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~9 Percent of Observation Services Stays Exceed 48 Hours

Mean charge for observation services stay $10,373; increased costs for longer stays

THURSDAY, Jan. 9, 2014 (HealthDay News) -- For patients whose care needs exceed standard outpatient care but do not qualify for admission, observation services (OS) stays are not usually longer than 48 hours, but prolonged stays are associated with a considerable increase in costs, according to a study published online Dec. 18 in Health Services Research.

Jason M. Hockenberry, Ph.D., from Emory University in Atlanta, and colleagues used data from the Healthcare Cost and Utilization Project from 10 states and data for two additional states for 2009 to examine patient- and hospital-level predictors of OS stays exceeding 48 and 72 hours (prolonged OS).

Data were included for 696,732 patient OS stays, of which 8.8 percent were for visits longer than 48 hours. The researchers found that factors associated with prolonged OS stay included having Medicaid or no insurance, having a condition associated with no OS treatment protocol, and being discharged to skilled nursing. The mean OS charge was $10,373 among Medicaid patients. A 42 percent increase in costs was associated with OS visits of 48 to 72 hours, and visits exceeding 72 hours correlated with a 61 percent increase in costs.

"The role of observation medicine in the continuum of health services is still developing, which has created some concerns over Medicare coverage policies," the authors write. "Given the promise this care setting has shown, aligning incentives to encourage appropriate use of this care and to alleviate the cost-sharing burden for patients would likely allow for more efficient and effective care."

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