Patients are treated using observation services () when their care needs exceed standard outpatient care (i.e., clinic or emergency department) but do not qualify for admission. Medicare and other private payers seek to limit this care setting to 48 hours.
Healthcare Cost and Utilization Project data from 10 states and data collected from two additional states for 2009.
Bivariate analyses and hierarchical linear modeling were used to examine patient‐ and hospital‐level predictors of stays exceeding 48 (and 72) hours (prolonged ). Hierarchical models were used to examine the additional cost associated with longer stays.
Of the 696,732 patient stays, 8.8 percent were for visits exceeding 48 hours. Having Medicaid or no insurance, a condition associated with no treatment protocol, and being discharged to skilled nursing were associated with having a prolonged stay. Among Medicare patients, the mean charge for stays was $10,373. visits of 48–72 hours were associated with a 42 percent increase in costs; visits exceeding 72 hours were associated with a 61 percent increase in costs.
Patient cost sharing for most stays of less than 24 hours is lower than the Medicare inpatient deductible. However, prolonged stays potentially increase this cost sharing.
Data Source/Study Setting