Is observation unit an obsolete term?

Some ED experts feel strongly that the term "observation unit" no longer accurately reflects the range of services that take place in these units. "The profession is groping to find the right language to describe the unit’s function," says Tony Joseph, MD, MS, the former chairman of the American College of Emergency Physicians’ (ACEP) section on short term observation services and the founder of American Medical Consulting in Columbus, OH.

While observation units began as holding units for patients waiting for an inpatient bed, their role has expanded considerably. "The current incarnation is not the static observation of the holding unit but a dynamic unit where ongoing evaluation, analysis, treatment, and decision-making takes place," says Robert Andelman, MD, FACEP, formerly the regional director of emergency services for Ohio Permanente Medical Group, and a former chairman of ACEP’s section on observation services.

Instead of "observation unit," experts suggest such terms as "short-stay diagnostic unit" or "clinical decision unit." "The word ‘observe’ is really a misnomer because it has a very passive meaning, like you’re watching something," says Joseph. "The truth of the matter is, it’s now a place where people are being tested, evaluated, and treated with a very aggressive diagnosis and treatment regimen, which shortens length of stay and therefore cuts the cost of the care."

"The term has meant so many different things that today’s observation units should be understood as a different entity," says Andelman. Unlike observation units of the past, ED’s observation unit is currently used for patients with more than 30 diagnoses, including allergic reaction cellulitis, atrial fibrillation, drug overdose, GI bleeds, headaches, trauma, inhalation therapy, and postoperative surgeries for certain surgeries such as mastectomies, or liver or lung biopsies and appendectomies.

The word observation has also taken on a specific meaning in Medicare terminology. "It’s gotten very confusing because when we started this movement we meant one thing, and the government has turned it into something else as a billing tool,"says Joseph.

As a result, EDs may not be reimbursed adequately for services performed on observation units. "They now have a billing methodology based on ‘observation status,’ meaning somebody postoperatively watching a tonsillectomy, but what we are talking about in a short-stay unit is aggressive diagnostics and treatment modalities of sick people with potentially bad diagnoses who you don’t want to send home," says Joseph. "It’s just unfortunate that the government picked the same word we did."