Looking to prevent avoidable inpatient admissions, hospitals should increase the use of observation units to reap billions in savings and reduce length-of-stay, according to new research published in Health Affairs. With such units, hospitals with sufficient emergency department volume could save $4.6 million annually.
Although only one-third of U.S. hospitals have dedicated observation units, implementing units nationwide would lead to $3.1 billion a year in savings.
The observation units also prevent complications associated with inpatient hospitalization, reduce errors during patient hand-offs and increase inpatient capacity.
The research focused on dedicated observation units in which maximum length-of-stay was 24 hours, and the average length-of-stay clocked in at 15 hours.
However, observation care stays typically go beyond the 24-hour limit recommended by the Centers for Medicare & Medicaid Services. In fact, almost 50 percent of observation care stays exceeded a full day, while nearly 15 percent were for more than two days, according a June Health Affairs study.
The new research noted that long observation stays are similar to inpatient admissions and therefore fail to miss the benefits of dedicated observation units.
The findings come as providers are pushing the Centers for Medicare & Medicaid Services to change observation status rules. They claim that without clinical standards for when to keep patients under observation, Medicare fraud auditors guide many observation decisions, rather than physicians.
To learn more:
- read the Health Affairs study