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Health November 2012

Aid for Age

Big Savings Inside and Outside the Traditional Emergency Room

By Tait Trussell

Giving a senior care in an observation unit as an alternative to admitting patients who can’t be safely discharged and sent home following an emergency room visit, has distinct advantages in addition to cost savings. Patients get care in an observation unit often for up to 24 hours.

We could save $3.1 billion a year in the nation’s hospitals by using what’s called “observation units.” Rather than automatically admitting a senior with chest pains to a hospital, for instance, in the observation unit, doctors could determine whether the patient should be admitted for treatment or not.

This can be a much more efficient means of handling patients through shorter stays and lower costs. The average hospital in the U.S. could save about $4.6 million per year, according to a study in the journal Health Affairs. Unfortunately, only about one-third of the hospitals in the country have observation units.

“Future policies to increase the cost-efficiency of hospital care should include support for observation unit care as an alternative to short-stay inpatient admission,” the journal article recommended.

The increasing demand for acute care is attributable to such factors as access to unscheduled primary care with a patient’s family physician and our aging population with complex chronic illnesses.

This is placing increasingly heavy demands on crowded emergency rooms. In 2009, there were more than 136 million visits to the country’s 4,967 hospitals. The hospital emergency room is now the primary point of entry to hospital care, producing more than half of the non-obstetric inpatient admissions.

The financial existence of many of our hospitals has been threatened by rising demand and lower payments under the government’s payment system for Medicare patients. This has led to closures of both emergency rooms and hospitals, creating a shortfall in the supply of acute health care services.

The Institute of Medicine identified observation units as “central to improving resource use and patient flow.”

Giving a senior care in an observation unit as an alternative to admitting patients who can’t be safely discharged and sent home following an emergency room visit, has distinct advantages in addition to cost savings. Patients get care in an observation unit often for up to 24 hours.

Studies show that care in observation units is equal to, or better than, inpatient care for many conditions. “The strongest evidence supporting the benefits of observation care is specific to care delivered in dedicated observation units, where evidence-based evaluation and standardized protocols are used to avert inpatient admissions,” the journal article said.

Observation care can be provided either in these units or in other areas of the hospital. They can even be alongside emergency room patients or even among regular inpatients, if no dedicated and separate unit exists.

Understanding the financial benefits as well as the potential benefits for patients in the increased use of observation unit care and the correspondent reduction in the use of inpatient care, the authors said, is important for both health care policy makers and administrators. Not to mention taxpayers, who are funding much of what happens these days in health care policy and decisions.

Indirect costs “such as overhead and a large component of nursing costs” could be saved, as well. In addition, it is possible that the reduction in the hospital length of stay as a result of increased observation unit care can result in fewer inpatient falls and hospital-acquired infections.

These potential cost savings and improved patient satisfaction and quality of life were not measured in the study. But they could be worth, perhaps more billions of dollars.

In comparison with the total national health-care spending of more than $2 trillion, savings of billions of dollars may seem relatively small. But better, quicker care and longer lives can’t be measured in dollars.

 

Tait Trussell is an old guy and fourth-generation professional journalist who writes extensively about aging issues among a myriad of diverse topics.

Meet Tait