Hospitalized but Not Admitted: Characteristics of Patients With “Observation Status” at an Academic Medical Center

Study Questions:

What are characteristics of observation care (defined by the Centers for Medicare & Medicaid Services [CMS] as a “well-defined set of specific, clinically appropriate services,” usually lasting less than 24 hours) at a tertiary academic medical center?


This was a retrospective study of all inpatient admissions and observation stays during an 18-month study period at an academic health system. Observation status was assigned by case managers using McKesson InterQual. Care was characterized on the following main outcomes and measures: patient demographics, length of stay, difference between cost and reimbursement per stay, and percentage of patients discharged to skilled nursing facilities.


Of 43,853 stays, 4,578 (10.4%) were for observation. The following were characteristics of observation care: mean observation length of stay, 33.3 hours (16.5% more than 48 hours) and a negative margin/stay of -$331, even though the cost per encounter for observation care was less than that for inpatient care. Adult general medicine patients accounted for 52.5% of all observation stays. Chest pain was the leading diagnosis for observation care (12.1% of stays); 7.0% of observation stays resulted in discharge to a skilled nursing facility (vs. 13.7% of inpatient encounters).


The authors concluded that observation care at a single academic center differs from the CMS definition, is frequently greater than 48 hours, and is associated with operating losses.


The authors provide a useful glimpse into the practice of ‘hospitalization without admission.’ In a retrospective descriptive, single-center study, they demonstrate the operating losses of observation units. While the CMS definition for observation care would characterize such care as usually lasting less than 24 hours and stays of more than 48 hours being ‘rare and exceptional,’ this analysis demonstrates that nearly one out of every five observation stays are for more than 48 hours. The authors have highlighted an imperative to better understand observation care, as it is clearly different (at least in this single-center analysis) from what it has been defined to be.

Keywords: Demography, Chest Pain, Centers for Medicare and Medicaid Services (U.S.), Skilled Nursing Facilities, Inpatients, Length of Stay

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