The financial implications of variability in decision to disposition times for patients placed in observation status

A host of variables beyond the control of the ED physician affect ED throughput. In-process time represents the period most directly affected by physician decision-making patterns. This study attempts to evaluate implications of variable decision-making for those patients placed in observation status for throughput and financial implications.

A retrospective review of all ED admissions to observation status over an 8-month period, for observation decision times (ODT) was performed. The average cost per patient bed hour in the ED, opportunity cost from patients not being seen during excessive ODTs, and the cost of an unfilled bed in an observation unit were estimated.

Of 2693 observation cases reviewed, 114 (4.2%) had ODTs longer than two standard deviations above the median. These accumulated ODTs lead to an additional cost of $12,307, or $107 per admission. An additional 45 patients could have been treated during these excess ODTs, from which result an opportunity loss ranging from $32 to $1350 per hour. There is an additional cost of $8036 to maintain empty observation beds in the hospital.

For those ODTs beyond two standard deviations above the median, there is a direct unreimbursed cost to the hospital, an opportunity cost for patients not seen in those occupied ED beds, and a cost of maintaining unfilled observation beds. Variability in the efficiency of decision-making suggests real consequences in terms of throughput and cost-to-treat.