Strategic Management of Operations in the Emergency Department

This study is based on the analysis of field data on the revenues and patient flows that we collected on all adult emergency department (ED) visits to a level‐1 trauma, tertiary referral center. Our objective was to provide researchers in operations a rich overview of the processes, resources, and metrics of financial and operations performance in the ED. We analyze how patients, physicians, hospitals/physician employer groups, and payers are party to the value created and financial workflow of the ED. A waterfall model for professional services revenue is developed that highlights the impacts of changes in processes, resources, scale, complexity, and mix of patients treated in the ED. We also discuss future implications of new compensation models and potential scenarios that will focus upon controlling costs while maximizing population health and patient satisfaction. These models will necessitate re‐engineering of operations in the ED from a strategic perspective. Four major thrusts for selecting the capacity portfolio in the ED operations to align the interests of all the stakeholders are recommended. New avenues for research are also identified.