ver the last two decades, the demand for hospital services in the United States has
been on the rise. Inpatient admissions have increased by 14 percent and emergency
department (ED) visits by 40 percent, while the number of staffed hospital beds
has dropped by 15 percent.
The pressure for medical services under limited bed capacity is especially felt by
urban teaching hospitals such as the University of Chicago Medical Center (UCMC),
which is located in a mostly poor and underserved area. UCMC struggles to serve
a community that has limited options other than going to the emergency room for
routine medical care. Many such patients, when admitted to the hospital, receive
general medicine (GM) services, one of the 25 patient care services offered by UCMC.
At times, patients admitted into the GM service occupied nearly one-third of the
295 adult care beds available in the hospital. Furthermore, due to the 1986 Emergency
Medical Treatment and Labor Act, patients who present themselves to the ED and require
admittance must be admitted if the hospital has the capacity and capability to treat
This is not just an issue of revenues for the hospital— it certainly is a financial
burden—but more importantly it is a strain on UCMC's ability to care for some
of the most complex and critically ill patients throughout the country. UCMC is
a premier research and teaching hospital with expertise in such areas as advanced
cancer and cardiology treatments. For some of these patients, UCMC may be one of
few options for the care they require. Furthermore, the mission of UCMC as a research
and teaching hospital calls for a level of inquiry into complex medical cases, and
its accreditation as a teaching hospital requires it.
UCMC faces difficult decisions on how to best utilize its limited capacity, which
has spurred passionate debate. The hospital has a commitment to the local community
in which it resides but also to the most critically ill and complex patients. At
the same, it must continue to be a financially viable premier research and teaching
To help address some of these issues, UCMC received special dispensation from the
state of Illinois in 2006 to divide its medical and surgical adult beds into mini-hospitals
or wings. A wing is defined by a fixed set of specific patient diagnoses and a fixed
allocation of beds. In practical terms, each wing will house a subset of UCMC's
25 patient care services. A particular patient can only be admitted if a bed is
available in the wing that provides the medical service the patient requires.
UCMC formed four wings: general medicine, cancer treatment, cardiology, and multi-specialty
care for the remaining medical services. A number of beds is specified for each
wing, but the beds need not be physically isolated from another wing. However, the
number of patients admitted to a wing at any given time must not exceed the agreed-upon
limit as stipulated in the agreement with the state. The GM wing was initially allocated
69 beds, but at the time of this writing, it is allocated 35 beds. Such changes
to the formation of wings can, in practice, only be made about once per year.
The effective reduction in the number of available GM beds was implemented along
with an agreement with Mercy Hospital and Medical Center, a community hospital located
near UCMC. Under the agreement, patients presenting themselves to the ED who need
admittance for routine care are given the option of being admitted to Mercy, where
they can typically get a bed immediately. Furthermore, patients transferred to Mercy
would still receive care from UCMC physicians who would begin to divide their clinical
time at Mercy. Mercy benefits from this arrangement because its cost structure is
much lower—it can make a profit on the same patient that UCMC cannot. UCMC
has a significantly higher cost structure due to its advanced technology, teaching,
and research costs. Proponents of the arrangement view this as a win-win for both
the hospitals and patients. Opponents of the arrangement view this as "patient-dumping."
Analyzing such wing formation and hospital collaboration spawned the interest of
researchers Thomas Best, a Chicago Booth PhD student, and University of Chicago
professors Donald D. Eisenstein, David O. Meltzer, and Burhaneddin Sandıkçı
in a recent study titled, "Efficient Management of Strained Inpatient Bed Capacity."
The interest of the researchers spans a number of issues. One is to understand how
a hospital like UCMC should form wings; that is, how many wings should be formed,
which medical services should be assigned to each wing, and how many beds should
be allocated to each wing. The researchers also sought to understand if forming
wings resulted in any advantages due to "operational focus." It is well understood
that when focusing an operation, including medical services, greater efficiency
and improved quality can result. For example, a medical facility dedicated to cancer
treatment can attain improvements both in efficiency and quality by focusing its
resources on a narrow set of treatments. Forming wings at UCMC is one potential
way to attain some operational focus.
Finally, this initial work leads to the more general issue of how to plan care across
a community of hospitals. Forming collaborations across health care facilities to
take advantage of focused care in some places and multi-specialty care in others,
can improve patient care and access to medical services as well as overall efficiencies.
After UCMC formed wings, evidence emerged that new efficiencies were being realized.
In particular, the average length-of-stay (LOS) of patients admitted to the hospital
dropped significantly after the wings were formed, an effect which could not be
attributed to a change in patient mix or improvements in technology.
The researchers discussed the data with the physician who acted as the patient flow
director for one of the wings. He described how his job evolved after the wings
were formed. He started daily meetings with case managers, nurses, and doctors within
the wing. They would discuss each patient and ask the question "Why is Mr. Jones
still in the hospital?" Case workers could focus on the types of discharge needs
typical for the wing in question. And very importantly, the stakeholders of a wing
began to take ownership of their beds. As Eisenstein explained, "It was now clear
to all that turning over a bed resulted in capacity for their patients."
The researchers also collected data that showed the turnover of beds was greatest
when the wing was almost full. As occupancy in the wing neared 100 percent, the
average LOS decreased.
How to Form Wings
The authors formulated a model that can help hospitals decide how many wings to form,
the number of beds in each wing, and the type of services that should be assigned
to each wing. The model seeks to maximize a function of bed utilization. That is,
given a formation of wings, each wing is evaluated in terms of this function, which
has two components: the average number of beds occupied in the wing and the average
value of a patient-day within the wing. The average number of beds occupied incorporates
a model that considers the random arrival of patients for service.
The model is very flexible in terms of setting a weighted value of a patient admitted
to a wing. It can set the weight in terms of profitability. Alternatively, it can
set a weight in terms of the efficiency of care. In other words, how equipped is
this facility to care for this type of patient? Or, it can set a weight in terms
of the complexity of care to address how well a patient matches the core competency
of the facility. The initial test runs of the model, as applied to UCMC, use a weight
that is a combination of all of these attributes. For each type of patient, a national
measure called the DRG (Diagnostic Related Group) relative weight measures the cost
and complexity of care of patients. The larger the value, the more difficult or
complex a patient is to care for, and thus typically more profitable.
To estimate the average LOS for a patient, the researchers used a function that decreased
the estimated LOS for a proposed wing as demand approached and exceeded the available
capacity. The model uses both UCMC data as well as national databases to estimate
the relative demand for each type of patient. The model considers over 500 different
types of patients to estimate their relative demand and value. These types are then
aggregated into 25 different medical services. For a hospital the size of UCMC,
there are numerous ways to form wings, so the researchers used advanced optimization
techniques that were able to find solutions that they could prove were effectively
An example of the model's output using data for UCMC is as follows. If the total
demand for hospital beds per day is just 67 percent of the bed capacity, then the
optimal solution is to keep all 25 medical services together in one wing. That is,
do not ask for special dispensation to subdivide the hospital. The reason is that
when demand for beds is relatively low, then it is best to pool the demand variances
of the various medical services in one large pool of bed capacity. The higher-weighted
services are in little danger of being crowded out by lower-weighted services.
But as the total demand for beds increases, it begins to become more advantageous
for the hospital to form wings. There will be days when the hospital experiences
more demand than capacity and days when it has slack capacity. Consider, for example,
when demand is on average equal to the hospital's capacity. In this case, the best
solution is to form two wings: one for the top 18 higher-weighted services and one
for the next six lower-weighted services. The medical service with the lowest-weighted
value is allocated no beds. This indicates that the hospital is not well suited
for this type of medical service and may wish to explore facilities that are better
suited to meet the demand for this service. However, it is also possible to add
constraints to the model that sets a minimum number of beds available for each service.
More wings are formed and more medical services are allocated zero beds when overall
demand is 33 percent higher on average than the bed capacity of the hospital. The
researchers believe that UCMC is close to this case. Its collaboration with Mercy,
which has spare bed capacity, is critical to manage demand when it exceeds the capacity
of the hospital. Furthermore, the model predicts that forming wings can actually
increase the total number of patients a facility is able to accommodate. "This is
because our model incorporates reduced length-of-stays as demand increases and wings
narrow their focus of care," remarks Sandıkçı.
If other hospitals manage their beds in a similar way, then one can imagine a network
of hospitals forming partnerships across a community. Each one would focus on the
medical services that they do best. This "global" approach may be a better solution
to a hospital's limited capacity than expecting a hospital like UCMC to be everything
to everybody. "It is impractical to think that every facility can function as a
general hospital," says Eisenstein. "We should take advantage of focused care where
"Efficient Management of Strained Inpatient Bed Capacity."
Thomas Best, Donald D. Eisenstein, David O. Meltzer and Burhaneddin Sandıkçı.