Observation Unit Cuts Length of Stay, Lowers Costs
Dedicated staff closely monitors patients
Patients who were transferred to the Outpatient Observation Unit at Rockford (IL) Memorial Hospital experienced lower lengths of stay and lower costs than patients who were candidates for observation services but were treated on an inpatient unit. The 16-bed unit opened in 2012.
In December 2015, the average length of stay for patients discharged from the Outpatient Observation Unit was 25.58 hours, compared to 32.72 hours for patients discharged from inpatient units, according to Rhonda Meuris, RN, BSN, nurse manager for the Outpatient Observation Unit at the 376-bed tertiary care hospital.
Patients in the Outpatient Observation Unit, on average, contribute $587 more to the hospital’s bottom line than patients who qualify for the Outpatient Observation Unit but are placed on an inpatient unit, Meuris says. The figure is determined by subtracting the per-patient variable expense from payments and subtracting the average for Outpatient Observation Unit patients from ones who were not on the unit.
“Even though payments are lower for patients in the Outpatient Observation Unit, the result is still a higher contribution margin for Outpatient Observation Unit patients. The unit had 1,708 patients in calendar year 2014. This adds up to a $1 million improved contribution margin for the year,” she adds.
Lengths of stay are shorter because the unit uses standardized protocols and provides standard care, Meuris says. Cost of care for patients in the Outpatient Observation Unit are lower because of reduced testing, pharmacy, and nursing time, Meuris says. The Observation Unit staff work only on the unit, which is staffed with one nurse for every four to five patients.
The hospital named the unit the “Outpatient Observation Unit” so patients and family members will understand that they are not in an inpatient unit, Meuris says.
The majority of patients transferred to the Outpatient Observation Unit come through the ED, Meuris says. The unit can take patients who are admitted directly but does not take postoperative patients, patients with psychiatric issues, patients who have undergone cardiac catheterization, or obstetrical/gynecological patients. Even with those patients excluded, 79% of all observation patients receive services in the Outpatient Observation Unit, she adds.
Chest pain is the No.1 diagnosis for patients in the Outpatient Observation Unit, Meuris says. “The unit has full cardiac monitoring, and our nurses are stroke and EKG certified,” she says. The unit is overseen by two hospitalists and two independent specialist physicians.
All physicians with admitting privileges have been educated on observation unit eligibility guidelines. The guidelines specify that physicians must believe the patients need observation services and that their stay will be less than two midnights.
Other criteria include functional baseline mental status, functional baseline physical status except for chronically bedbound patients, and less than 20 weeks gestation for pregnant women. The guidelines specify vital signs, including systolic and diastolic blood pressure readings, heart rate, and oxygen saturation rate.
In addition, the unit has guidelines for the diagnoses/complaints for the majority of patients who receive services in the unit. For instance, guidelines for chronic obstructive pulmonary disease/asthma specify that patients must be unresponsive to ED treatment and have oxygen saturations greater than 90%.
“The emergency department physicians do not have admitting privileges, so they call on the hospitalists when they need to admit a patient or place them in the observation unit,” she says.
The ED case managers work with the physicians to determine if patients meet medical necessity criteria for an inpatient stay. Physicians can call on nurses on the observation unit for assistance in determining patient status when the case managers are off duty.
“The nurses on the observation unit are savvy and understand inpatient criteria. In addition to helping with initial status, the nurses can alert physicians if it appears that patients in the observation unit are meeting inpatient criteria,” Meuris says.
The case managers review patients in the observation unit every day to ensure correct status and participate in rounds at 8:30 each morning on the inpatient unit.
Meuris reviews the hospital census every day to ensure correct patient status. “We are looking for patients on other units whose status can be flipped to observation. Sometimes, when the hospitalist sees a patient a couple of hours after admission, his or her condition would indicate that a transfer to the observation unit is appropriate,” she says.
In 2015, 18.4% of the patients in the Outpatient Observation Unit were converted to inpatient status, she says.
Meuris collects data every month on the percentage of observation patients who are converted to inpatient and admitted to other units; patients who are admitted to inpatient but discharged as observation patients; which changes were due to case management intervention and which changes were instituted by coding and billing; missed opportunities for patients who could have been on the observation unit; and length of stay for observation patients by diagnosis and for all diagnoses.
“I look at where the observation patients end up if they aren’t on my unit,” Meuris says. She also collects financial data, including payer mix and reimbursement amounts.
Meuris presents the information to the administration and finance department officials and suggests changes that could improve the hospital’s bottom line.
Meuris and the medical director of the observation unit review the data to identify potential causes for trends and practice patterns that indicate opportunities for improvement, and use the information in their educational activities.
“The patients that were admitted to the inpatient unit and discharged from the inpatient unit in observation status is a problem population. We are drilling down to determine why they weren’t placed in observation in the first place,” Meuris says.
Patients who were transferred to the Outpatient Observation Unit at Rockford (IL) Memorial Hospital experienced lower lengths of stay and lower costs than patients who were candidates for observation services but were treated on an inpatient unit.
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