“I am concerned that the benefits of ‘good’ observation services in dedicated units may be overlooked,” said Dr. Michael Ross, Medical Director of Observation Medicine at Emory University, Chair of the CMS APC Panel’s Observation Subcommittee, and author of several published studies on use of observation units. “I realize that one concern is the percentage of patients whose length of stay in observation is over 48 hours. However, the average length of stay in a dedicated observation unit is 15 hours, with less than 1% having a LOS over 48 hours.”

Several well-done, randomized studies have shown that the length of stay in a dedicated unit is less than half that of care in a general inpatient bed. This more-efficient care addresses most of the issues currently raised. The 20% copay is much less when a decision is made in a timely manner (15 hours or less), and there is much less risk of using 3-day skilled nursing facility (SNF) qualifying time. Most of the observation failures reported in the news are for painful conditions in the elderly – a finding reported in Annals of Emergency Medicine 7 years ago. Elderly patients with painful conditions are more likely to fail observation and to return to the emergency department if discharged. Unfortunately, commercial admission criteria, such as those of Interqual, often are not based on strong evidence.

Well-performed observation services are good for the patients. Studies of observation protocols have shown improved patient satisfaction and quality of life relative to inpatient admission. Further, preventing avoidable admissions is very important for elderly patients, who are at a greater risk for decline in their functional status when they are hospitalized. Observation care has decreased diagnostic uncertainty. For example, chest pain observation protocols have been associated with a 90% reduction in the rate of missed heart attacks. Observation protocols have been shown to improve compliance with recommended diagnostic testing in conditions such as transient ischemic attack, syncope, or chest pain. Well-run dedicated observation units have been shown to decrease hospital admissions, ED crowding, ambulance diversion, and patients who leave the emergency department without being seen.

Finally, observation protocols have decreased unnecessary resource utilization and cost by 50%-70% of routine inpatient care costs.

The government should not focus on whether observation should occur, but on how and where it should occur and how to identify and encourage best practices for these patients. The overwhelming evidence from 2 decades of intense research in this area is that the setting should be in dedicated observation units. This is why ACEP’s 2008 policy on ED observation units considered this setting to be a “best practice” when done appropriately.