capacity QUaYt anLd hospital (note a) 197Q I.-31-70 1971-74 bt19174 Baker: Ed Fraser Memorial 25 - 25 - 25 Bradford: Bradford County 50 - 50 - 50 CI-y: Clay Memor'al 60 - 60 -60 b - New (unnamed) Nassau: 150 c 150 Humphrey's Memorial 56 - 56 - 56 St. Johns: Flager 122 - 122 - 122 New (unnamed) Union: 51 C 51 Union County - 25 d 25 - 25 aAs deter -sing PHS criteria. (See p. 21.) bPlans be , vprepared for conversion of beds from acute-care beds to skilled-nurring- care beds. tIn preliminary planning stage. dUnder construction as of Decamber 31. 1970. Union County Hospital, a 25-bed hospital, which under construction at the time of our fieldwork, was is located in a rural county having about 7,150 residents, about 45 miles southwest of Jacksonville. Of the estimated cost of $939,000 of the hospital, $920,000, or 98 percent, is being financed with Federal funds consisting of a Hill- Burton grant of $365.n00 and a loan of $555,000 from the Departmen. of Housing and Urban Development. The chief of the State agency and other State and Fed- eral officials informed us that they were opposed project because (1) the occupancy rates of four to the hospital 8s within 30 miles of the new hospital which would serve Union County were low, (2) Union County did not have to serve the new hospital, and (3) there were a physician not enough people in the county to jus.ify the new hospital. theless the project was approved by the State Never Hospital Advi- sory Council because the 1968 State plan showed that the county, by not having a hospital, had a high priority for Hill-Burton funds. Because a large number of patients residing counties neighboring Duval County received in the six their care in Duval County hospitals and because hospitals in boring counties are experiencing low occupancy the neigh- rates, it 22 appears that the six counties and Duval County should be combined into one service area for planning purposes. The chief of the State agency informed us that desig- nating the service area was one of the most important fac- tors in planning. He agreed that a county should not nec- essarily be designated a service area because it did not always represent the true need of an area for medical fa- cilities. He stated that the State agency had not been able to establish service areas throughout the State in ac- cordance with PHS regulations because of the lack of ade- quate data, such as (1) the locations of hospital patients' homes and (2) the availability of medical manpower. 23 CHAPTER 3 PLANNING AND CONSTRUCTION OF SKILLED-NURSING-CARE FACILITIES According to the 1970 State plan, Duval County will need 1,379 skilled-nursing-care beds by 1974. We made an analysis of the capacity of Available facilities as of De- cember 31, 1969. Our analysis showed that a total of 1,247 skilled-nursing-care beds were in use in 12 non- Federal facilities and that accommodations for 291 addi- tional beds were under construction. Local nursing-home and hospital officials had plans to increase the bed capacity of skilled-nursing-care faci- lities bv 359 beds by 1974. If the plans of these offi- cials are carried out, the bed capacity of skilled-nursing- care facilities in Duval County by 1974 will total about 1,897 beds in 17 facilities. Therefore we estimate that by 1974 Duval County may have about 518 more skilled- nursing-care beds than the projected need of 1,379. The 1970 State plan showed that the capacity of skilled-nursing-care facilities in operation or under con- struction at December 31, 1968, totaled 1,138 beds, or 241 beds less than the projected need of 1,379 beds by 1974. The State plan showed also that, as of December 31, 1968, 11 skilled-nursing-care facilities, having a total of 548 beds, did not conform to Hill-Burton construction standards because the facilities were not constructed of fire- resistant material. These facilities complied with State and local licensing and safety requirements. The State plan did not include these beds in the inventory of skilled-nursing-care beds that would be available to meet the projected need of Duval County for 1974. PHS regulations, however, require that such beds be considered in determining whether the number of beds in facilities in operation or under construction will be suf- ficient to meet future bed requirements. Had these beds been included in the 1970 State plan as being available to meet the projected need for 1974, the plan would have shown that the capacity of skilled-nursing-care facilities as of 24 December 31, 1968, exceeded the projected need for 1974 by 307 beds, rather than showed a need for 241 additional beds by 1974. The exclusion of nonconforming beds in computing bed capacity to meet estimated needs in the State plan resulted in the issuance of certificates of need by the State agency for the construction of additional skilled-nursing-care facilities. Federal financial assistance later was approved for the construction of these facilities. As of January 1970, seven of the 11 nonconforming facilities, having a total of '55 beds, had been closed. The remaining four facilitier having a total of 393 non- conforming beds, complied wi -.State and local licensing and safety requirements. PLANNED CHANGES IN BED CAPACITY OF SKILLED-NURSING-CARE FACILITIES In accordance with PHS regulations, the State agency, in computing the need for skilled-nursing-care beds, does not consider planned increases or decreases in bed capacity but considers only additional capacity under construction. Therefore we interviewed hospital and nursing-home officials to determine plans for increasing or decreasing the bed capacity of existing skilled-nursing-care facilities. These officials informed us of definite plans by three skilled-nursing-care facilities to construct facilities for 207 additional beds by 1974 and of plans of one hospital to convert 202 acute-care hospital beds to skilled-nursing- care beds. One skilled-nursing-care facility plans to con- vert 50 skilled-nursing-care beds to acute-care beds. Following is our analysis of the projected changes in bed capacity--planned and under construction--in Duval County by 1974. 25 Increase or decrease(-) Increase or Proj cted Bed capacity in beds Projected decrease(-) ed Skilled-nursing- at 12-31-69 during capacity in beds capacity care facility (note a) 1970 at 12-31-70 1971-74 L 1S74 Cathedral Health Center (note b) c 128 128 128 Duval Medical Center - 202 d 202 Memorial Hospital 73e 73 --50 f 23 Baptist Memorial Hospital (nte g) - 57 h 57 57 Medicenter of America 176 .44i 132 44i 176 Arlington Manor (note g) - - 120J 120 All Saints Home (note b) 30 30 k 60 - 60 Arms of Mercy 48 - 4 - 48 Donovan's 180 - 10 - 180 Earths M. H. White (note b) 120 - 120 - 120 Jacksonville Convalescent Cen- ter (note g) 100 - 100 - 100 Mason Manor 100 - 100 - 100 River Garden Hebrew Home (note b) 90 901 160 - 180 Rosewood Haven 55 - 55 - 55 St. Jude Manor (note g) 138 - 138 - 138 Southside Center 100 - 100 - 100 Unicare Trowbridge _o10 110 - 110 Total 1247 334 1 581 316 1.897 abased on State agency's statistics nurdinformation. bFinanced under a HilL-Burton grant. Cfacility, which opened in March 1970, was constructed under a Hill-Burton grant of $768,000. dBeds will be converted from hospital use to long-term-care use. eFacility,which opened in July 1970, was constructed under a Hill-Burton grant of $750,000. fBeds will be converted from long-term-care use to hospital use. 8 FHA-insured mortgage project. hCommitment made by FHA to insure loan; construction to start in 1971. iBeds, temporarily leased to St. Vincent Hospital for care of hospital patientsa, will be returned to long-term-care use. JOn November 11, 1970, FHA approved a commitment to insure a loan for construction of this nursing home. k0 r August 19, 1970, PHS authorized the award of the construction contract. iFacility opened in April 1970. .WV"'. AVAILABL 26 OCCUPANCY RATES OF SKILLED-NURSING-CARE FACILITIES On the basis of patient-day statistics provided by the State agency for calendar year 1969, we estimated that the average occupancy rate for 11 of the 12 skilled-nursing-care facilities in Duval County was about 75 percent. Occupancy data was not available for the remaini:g facility. The fol- lowing table shows additional data on the capacity and oc- cupancy rates of skilled-nursing-care facilities in Duval County. Average Capacity at occupancy rate December 31. 1969 (note a) Licensed Survey Licensed Survey Skilled-nursing-care facility (note b) (note c) .capacitY capacity Medicenter of America 176 176 3 0.7°d 30.7-d All Saints Home 30 30 94.1 94.1 River Garden Hebrew Home 120 90 91.8 122.0 Eartha M. M. White 120 120 95.5 95.5 St. Jude Manor 140 138 67.4 68.3 Jacksonville Convalescent Center 100 100 72.5 72.5 Arms of Mercy 48 48 83.3 83.3 Donovan' s 180 180 66.7 66.7 Mason Manor 100 100 75.6 75.6 Rosewood Haven 55 55 90.1 90.1 Southside Center 100 100 (e) (e) Unicare Trowbridge 110 110 86.3 86.3 Total 1.279 27 72.7 74.5 aBased on patient-day statistics provided by the State agency for the period Jan- uary 1 to December 31, 1969. bLicensed beds represent the maximum number of beds that the State has authorized the facility to use. CSurvey beds represent the available capacity as determined by the State agency either from questionnaires returned by the skilled-nursing-care facilities or as a result of onsite inspections. dBased on actual data for a 7-month period and projected for a full 12-month period. eDue to a change in management, patient statistics were not available. 27 OVERSTATE4ENT OF BED NEEDS IN 1970 STATE PLAN Our review showed that, in preparing the State plan, the State agency excluded skilled-nursing-c re facilities which did not conform to Hill-Burton construction standards. We noted that, in the 1970 State plan, a total of 548 beds in 11 skilled-nursing-care facilities which did not conform to Hill-Burton construction standards were excluded from the inventory of skilled-nursing-care beds that would be avail- able to meet the projected need of Duval County for 1974. PHS regulations state that the inventory of facilities include all existing facilities in each area which provides inpatient care. It further states that facilities providing only domiciliary care are to be excluded and that facilities owned and operated by the Federal Government may be included but that all data related to these, such as days of care provided, should be excluded from area totals. The regula- tions do not provide for the exclusion of facilities which do not conform to Hill-Burton construction standards. Following is an analysis of the effect of the exclusion of nonconforming beds on the 1970 State plan. Projected bed need according to 1970 State plan 1,379 1,379 Bed capacity according to State plan 1,138 - Bed capacity, including noncon- forming beds - 1,686 Beds needed 241 Excess beds 307 As discussed on page 16, Federal financial assistance can be made available for the construction of a medical fa- cility only if the State agency issues a certificate of need for the proposed facility. The decision to issue a certifi- cate of need is based on a comparison of the existing bed capacity of facilities (in service and under construction) with the projected need as shown in the State plan. 28 As noted above, however, the State plan showed a need for more skilled-nursing-care beds in Duval County by 1974 because the State plan excluded beds in facilities which did not conform to Hill-Burton construction standards from the inventory of available beds. Had the State plan included these nonconforming beds,the 1970 State plan would have shown that Duval County had an excess of beds, rather than a need for more beds. One expansion project, Baptist Memorial Hospital, in- cludes 57 skilled-nursing-care beds. To qualify for FHA mortgage insurance, the hospital had to obtain a certificate of need for the skilled-nursing-care-bed spaces. The State agency issued the certificate of need on the basis of the 1970 State plan. Another expansion project, the All Saints Home, will provide 30 additional skilled-nursing-care beds under a Hill- Burton grant of $187,500.- On August 19, 1970, PHS authorized the award of the construction contract for the project. Construction of a new nursing-home facility will pro- vide 120 additional skilled-nursing-care beds. On August 27, 1970, the Health Planning Council of the Jacksonville Area, Inc., approved this project on the basis that the facility would provide needed nursing-home beds at a lower cost. An FHA official informed us that a certificate of need was is- sued by the State agency on September 18, 1970, for the 120-bed facility. He also stated that FHA had issued a com- mitment to insure a loan in the amount of $848,700 for the project on November 4, 1970. 29 CHAPTER 4 COORDINATION AMONG HOSPITALS IN PLANNING AND SHARING MEDICAL SERVICES Our survey of specialized medical services, such as neu- rosurgery and open-heart surgery, provided by hospitals in Duval County showed that there was a potential for sharing such services. We believe that, before this potential can be fully realized, studies will have to be made to determine specifically what services can be shared and how such shar- ing can be accomplished to benefit all concerned. To achieve optimum sharing of medical services, these studies should be made at the time that plans are formulated for new facili- ties. Seven non-Federal hospitals in Duval County (each over 100 beds) generally provide the same types of specialized medical services and have similar medical equipment. At each of these hospitals, neither the volume of work nor the number of patients was sufficient to utilize fully the avail- able equipment. Low utilization of equipment at these hos- pitals results in higher charges for each unit of service. Section 113 of Public Law 91-296, which amends the Pub- lic Health Service Act, provides that States are entitled to receive grants amounting to 90 percent of a project's cost if the project offers potential for reducing health care costs "through shared services among health care facilities" or "through interfacility cooperation." It appears that this legislation, which increases Federal financial partici- pation in those projects that involve sharing, should pro- vide hospitals which are seeking Federal grant funds with an incentive to share services. More aggressive action, how- ever, will be required by PHS, State agencies, and local planning groups if the full potential for sharing services is to be achieved. SIMILAR SPECIALIZED SERVICES AND EQUIPMENT AVAILABLE AT HOSPITALS Following is a listing of similar specialized services and equipment available at the hospitals in Duval County. 30 Number of Number of of hospitals hospitals providing having Service service Related equipment equipment Neurosurgery 7 Electroencephalography recorder 7 Cardiovascular Cardiac catheteriza- surgery 6 tion unit 4 Open-heart surgery 3 Heart-lung machine 3 Blood analysis 7 Automatic blood- analyzing equipment 7 It is planned that the new Jacksonville General Hospital to be built in Duval County (see p. 11) will also provide these services. The Navy hospital does not provide neurosurgery or open- heart surgery but does provide cardiovascular surgery and most of the other services available at the Duval County ci- vilian hospitals. The Navy hospital does not have a cardiac catheterization unit or a heart-lung machine. The Navy hos- pital's facilities, however, can be used only by eligible persons, except in cases of emergency. We were advised by the Navy hospital's Administrative Officer that patients in need of services not available at the Navy hospital were transferred or referred to other hospitals--military patients to other military hospitals and civilian patients to Duval County hospitals. As of July 1970 radiation therapy was available at two hospitals in the area--Duval Medical Center and Baptist Me- morial Hospital. The other hospitals referred their pa- tients to these hospitals if they needed radiation therapy. USE OF SPECIALIZED MEDICAL EQUIPMENT We reviewed the hospitals' use of four selected spe- cialized items of equipment. According to hospital offi- cials, most of the equipment was not being used to capacity (on the basis of tests made or patients treated). The aver- age daily use ,,f the equipment, as reported by hospital per- sonnel, in November and December 1970 was as follows: 31 ernap o- caear riac He art Automato c encephalo- catheter- Heart- blood- graphy ization lung analyzing recorder unit machine _ Equipment Daily Ae -Da l y Aver- ` Avey r- DDail ver- capac- age capac- age capac- age capac- age ity daily ity daily ity daily ity daily (note a) use (note a) use (note a) use (note a) use Baptist Memorial 5 to 7 5 3 0.43 1 0.24 400 60 Memorial 4 4 - - - - 00 (b) Riverside 3 1.8 (b) (b) (b) (b) 330 21 St. Vincent 4.5 4.5 - - - 400 40 to 50 St. Luke's 16 6 4 1 - - 400 35 Methodist 4.5 2.3 - - - 800 100 DWval Medical Center (b) (b) (b) (b) (b) (b) (b) (b) Navy 6 3 - 425 175 aAverage number of treatments or tests which can be provided in a workday, as estimated by hospital officials. bHospital nas equipment but use date has not been obtained. The administrator of Baptist Memorial Hospital told us that, because of the shortage of physicians in the area, each hospital had made an effort to attract physicians by having available--without regard to the equipment available at other hospitals--a full range of modern, expensive equip- ment. He s;aid that, as a result, there had been a duplica- tion of costly equipment within the area. He cited the proliferation of blood-analyzing equipment and cardiac catheterization units as examples of duplicated equipment. He said that equipment of this type in one or two of the hospitals would be sufficient to meet the needs of the area. He stated that at one hospital the number of tests or patients treated did not constitute sufficient use of the equipment. As a result, the cost of the equipment was being allocated to a small number of patients and the charges made to patients were higher than the normal charges for such ser- vices. In a letter dated April 22, 1970, to the executive sec- retary of the Health Planning Council of the Jacksonville Area, Inc., concerning the duplication of equipment in the area, the administrator of Baptist Memorial Hospital stated that: BET DOCUMENI AVAIL ALI 32 "In addition to this, over the past few months we have seen the installation of SMA-12/60's [blood- analyzing equipment] in laboratories. One or two of these instruments, located strategically in the city, could handle this particular laboratory testing for every patient in the community, in- cluding those going to the private doctor's of- fices. We have seen, with the advent of two neu- rologists coming to the community, a prolifera- tion of EEG relectroencephalography] departments to the point that it is no longer possible to charge a reasonable fee for this service and break even on it. In addition to that, I sud- denly find that St. Luke's Hospital is develop- ing a cardiac catheter laboratory and that St. Vincent's is also considering the same thing. "Undoubtedly, Memorial has some plans in the vault along this Line too. "I cannot deny that each individual hospital probably has the feeling it needs everything it is doing, but somewhere sanity must pre- vail or the $100 per day cost estimate will come true." 33 ROLE OF COUNCIL IN CONTROLLING SERVICES PROVIDED BY HOSPITALS We noted that the Health Planning Council of the Jack- sonville Area, Inc., did not have any control over services being planned or provided by hospitals in Duval County. We noted also that, in its October 1969 report on radi- ation therapy, the council--recognizing not only the exist- ing radiation therapy needs but also, and possibly more im- portant, the costs involved and the difficulty of recruiting trained personnel to staff a facility--stated that perhaps only one facility should be planned at that time. The coun- cil stated also that it was imperative that planning be done prior to building radiation facilities and that the addi- tional cost of providing more than one facility be recognized and considered. Prior to the release of the council's report, both Duval Medical Center and Baptist Memorial Hospital had plans for major radiation facilities. Baptist Mimorial Hospital had plans to install a complete radiation-therapy unit which the council had originally approved in 1964. The Duval Med- ical Center already had some radiation-therapy capability and had plans for a major radiation facility. The executive secretary of the council stated, at a council meeting in November 1969, that the council should be concerned with the planning and installation of a complete radiation-therapy unit. The administrator of Baptist Memo- rial Hospital stated at this meeting that he agreed with the concepts of comprehensive health planning but that he be- lieved that such planning should be done before developments, such as the planning for the installation of a complete ra- diation therapy unit at Baptist Memorial Hospital, were ini- tiated. Subsequently the administrator of Baptist Memorial Hos- pital told us that he belived that the council, to avoid un- necessary duplication, should have more control in determin- ing what equipment and services would be available at local hospitals. 34 The administrator of St. luke's Hospital told us that there was almost no coordination among Jacksonville hospitals and that, as a result, some equipment had been duplicated unnecessarily. He said that one reason for the duplication was that hospital administrators just did not know what the other hospitals were planning or doing. He explained that one hospital might order an expensive piece of equipment only to find out that another hospital had already ordered the same type of equipment. He stated that, if the Health Planning Council of the Jacksonville Area, Inc., had the au- thority to review hospitals' proposed purchases of costly equipment, it could help to prevent duplication. The Navy hospital had not kept the colmcil advised of its activities or functions. The Navy hospital's Adminis- trator told us that the council was concerned primarily with area planning and that the Navy hospital really was not in- volved. POLE OF STATE AGENCY IN CONTROLLING SERVICES PROVIDED BY HOSPITALS PHS Health Grants Manual, part 23-2, dated January 29, 1968, provides that the State agency develop administrative policies related to (1) prevention of unnecessarily dupli- cated services, (2) coordination of services, and (3) limi- tations relating to size of facility and services provided. We found no evidence, however, that any such policies had been developed. The chief of the State agency stated that there was nothing that could be done by the State agency regarding the number of similar specialized services available at Duval County hospitals, because the State agency did not get in- volved in the administration of the separate hospitals. He stated that this was a problem area resulting from various factors--primarily the lack of coordination among the hospi- tal administrators who each wanted his hospital to offer the full range of services and facilities to satisfy staff phy- sicians. He said that physicians did not like to transfer patients to other hospitals for treatment. He stated that controlling and coordinating services should be the responsibility of the local health planning council. 35 We believe that detailed studies should be made State and local planning organizations to determine by the po- tential for sharing specialized medical services and that the State agency should know what services are available or needed before it approves new projects for an area. 36 CHAPTER 5 SCOPE OF REVIEW We reviewed the coordination among Federal and State agencies and local organizations in planning and construct- ing acute-care hospitals and skilled-nursing-care facilities in the Jacksonville area. We reviewed the planning and con- struction of medical facilities financed either with private funds or through Federal financial assistance. We compared the existing and planned capacity of acute-care hospitals and skilled-nursing-care facilities with projected needs as determined by the State agency. Although we verified the mathematical accuracy of the State agency's computation of future bed needs, we did not evaluate the appropriateness of the method prescribed by PHS for use by the State agency in determining future bed needs. We also considered the actions taken to effect the sharing of certain facilities and equipment among the various hospitals. Information was developed primarily on the basis of discussions with Federal, State, and local officials. We made our review at the State agency; the Health Planning Council of the Jacksonville Area, Inc.; and at Jacksonville area hospitals, skilled-nursing-care facilities, and other health organizations. U.S. GAO, Wsh., D.C. 37
Planning, Construction, and Use of Medical Facilities in the Jacksonville, Florida, Area
Published by the Government Accountability Office on 1971-08-27.
Below is a raw (and likely hideous) rendition of the original report. (PDF)