Logistics. Coordination of people, facilities, and supplies that go into instituting a COU might be a challenge. Also, there may be times where patient ownership may not be very clear. Logistical concerns can include:
- Who owns the patient?
- How much of a role does a consulting service have?
- Who oversees the follow-up plans?
Although a popular COU setup is to have a dedicated observation unit adjacent to the ED, it is not a standard.
Reimbursement. Unfortunately, there is some degree of negative incentive built into reimbursements for COU operations. To understand why this is a bad thing for a hospital, let’s examine how hospitals are paid for services provided in a COU.
Frequently, COU patients are treated as “outpatients.” The operating formula is based on the Hospital Outpatient Prospective Payment System (OPPS), which is based on Ambulatory Payment Classification, or APC.8 Reimbursement differences in these two approaches can be quite sizable. Depending on what condition is being treated, the hospital reimbursement can be as little as half to a quarter of the payment for inpatient treatment.9 Essentially, the patient would have received very similar care, diagnostic work-up, antibiotics, imaging, lab work, and equally qualified clinicians as caretakers in both the settings. The payments need to account for the care in the COUs, which is usually more acute than in the ambulatory setting and potentially more efficient than an inpatient setting. The payments, therefore, should be sensitive to these factors.
The Ugly
COUs are intended to address many of the challenges facing the healthcare system, and in large part, that is what they do. However, some hospitals could be penalized for providing care through COUs. An efficient COU means that the patients who are admitted are, in fact, sicker. Logically, these patients will have a higher chance of being readmitted. Because the “not so sick” patients were successfully intervened and discharged from COUs, the patients that did get admitted must be pretty sick and must have higher comorbidities.
According to CMS, a readmission occurs if a patient has “an admission to a subsection hospital within 30 days of a discharge from the same or another subsection hospital.”10 The denominator here consists of all the patients who were discharged from the hospital inpatient stay. If a hospital does not have a robust COU, a large number of “not so sick” patients will be admitted as inpatients and will provide a larger denominator for calculating the readmission rates.
In contrast, a successful COU will allow for a large number of “not so sick” and “borderline” patients to be discharged, shrinking the denominator base, and “very sick” patients who are likely to be readmitted. This may erroneously cause the hospital to appear to have higher 30-day readmission rates. These hospitals may risk substantial readmission-related penalties.
This issue, along with a lopsided payment model, makes the COU landscape murky. With a greater share of pie being the “Il buono” in Il buono, il brutto, il cattivo, clinical observation units are certain to take a prominent position in addressing many of the issues that plague current healthcare facilities—capacity constraints, long ED wait times, limited inpatient beds, and soaring health-care expenditures.
Most important, COUs can lead to better and more efficient patient care.11 It is, therefore, not surprising that the IOM, in its report “Hospital Based Emergency Care—At the Breaking Point,” has identified clinical decision units as a “particularly promising” technique to improve patient flow.12
Dr. Asudani is a hospitalist in the division of hospital medicine in the department of internal medicine at the University of California San Diego Health System. Dr. Tolia is director of observation medicine in the department of emergency medicine and internal medicine at UCSD Health System.