Feasibility Study: Proposal Overview
MBA Decision-Making in HC System 5310 – Capella University
9/24/19
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HCM5310 Feasibility Study
Section I:
... [Show More] Organization Background
Whitaker Memorial Hospital was founded in 1908 in the East of Newport News, a small
community located in Virginia that was growing rapidly. This hospital was established with one
goal in mind, and that was to provide health care to the African American community that was
being excluded from the "white" hospitals. Four African American physicians decided to take a
stand and utilized their resources to rent a four-room building to create a hospital for individuals
of color.
Whitaker Memorial Association
Six years after Whitaker Memorial Hospital was formed a non-profit organization known
as the Whitaker Memorial Association was created to provide funding and governance to the
hospital. According to the By-Laws in this organization, a Board of Trustees was to be elected to
oversee the operations and to ensure that the community remained in control. Due to this nonprofit, the hospital received significant amounts of funding to establish a School of Nursing to
provide the necessary training for the staff. However, despite the funding and rapid growth of
the institution, Whitaker Memorial Hospital filed for chapter 11 bankruptcy due to its increased
debt.
Financial Struggles
By 1943 Whitaker Memorial Hospital saw some massive changes including an upgraded
facility with 58 beds, which was financed by the Lanham Act in World War II. In 1956 the
hospital was upgraded again to a new state of the art 81-bed facility. As the years progressed,
African Americans physicians were now part of the active staff at what were considered the
"white" hospitals. The environment surrounding Whitaker Memorial Hospital was changing
rapidly, and the hospital was starting to identify as a public hospital that could only provide care
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HCM5310 Feasibility Study
to the more impoverished communities. With this new reputation, the hospital was unable to
raise its prices for care, and all the services offered may not have been charged correctly. The
financial problems were mounting, and eventually, the hospital's expenses exceed its revenues by
$749,000 (Makamson, 2006).
Fresh Start
In order to get back the community hospital image, a new 126-bed facility was built in
1985, and the name was changed from Whitaker Memorial Hospital to Newport News General
Hospital. The hospital reported a loss the first year, spent a half a million dollars on a mainframe
computer system, and cut its employees by half. The board considered different options to
change the hospital to maximize revenue. One option was to convert to psychiatric care but did
not materialize since it required additional licensure and changes to the current building. Another
option was to merge with a more prominent hospital in the community, but this idea was rejected
immediately. As we can see, the plan to re-invent the hospital's image, reduce the current debt,
and restructure the organization has failed to gain any momentum. A new program or service is
needed to maximize revenue, secure a competitive advantage, and establish a reputation as a
leader in the health care in the community.
Current Client Base
It was clear what client base was being served when the hospital was first created, but
now in 1995 with debts rising and revenues on the downward slope, it wasn't so clear. Initially,
the clients were the African American population located in the East End of Newport News, but
now the demographic has changed. The population total in Newport News in 1994 was 183,000
with 33% being African American. The client base needs to be readdressed moving forward so
that we can successfully implement a new program.
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HCM5310 Feasibility Study
Staffing
According to Hospital Data (1997), the staff is comprised of twelve registered nurses,
eighteen licensed practical nurses, one registered pharmacist, six respiratory therapists, one
social worker, one physician, two dieticians, and ninety other personnel. Ensuring a well-trained
staff will be vital to the success of a new program and service. Cutting the staff to save on money
will not be the current approach like was previously done in the past. Having a reliable
management team that oversees the operations as well as monitors the implementation of a new
program will be equally important to the doctors and nurses we have on staff.
Revenue Streams
Currently, there are 126 beds and the sources of revenue come from a variety of areas
such as emergency room, anesthesia, pediatrics, intensive care, occupational therapy, psychiatric,
dietary services, physical therapy, and the list goes on. It is important to note that there are many
services offered and thus more revenue possibilities. However, if disruptive innovation utilized in
the health care system, it could simplify things and save the hospital from overpaying for several
specialty services (TEDx Stouffville, 2012).
Section II: Objectives of the Proposed Program
Newport News General Hospital has been struggling to generate revenue, and
restructuring the hospital has been unsuccessful. The purpose of a new program is to improve the
current financial status of the hospital and to deliver exceptional patient care. This feasibility
study will ensure a well-informed decision by exploring the viability of the program and whether
it is affordable, sustainable, and integrates with the long-term goals. The proposed program
involves investing in a state-of-the-art Electronic Health Record system (EHR) created by
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HCM5310 Feasibility Study
Athenahealth (Cloud-computing in Healthcare. n.d.). This new EHR system will improve the
quality of patient care, increase clinical efficiency, and maximize revenue (Tate, 2018). The
project will be known as the Revitalization Program.
Revitalization Program
Electronic Health Record systems have seen significant changes, and hospitals are
utilizing this disruptive innovative technology all around the globe. EHR systems connect the
provider to the patient, and they increase efficiency within the clinical setting. Health care
spending is expected to increase by 4.1% in 2017-2021, which is substantial compared to 1.3%
in 2012-2016. The increasing population, the rise in the aging population, and innovative
medical technologies will all be drivers of spending in the health care system (Deloitte Center for
Health Solutions, 2018). The reason that this program is being considered is due to its ability to
streamline workflow, reduce medication errors, and improve clinical efficiency, thereby
eliminating wasteful processes and saving money. Using an EHR platform that blends CPOE and
CDS systems can potentially decrease medication errors by as much as 70% (Tate, 2018). Higher
clinical efficiency can be achieved through faster documentation, accurate prescribing of
medications, better diagnosis as well as treatment plans, and successful coordinated care.
Smart health care is the road that is currently being traveled, and by implementing a
technologically advanced EHR system, I expect this program to accomplish three essential goals
and thereby fill the gap of quality patient care.
1) Provide physicians with resources that lead to better clinical decisions which will
result in better health care.
2) Reduce medication errors and duplications of data entered in computerized physician
order entry (CPOE) systems, which will minimize costs.
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HCM5310 Feasibility Study
3) Increase in patient returns due to the high quality of care and positive patient
experience. According to NCBI’s research, some providers saw up to 27% more
patients with the implementation of an EHR system (Tate, 2018).
The system will allow our providers to stay up to date on the latest preventative
treatments and the clinical decision support tool (CDS) known as Epocatres will assist physicians
in making informed decisions regarding our patient's health. The EHR system by AthenaHealth
will allow for effective interdisciplinary work since crucial patient information can be shared
with other health care institutions, and it will automatically update the patient chart after each
visit. This entire system is something our hospital has not seen before, and it has the potential to
be that disruptive piece of technology that will differentiate us from the competition.
Objectives
1) Increase revenue by 20% at the end of 12 months.
2) Decrease expenses by 20% at the end of 12 months.
3) 20% increase in new patients seen at our hospital at the end of 12 months.
Patients That Will Benefit
The patients that will benefit from this new program include all demographics in and
around Newport News. With the implementation of this program, the quality of care will increase
so that all patient needs can be addressed effectively. Having this innovative technology within
the hospital will prevent Newport News General from having to transport patients to the more
sophisticated facilities. From the second, the patient enters the hospital, they will receive the best
care, and they will feel comfortable knowing their health is in good hands (Makamson, 2006). [Show Less]