WGU (AMT2) Service Line Development All 4 Tasks

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AMT2 Task1 (Western Governors University)

Building Advantages (A1a)

Cost of Building Construction: $600,000
Radiology Expansion/Second MRI: $3,000,000

Total: $3,600,000
Architectural and Organizational Autonomy

According to the information provided, Trinity Hospital (TH) wants an efficient and esthetically beautiful facility. The
primary purpose of the building, other than increasing revenue, is to facilitate convenience for hospital patients,
staff, and clinicians. The mission of the facility is to provide patients with comfort, convenience, and increased
quality of care.
If TH chooses to build a new facility, they will have total control over its layout; this will provide management and
clinicians the ability to collaborate with one another and create a layout conducive for an efficient environment vis-vis patient care. If TH wants to set themselves from their competition, they could start by providing an easily
navigated facility, thus making the hospital experience less arduous.
Option 1: Pay Cash Advantage
Currently, TH has a cash reserve of $25,000,000; if TH wanted, they could purchase the building debt free. This,
depending on the managements point of view, does have its advantages, especially if the landscape of the
economy is a buyers market. Although, TH would not recoup money via tax savings, they would overall have less
liabilities giving them leverage if needing to borrow monies for future projects.
Option 2: Borrow: Tax Savings Advantage
If TH borrowed the money to build the new building, they could potentially save on taxes by writing off interest;
albeit, this may appear appropriate, mortgage payments will still surpass any savings on taxes or tax advantage.
Buying Advantages (A1b)
Building Purchase: $700,000
Radiology Expansion/Second MRI: $3,000,000
Total: 3,700,000
Quick Building Turnover
If TH wanted to purchase the building and quickly remodel it, they could get the building operational earlier, thus
generating revenue more quickly than fully constructing a building. It is unclear from the information provided vis-vis how long it will take to fully construct the new building; however, it can be deduced logically that it would take
less time to completely remodel the inside of the building. And, if it takes less time to make the building
operational, TH can begin admitting new orthopedic patients sooner.
Remodel

As discussed previously, TH would need to renovate the inside of the adjacent building to secure a suitable and
efficient workspace. They could, depending on the structure of the building, have little to no limitations on floor
plans which could affect efficient workflow.
Option 1: Pay Cash Advantage
Please refer to pay cash advantage listed under A1a.
Option 2: Borrow: Tax Savings Advantage
Please refer to tax savings advantage listed under A1a.

Leasing Advantages (A1c)

Cost of Yearly Lease: $100,000
Radiology Expansion/Second MRI: $3,000,000
Costs of Renovations: Unknown
Triple Net Lease (includes taxes and repair costs)
Total: Unknown
Flexibility
If TH chooses to lease a building instead of purchasing it, they would have the flexibility to break their lease and
move elsewhere in the future, especially if the new orthopedic center failed to bring in expected revenue.
Moreover, if the new orthopedic center is successful, TH could break the lease and look for an overall better
building and location.

AMT2 Task 2 (Western Governors University)

Major Risk Factors (A1)

Oncology Services
Demand
According to the Community Health Needs Assessment (CHNA), over the ensuing five years 15% of the residents
will be 65 years or older. All in all, new cancer cases are anticipated to increase within the community from 3200 to
4,282 throughout next five years; as of now, 50% of men and 33% of women are expected to develop cancer over
the passage of their lifetime. The community, like most other American communities, must face challenges vis-vis increased occurrences of cancer and concurrent co-morbidities.
Existing Resources
According to the CHNA, the community does have resources to prevent, diagnose, and treat cancer; however, these
resources are already stressed. The report, which mostly consist of professional interviews with pertinent
healthcare staff, indicate that current physician practices are at capacity and fragmented; furthermore, there is
currently little cancer prevention and control, e.g. education on lifestyle modification, diet, exercise, etc.
Orthopedic Services
Demand
According to the CHNA, orthopedic cases are expected to rise in the future, as orthopedic cases are likely to surge
from 11,800 to 17,338 (+46%); joint and spine procedures are expected to increase by 30%; and outpatient joint
and spine procedures are likely to increase by 350%.
Existing Resources
According to the information provided, the community is currently stressed vis--vis orthopedic services; according
to healthcare providers, the community needs more orthopedic surgeons, gear, surgical suites, and physical
therapy services.
Cardiovascular Services
Demand
According to the CHNA, demand for cardiovascular services is likely to intensify in the future. According to the
statistics, coronary artery disease is expected to grow from 54,000 to 65,700 (+21.6%); diagnostic cath procedures
are likely to increase from 10,800 to 13,140 or an estimated +22%; and angioplasties are expected to grow from
4,000 to 5,032 or approximately +25.8% over the next five years.
Existing Resources
Currently, the existing cardiovascular resources are less than optimal. There is, like orthopedics, a lack of
cardiovascular physicians and/or surgeons; presently, the hospital is looking at ways to recruit and bring new
cardiovascular physicians surgeons and/or to the community; furthermore, all healthcare facilities in the area need
more cath labs, surgical suites, and cardiac rehab facilities. The healthcare community, as a whole, needs to
emphasis education vis--vis cardiac risk issues, healthy living, and lifestyle change.
Healthcare Facility (A2)

Oncology Services (Five Year Plan)

According to the information provided, Trinity Hospital (TH) has a five year plan to create a cancer by revamping
MOB 1; the plan consists of procuring a simulator, linear accelerator, infusion suite, and cancer center renovations,
costing about TH a projected $8,000,000. This plan will assist in filling the void vis--vis existing oncology needs in
the community.

AMT2 Task 3 (Western Governors University)

New and/or Pending U.S. Legislation

The Patient Protection and Affordable Care Act (PPACA)
The purpose of the PPACA is to ensure more Americans have access to quality healthcare. According to the
Congressional Budget Office (CBO), the PPACA is paid for and will provide quality healthcare to more than 94% of
Americans. The PPACA will, or is supposed to, eliminate lifetime and unreasonable annual limits on healthcare
benefits; prohibit health insurance policy recessions; extend dependent healthcare coverage up until the age of 26;
provide assistance to uninsured due to pre-existing conditions; cap insurance administrative expenditures; require
coverage for immunizations and preventative services; develop uniform coverage documents allowing consumers
to juxtapose different insurance plans from different insurance providers; create temporary re-insurance programs
to support coverage for early retirees; simplify healthcare administration as a means to lower health system costs;
create an internet portal for consumers to identify insurance coverage options; and implement an appeals process
to guarantee consumers and provide consumers assistance processing and accessing their insurance
coverage(PPACA Summary, n.d.)
The PPACA does expand public programs, e.g. expanding the eligibility for Medicaid to lower income people;
simplify Medicaid and enhance the Childrens Health Insurance Program; simplify enrollment; and expand resources
to community based programs, just to name a few. The PPACA will affect every community in the United States,
changing the way businesses provide healthcare, holding hospitals and other healthcare facilities more
accountable, and providing individuals with more options vis--vis insurance options. The PPACA is paradoxical; it
will, according to the data, ensure Americans quality healthcare; however, the PPACA does have a dark side. In
theory, the PPACA may positively impact the U.S. healthcare system, but until it is fully implemented, the
consequences of it are unknown and conjecture (PPACA Summary, n.d.).
U.S. Healthcare Trends
Perceived Positives
High Deductible Health Plans

AMT2 Task 4 (Western Governors University)

Demand (A1)
Orthopedic Services
Demand
According to the Community Health Needs Assessment (CHNA), orthopedic cases are expected to rise in the Trinity
Hospital (TH) area over the next five years. In the future, it is expected that orthopedic cases are likely to surge
from 11,800 to 17,338 (+46%); joint and spine procedures by 30%; and outpatient joint and spine procedures are
likely to increase by 350%.
According to the information provided, the community is currently stressed vis--vis orthopedic services; according
to healthcare providers, the community needs for more orthopedic surgeons, gear, surgical suites, and physical
therapy services. According to the basic laws of supply and demand: if demand increases and supply remains
unchanged, a shortage will occur, leading to higher price equilibrium and if demand remains unchanged and supply
decreases, a short occurs, leading to higher price equilibrium, TH will incur an increase and overall revenue due to
a significant increase in demand for orthopedic services. Although TH will increase the supply of orthopedic
services, it is unlikely and highly improbable that supply of services offered will outstrip demand for them, as
people are getting older and the overall size of the community is expanding.
International Healthcare Trends and Impact (A2)
Government Healthcare Intervention
International Healthcare Trends
Rationing
Due to increasing global demand for healthcare services, accompanied by new and expensive high-tech treatments
and pharmaceuticals, medical costs are increasing worldwide. This increase cost is causing the way people,
insurance companies, and governments spend their money on healthcare. On an individual level, people must
decide between when and why they visit their physician or physicians and/or go to the hospitals. Moreover, some
people must now ration medications, a problematic situation vis--vis costs associated with re-hospitalization and
preventive medicine.
On a macro level, insurance companies and governments must now become more selective on who and what they
spend monies towards. This will inevitably create ethical conundrums on what treatments and procedures will
effectively increase quality of life. Eventually, the cost of healthcare will become too expensive to realistically
sustain people with conditions unlikely to improve quality of life (Dillion & Prokesch, 2010).
Statistic-based Medicine
In the future, most likely, physicians will only get paid if they perform procedures using a cost-benefit analysis,
which will in turn cause physicians to use more rigid and statistically-proven models towards treating disease. In
first-world countries, patients may be expected to provide DNA samples to locate genes which lead to disease and
to take preventive measures to counter them.