In 1850, influential mental health activist Dorothea Dix petitioned the North Carolina General Assembly to support and build a psychiatric hospital to treat the insane. Within 25 years the General Assembly determined that one hospital was insufficient to care for the population of people afflicted with mental illness. In 1875, the State provided $75,000 for the establishment of a second psychiatric hospital. Built in Morganton on 283 acres (115 ha) of land, Western Carolina Insane Asylum, opened on March 29, 1883. The asylum admitted physician Dr. Red Pepper as its first patient. By 1884 its first director, Dr. Patrick Livingston Murphy, reported to the General Assembly that more space was needed. In 1885 and 1886 two new wings were opened, expanding the hospital's bed space to over 500 patients. In 1890 the hospital's name was changed to State Hospital at Morganton, a name it kept until 1959. Patients were used to construct roads on the property, and establish and maintain the gardens and grounds. By 1893 the hospital's holdings would encompass over 300 acres (120 ha). During the early 1900s the hospital expanded greatly. Using the colony system, a farm area was established with a dairy, vineyard and greenhouses, all staffed by patients of varying degrees of functionality. The hospital was nearly self-sufficient. Additional expansions and land holdings would take place until just after World War Iwhen public attitudes about mental health patients changed dramatically. The hospital, like many others of this time period, was neglected and suffered during the state and national financial problems of the Great Depression.
The period from the 1980s through 1990s was especially difficult for Broughton. Facing increased costs and increased oversight from various organizations, Broughton encountered severe budget problems. In December 1992, the Broughton Hospital Foundation was formed. Its goal was to enhance the lives of the patients at Broughton Hospital through donations, endowments, activities, etc. Today[when?] Broughton serves approximately 800 patients per year and employs approximately 1200 staff members, with a $98 million annual operating budget. In 2011, Broughton began hiring temporary and contract staff to help control overhead costs. Broughton will complete a new facility in 2017 that will house the hospital departments and patient divisions under one roof, on the existing grounds.[needs update] The main building will be preserved as a historical landmark to be used as office space