OAR 333-590-0030: Assumptions

The following general assumptions are made with respect to the balance between bed capacity and anticipated future utilization. In specific cases, certain assumptions may or may not apply: (1) The annual patient days needed by the population of a health service area can be more confidently forecasted than the demand at a single hospital or local market area. (2) Hospital service area patient days can be more confidently forecasted by isolating the trends in the area’s population from trends in the area’s use-rate (annual patient days per 1,000 population). The two trends can then be recombined by multiplication. (3) Population-based acute inpatient use-rates (annual patient days in nonfederal, nonspecialty, short-term Oregon hospitals, divided by forecasted Oregon population) have declined for the past ten years, and are likely to continue to decline for the next ten years: (a) Within the area to be served by the proposal, factors such as changing age structure of the population, transportation patterns and locations of physician specialists, may modify this effect, as may changes in the intensity or types of services delivered; and documented commitments to develop other procompetitive initiatives such as alternative delivery systems, selective contracting, successful competitive bidding, and other market oriented changes; (b) At the applicant’s request, the division may modify the general assumption that use-rate will decline. One basis for such modification can be documentation (which the division can validate) by the applicant that its facility does, or proposes to provide 30 percent or more of its services to meet elective acute care needs (which cannot be met at existing facilities in the hospital service area as defined in OAR 333-590-0050(1)) to individuals not residing within 50 miles by road in the case of nonemergency acute services; or 25 miles by road in the case of emergency acute services. In such a case, the applicant’s population base for purposes of calculating use-rate will take into account the number of persons from outside the area to be served by the facility who are projected to use the facility; (c) At the request of the applicant, the division may also modify the general assumption that use-rate will decline if the applicant provides documentation (which the division can validate) that its facility proposes to provide all or some of its services to members, subscribers and enrollees of institutions, HMOs or health care plans. In such cases, the population to be served by the facility will be considered to be the members, subscribers and enrollees of such institutions, HMOs or health care plans who reside in the facility’s service area. In cases where the applicant provides or proposes to provide only a portion of its services to such members, subscribers and enrollees, the population to be served by the proposal will be adjusted on a proportionate basis. Assumptions as to the use-rate of such members, subscribers or enrollees will be based either on past experience of the institution, HMO or health care plan or, in the case where no past experience exists, on past experience of similar institutions, HMOs or health care plans in the state; (d) At the request of the applicant, the division may also modify the general assumption that use-rate will decline if the applicant documents that its facility is either: (A) A medical or other health professions’ school; or (B) A multidisciplinary clinic; or (C) A specialty center; or (D) A facility established or operated by a religious body or denomination to meet the needs of members of such religious body or denomination for care and treatment in accordance with their religious or ethical convictions, when these religious and ethical convictions demonstrably preclude use of established health care facilities in the area, and particular health care facilities provided for the purpose of rendering health care to such members. Utilization and beds at such facilities shall not be counted when considering the need for services at other facilities in the hospital service area. (e) In such cases as stipulated in paragraph (d)(A), (B), (C), or (D) of this section, modification of the basic use-rate assumption shall be based on documentation (which the division can validate) by the applicant that a population different from or in addition to the hospital service area population (as defined in OAR 333-590-0050(1)) is served or will be served by the facility, and that this population has experienced trends in hospital use-rates which are different from those in the applicant’s health service area. The use-rate assumption shall be modified only to the extent that the additional service area population or geographic area is taken into account. For example, if an applicant demonstrates that it draws patients from the entire state, then the use-rate would be assumed to decline at the statewide historical rate of decline. (4) The share of patient days captured by a hospital in a given service area will generally be stable for the next ten years, unless local factors change. (5) In estimating future market share, current hospital discharge data will be the basis against which the effects of factors such as population shifts; changes in future or past hospital location, service mix, age mix, or reimbursement mix; documented commitments to develop procompetitve initiatives such as alternative delivery systems, selective contracting and successful competitive bidding; and other evidence which may indicate changes in market share, such as projected decreases in market shares of other facilities, will be evaluated. The burden of proof shall be on the applicant. (6) The use-rate of persons, ages 0–14, 15–44, 45–64, or 65 plus, from counties of origin expected to contribute substantially to future utilization of the hospital should be taken into account in interpreting quantitative estimates of future general use-rates, patient days and bed need. (7) The number of beds needed to provide an anticipated range of patient days in a given hospital should be calculated to include an allowance for enough excess capacity to meet statistically estimated peak demand, taking into account number of beds, proximity to other hospitals, and feasibility of improved utilization through effective scheduling and other manage-ment actions.