feasibility study final

Running head: FEASIBILITY STUDY 1

Feasibility Study

By:

Daniel Akins

FEASIBILITY STUDY 2

Feasibility Study

Health care organizations face a variety of challenges in delivering care and meeting the

needs of consumers. Pocahontas Memorial Hospital is a rural hospital that struggles in serving

the needs of Pocahontas County in West Virginia. The board of directors of Pocahontas

Memorial Hospital is interested in starting a comprehensive satellite clinic to help meet the needs

of Pocahontas County residents and requested a report on the feasibility of the proposal. This

report recommends that to successfully implement a comprehensive satellite clinic the board

needs to make changes to the hospital’s mission statements, create a vision statement, and adopt

the strategic initiatives outlined including increasing access to health care, recruitment of

providers and professionals, and implementing new technology.

Pocahontas Memorial Hospital

Pocahontas Memorial Hospital (PMH) is the only hospital in Pocahontas County and it

has successfully overcome many challenges in its service to county residents over the past 100

years (Pocahontas Memorial Hospital, n.d.). However, it still faces the challenge of being a rural

hospital serving an economically depressed area. The demographics of Pocahontas County make

it difficult for PMH to provide health care. The county is primarily agricultural with a declining

population of close to 8,700 residents who struggle financially with 19% below the federal

poverty line and a median income of $32,000 (United States Census Bureau, 2014).

Recent data shows that PMH has 3,700 patient visits to its emergency department (ED) a

year (U.S. News & World Report, 2013). Having only one location makes it difficult for

residents to get preventive care and has led to overutilization of PMH’s ED, evidenced by

serving close to half the population of Pocahontas County yearly. Unnecessary visits to the ED

are expensive for both patients and PMH. IMS Institute for Healthcare Informatics (2013)

FEASIBILITY STUDY 3

reported that ED visits involve many inefficiencies and wasteful spending for both the consumer

and the hospital. Being a rural hospital, PMH resources are finite and the money spent on

unnecessary ED visits could be spent on hospital needs and improvements. A comprehensive

satellite clinic of PMH is worth the investment as it will relieve the overuse of the hospital ED.

Prior to developing the clinic, PMH will need to develop a vision statement and adjust the

current mission statement to guide it into this new chapter.

Vision and Mission Statement

PMH does have a mission statement but it needs to be updated to better identify with its

organizational values and ensure the success of the new clinic. Through implementation of the

comprehensive satellite clinic, PMH is expanding its operations to better serve its community. It

also will need a vision statement to identify what it wants to achieve in the future. Vision and

mission statements are necessary during the change so that PMH can identify its future

aspirations and how it wants to achieve them (Srinivasan, 2014). These are important because

they provide employees with a sense of purpose and direction. Motivating and recruiting

employees creates a positive organizational culture as well as a sense of unity. To build a

positive organizational culture, it is important to include employees in the development of both

statements (Spector, 2012). Such inclusion helps with creating ownership in the development of

a new clinic. PMH will need to create a vision statement and update its mission statement.

Vision Statement

Transformation is not easy for organizations but a vision statement provides a sense of

direction for the future. This direction allows the organization to effectively communicate

stability and optimism because the vision statement provides an end goal (Srinivasan, 2014).

This is important to focus on during the development of PMH’s new vision statement. An

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example of a vision statement PMH could use to support its current model and to create a

comprehensive satellite clinic is provided below.

PMH’s Vision Statement. Pocahontas Memorial Hospital will become a premier health

care organization through improving access and quality of care to Pocahontas County residents.

Pocahontas Memorial Hospital will achieve this through responsible investment in staff,

facilities, and technology.

Mission Statement

PMH also will need to develop a mission statement that goes along with the strategic plan

for a comprehensive satellite clinic. Ginter, Duncan, and Swayne (2013) wrote that mission

statements provide guiding principles for health care organizations and influence the

accomplishment of goals. By establishing its identity and purpose, PMH can create a strategic

plan with short and long term goals. A mission statement expresses how it will achieve the goals

stated in the vision statement. An example of a mission statement for PMH to adopt to further

establish a comprehensive satellite clinic is provided below.

PMH’s Mission Statement. The mission of Pocahontas Memorial Hospital is to provide

quality care that is accessible and at low cost to the residents of Pocahontas County. In order to

do so, we must not only invest in opportunities to expand care but also improve quality and

lower the cost of care. Through innovative planning and managed growth, we will be able to

provide the best medical care at a lower cost.

Assessments

In developing a strategic plan for implementing a comprehensive a satellite clinic, it is

necessary for PMH to assess its environment. A successful strategy gathers information on the

environmental challenges that will be encountered as well as completing a SWOT and market

FEASIBILITY STUDY 5

analysis. The collection of such information is necessary to develop the right strategy and to

ensure the clinic is sustainable for the long term.

Environmental Challenges

Identifying environmental challenges highlights potential barriers that PMH needs to

overcome to be successful in the development of a new clinic. The challenges that PMH will

face include new health care regulations meant to reform the industry, consumer access to care,

and technological needs.

Regulation. PMH is facing substantial challenges from policymakers as they attempt to

reform the health care industry in the United States (U.S.). For example, the Affordable Care

Act (ACA) mandates insurance for consumers, which has a significant impact on hospital

revenue and costs. The ACA has expanded Medicaid eligibility and requires individuals to have

coverage with the government, giving subsidies to assist in purchasing a policy on a public

exchange (James, Gellad, & Primack, 2014). Health coverage makes care more affordable

because a third party payer will pay for a consumer’s care. PMH will be able to see an increase

in revenue through reimbursements that are closer to actual cost and a reduction in the number of

patients that cannot pay for procedures.

To prepare for an increase in third party payers, PMH will need to increase its staff to

ensure it is in compliance with standards set by third party payers. For example, the ACA

introduced a set of standards through the Physician Quality Reporting Initiative (PQRI) that

hospitals must meet in order to qualify for Medicare reimbursement. The PQRI has 138

standards that hospitals need to follow in order to qualify for reimbursement, and the

reimbursement amounts can be reduced if even one standard is not met (James, Gellad, &

FEASIBILITY STUDY 6

Primack, 2014). This regulation requires a significant investment of resources in order to attain

compliance and will strain PMH both financially and through demands on staff time.

Consumer Access. PMH is located in the southern part of Pocahontas County where

over half of the county’s population lives; the northern part of the county is more sparsely

populated (World Media Group, 2014). PMH’s location provides easy access to many of the

residents of Pocahontas County, but leaves the residents in the northern part of the part of the

county with limited access to care. This dichotomy increases utilization of PMH’s emergency

department (ED), which increases costs for both the consumer and the hospital. In addition, the

lack of presence in the northern part of the county creates a vulnerability for a competitor to

enter into the market by strategically opening a clinic.

Another barrier to access for consumers is the shortage of providers that PMH is

experiencing. For a county the size of Pocahontas, with 3,700 ED visits annually, PMH

presently employs three doctors and 28 nurses (U.S. News & World Report, 2013). This is not

enough staff to provide adequate care to consumers. This can strain PMH’s providers and staff

because of the numbers of hours that they have to work to ensure patients get care. A lack of

providers is a common problem in many rural hospitals (Mueller, Potter, MacKinney, & Ward,

2014). If PMH fails to recruit enough staff and providers, it will struggle to provide adequate

care and will consistently be over utilized.

Technology Needs. As PMH develops its new clinic, it will need to make a significant

investment in information technology (IT) infrastructure. Due to recent reforms, PMH will have

to move to an electronic health records (EHR) system which contains a patient’s medical history

in a digital format that can be accessed anywhere via computer technology (Bernd & Fine,

2011). The investment is more than just a software program. It includes an infrastructure that

FEASIBILITY STUDY 7

protects patients’ information and allows communication among the clinic, PMH, and other

hospitals. Investing in in an EHR will make coordination of care easier between the hospital and

the clinic. Tele-health technologies are an IT tool that health care organizations use to help

improve care and lower costs. Tele-health technologies are being used to connect patients and

providers remotely (Mueller, Potter, MacKinney, & Ward, 2014). Tele-health is providing

health care organizations, particularly those in rural areas, with more resources to help treat

patients. By using and investing in tele-health, PMH can connect with providers in other parts of

the country to enable professional care consultations or take make continuing education classes

available to all staff. This helps improve patient care because of the additional resources and

quick access it patients and providers.

Market Analysis

In assessing the feasibility of opening a satellite clinic, it is necessary for PMH to

complete a market analysis on trends, segments, competitors, and regulations (Steblea, Steblea,

& Pokela, 2009). This information helps determine whether the project will be successful.

Appendix A has a complete market analysis for PMH; this section will only provide a summary.

The market analysis was completed by a team of stakeholders made up of consumers and staff

from PMH in order to give a wide perspective. The CEO and board of directors from PMH set

the direction for the team so that it gathered the correct information.

The objective of this market analysis is to determine the feasibility of opening a

comprehensive satellite clinic in Pocahontas County. The project team gathered information on

industry trends, segments, competitors, and regulations. PMH’s biggest competitor is Davis

Memorial Hospital (DMH) which is located in an adjacent county. DMH is part of a larger

FEASIBILITY STUDY 8

health system, which gives it more resources and ability to expand (Davis Health System, 2013).

This could let DMH compete with PMH for market share.

A major trend in the health care industry that is outlined in the market analysis is the use

of tele-health technology. Rural health care organizations are using tele-health technologies to

improve care for patients (Mueller, Potter, MacKinney, & Ward, 2014). Tele-health technology

is a viable resource for PMH because it will improve the quality of care as well as reduce the

strain on its staff. Also, it can attract providers and health care professionals to work at PMH.

Being a rural hospital makes it difficult for PMH to recruit providers and health care

professionals. However, tele-health technology connects providers with an expanded network

and larger resources than they might have even in an urban setting.

The market analysis also discusses how, through changes in regulation, PMH may see an

increase in demand on health care providers. The ACA expands PMH’s payer mix by making

public and private insurance more available (Bradley, Gandhi, Neumark, Garland, & Retchin,

2012). The increase in coverage will encourage residents to seek more regular care. This

provides an opportunity for PMH to attract residents to its hospital but will increase the patient

load on providers.

SWOT Analysis

Another assessment to help PMH determine feasibility of opening a satellite clinic is the

strengths, weaknesses, opportunities, and threats (SWOT) analysis. A SWOT analysis evaluates

an organization’s internal and external environments (Harrison, 2010). A SWOT analysis is

effective in determining the barriers and opportunities that PMH will likely face in the

development and opening of its comprehensive satellite clinic. This information is used to

FEASIBILITY STUDY 9

develop a strategy to ensure that the clinic is sustainable over the long term. Appendix B has the

full analysis on PMH; the following is a summary of the findings.

Two core strengths for PMH are the support it receives from its market and its high

patient satisfaction scores. PMH has consistently received support from the community,

particularly during rough times over the past 100 years (Pocahontas Memorial Hospital, n.d.).

This shows that the community is proud of its health care facility and wants to see it succeed.

Furthermore, this shows resident loyalty to PMH to provide a stable consumer base. By

expanding its facilities, it can maintain its consumer base and prevent consumers from going

elsewhere. High patient satisfaction scores show that patients are satisfied with the care they

receive from PMH providers (Centers for Medicare and Medicaid, n.d.). This demonstrates that

PMH is able to deliver quality care and should continue to do so through an expansion.

PMH’s weaknesses focus on them being understaffed and the emergency department

being over utilized. Being a rural hospital makes it difficult to attract and retain providers and

health care professionals. The small staff and over utilized ED puts a strain on the entire staff

and makes it even more difficult to attract providers and health care professionals. Lastly, the

over utilized ED is expensive for both consumers and PMH. A large self-pay portion of its

consumers makes it difficult to collect payment and causes PMH to absorb even more cost.

Recent reforms such as the Health Information Technology for Economic and Clinical

Health (HITECH) Act and ACA, provide PMH with several opportunities to expand. The ACA

increases the amount of people who have insurance (Bradley, Gandhi, Neumark, Garland, &

Retchin, 2012). As more patients become insured, PMH will have fewer patients who are unable

to pay for care. As PMH upgrades IT systems, the HITECH ACT provides funding for

implementing technologies such as tele-health (Mueller, Potter, MacKinney, & Ward, 2014).

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This will help PMH become complaint with reforms requiring upgrades to IT infrastructures.

Tele-health technologies will allow PMH to connect with other providers for consultations on

patients, relieve providers and staff when overwhelmed with patients, and enable providers to

remotely connect with patients (Mueller, Potter, MacKinney, & Ward, 2014). Tele-health will

allow PMH to provide quality care and attract providers and staff to PMH

The SWOT identified two major threats facing PMH, the required implementation of

EHRs and the unprecedented acquisition activity in the health care industry after the passage of

the ACA. The implementation of EHRs brings a substantial cost to rural hospitals. In addition

to the implementation costs, the hospital staff will need to convert its paper records to EHRs and

redesign its work processes (Fleming, Culler, McCorkle, Becker, & Ballard, 2011). With PMH

currently understaffed this will prove to be a difficult task. Also, the increase of patients having

health coverage may attract competitors which may cause PMH to be acquired by a larger

system.

Recommendations

In order for PMH to maintain and increase its market share, it should open a

comprehensive satellite clinic. To be successful, PMH will need a strategic plan that covers

investing in the development of tele-health technology, recruitment of providers, and taking

advantage of the increase in insurance enrollment.

Tele-Health Technology

In order to remain competitive, lower costs, and improve care PMH needs to invest in

health information technologies such as tele-heath. Tele-health is being recognized as a model to

serve patients and is being reimbursed by both public and private insurers (Mueller, Potter,

MacKinney, & Ward, 2014). Tele-health technologies are very expensive to acquire, implement,


and maintain but the new health reforms provide ample opportunity to get financial support for

implementation. For instance, the HITECH Act set aside two billion dollars for the development

of IT systems in health care organizations (Blumenthal, 2011). This funding makes it possible

for rural hospitals like PMH to develop a technology infrastructure. A strategic initiative of

PMH should be to apply for a portion of the available funds in order to develop tele-health

technology.

The successful development of tele-health systems will provide PMH with several

benefits including the potential to improve the quality of patient care through better coordination.

Tele-health will be able to provide quicker response times to patients with the ability of

providers from PMH connecting to their own patients remotely as well as connecting to a larger

network of providers (Mueller, Potter, MacKinney, & Ward, 2014). This will help relieve the

strain on PMH staff by having more options for patient access and allowing providers from other

areas of the country to provide care remotely. Muller, Potter, MacKinney, and Ward (2014) also

explain that tele-health will help in the recruitment and retention of rural providers because of

the resources it gives providers. Tele-health connects urban and rural medicine, making the rural

provider not feel alone and isolated. Increased retention improves care because providers can

build long term relationships with patients, relieve the strain felt at the hospital, and expand

access to care.

Recruitment of Providers

Another recommendation is that PMH recruit providers by establishing a partnership with

an academic medical institution. This will accomplish several of the needs of both PMH and the

academic institution. It will help PMH staff its new clinic while providing medical students the

opportunity to serve and learn in a rural environment. Rural medicine faces different challenges


than urban medicine and giving medical students the opportunity to experience it will give them

a different perspective (Rourke, 2010). This will provide PMH an opportunity to recruit new

providers as well as to have increased access to current research and instructors at the institution.

The closest medical school to PMH is West Virginia School of Osteopathic Medicine which has

a focus on rural health care (West Virginia School of Osteopathic Medicine, n.d.). A PMH

comprehensive satellite clinic would give students the opportunity to experience firsthand the

operations of a rural health care facility and put their schooling into practice.

Health Coverage

With the expansion of Medicaid and private insurance, consumers may be confused as to

what they are eligible for under their new coverage. Through the mandate, West Virginia

experienced a 33% increase in Medicare participants (Wachino, Artiga, & Rudowitz, 2014). As

PMH opens its new clinic, it will need to invest in patient navigators. Patient navigators are staff

that can help patients, particularly those who are new to having health coverage, understand their

benefits. Through employing navigators, quality of care will improve and PMH can help ensure

that it gets the maximum reimbursement (Kwan, Bell, Morgan, & Stewart, 2013). Patient

navigators can ensure that patients are meeting and are maximizing their benefits. Navigators

also follow up with patients, making sure that they are aware of upcoming treatments. Adding

this service will help maximize PMH’s reimbursements and eliminate unnecessary utilization of

hospital resources.

Conclusion

Pocahontas Memorial Hospital’s board of directors requested a feasibility study to

explore the creation of a comprehensive satellite clinic. The study recommends the clinic be

established in order for PMH to remain competitive, maintain market share, and provide


adequate patient access. The study utilized an evaluation of environmental challenges, a market

analysis, and a SWOT analysis. The study suggested that Pocahontas Memorial Hospital

develop a strategy that includes a new vision statement and an updated mission statement. It

provided the recommendations for investing in technology, partnering with an academic medical

institution, and taking advantage of an increase in the number of residents with medical

coverage.


Appendix A

Market Analysis

Health care is an important part of rural communities and Pocahontas Memorial Hospital

(PMH) is no exception. PMH faces many challenges in serving their market and is considering

opening a comprehensive satellite clinic to better serve patients. A market analysis is necessary

to gather the correct information to determine the feasibility of opening a comprehensive satellite

clinic. This analysis will provide PMH with information about its marketplace including trends,

segments, competitors, and regulations (Steblea, Steblea, & Pokela, 2009). A market analysis

provides the external information needed to determine whether a project is feasible. The project

team at PMH will use the information gathered in its recommendations to the organization’s

senior management and board of directors. To ensure that the market analysis is successful, a set

of objectives is needed to ensure the correct information is gathered and to make the correct

recommendation.

Objectives

Before Pocahontas Memorial Hospital (PMH) begins its market analysis, the organization

needs to set its objectives. Setting goals and objectives will provide direction as to what

information is needed in the market analysis. This direction comes from the board of directors

and chief executive officer (CEO) (Nauert, 2005). This information ensures that the team

conducting the analysis uses correct research methods and gathers accurate data before making

its recommendation to the CEO and the board of directors.

It is important to involve a variety of stakeholders from PMH such as consumers and

employees in this project. This provides different perspectives, creates a team atmosphere, and

ensures the success of the team; these methods increase buy in from the organization’s members


(Spector, 2012). The likelihood of making correct recommendations increases because diverse

membership brings to light organizational blind spots. Organizational resources are finite and

the information gathered in a market analysis needs to be useful in order to make a strategy that

ensures PMH’s success.

The objective for PMH’s market analysis team is to help determine the feasibility of

establishing a comprehensive satellite clinic in Pocahontas County. The information needed to

help PMH determine this includes industry trends, segments, competitors, and regulations. The

project team also will need to ensure that there is a patient need for a satellite clinic in

Pocahontas County. In order to determine such a need it can collect information through surveys

and by searching its own patient information. Primary research techniques such as surveys can

be costly in terms of money and time and this is a disadvantage, particularly to a rural hospital

(Berkowitz, 2011). However, identifying potential consumers and surveying them often is

necessary to determine project feasibility. Surveys can be conducted through many different

methods including mail, internet, and telephone. The most cost effective method for PMH to use

would be telephone. The project team also can gather information through secondary methods.

Secondary methods include using information that is made available by other organizations but

usually collected for other reasons.

Overview

PMH is a rural hospital that has served Pocahontas County, West Virginia for over 100

years (Pocahontas Memorial Hospital, n.d.). Like other rural hospitals, PMH has faced many

challenges while attempting to provide the care that the local community needs. For example,

rural hospitals such as PMH have difficulty managing costs and serving a local population that is

not geographically concentrated in one area but spread out (American Hospital Association,


2011). This provides a challenge to remaining in business, providing quality care, recruiting and

maintaining providers and hospital staff, and meeting health care regulations. PMH is exploring

whether or not to open a comprehensive satellite clinic to increase revenue and bring health care

to remote locations in the county. Identifying the influence of segments such as competitors,

industry trends, patients, and physicians is important in determining whether or not such a

comprehensive clinic is feasible.

Competition

PMH is the only hospital that serves rural Pocahontas County, which has a population of

approximately 8,700 (United States Census Bureau, 2014). Although serving a low population

density area, PMH is still strained by the number of patients it sees. For example, U.S. News &

World Report (2013) reported that PMH serves over 3,700 patients in its emergency department

(ED) a year. This creates a strain on PMH’s staff and ability to effectively serve its community.

In establishing a comprehensive clinic, it hopes to reduce the strain on the hospital and increase

its market share in Pocahontas County and the surrounding area.

The neighboring counties of Pocahontas County share similar demographics and

infrastructure to those of Pocahontas County (United States Census Bureau, 2014). For PMH,

this means that counties that have hospitals are going to be very similar in terms of size and

services. The biggest competitor to PMH is Davis Memorial Hospital (DMH) which is part of a

larger health system. DMH serves Randolph County and is part of the Davis Health System

which is northeast of Pocahontas County (Davis Health System, 2013). Being a larger facility

and part of a larger system, DMH is in a better position to lower costs and improve care. This is

because it has the resources to handle more patients. Also, it has the resources to invest in and


attract patients from a wider area than that of PMH. By creating a satellite clinic, PMH can

secure its market.

Trends

A trend in health care, particularly among rural hospitals, is the use of tele-health

technology in the ED. Rural hospitals are using tele-emergency to connect with an urban health

care facility to provide real time care to patients (Mueller, Potter, MacKinney, & Ward, 2014).

This provides a resource for rural health systems like PMH to improve the quality of care as well

as reduce the strain on resources. This benefits both PMH and urban hospitals by avoiding

having to move patients. In addition, funding from the Health Information Technology for

Economic and Clinical Health (HITECH) Act and insurance coverage moving towards value

based payment, will encourage tele-emergency development (Mueller, Potter, MacKinney, &

Ward, 2014). Applying for such funds will allow for PMH to improve its service.

Patients

Not only has PMH had to handle a small consumer base but they also have to deal with

residents as they endure economic challenges. Pocahontas County residents are in an

economically depressed area with many single income and low income families (United States

Census Bureau, 2014). This has caused a significant portion of the payer mix in Pocahontas

County to be uninsured or self-pay for the medical and health services they receive from PMH.

This means that certain services like EDs are going to be over utilized. A significant portion of

the patients that visited PMH were in the ED (U.S. News & World Report, 2013).

ED services are expensive for both the patient and the hospital, making it hard on

hospitals to utilize resources to better care for patients (Bradley, Gandhi, Neumark, Garland, &

Retchin, 2012). However, recent legislation, such as the Affordable Care Act (ACA), should


provide better coverage and access to care for patients. The ACA expands public insurance and

provides significant subsidies to those with low income for buying private insurance coverage

(Bradley, Gandhi, Neumark, Garland, & Retchin, 2012). With expanded coverage, ED visits

should decrease and Pocahontas County residents will be able to seek more regular care. This

will therefore increase the demand for non-emergency care by consumers and could strain

PMH’s non-emergency areas causing the need for more providers. The increase in demand of

care may also attract other health systems to consider establishing a presence in Pocahontas

County.

Physicians

With the increase in public and private coverage, PMH will have to develop a plan to

attract physicians to work at the hospital. Tele-health technologies are one method that

administrators can use to expand and provide services to Pocahontas County residents. Mueller,

Potter, MacKinney, and Ward (2014) explained that tele-health technologies are implemented in

several areas of care such as cardiology or radiology, giving providers and patients access to

specialists. This can help improve the care patients receive as well as give PMH access to

providers in specialty areas not currently staffed.

With expanded coverage, there will be a need for PMH to attract and retain primary care

physicians, so PMH will need to create a strategy that attracts primary care physicians to its

hospital. A strategy that gives primary care doctors significant responsibilities as well as

educational opportunities is key to attracting and retaining primary care as well as other medical

providers (Walker, Ryan, Ramey, Nunez, Beltran, Splawn, & Brown, 2010). An investment in

technology such as tele-health would give physicians and other providers at PMH access to a

network of providers that they can learn from as patients present difficult cases.


Conclusion

Pocahontas Memorial Hospital is vital to the well-being of Pocahontas County. As a

health care organization it faces many challenges in serving its market and will continue to do so

as the market changes. In order to prepare for future challenges, the Board of Directors at

Pocahontas Memorial Hospital asked for a market analysis as part of a project to determine the

feasibility of opening a comprehensive satellite clinic in Pocahontas County. This market

analysis explained the objectives of the analysis and provided information about the market so

that an informed decision can be made.


Appendix B

SWOT Analysis

In order to determine whether or not Pocahontas Memorial Hospital (PMH) can

successfully establish a comprehensive satellite clinic, it is important to evaluate the internal and

external environment. By conducting a SWOT analysis, the project team will be able to evaluate

PHM’s internal environment by examining its strengths and weaknesses and its external

environment by examining opportunities and threats (Harrison, 2010). The SWOT analysis aids

the project team and the board of directors in the decision making process to determine whether

or not PMH can open a comprehensive satellite clinic. If PMH decides to move forward, the

information gathered should be incorporated into the strategic plan. A SWOT analysis will help

PMH maximize its internal strengths and opportunities in its market by overcoming internal

weaknesses and external threats (Harrison, 2010). Through the identification of its strengths and

opportunities PMH can better utilize its resources to take advantage of its opportunities and to

surmount the challenges it will face.

Strengths

PMH has many challenges as being the only hospital in Pocahontas County. However,

by being the only hospital in the area it has enjoyed tremendous support from the county

government and Pocahontas County residents. Pocahontas County residents have worked to

ensure that PMH is open by raising funds for the hospital when it has struggled through various

natural disasters or financial hardships (Pocahontas Memorial Hospital, n.d.). Resident support

for PMH shows that residents want a health care facility in their community. This is important

for staff morale and retention.


Resident support also is a reflection of patient satisfaction with the hospital and its

performance. The patient satisfaction scores collected through the Hospital Consumer

Assessment of Healthcare Providers and Systems (HCAHPS) and reported by the Centers for

Medicare and Medicaid (CMS) (2013) show that patient satisfaction scores in many areas meet

or exceed consumer expectations. This is a strength for PMH because it shows that the staff and

providers are working to provide quality care for the patients. This also shows that PMH has a

positive organizational culture. Spector (2012) wrote that organizations that build a positive

organizational culture will bring about positive results. Positive patient satisfaction scores,

particularly those on customer service, show that PMH has a positive environment for patients

and staff.

Weaknesses

PMH is understaffed for the population that it serves. The hospital has three doctors and

28 nurses handling over 3,700 emergency department (ED) visits per year in a county with

approximately 8,700 residents (U.S. News & World Report, 2013). PMH is in desperate need of

more providers. Being the only health care facility in Pocahontas County with significant

utilization by residents will lead to provider burn out. Rosenstein (2012) reported that there are

many causes of burnout but among the leading causes are the demanding schedules that hospitals

and health systems place upon providers. With PMH understaffed in providing for the health

care needs of Pocahontas County residents, the present staff will struggle to meet the needs of its

consumers.

If PMH is going to solve its staff shortage, it must recruit and retain staff. However, like

other rural health care organizations, PMH is handicapped in its ability to attract and retain

providers and health care workers because of the rural environment. Rourke (2012) reports that


health care organizations have consistently struggled in recruiting and retaining health care

professionals. PMH will be strained further in staffing if it is going to set up a clinic in another

part of the county. In its present situation, PMH does not look particularly attractive to potential

providers.

The utilization of PMH’s ED is quite high, which results in significant costs for both the

hospital and the patient. Enard and Ganelin (2013) report that high utilization of a hospital’s ED

can be a significant source of a hospital’s costs because of the increased expense to operate,

patient dependence on using ED’s for primary care related visits, and patient failure to pay. The

utilization is detrimental to PMH because of the ED’s high cost to both the patient and the

hospital. It is difficult to collect payment from patients in an economically depressed area such

as Pocahontas County (United States Census Bureau, 2014). PMH my need to work with

patients who need payment plans or are unable to pay the full costs. Although PMH is likely to

receive payment from insurance payers, that payment is likely to be a reduced amount making it

difficult to cover all ED costs.

Opportunities

There have been several recent developments in the health care industry that provide

opportunities for PMH. One such example comes with the passage of the Health Information

Technology for Economic and Clinical Health (HITECH) Act. The HITECH ACT made

funding available for implementing tele-health technologies, which allows patients and providers

to connect with each other (Mueller, Potter, MacKinney, & Ward, 2014). Tele-health

technologies benefit rural hospitals and clinics because they can allow providers to connect with

patients and other providers remotely. Tele-health technologies can provide a wide variety of

opportunities for PMH, by connecting them in areas where they do not have enough resources


and relieving the workload of providers. This is because tele-health technology can provide real

time care to patients at PMH (Mueller, Potter, MacKinney, & Ward, 2014). This may help

relieve burnout and increase retention.

The Affordable Care Act (ACA) is another example of legislation that will provide

another opportunity for PMH. The ACA mandates that all individuals have health insurance,

expands public insurance programs like Medicaid, and makes private insurance more affordable

through government subsidies for people of lower income (Bradley, Gandhi, Neumark, Garland,

& Retchin, 2012). The goal of the ACA is to make health care more affordable by expanding

coverage. With care more affordable, it brings about an opportunity for PMH to encourage

residents to schedule regular appointments to treat chronic conditions and encourage

preventative care to prevent residents from developing chronic and acute conditions. The ACA

provides the opportunity to balance PMH’s payer mix to make this opportunity more affordable.

The increase of the amount of residents on public and private insurance will allow for a more

profitable PMH (Gentzel, 2005). This is because PMH will see a reduction of self-payers,

particularly those that have struggled to pay for their health care. The increase in revenue will

give PMH more freedom to care for its patients and work to attract quality doctors.

Threats

A threat that is facing many rural hospitals, like PMH, is the required implementation of

electronic health records (EHRs). Implementing an EHR system is hard for rural health care

organizations because of the scarcity of funds available. PMH faces a startup cost of $46,000 per

physician, which involves purchasing the EHR system, software licensing, employee training,

data entry, ensuring privacy protections, technical support, and changing workflows to

incorporate the new EHR (Fleming, Culler, McCorkle, Becker, & Ballard, 2011). The


investment in an EHR system is quite extensive, particularly with the establishment of a satellite

clinic. PMH will need to ensure that the hospital and clinic are able to successfully connect and

share information. This project will place demands on the financial resources at PMH and will

strain the workforce due to the time needed to input data and train the hospital staff. The yearly

maintenance costs of approximately $17,000 per physician which includes system security,

updates, backups, and technical support also present a challenge (Fleming, Culler, McCorkle,

Becker, & Ballard, 2011). EHRs have maintenance costs which significantly increases hospitals

overhead.

With the passage of the ACA, merger and acquisition activity in the health care industry

has significantly increased. Umbdenstock (2014) reported that ACA has encouraged mergers

and acquisitions among hospitals. This could lead to a larger health system entering PMH’s

market. This is a serious threat to PMH because it does not have the resources to compete with a

larger health system.

Conclusion

The SWOT analysis can assist the board of directors in evaluating the feasibility of

opening a comprehensive satellite clinic. This SWOT analysis examines the internal and

external environment of PMH. The information gathered is important in determining success in

its current model and in opening a comprehensive satellite clinic.


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feasibility study final

Documents

rural hospital

mission statement pmh

pmh resources

vision statement

new clinic

current mission statement

unnecessary ed visits

needs of consumers