The financial consequences of lost demand and reducing boarding in hospital emergency departments

Abstract

Study objective: Some have suggested that emergency department (ED) boarding is prevalent because it maximizes revenue as hospitals prioritize non-ED admissions, which reimburse higher than ED admissions. We explore the revenue implications to the overall hospital of reducing boarding in the ED.

Methods: We quantified the revenue effect of reducing boarding-the balance of higher ED demand and the reduction of non-ED admissions-using financial modeling informed by regression analysis and discrete-event simulation with data from 1 inner-city teaching hospital during 2 years (118,000 ED visits, 22% ED admission rate, 7% left without being seen rate, 36,000 non-ED admissions). Various inpatient bed management policies for reducing non-ED admissions were tested.

Results: Non-ED admissions generated more revenue than ED admissions ($4,118 versus $2,268 per inpatient day). A 1-hour reduction in ED boarding time would result in $9,693 to $13,298 of additional daily revenue from capturing left without being seen and diverted ambulance patients. To accommodate this demand, we found that simulated management policies in which non-ED admissions are reduced without consideration to hospital capacity (ie, static policies) mostly did not result in higher revenue. Many dynamic policies requiring cancellation of various proportions of non-ED admissions when the hospital reaches specific trigger points increased revenue. The optimal strategies tested resulted in an estimated $2.7 million and $3.6 in net revenue per year, depending on whether left without being seen patients were assumed to be outpatients or mirrored ambulatory admission rates, respectively.

Conclusion: Dynamic inpatient bed management in inner-city teaching hospitals in which non-ED admissions are occasionally reduced to ensure that EDs have reduced boarding times is a financially attractive strategy.