Demand Forecasting Manages Capacity, Optimizes Staffing Levels, and Reduces Length of Stay

“The daily challenge to optimize flow for today’s situation keeps continuous downward pressure on our length of stay.”

-  Mark Chase Executive Director of Decision Support Vancouver Coastal Health



  • Lions Gate Hospital
    Vancouver Coastal Health
    North Vancouver


  • Overcrowding, bottlenecks in the ICU, OR, PACU; discharge delays; lack of awareness of available beds.



  • Aligned predicted patient demand with capacity and staffing, about $500,000 annual savings, 3% reduction NHPPD, 50% decrease in surgery overtime shifts, decrease in average LOS on medical and surgical units.

The Customer

After years of struggling to overcome severe capacity constraints, Lions Gate Hospital (LGH), a regional hospital in North Vancouver, British Columbia, was ready to address its patient throughput issues. The facility operated at a 100 to 110 percent utilization rate, and staff was continually in crisis management mode.

The Challenge: Lack of Ability to Predict Patient Demand and Staff Effectively Hindered Hospital Efficiency and Quality of Care

Without the ability to predict patient demand and optimize bed utilization, LGH couldn’t staff effectively, which compromised the quality of patient care.

Bottlenecks in the ICU, OR and PACU – coupled with discharge delays and a lack of awareness of available beds – led to systemic overcrowding.

Financially, LGH’s capacity management issues were resulting in high and variable labor costs that well exceeded budget targets. Managers routinely opened a surge unit to provide available beds, and more than 50 percent of shifts incurred overtime in 2011. Staff satisfaction was low, while turnover was high.

The Solution: Capacity Management Helps Facility Reduce Length of Stay, Improve Patient Flow, and Increase Revenue

LGH implemented Change Healthcare Capacity Planner, a predictive analytics solution that helps organizations accurately forecast patient demand, enabling proactive resource alignment.

By prospectively matching staffing to predictive demand using Capacity Planner, LGH is now able to create accurate staff schedules, reducing overtime by 50 percent in its surge unit alone. Proactive capacity management has helped the facility reduce length of stay, improve patient flow, and decrease ED wait times, while earning $1.1 million in additional revenue through a provincial activity-based funding program that allocates funds based on the type and volume of severity adjusted services provided, similar to diagnostic related groups.

Change Healthcare Capacity Planner incorporates three years of historical ADT data, applying selected algorithms to account for seasonal, day-of-the-week, and other variations to create the baseline patient demand forecast.

The capacity planning tool predicts scheduled and unscheduled demand with a 95 percent accuracy rate one month out and a 98 percent accuracy rate one to three days out. By using the tool to make decisions three days in advance, Lions Gate Hospital has been able to optimize staffing levels and reduce overtime across the facility. “We’ve seen a cultural change across LGH. We are able to forecast consistently, which helps us make decisions more confidently,” says Leanne Appleton, Director Acute Services LGH.

The Result: Real-Time Visibility into Key Performance Indicators Aligns Predicted Patient Demand with Capacity and Staffing

Viewing forecasted patient demand by unit enables managers to anticipate capacity shortages and resolve patient flow issues. The ability to see projected discharges vs. actual discharges has proven to be a powerful motivator, as managers compete to beat the predictions. “If you beat the discharge targets, it’s because you’re beating the expected length of stay,” says Mark Chase, Executive Director Decision Support Vancouver Coastal Health. “The daily challenge to optimize flow for today’s situation keeps continuous downward pressure on our length of stay.”

Since the implementation of Change Healthcare Capacity Planner and related initiatives on its medical and surgical units, the hospital’s average LOS has decreased by 16 percent, creating estimated capacity comparable to more than 40 additional beds. Planning for demand surges is now a proactive process, not an emergency. Overtime on the surgical units has dropped from 7.9 percent of productive hours to 3.5 percent—a reduction of almost 50 percent. LGH has successfully embedded capacity forecasting into its daily workflow. Managers review the three- to seven-day demand projections and set discharge targets to create the necessary capacity. Staffing coordinators smooth scheduling based on the seven-day plan, assigning floats, prioritizing short-call lists, and preparing for variable staffing needs. Vancouver Coastal Health, the publicly funded organization that operates Lions Gate Hospital, also uses Change Healthcare Capacity Planner to analyze capacity and staffing at a regional level. After the solution was implemented successfully at five additional hospitals, the health authority began looking at ways to relieve congestion and optimize throughput across facilities. Using Change Healthcare Capacity Planner’s modeling feature, managers were able to test various scenarios to determine the annual volume of surgeries that could be moved and the associated impact on wait times. They were also able to identify what adjustments were needed to best match inpatient census to staffing. “This is very complicated work, which was made possible with the use of the modeling tools,” says Steven Kabanuk, Director VGH & UBCH Perioperative Services. Management used Change Healthcare Capacity Planner to model optimal OR flow and determine an OR allocation plan for the year, taking seasonal bed closures into account and determining elective bed requirements months in advance. They optimized weekly elective OR bookings to meet targets, reduce waiting lists and alleviate logjams in the postanesthesia recovery room.

Since implementing the solution three years ago, the health system has seen a $2.7 million reduction in staffing costs. It has also seen a 3 to 11 percent drop in nursing hours per patient day (NHPPD). “Capacity Planner has made a significant difference in the quality of the workplace for our staff, as well as the quality of care we provide,” says Chase.

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