Observation Units Proving Costly for Hospitals
A study in JAMA Internal Medicine has revealed that as more hospitals institute observation units, the Medicare reimbursement rates are falling short of expectations. "Though the cost of hospital observation care costs less, reimbursement per encounter is proportionally a lot less," said Ann Sheehy, MD, principal investigator of the study. The move to observation unit utilization has occurred in response to federal regulations that penalize hospitals for admitting patients for less than 48 hours. However, hospitals have reported that the financial costs outweigh the gains, while patients have complained that being admitted to the observation unit is proving more costly than being admitted to the inpatient department.
Learn more about the pros and cons of implementing an observation unit during a free webinar on Wednesday, Aug. 14.
Growth of Freestanding EDs Raises Concerns for Providers and Patients
Kaiser Health News and USA Today highlight a trend happening across the country: the rise of freestanding emergency departments (EDs). Similar to ambulatory and urgent care centers (UCCs), freestanding EDs are independent facilities used to treat patients who present with a serious illness or injury but are unable to see their primary care physician. Unlike UCCs, however, freestanding EDs bill at the same rate as hospital-based EDs, which can be thousands of dollars higher than a UCC visit — and might ultimately result in higher healthcare costs for the nation. Despite their convenience, freestanding EDs are not required to disclose prices before a patient is treated, and insurance frequently does not cover all of the expenses.
Oregon Sees Success in Reducing ED Visits Through Coordinated Care
In conjunction with the nationwide overhaul of the healthcare system, the State of Oregon has received $2 billion dollars in federal funds to reduce medical costs. Their primary targets are “frequent flyers” — patients who visit hospital emergency departments at least 10 times a year and have been blamed for rising healthcare costs. Although the state does not have formal numbers to report, one hospital is reporting a 49 percent decline in ED visits in the first six months of the program’s implementation. The program works to educate patients and connect them with lower-cost alternatives when they need medical care for lower-acuity injuries and illnesses.