Extremes of Emergency Department Boarding are Associated With Poorer Financial Performance Among Hospitals

Abstract

Goal: Boarding emergency department (ED) patients is associated with reductions in quality of care, patient safety and experience, and ED operational efficiency. However, ED boarding is ultimately reflective of inefficiencies in hospital capacity management. The ability of a hospital to accommodate variability in patient flow presumably affects its financial performance, but this relationship is not well studied. We investigated the relationship between ED boarding and hospital financial performance measures. Our objective was to see if there was an association between key financial measures of business performance and limitations in patient progression efficiency, as evidenced by ED boarding.

Methods: Cross-sectional ED operational data were collected from the Emergency Department Benchmarking Alliance, a voluntarily self-reporting operational database that includes 54% of EDs in the United States. Freestanding EDs, pediatric EDs and EDs with missing boarding data were excluded. The key operational outcome variable was boarding time. We reviewed the financial information of these nonprofit institutions by accessing their Internal Revenue Service Form 990. We examined standard measures of financial performance, including return on equity, total margin, total asset turnover, and equity multiplier (EM). We studied these associations using quantile regressions of added ED volume, ED admission percentage, urban versus nonurban ED site location, trauma status, and percentage of the population receiving Medicare and Medicaid as covariates in the regression models.

Principal findings: Operational data were available for 892 EDs from 31 states. Of those, 127 reported a Form 990 in the year corresponding to the ED boarding measures. Median boarding time across EDs was 148 min (interquartile range [IQR]: 100-216). A significant relationship exists between boarding and the EM, along with a negative association with the hospital's total profit margin in the highest-performing hospitals (by profit margin percentage). After adjusting for the covariates in the regression model, we found that for every 10 min above 90 min of boarding, the mean EM for the top quartile increased from 245.8% to 249.5% (p < .001). In hospitals in the top 90th percentile of total margin, every 10 min beyond the median ED boarding interval led to a decrease in total margin of 0.24%.

Practical applications: Using the largest available national registry of ED operational data and concordant nonprofit financial reports, higher boarding among the highest-profitability hospitals (i.e., top 10%) is associated with a drag on profit margin, while hospitals with the highest boarding are associated with the highest leverage (i.e., indicated by the EM). These relationships suggest an association between a key ED indicator of hospital capacity management and overall institutional financial performance.