The traditional venue for the management of most medical and surgical emergencies has been the in-hospital environment. It is only when patients have been fully evaluated and treated that they are discharged. The increasing cost of hospital stay and burgeoning cost of health care are forcing the medical profession to consider options where illnesses can be managed on a more ambulatory basis. The objective of this study was to assess the volume, characteristics, and disposition of emergency department (ED) patients who were managed in the Short-Stay Emergency Observation Ward (SSEOW). A retrospective study of all patients managed in the SSEOW at the Singapore General Hospital (SGH) from July 1 to December 31, 1997 was conducted. The ED case-records of all observed patients were reviewed. Demographic data as well as information on duration of stay, provisional diagnoses, investigations performed, treatment rendered, and disposition were collected. A total of 114,586 patients were seen at the ED during the study period. There were 9,126 (7.9%) patients who were observed and 1,756 (19.2% of observed or 1.5% of total ED attendance) were subsequently admitted. The median duration of observation was 5.6 +/- 9.2 hours. The hospitalization rate for male and female patients was almost equal (19.2% versus 19.3%) and those 60 years and older (3,559 or 39.00%) had the highest hospitalization rate (28.0%). The higher the triage priority, the more likely the patient was to be observed and subsequently admitted. Most were observed between 2 to 4 hours (3,288 or 36.0%) and the largest group comprised of those with abdominal complaints (4,115 or 45.1%). Patients with alcohol-related problems were observed the longest (6.7 + 9.8 hours) but had the lowest hospitalization rate (2.6%). The SSEOW allowed a 6.4% savings to direct inpatient admission at SGH. The SSEOW represent a management area for the delivery of short-term and diagnostic care on an ambulatory basis. It is accessible, safe and effective in reducing adions.