Economic Issues in Observation Unit Medicine
Section snippets
BASIC ECONOMIC TERMINOLOGY
In the experience of most people, cost is really the “price” paid to a vendor for something bought. In medicine, cost is much more complicated. When one is defining cost, the first thing to clarify is the frame of reference, or who is paying. Cost from the hospital perspective is what it pays for the raw materials of health care: buildings, labor, utilities, equipment, supplies, medicine, and paper. This is what is usually meant by cost when comparing costs with charges. Conversely, charges are
Chest Pain Evaluation
In the area of chest pain evaluation, there has been the most research demonstrating the cost savings from ED observation units. Initial criticisms of the application of observation to chest pain evaluation questioned whether the opening of an observation unit would be cost effective. Some speculated observation units would simply cause physicians to send patients there whom they would have previously discharged home, leading to higher costs and no improvement in quality of care (e.g., fewer
HOSPITAL'S ECONOMIC PERSPECTIVE OF OBSERVATION
Observation units arise as an alternative to hospital care. The decision to open an observation unit is made by the hospital, so that the hospital frame of reference or perspective must be assumed in measuring their value. The hospital's profitability depends on its revenue versus costs. As shown above, the observation unit has markedly lower costs than inpatient care. These costs do vary depending on the observation unit's management's astuteness in structuring the unit. Those observation
PAYER'S AND PATIENT'S ECONOMIC PERSPECTIVE OF OBSERVATION
Observation is the rational and most cost-effective alternative for the evaluation and management of patients with acute emergent conditions. This is true whether the payer is the patient or the patient's insurance company. With observation, the costs of patient care and the resultant charges are one half that of traditional hospitalization.
In one way the payer and patient's perspective of observation varies—the valuing of the quality of care provided during observation. Certain payers have
PHYSICIAN'S ECONOMIC PERSPECTIVE OF OBSERVATION
Compensation of physicians treating patients in the observation unit has now become standardized. In 1993, the first set of CPT codes were developed for reimbursement of physician services to observation patients discharged the day after admission to the observation unit. The physician initially codes 99218, 99219, or 99220. At discharge, the next day the physician codes 99217. There was, however, a problem with these codes. If the patient were discharged by the physician on the same day the
SUMMARY
Emergency department observation units are the rational choice for improving the utilization of health care resources and at the same time improving the quality of patient care. Potential pitfalls can be avoided by flexibility on both the part of the observation unit and the hospital administration staff. The continued growth of observation medicine throughout the country is evidence that most have been successful in designing creative solutions to accommodate this new health service.
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Cited by (40)
Biomarkers to Assist in the Evaluation of Chest Pain: A Practical Guide
2018, Biomarkers in Cardiovascular DiseaseReply
2014, Revista de Calidad AsistencialComments on the article: «influence of short-stay units on the quality of health care in Spain. A systematic review»
2014, Revista de Calidad AsistencialEffect on efficiency and cost-effectiveness when an observation unit is managed as a closed unit vs an open unit
2013, American Journal of Emergency MedicineAggressive approach and outcome in patients presenting atrial fibrillation and hypertension
2013, International Journal of CardiologyCitation Excerpt :Because of its high prevalence in the population, hypertension independently accounts for more AF cases than any other risk factor [18,19]. Several other studies stated Observation Units as a rational choice for improving the utilization of health care resources [20], especially for successful treatment of chest pain [21], asthma [22], syncope [23] and eventually for treatment of AF, in order to reduce in-hospital stay [24]. Nonetheless no strategy to pursue normal sinus rhythm including antiarrhythmic drug therapy, conversion and ablation has definitely being shown to reduce the risk of stroke and hospitalization [25], in our setting physicians were strongly invited to consider pharmacological conversion as first line treatment [9].
Clinical management of atrial fibrillation: Early interventions, observation, and structured follow-up reduce hospitalizations
2012, American Journal of Emergency MedicineCitation Excerpt :More than a quarter of patients have been sent to the outpatient clinic for elective treatment and short-term follow-up, eventually avoiding admission. Consistent with our findings, previous studies have reported observation units as a useful choice for improving the utilization of health care resources [20], especially for successful treatment of chest pain [21], asthma [22], and syncope [23] and eventually for treatment of AF, to reduce in-hospital stay [24]. Another study showed cost savings with the use of oral rate control agents, appropriate anticoagulation, and electrical cardioversion, with expedited referral to an outpatient AF clinic [25].
Address reprint requests to Rebecca Roberts, MD, FACEP, Cook County Hospital, 1900 West Polk, 10th floor, Chicago, IL 60612