MBA 8240 2024 Fall - Luo
Case Study 1:
Management in Processes
MBA 8240
2024 FALL
Agenda
• Backgrounds – ED Patient Flow Management
• ED/OC Capacity Control
• Reflections
MBA 8240 2024 Fall - Luo
Emergency Department (ED) Management
• Overcrowding and congestion
becomes a common challenge in ED
‒ Understaffing/no beds
‒ Administrative issues
”Overcrowding occurs most often in
EDs with an annual volume of over
40,000 visits in 2017.”
Sartini, Marina, Alessio Carbone, Alice Demartini, Luana Giribone, Martino Oliva, Anna Maria Spagnolo, Paolo Cremonesi,
Francesco Canale, and Maria Luisa Cristina. "Overcrowding in emergency department: causes, consequences, and
solutions—a narrative review." In Healthcare, vol. 10, no. 9, p. 1625. MDPI, 2022.
MBA 8240 2024 Fall - Luo
Introduction to Observation Care
Admission Control in Emergency Department (ED)
What is Observation Care (OC)?
• Definition (American Medical Association):
“A set of clinical services that includes
short-term treatment, assessment and
reassessment before a decision can be
made as to whether a patient can be
discharged or requires further treatment
as an inpatient.”
Tan, Kar Way, Hoong Chuin Lau, and Francis Chun Yue Lee. "Improving patient length-of-stay in emergency department through dynamic
queue management." In 2013 Winter Simulations Conference (WSC), pp. 2362-2373. IEEE, 2013.
MBA 8240 2024 Fall - Luo
What is Observation Care (OC)?
• Function:
–Avoid costly inpatient admissions
• Short- stay admissions under 48 hrs.
–Mitigate risk of immediate discharge
from ED.
• Readmission rate is a critical
measurement of ED performance.
Ross, Michael A., Scott Compton, Patrick Medado, Maureen Fitzgerald, Philip Kilanowski, and Brian J. O’Neil. "An emergency department
diagnostic protocol for patients with transient ischemic attack: a randomized controlled trial." Annals of emergency medicine 50, no. 2 (2007): 109-
119.
MBA 8240 2024 Fall - Luo
Management Challenges of OC
• Bed location problem
–Undersupply of OC units → administrative disadvantages for ED
inpatient and risks of readmission.
–Oversupply of OC units → inpatient beds occupied by patients on
observation status.
• Question:
–How many beds should be allocated to OC?
Lovejoy, William S., and Jeffrey S. Desmond. "Little’s Law flow analysis of observation unit impact and
sizing." Academic Emergency Medicine 18, no. 2 (2011): 183-189.
MBA 8240 2024 Fall - Luo
Measuring Benefits of OC in Practice
• Current guideline: Who will benefit from OC?
– Type 1: Patients admitted on OC → discharged.
• $ revenue of OC + ED visit – cost of occupying inpatient bed (e.g., $1k/patient)
– Type 2: Patients admitted on OC → inpatient.
• $ DRG (diagnosis-related group) payment – ED visit - cost of occupying inpatient bed
(e.g., $2k/patient)
– Measuring benefits by relevant reimbursement rules.
• 0.4*Type 1+0.6*Type 2
• What goes wrong?
– Neglecting administrative advantages of OC in congestion control.
– OC increases the long-term throughput volume of admitted patients.
MBA 8240 2024 Fall - Luo
Group Discussion
Strategies for Improving OC Operations
ED/OC Management
• Three perspectives of ED management
‒ The incoming volume of patients (input)
‒ Time to process and treat patients
(throughput)
‒ The volume of patients leaving the ED
(output)
• Discussion #1:
‒ What types of data are required for the
analysis?
Sartini, Marina, Alessio Carbone, Alice Demartini, Luana Giribone, Martino Oliva, Anna Maria Spagnolo, Paolo Cremonesi,
Francesco Canale, and Maria Luisa Cristina. "Overcrowding in emergency department: causes, consequences, and
solutions—a narrative review." In Healthcare, vol. 10, no. 9, p. 1625. MDPI, 2022.
MBA 8240 2024 Fall - Luo
Patient flow control
• Patient flow → Cash flow
–Patient flow: R patient/day
–Length of Stay (LoS): T days (average per patient)
–Census: long-run average patient inventory I
• Discussion#2: Consider an ED management plan
–An ED plans to set up 17-bed OC units
–Average LoS is1.2 days
–Discussion #2: The hospital found 90% utilized to handle an input
rate of 15 observation patients/day. Is it correct?
MBA 8240 2024 Fall - Luo
Reflection and Discussion
Integrating flow control into operations
Patient flow control without OC
Lovejoy, William S., and Jeffrey S. Desmond. "Little’s Law flow analysis of observation unit impact and
sizing." Academic Emergency Medicine 18, no. 2 (2011): 183-189.
MBA 8240 2024 Fall - Luo
Patient flow control with OC
MBA 8240 2024 Fall - Luo
MBA 8240 2024 Fall - Luo
Thank you
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