Complex Adaptive Strategy to Produce Capacity-Driven Financial Improvement.
Managing capacity in hospitals and emergency departments (EDs) is a global problem. This article demonstrates an efficiency model applied to an acute care hospital facing a budget shortfall as a result of capacity constraints that negatively affected admissions and increased ED diversions. Operating on the hypothesis that reducing inpatient length of stay would allow patients access through all service points and would return the admissions growth rate to budget, a turnaround team was quickly assembled and charged by the chief executive officer to fix the primary cause of financial underperformance--the creeping length of stay--within 60 days. This case study is generalizable to all organizations, regardless of size. Deploying an efficiency model based on the complex adaptive systems approach of "swarmware," the hospital's rapid turnaround efforts produced the results necessary to achieve two established goals: (1) length of stay was decreased to 0.1 days below budget in the 60-day time frame, and (2) all admissions and potential admissions were accepted (saying "yes" to patients) through key points of access in the hospital. Transfer Center denials were reduced to 0 in 19 days, and monthly ED diversions decreased from 110 hours to 20 hours in 60 days. By using a swarmware approach, the hospital created additional bed capacity, allowing for community demand to be accommodated, budgeted admissions target to be exceeded, and market share to be stabilized. This article describes this project's processes and outcomes and the lessons learned and applied, which will assist healthcare leaders who are facing capacity issues in their own organization.
Published In/Presented At
Capuano, T., MacKenzie, R., Pintar, K., Halkins, D., & Nester, B. (2009). Complex adaptive strategy to produce capacity-driven financial improvement. Journal Of Healthcare Management / American College Of Healthcare Executives, 54(5), 307-318.
Business Administration, Management, and Operations | Health and Medical Administration | Management Sciences and Quantitative Methods
Administration and Leadership, Department of Emergency Medicine, Department of Emergency Medicine Faculty, Health Care Informatics