Homepage > Research abstracts > Strategic Effort and Organizational Performance: Evidence from a Hospital Reform
Strategic Effort and Organizational Performance: Evidence from a Hospital Reform
Researchers: Omer Dagan 1, Shirlee Lichtman-Sadot 1, Ity Shurtz 1, . Yehezkel Waisman 2,3, Dan Zeltzer 4
- Department of Economics, Ben-Gurion University of the Negev.
- Faculty of Medical & Health Sciences, Tel Aviv University
- Clalit Health Services
- UC Berkeley School of Public Health, Division of Health Policy and Management
Background: Emergency department (ED) congestion is a persistent challenge in modern hospital systems. Hospitals, like other multi-unit organizations, distribute workload across departments whose strategic interactions may shape system-wide efficiency. A key, but underexplored, driver of ED congestion lies in patient routing protocols
— the rules that determine how admitted patients are assigned across inpatient departments. When routing rewards faster discharge with higher patient inflow, departments face incentives to delay discharges, generating free-riding behavior that worsens congestion.
— the rules that determine how admitted patients are assigned across inpatient departments. When routing rewards faster discharge with higher patient inflow, departments face incentives to delay discharges, generating free-riding behavior that worsens congestion.
Objectives: To estimate the causal effect of a reform in patient routing at Emek Medical Center on ED wait times, inpatient length of stay, hospital bed occupancy, and patient health outcomes.
Method: We use a difference-in-differences design, comparing outcomes in the 20 weeks before and after the reform (October 2019) against the equivalent period in the prior year. The sample includes about 39,000 ED visits drawn from detailed electronic medical records. Empirical findings are interpreted through a queuing theory model with endogenous strategic departmental effort.
Findings: The reform reduced average ED visit duration by 1.5 hours (25%) and inpatient length of stay by approximately one day (20%), with no increase in 30-day readmission or 90-day mortality rates. Bed occupancy declined by roughly 7%, and ED admission rates subsequently rose by 15%, consistent with convergence to a new equilibrium.
Conclusions: Replacing a "first-available-bed" policy with an "equal-load" rule eliminated free-riding incentives across departments, raised effort, and substantially improved operational efficiency with no adverse effect on care quality and at zero additional cost.
Recommendations: Hospital administrators should carefully consider the strategic incentives embedded in patient routing protocols. Budget-neutral redesign of workload allocation rules can yield large efficiency gains, improving patient access and throughput without requiring additional staffing or resources. These insights extend beyond healthcare to other service organizations with distributed workload systems.
Research number: 2022/73/ר
Research end date: 06/2026