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Good OM Reading: RX for the Emergency Room

November 21, 2011

If you want to read an excellent article about issues of quality, capacity, and bottlenecks in hospitals, see OR/MS Today (Oct., 2011), for “RX for the ER”.  The authors (one of whom is head of the ER at New Orleans’ Ochsner Hospital), write: “As an industry, hospitals exhibit technologic excellence in terms of diagnostic and therapeutic innovations. However, service delivery has been absent. The economic incentives to develop and sustain service delivery models that are viewed by the patient as efficient, useful, and valuable have been to a large degree nonexistent in a hospital environment”.

But things may be changing. Patients are demanding relevant information, more choice and better services. As a result, healthcare in the US is beginning to embrace the OM techniques that have made other sectors of American industry competitive. ERs are the perfect place to begin. And Ocshner Hospital had no choice but to reengineer its ER after Hurricane Katrina wiped out 70% of New Orleans’ healthcare services in 2005. ER volumes ramped up overnight to 180% of pre-hurricane averages and wait times tripled. Annual revenue loss, estimated to be $500,000 for every 1% of patients who leave prior to examination, is one factor in hospitals wishing to invest in a more efficient system.

Some of the highlights of the article: (1) ER arrivals tend to follow a known demand curve at different hours (contrary to what many administrators think), making staffing much more efficient; (2) the ER bed is the major resource in the department and it runs at more than 100% capacity a large part of the  day– but 75% of patients do not need a bed and are discharged that day; (3) low risk  patients do not need the services of a highly trained ER physician, and physician assistants can provide good care at 25% of the cost; and (4) registration and triage time can be reduced by 80% with lean workflow models.

This article is full of excellent graphics (10 of them) that you can use in class to make points about lean, waiting line costs and distributions, workflow, and metrics.

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