Study says hospitals could boost revenues by reducing ER times

The results of a recent study indicate that a one-hour reduction in the average emergency department boarding time could result in millions of additional dollars per year in revenue for hospitals.

The results of a financial analysis and simulation model using real hospital data were reported this week in the online version of the Annals of Emergency Medicine.

"The Financial Consequences of Lost Demand and Reducing Boarding in Hospital Emergency Departments" emphasizes the gains to hospitals of implementing active bed management strategies.

"This study helps debunk the conventional wisdom that boarding patients in the ER maximizes hospital profits," said lead study author Jesse M. Pines, MD, of George Washington University in Washington, D.C. "Boarding is a major problem across the United States that results in poor patient care and worse outcomes. What we found is that it is possible for smart hospital managers to make more money and provide better ER service through less boarding if they are willing to cancel an occasional scheduled admission."

Researchers created models to determine what combination of emergency department admissions and scheduled admissions leads to highest hospital revenues. They determined that when hospital occupancy reached a certain point, a reduction of scheduled admissions of only 5 percent (generally only a few patients) would lead to an increase in hospital revenue of $7,418 per day.

Because emergency department admissions typically generate significantly less hospital revenue than scheduled admissions, hospital administrators have tended to favor scheduled admissions over emergency department admissions when allocating inpatient beds. Hard limits on beds allocated to emergency department admissions have led to patients being held in the emergency department for hours – a practice known as boarding.

"From a medical standpoint, less boarding is better for patients," said Pines. "Patients who need treatment are seen faster and patients who have been admitted to the hospital get out of the hallway faster. Just one hour less of boarding could trigger a cascade of positive events – better health for our patients and better profits for the hospital."

Study co-author Robert J. Batt, of The Wharton School at the University of Pennsylvania in Philadelphia, said he and his colleagues attempted to develop an admissions management policy that could be used during periods of peak emergency admissions to maximize hospital revenue.

"The optimal strategies we tested resulted in at least $2.7 million more a year for the hospital," said Batt. "A small adjustment in scheduled admissions now and then could have a big impact on both patient health and the hospital's bottom line."