Case study Middletown General Hospital Emergency Department Observation Analysis Unit: 

1) What was the profit flow in $/day from patients who entered the hospital (on either observation or admitted status) through the ED? 

2) Assume that an observation unit of your recommended size (15 beds; 80% occupation: 12) is built and the hospital experiences the exact same demand rate. Also assume that all of the inpatient beds that were formerly occupied by ER Observation patients can now be filled by inpatients (at the same Length Of Stay LOS and profit/patient rate). Ignoring the fixed and variable costs to build the observation unit, what would be the benefit in $/day to the hospital for having the observation unit relative to the status quo? 

3) How can you verify the above assumption that "all of the inpatient beds that were formerly occupied by ER Observation patients can now be filled by inpatients" at the same LOS and profit/patient rate)? 

4) What is the financial business case to be made for building the ED Observation unit with the backfill assumption? (NPV, payback period)?