FXP5310_Assessment3-Attempt1

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Whitaker Memorial Hospital – Feasibility Study HCM-FPX5310: Decision-Making in HC System Instructor: Don Nowill

Executive Summary Whittaker Memorial Hospital began facing financial challenges in 1993. In 1995, as part of the reconstruction efforts, Dr. Bryant assumed the role of Executive Director. Despite gaining a fresh start by alleviating the burden of nearly 900 creditors, the hospital continues to confront financial hurdles. The hospital must create a strategic plan that will lead the facility to a significant reorganization. The proposition is to implement Epic Systems to maintain revenue streams for the hospital. This endeavor comes with its challenges but yields fruitful results as its advantages outweigh the costs to initiate this plan. The following feasibility study explores the idea of implementing Epic Systems into Whittaker Memorial Hospital. The results of this study suggest a new HER will best equip the facility to improve its revenue stream as well as its healthcare delivery.

Introduction Established in 1908 as the name Whittaker Memorial Hospital, the institution underwent a transformation in 1985, becoming Newport News Memorial Hospital with a capacity of 126 beds. Originally established to address the healthcare needs of African Americans in the early 1900s, the hospital has grappled with persistent financial challenges. The financial downturn began in 1984 when expenses surpassed revenues by $749,000. By the close of the first year, the hospital reported a loss of $184,000, prompting the departure of the administrator. Facing mounting financial difficulties, the hospital filed for bankruptcy in 1993 and embarked on a path of restructuring to address its fiscal issues. In 1995, as part of the reconstruction efforts, Dr. Bryant assumed the role of Executive Director. Despite gaining a fresh start by alleviating the burden of nearly 900 creditors, the hospital continues to confront financial hurdles (Makamson, 2006). The hospital must create a strategic plan that will lead the facility to a significant reorganization. Section I: Organization Background Hospital Mission and Vision The hospital has consistently upheld its mission to serve the community efficiently and effectively, placing special emphasis on delivering exceptional care to African Americans. This commitment arose from the prevalent issue of nearby hospital facilities turning away many African American individuals, making Newport News General Hospital the preferred choice. While the hospital catered to all nearby residents, it sought to distance itself from the perception of a public hospital, which unfairly implied inferior care. Determined to shed this stigma, the hospital aspired to evolve into a respected healthcare institution. Current Revenue Stream In 1991, the hospital experienced a net profit of -$2,173,593 with net revenues amounting to $8,666,300, resulting in a -25.08% profit percentage. By 1994, the hospital achieved an efficiency score of 3.39, where a lower score indicates a higher efficiency rating. Notably, the hospital's efficiency score surpassed that of other nearby hospitals during this period. There were concerns that the hospital might have overlooked some charges for services rendered, potentially contributing to its financial losses. In response, the administration opted to operate the facility with 80 beds, although, on average, there were 64 inpatients (Makamson, 2006). Hospital Staffing At the end of the first year, the hospital board appointed the city's mayor as the hospital administrator, aiming to implement a more effective management system. In pursuit of a more efficient management system, a $500,000 mainframe computer was acquired. Faced with ongoing financial challenges, the administration chose to trim expenses by downsizing the workforce, reducing the staff from 200 employees to 100 employees. Notably, the hospital stood as one of the primary employers in the area (Makamson, 2006). This reduction in the number of

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nurses within a hospital carries inherent risks, considering that each state mandates a specific nurse-to-patient ratio. Layoffs may lead to standing issues at the facility, potentially jeopardizing the hospital's credentials. Ensuring an appropriate staffing level is crucial for the successful reconstruction of the facility. Tax Status In 1993, the hospital applied for Chapter 11 bankruptcy and received approval. The bankruptcy filing revealed a debt of $22.4 million against assets totaling $14.6 million. Chapter 11 provides the hospital with the opportunity to undergo reorganization and strategize for the future (Makamson, 2006). Section II: Objectives of the Proposed Program Hospitals play a significant role in contributing to the economic vitality of a city or town, and maintaining the hospital's favorable standing is considered beneficial for the local community. The proposed program aims to enhance healthcare systems, enabling personnel to effectively monitor services and received payments. Historically, Newport News General Hospital faced substantial financial losses due to the hospital not capturing all charges for services rendered. Implementing Epic Systems will empower staff to input each patient into the electronic database, facilitating the seamless addition of ancillary charges as they occur. This includes lab work, medication administration, services rendered, etc. This method ensures the comprehensive capture of all necessary charges in an efficient manner, contributing significantly to increased revenue. Moreover, the program meticulously documents all charges, promptly identifying and rectifying any instances of incorrect patient billing (Epic Systems Corporation, 2023). This system will not only maintain revenue streams for the hospital but allow patients to accurately track what they are being charged for. The Epic System will allow for direct payment for invoices. Everyone will benefit from the program because charges will be captured, and it will reduce the margin of error. Section III: Program Consistency The organization stands to benefit significantly from the implementation of new programs and enhanced services. Given the evolving landscape of technology, it is crucial for the organization to embrace these changes. Integration of online programs for streamlined payments and effective tracking of ancillary processes is a vital aspect. In today's fast-paced environment, there is a universal desire for swift access to information. Consequently, acquiring programs that offer this convenience becomes a pivotal strategy for the organization. Epic Systems stands as a major player in the realm of health information technology, catering primarily to hospitals for the purpose of efficiently managing medical records. Despite widespread adoption by numerous large healthcare institutions, over 50%, the associated costs can occasionally be substantial (Epic Systems, 2023). Consequently, it becomes crucial for

hospital boards of directors to carefully select a company that not only offers competitive pricing but also ensures exceptional service for the organization. Section IV: Economic and Fiscal Issues The development and implementation of Epic Systems in a hospital are subject to various economic considerations. Local and regional factors such as unemployment rates and shifting demographics may impact the program's development, with high unemployment potentially limiting budget availability. However, the introduction of Epic Systems could contribute positively to the local and regional economy. The program has the potential to create jobs, particularly in the IT and healthcare sectors, enhance overall healthcare efficiency, and attract skilled professionals to the region. Funding for the program can be derived from multiple sources. Private insurance payments for healthcare services facilitated by Epic Systems, support from government- sponsored programs like Medicare and Medicaid, revenue generated from private pay patients, state medical assistance, and grants from governmental bodies or philanthropic organizations are all potential funding avenues (Green, 2023). Estimating the costs associated with implementing and maintaining the program involves several categories. This includes expenses related to software licensing, initial implementation (setup, training, and integration), hardware acquisition, ongoing maintenance and support, continuous staff training, infrastructure upgrades, data security measures, and potential costs associated with operational downtime during the transition to Epic Systems (Green, 2023). These considerations highlight the multifaceted nature of implementing Epic Systems in a hospital and the importance of understanding economic factors, funding sources, and associated costs. Section V: Marketing Issues Implementing Epic Systems in a hospital requires careful consideration of marketing- related issues to ensure the program's success. The impact on the marketing of the organization is substantial, as the adoption of advanced health information technology represents a key selling point for the hospital's services. The marketing strategy should be tailored to highlight the benefits of Epic Systems, emphasizing improved patient care, streamlined processes, and cutting- edge technology. Identifying key market segments is crucial for effective promotion. In the context of Epic Systems, key demographics include healthcare professionals, hospital administrators, and potential patients. Healthcare professionals and administrators are targeted for their roles in decision-making and system implementation, while patients may be influenced by the promise of enhanced and efficient healthcare services. Competition analysis is essential to position Epic Systems effectively. Other health information technology providers such as Cerner or Meditech may offer similar solutions, but the unique features and advantages of Epic Systems must be highlighted. This includes superior

xintegration capabilities, user-friendly interfaces, or advanced data analytics (Epic Systems, 2023). By leveraging comprehensive marketing strategies and understanding key market segments and competition, the hospital can effectively promote the implementation of Epic Systems as a superior choice in the realm of health information technology. Section VI: Organizational Issues The implementation of Epic Systems in a hospital is a transformative initiative that can have far-reaching impacts on the entire organization, extending beyond individual departments. Several critical considerations include regulatory and policy implications, potential requirements for new licenses or certificates, tax status implications, liability and risk management, space requirements, and the existence of literature supporting the program's effectiveness. From a regulatory standpoint, the adoption of Epic Systems may necessitate compliance with specific healthcare regulations and policies governing the use of electronic health records (EHRs). This includes adherence to privacy and security standards outlined in laws such as the Health Insurance Portability and Accountability Act (HIPAA). The introduction of Epic Systems may require the organization to obtain new licenses or certifications, both for the organization as a whole and individual staff members involved in utilizing the system. Ensuring compliance with industry standards and regulations may involve additional training and certification processes. Tax status is another critical consideration. Depending on the financial structure of the hospital and regional tax regulations, the implementation of Epic Systems could potentially impact the organization's tax status. This may involve consultation with financial experts to assess any changes in tax liabilities or benefits (Green, 2023). Liability and risk management are crucial aspects to address, particularly in the context of handling sensitive patient data. Implementation of Epic Systems should include robust cybersecurity measures and risk mitigation strategies to safeguard against potential breaches and protect the organization from legal and financial consequences. Space requirements for the program must also be evaluated, considering the physical infrastructure needed to support the new system. This may involve the allocation of dedicated spaces for servers, additional workstations, and training facilities. Specific operating systems would be needed prior to implementation to make sure Epic Systems is compatible (Epic Systems, 2023). Epic Systems has demonstrated effectiveness in hospital settings through improved patient care, enhanced operational efficiency, and streamlined workflows. The system's interoperability promotes coordinated care, while patient engagement features empower individuals to actively participate in their healthcare. Robust data analytics capabilities support evidence-based decision-making, and the system's compliance with regulatory standards ensures

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adherence to healthcare laws. Epic Systems contributes positively to financial outcomes through efficient revenue cycle management. With a user-friendly interface, the system facilitates quick adoption and proficiency among healthcare professionals. While evidence of effectiveness is robust, variations may exist based on specific hospital needs, implementation strategies, and user engagement levels, emphasizing the importance of tailored assessments and continuous evaluation (Virdee, et al, 2022). Section VII: Conclusion and Recommendations Based on the synthesized information, the recommendation for the organization is to proceed with the implementation of Epic Systems while concurrently addressing the identified goals and objectives. This involves meticulous planning and execution, ensuring regulatory compliance, obtaining necessary licenses and certifications, assessing tax implications, implementing robust risk management strategies, planning for space requirements, and conducting a literature review to support the program's effectiveness. It is crucial to involve key stakeholders, including healthcare professionals, administrators, and IT personnel, in the decision-making and implementation processes. Continuous monitoring and adaptation of strategies in response to evolving regulatory and technological landscapes will be essential for the successful integration of Epic Systems into the hospital's operations. By aligning the implementation with the outlined goals and objectives, the organization can leverage Epic Systems to enhance healthcare services, improve revenue streams, and position itself as a leader in the adoption of advanced health information technology.

References Epic Systems Corporation. (2023). Our Software. Epic.com. https://www.epic.com/software/ Green, J. (2023, March 23). How much EHR costs and how to set your budget. Retrieved from ww.ehrinpractice.com: https://www.ehrinpractice.com/ehr-cost-and-budget- guide.html Kaiser, L. S., & Lee, T. H. (2015, October 8). Turning value-based health care into a real business model. Harvard Business Review Digital Articles , 2–5. Retrieved from https://hbr.org/2015/10/turning-value-based-health-care-into-a-real-business-model Makamson, E. L. (2006). WHITTAKER MEMORIAL HOSPITAL. Journal of the International Academy for Case Studies, 12 (5), 83-92. http://library.capella.edu/login?qurl=https%3A %2F%2Fwww.proquest.com%2Fscholarly-journals%2Fwhittaker-memorial-hospital %2Fdocview%2F216292854%2Fse-2%3Faccountid%3D27965 Virdee, J., Thakrar, I., Shah, R., & Koshal, S. (2022). Going electronic: an Epic move. British dental journal , 233 (1), 55–58. https://doi.org/10.1038/s41415-022-4404-6

FXP5310_Assessment3-Attempt1

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