Hospital Observation Services Rising for Medicare Enrollees

From 2007 to 2009, shift seen away from inpatient admission toward outpatient observation

THURSDAY, June 7 (HealthDay News) -- From 2007 to 2009, there was an increase in the prevalence and duration of hospital observation services for Medicare beneficiaries, according to a study published in the June issue of Health Affairs.

Zhanlian Feng, Ph.D., from Brown University in Providence, R.I., and colleagues analyzed nationwide Medicare enrollment and claims data to identify the prevalence and duration of hospital observation services in the fee-for-service Medicare population, aged 65 years and older, from 2007 to 2009.

The researchers identified a rising trend in the prevalence and duration of hospital observation services, along with a decrease in inpatient admissions. There was a 34 percent increase noted in the ratio of observation stays to inpatient admissions, from 86.9 observation stay events per 1,000 inpatient admissions per month in 2007 to 116.6 in 2009. There was an increase in hospital observation care for Medicare beneficiaries who were treated as outpatients, potentially exposing them to increased out-of-pocket expenses if admitted to skilled nursing facilities. There was an increase in the duration of observation, with some of the nearly one million beneficiaries being held for observation for more than 72 hours. Geographic and hospital variation was observed in the prevalence of observation services.

"This may be an unintended consequence of Medicare payment policies designed to constrain hospital admissions," the authors write. "Additional research is needed to pinpoint the drivers and consequences of this phenomenon, as is more clarity in clinical practice and Medicare policy guidelines regarding observation care."

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