EXECUTIVE SUMMARY

UMC Health System in Texas opened a new 34-bed outpatient observation unit to ensure that all patients are receiving appropriate care.

• Observation patients are no longer spread across the hospital.

• Dedicated case managers screen patients to ensure appropriateness for the observation unit.

• Lengths of stay and costs have decreased since the observation unit opened.


UMC Health System in Lubbock, TX, is just one example of a growing trend in outpatient observation status. It recently opened a 34-bed outpatient observation unit for patients requiring further testing and/or observation before deciding whether the patient either needs to be admitted to the hospital or sent home.

Before UMC opened the unit — where patients can stay for 8-24 hours — observation patients were spread throughout the hospital. Unfortunately, this led to patients experiencing delays with testing or treatments, increased length of stay (LOS), shortage of beds, and financial loss, according to Nicole Bitar, MSN, RN-BC, nursing department director of the new unit.

The following is Hospital Case Management’s Q&A with Bitar, who says UMC’s new multidisciplinary approach will provide cost savings for both patients and the hospital. She says it also will ensure patients are receiving appropriate care.

HCM: Your new observation unit is attached to your hospital. Medicare doesn’t explicitly state where to have an observation unit, but you chose to have 34 beds attached to your hospital. Had you tried other models before?

Bitar: Hospital administration identified an opportunity to better manage our observation patient population. Opening our observation unit is an innovative, interdisciplinary approach to the overall management of observation patients. It is a potential solution for our growing amount of observation patients and the daily capacity struggles we face in the emergency center.

Before opening the observation unit, we used a scattered unit model for observation patients as many hospitals do.

In a scattered unit model, observation patients can fill any inpatient bed. The problem with the model is observation patients are scattered throughout all of the inpatient units. They tend to fall through the cracks, getting lost in the daily shuffle. Their care was not standardized, and they were not always treated as a priority. Observation patients ended up staying in the hospital longer than necessary, receiving additional testing and treatment, which could have been safely handled on an outpatient basis.

HCM: How is the overall management of those patients since the observation unit opened in June? In particular, how are nurse case managers involved with and facilitating this transition and care? Does this observation unit have dedicated case managers?

Bitar: Case management plays a crucial role. The emergency center case managers are reviewing patients in real time to ensure they are being placed appropriately. Once the physician writes the order for observation, the case manager is reviewing the patient information, deciding if the patient can be targeted to the observation unit or to another floor.

Again, in order to improve patient flow, our unit’s goal is for the patient’s LOS to be 23 hours or less. If the physician and/or case manager believe the patient’s stay will require more than 23 hours, the patient will be placed on another unit.

The observation unit does have a dedicated case manager, Monday through Friday. Our case manager screens all patients to ensure appropriateness for our unit. The case manager rounds with physicians, deciphers which patients meet inpatient criteria, helps the physicians understand medical necessity, and so much more.

Having a dedicated case manager has been invaluable. Case management has been an outstanding resource for nursing staff. Our nursing staff has really gained a better understanding of the role.

HCM: Things operate differently in an observation unit. For example, how is length of stay measured? How are tests and diagnostics scheduled?

Bitar: Observation patients take priority behind emergent cases. Our timer for observation begins as soon as the physician places a status order to place a patient in observation. Monitoring of quality of care and appropriate utilization will be an essential part of performance improvement for our department. Our monthly unit metrics will include: conversion number (number of patients converted to inpatient status), number of patients over the 23-hour time frame, number of consults, length of stay by physician, number of diagnostic tests ordered, and number of physician consults.

In an effort to save time, our unit has become a nurse-draw unit and no longer utilizes our phlebotomy team. We met with all ancillary departments during the planning phase, and have continued to meet with them in an effort to seek out process improvement opportunities. Most ancillary departments have had to make subtle changes in an effort to accommodate our unit. Their willingness to be so flexible and accommodating has played a huge role in our success.

HCM: Patients typically stay less than 24 hours. How does it help prioritize care? Does it also prevent readmissions? If so, how?

Bitar: Our goal is to streamline all tests and treatments so a decision can be made on whether to admit or discharge in 23 hours or less. Our team provides expedited evaluations, therapeutic interventions, and coordinated services to safely discharge a patient home or determine the need for inpatient admission. Patients whose conditions improve, or can be managed at home, are discharged with a plan for appropriate care. Our team helps these patients set up their follow-up appointments.

Patients whose conditions fail to improve or worsen will be admitted to the hospital for further care. If the decision is made that the patient requires acute inpatient care, they will be transferred to an inpatient unit.

HCM: Have there been any concerns or surprises along the way?

Bitar: Initially when we opened, our biggest concern was the turnaround time of radiology exams and stress test readings. We were actually blindsided with nurse staffing issues. Our census was not exactly what we expected in the beginning. Yes, our hospital typically has 80 observation patients in house daily; however, they do not all meet the 23-hours-or-less criteria we initially set. Therefore, we weren’t receiving as many patients as we thought we would. Census dropped and nurses were being canceled frequently. Nurses would be placed on call at the beginning of the night shift. Then, we would receive a high volume of admissions, peaking from 1,900 to 2,100, so nurses would be called back in.

The observation unit is now trialing core staffing for four weeks. We also made the decision to toss the initial criteria, and decided to accept all observation patients (excluding pediatric, OB/GYN, and chemo). We decided this for two reasons. First, what impact could our unit have on these patients? And, second, to help with census.

HCM: Have you received feedback from patients, either positive or negative, when it comes to their transition to an observation unit? Do they understand why they’re there, or ask questions?

Bitar: The observation unit has received positive feedback from patients. Patients are kept informed every step of the way. When the physician puts in an order to place the patient on the observation unit, the patient is made aware by the emergency center team. They explain what is to be expected under observation. The patients are also given a brochure that is filled with helpful information. Once the patient arrives to the observation unit, our team also reinforces to the patient that they are not being admitted to the hospital; rather, they are being placed in observation. We have all of our patients sign an observation notice form.

The patient is asked to keep a visitor with them at all times when possible. This way, they have transportation available if the decision is made to safely discharge the patient home. Patients have really appreciated the expedited, streamlined care. Having a dedicated observation unit allows our patients to be the focus of care.

HCM: Do you have any other tips or strategies to recommend if other hospitals are looking at creating their own observation unit?

Bitar: Once the decision was made to transition from a medical/surgical unit to an observation unit, we had approximately eight weeks before our open date. Evidence-based research and best practices related to observation units were pretty scarce. A lot of time was spent reaching out to hospitals with observation units in hopes of receiving any type of advice or tips. My colleagues and I joke that we will write the manual on opening an observation unit when all is said and done. Although eight weeks doesn’t seem like a lot of time, it was just enough to prepare. The learning and adapting really began once we opened. We anticipated bumps along the way, and overall the transition has been better than expected.