HCMFPX5310_TrueloveElizabeth_Assessment3-2

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HCM5310 Feasibility Study Feasibility Study: Proposal Overview of Whitaker Memorial Hospital Elizabeth Truelove Capella University HCM-FPX 5310: Decision-Making in the Healthcare System March 28, 2023 1

HCM5310 Feasibility Study Executive Summary General Hospital, formerly known as Whitaker Memorial Hospital, is an organization with a long history in Newport News, Virginia. The hospital was founded and operated by a group of African American physicians with the goal to provide care to the African American population, as they were not allowed to seek care in other establishments. The hospital has seen its share of ups and downs and financial trouble throughout the years and the current leadership has been working on a strategy to improve their performance, reputation, and status in the community. This feasibility study is intended to provide an overview of the proposed implementation of a robust inpatient and outpatient mental health treatment program. The study analyzes the value of the program(s), potential financial and economic issues and risks, marketing barriers, and overall organizational impact. 2

HCM5310 Feasibility Study Section I: Organization Background Whitaker Memorial Hospital was a small healthcare facility founded in Newport News, Virginia in the early 1900’s. The hospital was created to meet the needs of the underserved African American community by four African American physicians. The facility started in a wood building that consisted of four rooms and became one of nearly twenty other facilities known as “colored” hospitals. Six short years after the founding of Whitaker Memorial Hospital, the Whitaker Memorial Association was established as a community, non-profit organization for governance and financial support to the organization. The mission of the hospital was to provide necessary care to the African American population as they were not allowed to seek healthcare from “white” facilities. Through the years, Whitaker Memorial Hospital saw tremendous growth, including a new construction hospital building and a School of Nursing. In 1956, Whitaker Memorial Hospital again experienced rebirth as an 81-bed medical facility deemed “state of the art” was newly constructed. The building costs approximately $628,000 and was financed using a combination of federal Hill-Burton funds and a matching share by the City of Newport News. Fast forward to the 1980’s, Newport News had transitioned to becoming a part of “the new South”. The African-American physicians who were once turned away from “white” facilities were now active medical staff in those same hospitals. Whitaker Memorial Hospital came to be known as the “public” hospital as it was surrounded by impoverished neighborhoods. Those who sought care at the facility were deemed as indigent. As a non-profit organization, the hospital depended solely on revenue by patient care (Makamson, 2006) . By 1984, the hospitals costs were exceeding their revenue by almost $750,000. The organization faced uncertainty for its future as financial issues continued to rise. The average daily charge of $381.76 was drastically lower than the region’s average daily charge for hospital care at $456.95. The difference in the daily average pointed to management problems and incorrect billing for all services. To combat the financial misfortunes, the board brought a new, 126-bed facility to life, complete with the new name Newport News General Hospital. The first year of the new beginning, General Hospital had a reported loss of $184,000 leading to resignation of the administrator. The board made the decision to hire the mayor as the administrator in hopes that he could turn things around. The new-found administrator purchased a $500,000 main frame computer in an effort to improve management systems. General Hospital was one of the East End’s major employers, but administration felt the need to make staffing cuts to further cut costs. Hospital staff was reduced from 200 employees to 100 employees, creating an uproar in the community. The revenue streams for General Hospital were primarily sourced by Emergency Room utilization and psychiatric care. According to the Journal of International Academy for Case Studies, one study revealed that bed utilization showed that of the 126 available beds, only 98 were allocated to medical and surgical patients; thus indicating that a lot of the community sought care at other facilities. The hospital allocated 22 beds to psychiatry as there continued to be an increase in demand for drug abuse cases. Community groups and the courts in the region referred patients to General Hospital for drug rehabilitation services. This line of service was 3

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HCM5310 Feasibility Study billed at $650 per day (Makamson, 2006) . While all available services were not widely used among patients or the community, Medicaid paid approximately 85% of the hospitals bill for patients enrolled in a Medicaid plan. Due to the impoverished population the hospital served, what was left of a hospital bill, after Medicaid coverage, was often unable to be recovered. With consideration of the instabilities of General Hospital, the future of the organization is largely unknown. Section II: Objectives of the Proposed Program Despite the various struggles over the years, General Hospital remains an important part of the community. For this reason, the board of directors have identified areas within the hospital that could increase the revenue streams and stabilize the financial status of the hospital. The hospital currently has a large demand for drug abuse treatment, as well as other psychiatric care. It has been determined that implementation of outpatient mental health treatment services, as well as improvements to existing inpatient services, have the potential to be a profitable solution for General Hospital. As previously mentioned, the hospital currently has 22 beds dedicated to psychiatry, however, the organization does not offer any outpatient treatment options. According to the NCQA, almost one in five adults 18 and older have a diagnosed mental health disorder (NCQA, 2023) . Despite the high prevalence of mental health diagnoses, adequate follow-up care is often not provided to individuals suffering from mental illness. Follow-Up After Hospitalization for Mental Illness, or FUH, is a HEDIS quality measure used to monitor an organization’s performance on post discharge follow-up for mental illness. According to several studies, when follow-up care is provided to patients after a mental health hospitalization, it can improve patient outcomes, reduce the overall cost of outpatient care, and decrease the likelihood of re- hospitalization (NCQA, 2023) . The implementation of a comprehensive mental health treatment program consisting of improving current inpatient services and the addition of outpatient services have the potential of a very positive impact to General Hospital. While other organizations in the area provide mental health services, they do not specialize in this treatment or even have a focus on it. The new services will include a structured and focused inpatient program for various mental health diagnoses including drug and alcohol addiction, severe depression and anxiety, bipolar disorder(s), schizophrenia, and post traumatic stress disorder. Completion of the inpatient program leads to automatic enrollment in a structured and focused outpatient program that include frequent progress goals and evaluations. The goal of the concurrent programs is to provide a strong foundation of knowledge and resources, as well as a support system following treatment to lessen the likelihood of relapse or readmission. Section III: Program Consistency The organization’s mission to provide necessary care to the African-American population aligns with the proposed program, but will also expand to treat patients of any race or nationality with mental healthcare needs. General Hospital has been a popular resource for the courts and community service groups to refer patients for drug rehabilitation. The onset of this program expands and improves current mental healthcare treatment options to allow General Hospital to 4

HCM5310 Feasibility Study grow into a leader in the industry. Other organizations in the geographical area including Riverside Regional Medical Center, Sentara General Hospital, and Mary Immaculate Hospital provided an array of services, but focused primarily in medical and surgical care and had limited options for mental health needs (Makamson, 2006) . Section IV: Economic and Fiscal Issues As with the inception of any new program, economic and fiscal issues should be taken into consideration. General Hospital is surrounded by impoverished neighborhoods, implying that most revenue for treatment will come from state funded healthcare plans such as Medicare and Medicaid. The strategic development of the program will be critical so that it is successful and renowned in the industry and therefore attracts other sources of funding such as private insurance, grant funding, and value-based care agreements with payors. Due to the location and demographics of the targeted population, building a program that appeals to others outside of the impoverished will be challenging. However, if done correctly, the program could have a potentially positive impact on the local and regional economy. The program will open up more jobs in the area which can help improve on the impoverished status of the neighborhood and its residents. It is estimated that the initial cost of implementation and maintenance of the program will be two million dollars. These costs will include modifications to the existing inpatient space to accommodate for additional staff, beds, and treatment areas. Because there is not an existing space dedicated to outpatient services, an unused area of General Hospital will be converted to allow for treatment rooms and office space. Initial funding of the program will need to be sourced from available grants due to the current financial stance of General Hospital. State and local grants are available and will need to be applied for. Additionally, the inception of the program will require hiring of new staff to fill the positions of one Medical Director, various Mental Health Technicians and Registered Nurses, Social Workers, and Administrative Assistants. To lower the financial impact of staffing, an evaluation of existing inpatient staff should be completed to identify ways to cross-utilize staff for the inpatient and outpatient areas. Section V: Marketing Issues Marketing of the new program should align with the original mission of the organization, but also be shaped to target a broader population. The marketing efforts should highlight the broad scope of services the robust inpatient and outpatient programs provide. The key market segments of the organization should be considered but also expanded upon to reach a broader audience. Because the community falls under an impoverished label, marketing should include broad community sources such as billboards, free magazines or newspapers, and posters or memos in public areas. The program will affect the marketing of the organization due to the nature of the program. While General Hospital is a general healthcare provider in multiple areas, marketing of the program should be specific to mental health treatment and needs. Marketing efforts should highlight the key components of the programs as well as proven success rates demonstrated by other organizations that have implemented a similarly structured program. 5

HCM5310 Feasibility Study General Hospital is at a competitive advantage as the other hospitals in the area have prioritized other areas of focus and do not heavily advertise mental health services (Makamson, 2006) . Advertisement of the programs should encompass treatment areas, program overviews, and eventually, patient success stories. It will be critical for leadership to have a well-planned marketing strategy at the inception of the program so that the community and patients are aware of the services and can immediately seek necessary treatment. Section VI: Organizational Issues The new program does come with implications for the organization as a whole. A Certificate of Need (CON) and State Medical Facilities Plan (SMFP) are required for the expansion of a mental health and substance abuse treatment program (Virginia Register, 2021) . New policies need to be established that encompass staff and patient protocol and expectations, as well as program scopes for liability and risk management purposes. It is important for legal to review all of the necessary requirements to ensure compliance at the onset of the programs. The staff for the inpatient and outpatient treatment areas have licensure and certification requirements to adhere to based on the area of practice. All staff employed in the inpatient and outpatient treatment areas, including Administrative Assistants, are required to have Crisis Prevention Intervention (CPI) certificates of training. Due to the nature of the inpatient unit and outpatient programs, additional mental health training and/or certifications may be required for all employees serving in direct patient care roles. General training and certification needs will be evaluated based upon the position. The implementation of this program has the potential to draw positive attention to the organization. Patients that show evidence of positive outcomes following enrollment in the program prove the effectiveness of the treatment plan(s). While the current available literature does not reflect the effectiveness of the program specific to General Hospital, it provides information on the effectiveness of the overall program structure. Once the program is operational and shown success, specific literature to General Hospital will be released. Section VII: Conclusion and Recommendations Based on the information provided in this study, it is recommended that General Hospital proceed with the implementation of the enhanced inpatient program and new outpatient treatment program. The community displays a need for such treatment options and competition in the area is nearly nonexistent. In addition to helping members in the community with mental health issues, the program, with time, has the potential to improve unemployment rates and neighborhood conditions. A successful program has the ability to turn around the financial implications the hospital has suffered from for years and grow the organization to an independent and successful healthcare provider. 6

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HCM5310 Feasibility Study References Grannum, E. S. (1964). Whittaker Memorial Hospital. Original Communications; Vol. 56, No. 2 . Makamson, E. L. (2006). Whittaker Memorial Hospital. Journal of the Internation Academy for Case Studies; Vol. 12, Iss. 5 , 83-92. NCQA. (2023). Follow-up after hospitalization for mental illness (FUH) . Retrieved from NCQA: https://www.ncqa.org/hedis/measures/follow-up-after-hospitalization-for-mental- illness/ Virginia Register. (2021, March 31). State Medical Facilities Plan. Retrieved from LIS Virginia law: https://law.lis.virginia.gov/admincode/title12/agency5/chapter230/section10/ 7

HCMFPX5310_TrueloveElizabeth_Assessment3-2

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