ED Observation Units and Admission Rates

Today more than one‐third of emergency departments (EDs) in the United States have affiliated observation units, where patients can stay 24 to 48 hours without being admitted to the hospital.[1] Observation units experienced significant growth in the United States from 2005 to 2007, secondary to policy changes involving the Centers for Medicare and Medicaid Services (CMS), which expanded reimbursement for observation services to include any clinical condition. Furthermore, CMS implemented the Recovery Audit Contractor process, which was able to fine providers and facilities for inappropriate claims, with the principle method for charge recovery being inappropriate charges for short inpatient stays.

ED observation units (EDOUs) vary in the number of beds, but are often located adjacent to the emergency department.[2] It is estimated that EDOUs have the capacity for caring for 5% to 10% of any given ED volume.[2] Almost half of EDOUs are protocol driven, allowing these units to discharge up to 80% of all patients within 24 hours.[1, 2] Some studies have suggested that EDOUs are associated with a decrease in overall hospitalization rates, leading to cost savings.[1] However, these studies were limited by their single‐center design or simulated in nature. In addition, other studies show that EDOUs decrease inpatient admissions, length of stay, and costs related to specific clinical conditions such as chest pain, transient ischemic attack, and syncope.[3]

To further evaluate the association of observation units on ED hospital admission rates nationally, we analyzed the largest ED‐based survey, the 2010 National Hospital Ambulatory Medical Care Survey (NHAMCS), to assess the impact of observation units on hospital admissions from the ED. We hypothesized that observation units decrease overall hospital admissions from the ED.

METHODS

RESULTS

There were 24,232 ED visits from 315 hospitals in the United States in our study. Of these, 82 (20.6%) hospitals had an observation unit physically separate from the ED. Hospitals with and without observation units did not have different hospital patient level characteristics. There was no association between hospital ownership, teaching status, region location, urban or rural location, and hospitals with observation units when compared with hospitals without observation units (Table 1).

In addition, there was no association between patient characteristics at the ED visit level in hospitals with observation units when compared with patient characteristics at the ED visit level in hospitals without observation units (Table 2). The average ED risk‐standardized hospital admission rate for hospitals with observation units was 13.7% (95% confidence interval [CI]: 11.3 to 16.0) compared to 16.0% (95% CI: 14.1 to 17.7) for hospitals without observation units (Figure 1). This difference of 2.3% (95% CI: 0.1 to 4.7) was not statistically significant.

Figure 1

DISCUSSION

In this national study of hospital admissions from the ED, we did not find that hospitals with observation units had a statistically significant lower ED risk‐standardized admission rate when compared with hospitals that did not have observation units. However, the difference of ED risk‐standardized hospital admission rates between hospitals with observation units and those without observation units was very small, and we were likely underpowered to detect a statistically significant difference.

Recently, EDOUs have received much attention, in part because of increases in their numbers and frequency of use.[7] Prior studies, which did not report admission rates that were risk standardized, have also demonstrated no difference in the admission rates among hospitals with and without observation units.[6, 8] Although this result seems counterintuitive, several possible explanations exist.

One reason that there may not be a relation between the rate of inpatient admission and the presence of an observation unit is that the introduction of an EDOU appears to change physician behavior. When the option to admit to an observation unit is present, ED physicians are 2 times more likely to disposition patients to observation status without a statistically significant change in the rate of inpatient admission.[6] Studies have demonstrated that after the introduction of an observation unit, ED physicians tend to overutilize observation among patients who previously would have been discharged, while continuing to admit patients as inpatients who meet observation criteria, which could result in an increase in cost for payers and patients.[7, 9]

Observation units that are protocol driven have been associated with the best patient outcomes including shorter length of stay, lower likelihood of subsequent inpatient admission, and decreased cost.[10] Furthermore, studies evaluating EDOUs suggest increased patient satisfaction and improved patient safety, especially for protocol‐driven EDOUs.[2] However, currently, only half of dedicated observation units are protocol driven. It is also possible that the ED inpatient admission rate does not capture the full impact of an observation unit on care delivery and quality. Observation units are more likely to be present in EDs with a higher overall patient census, longer patient lengths of stay, and higher rates of ambulance diversion.[6, 8] Unfortunately, NHAMCS does not distinguish protocol‐driven versus nonprotocol‐driven observation units. From a policy standpoint, as EDOUs continue to emerge, there is an opportunity to standardize how EDOUs function by using best practices.

This study should be evaluated in the context of limitations such as heterogeneity in the management of EDOUs, limited hospital factor variables that may influence hospital admissions, and small sample size associated with each hospital. Because we were not able to determine which EDs used protocol‐driven observation units, we were not able to determine the impact of having a protocol‐driven observation unit on inpatient hospital admission rates. Additionally, the study may suffer from a selection bias, as EDs with observation units have been shown to have higher patient volume, longer patient lengths of stay, and greater rates of ED diversion. Despite the small sample size, our risk‐standardized model accounted for case mix and hospital factors associated with hospital admission rates and had a high C statistic value, which indicates that the predicted probability of being admitted from the ED highly correlates with the actual outcome of being admitted from the ED. We were unable to track hospitals longitudinally to determine if a hospital's high volume is associated with the creation of EDOUs as a means to offset its demand. However, in our analysis, we did control for overall patient volume when calculating the RHSAR. Finally, we were not able to limit the dataset to observation unit admission conditions because of the limited number of visits provided per hospital by NHAMCS. We conducted an analysis using 80% power and a P value of 0.05 to determine the sample size needed to have statistically significant results. We would require 920 hospitals to have statistically significant results, which suggests we were underpowered to detect a statistically significant difference.

In this preliminary study, we did not find an association between the presence of EDOUs and ED hospital admissions. Our study was limited by an inability to analyze administrative differences and to adjust for certain hospital factors that are likely to influence inpatient admissions via the ED. Nonetheless, our findings suggest that EDOUs merit further evaluation of their potential cost savings and the quality of the care they provide. An evaluation of ED observation departmental management is also needed to assess differences in care at observation units managed by emergency physicians versus nonemergency physicians.

Today more than one‐third of emergency departments (EDs) in the United States have affiliated observation units, where patients can stay 24 to 48 hours without being admitted to the hospital.[1] Observation units experienced significant growth in the United States from 2005 to 2007, secondary to policy changes involving the Centers for Medicare and Medicaid Services (CMS), which expanded reimbursement for observation services to include any clinical condition. Furthermore, CMS implemented the Recovery Audit Contractor process, which was able to fine providers and facilities for inappropriate claims, with the principle method for charge recovery being inappropriate charges for short inpatient stays.

ED observation units (EDOUs) vary in the number of beds, but are often located adjacent to the emergency department.[2] It is estimated that EDOUs have the capacity for caring for 5% to 10% of any given ED volume.[2] Almost half of EDOUs are protocol driven, allowing these units to discharge up to 80% of all patients within 24 hours.[1, 2] Some studies have suggested that EDOUs are associated with a decrease in overall hospitalization rates, leading to cost savings.[1] However, these studies were limited by their single‐center design or simulated in nature. In addition, other studies show that EDOUs decrease inpatient admissions, length of stay, and costs related to specific clinical conditions such as chest pain, transient ischemic attack, and syncope.[3]

To further evaluate the association of observation units on ED hospital admission rates nationally, we analyzed the largest ED‐based survey, the 2010 National Hospital Ambulatory Medical Care Survey (NHAMCS), to assess the impact of observation units on hospital admissions from the ED. We hypothesized that observation units decrease overall hospital admissions from the ED.

METHODS

RESULTS

There were 24,232 ED visits from 315 hospitals in the United States in our study. Of these, 82 (20.6%) hospitals had an observation unit physically separate from the ED. Hospitals with and without observation units did not have different hospital patient level characteristics. There was no association between hospital ownership, teaching status, region location, urban or rural location, and hospitals with observation units when compared with hospitals without observation units (Table 1).

In addition, there was no association between patient characteristics at the ED visit level in hospitals with observation units when compared with patient characteristics at the ED visit level in hospitals without observation units (Table 2). The average ED risk‐standardized hospital admission rate for hospitals with observation units was 13.7% (95% confidence interval [CI]: 11.3 to 16.0) compared to 16.0% (95% CI: 14.1 to 17.7) for hospitals without observation units (Figure 1). This difference of 2.3% (95% CI: 0.1 to 4.7) was not statistically significant.

Figure 1

DISCUSSION

In this national study of hospital admissions from the ED, we did not find that hospitals with observation units had a statistically significant lower ED risk‐standardized admission rate when compared with hospitals that did not have observation units. However, the difference of ED risk‐standardized hospital admission rates between hospitals with observation units and those without observation units was very small, and we were likely underpowered to detect a statistically significant difference.

Recently, EDOUs have received much attention, in part because of increases in their numbers and frequency of use.[7] Prior studies, which did not report admission rates that were risk standardized, have also demonstrated no difference in the admission rates among hospitals with and without observation units.[6, 8] Although this result seems counterintuitive, several possible explanations exist.

One reason that there may not be a relation between the rate of inpatient admission and the presence of an observation unit is that the introduction of an EDOU appears to change physician behavior. When the option to admit to an observation unit is present, ED physicians are 2 times more likely to disposition patients to observation status without a statistically significant change in the rate of inpatient admission.[6] Studies have demonstrated that after the introduction of an observation unit, ED physicians tend to overutilize observation among patients who previously would have been discharged, while continuing to admit patients as inpatients who meet observation criteria, which could result in an increase in cost for payers and patients.[7, 9]

Observation units that are protocol driven have been associated with the best patient outcomes including shorter length of stay, lower likelihood of subsequent inpatient admission, and decreased cost.[10] Furthermore, studies evaluating EDOUs suggest increased patient satisfaction and improved patient safety, especially for protocol‐driven EDOUs.[2] However, currently, only half of dedicated observation units are protocol driven. It is also possible that the ED inpatient admission rate does not capture the full impact of an observation unit on care delivery and quality. Observation units are more likely to be present in EDs with a higher overall patient census, longer patient lengths of stay, and higher rates of ambulance diversion.[6, 8] Unfortunately, NHAMCS does not distinguish protocol‐driven versus nonprotocol‐driven observation units. From a policy standpoint, as EDOUs continue to emerge, there is an opportunity to standardize how EDOUs function by using best practices.

This study should be evaluated in the context of limitations such as heterogeneity in the management of EDOUs, limited hospital factor variables that may influence hospital admissions, and small sample size associated with each hospital. Because we were not able to determine which EDs used protocol‐driven observation units, we were not able to determine the impact of having a protocol‐driven observation unit on inpatient hospital admission rates. Additionally, the study may suffer from a selection bias, as EDs with observation units have been shown to have higher patient volume, longer patient lengths of stay, and greater rates of ED diversion. Despite the small sample size, our risk‐standardized model accounted for case mix and hospital factors associated with hospital admission rates and had a high C statistic value, which indicates that the predicted probability of being admitted from the ED highly correlates with the actual outcome of being admitted from the ED. We were unable to track hospitals longitudinally to determine if a hospital's high volume is associated with the creation of EDOUs as a means to offset its demand. However, in our analysis, we did control for overall patient volume when calculating the RHSAR. Finally, we were not able to limit the dataset to observation unit admission conditions because of the limited number of visits provided per hospital by NHAMCS. We conducted an analysis using 80% power and a P value of 0.05 to determine the sample size needed to have statistically significant results. We would require 920 hospitals to have statistically significant results, which suggests we were underpowered to detect a statistically significant difference.

In this preliminary study, we did not find an association between the presence of EDOUs and ED hospital admissions. Our study was limited by an inability to analyze administrative differences and to adjust for certain hospital factors that are likely to influence inpatient admissions via the ED. Nonetheless, our findings suggest that EDOUs merit further evaluation of their potential cost savings and the quality of the care they provide. An evaluation of ED observation departmental management is also needed to assess differences in care at observation units managed by emergency physicians versus nonemergency physicians.

Today more than one‐third of emergency departments (EDs) in the United States have affiliated observation units, where patients can stay 24 to 48 hours without being admitted to the hospital.[1] Observation units experienced significant growth in the United States from 2005 to 2007, secondary to policy changes involving the Centers for Medicare and Medicaid Services (CMS), which expanded reimbursement for observation services to include any clinical condition. Furthermore, CMS implemented the Recovery Audit Contractor process, which was able to fine providers and facilities for inappropriate claims, with the principle method for charge recovery being inappropriate charges for short inpatient stays.

ED observation units (EDOUs) vary in the number of beds, but are often located adjacent to the emergency department.[2] It is estimated that EDOUs have the capacity for caring for 5% to 10% of any given ED volume.[2] Almost half of EDOUs are protocol driven, allowing these units to discharge up to 80% of all patients within 24 hours.[1, 2] Some studies have suggested that EDOUs are associated with a decrease in overall hospitalization rates, leading to cost savings.[1] However, these studies were limited by their single‐center design or simulated in nature. In addition, other studies show that EDOUs decrease inpatient admissions, length of stay, and costs related to specific clinical conditions such as chest pain, transient ischemic attack, and syncope.[3]

To further evaluate the association of observation units on ED hospital admission rates nationally, we analyzed the largest ED‐based survey, the 2010 National Hospital Ambulatory Medical Care Survey (NHAMCS), to assess the impact of observation units on hospital admissions from the ED. We hypothesized that observation units decrease overall hospital admissions from the ED.

METHODS

RESULTS

There were 24,232 ED visits from 315 hospitals in the United States in our study. Of these, 82 (20.6%) hospitals had an observation unit physically separate from the ED. Hospitals with and without observation units did not have different hospital patient level characteristics. There was no association between hospital ownership, teaching status, region location, urban or rural location, and hospitals with observation units when compared with hospitals without observation units (Table 1).

In addition, there was no association between patient characteristics at the ED visit level in hospitals with observation units when compared with patient characteristics at the ED visit level in hospitals without observation units (Table 2). The average ED risk‐standardized hospital admission rate for hospitals with observation units was 13.7% (95% confidence interval [CI]: 11.3 to 16.0) compared to 16.0% (95% CI: 14.1 to 17.7) for hospitals without observation units (Figure 1). This difference of 2.3% (95% CI: 0.1 to 4.7) was not statistically significant.

Figure 1

DISCUSSION

In this national study of hospital admissions from the ED, we did not find that hospitals with observation units had a statistically significant lower ED risk‐standardized admission rate when compared with hospitals that did not have observation units. However, the difference of ED risk‐standardized hospital admission rates between hospitals with observation units and those without observation units was very small, and we were likely underpowered to detect a statistically significant difference.

Recently, EDOUs have received much attention, in part because of increases in their numbers and frequency of use.[7] Prior studies, which did not report admission rates that were risk standardized, have also demonstrated no difference in the admission rates among hospitals with and without observation units.[6, 8] Although this result seems counterintuitive, several possible explanations exist.

One reason that there may not be a relation between the rate of inpatient admission and the presence of an observation unit is that the introduction of an EDOU appears to change physician behavior. When the option to admit to an observation unit is present, ED physicians are 2 times more likely to disposition patients to observation status without a statistically significant change in the rate of inpatient admission.[6] Studies have demonstrated that after the introduction of an observation unit, ED physicians tend to overutilize observation among patients who previously would have been discharged, while continuing to admit patients as inpatients who meet observation criteria, which could result in an increase in cost for payers and patients.[7, 9]

Observation units that are protocol driven have been associated with the best patient outcomes including shorter length of stay, lower likelihood of subsequent inpatient admission, and decreased cost.[10] Furthermore, studies evaluating EDOUs suggest increased patient satisfaction and improved patient safety, especially for protocol‐driven EDOUs.[2] However, currently, only half of dedicated observation units are protocol driven. It is also possible that the ED inpatient admission rate does not capture the full impact of an observation unit on care delivery and quality. Observation units are more likely to be present in EDs with a higher overall patient census, longer patient lengths of stay, and higher rates of ambulance diversion.[6, 8] Unfortunately, NHAMCS does not distinguish protocol‐driven versus nonprotocol‐driven observation units. From a policy standpoint, as EDOUs continue to emerge, there is an opportunity to standardize how EDOUs function by using best practices.

This study should be evaluated in the context of limitations such as heterogeneity in the management of EDOUs, limited hospital factor variables that may influence hospital admissions, and small sample size associated with each hospital. Because we were not able to determine which EDs used protocol‐driven observation units, we were not able to determine the impact of having a protocol‐driven observation unit on inpatient hospital admission rates. Additionally, the study may suffer from a selection bias, as EDs with observation units have been shown to have higher patient volume, longer patient lengths of stay, and greater rates of ED diversion. Despite the small sample size, our risk‐standardized model accounted for case mix and hospital factors associated with hospital admission rates and had a high C statistic value, which indicates that the predicted probability of being admitted from the ED highly correlates with the actual outcome of being admitted from the ED. We were unable to track hospitals longitudinally to determine if a hospital's high volume is associated with the creation of EDOUs as a means to offset its demand. However, in our analysis, we did control for overall patient volume when calculating the RHSAR. Finally, we were not able to limit the dataset to observation unit admission conditions because of the limited number of visits provided per hospital by NHAMCS. We conducted an analysis using 80% power and a P value of 0.05 to determine the sample size needed to have statistically significant results. We would require 920 hospitals to have statistically significant results, which suggests we were underpowered to detect a statistically significant difference.

In this preliminary study, we did not find an association between the presence of EDOUs and ED hospital admissions. Our study was limited by an inability to analyze administrative differences and to adjust for certain hospital factors that are likely to influence inpatient admissions via the ED. Nonetheless, our findings suggest that EDOUs merit further evaluation of their potential cost savings and the quality of the care they provide. An evaluation of ED observation departmental management is also needed to assess differences in care at observation units managed by emergency physicians versus nonemergency physicians.