Sharon E. Mace MD, FACEP, FAAPDirector, Observation Unit

Director, Pediatric Education/Quality Improvement

Research Director, Rapid Response Team Cleveland Clinic

Former Chair, ACEP Section of Observation Medicine

Faculty, EM Residency, MetroHealth Medical Center/Cleveland Clinic

Professor, Cleveland Clinic Lerner College of Medicine at Case Western Reserve University

Observation Medicine Strategies:Observation Medicine Strategies:A Clinical ApproachA Clinical Approach

Tips for Success or FailureTips for Success or Failure

Observation Medicine Strategies:Observation Medicine Strategies:A Clinical ApproachA Clinical Approach

Tips for Success or FailureTips for Success or Failure

Number of Hospitals, Hospital Beds Number of Hospitals, Hospital Beds and EDs vs ED Visitsand EDs vs ED Visits

Number of Hospitals, Hospital Beds Number of Hospitals, Hospital Beds and EDs vs ED Visitsand EDs vs ED Visits

6

7

5

Hospitals(thousands)

HospitalBeds

(millions)

Number ofED Visits(millions)

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

90

120

80

130

110

100

0.9

1.2

1.3

1.1

1.0

12.6%

43.8%

21.5%

10.1%

Hospital Beds ED VisitsHospitals

4

6

5

EDs(thousands)

Allows physicians to evaluate and treat selected

patients over a finite time period which improves

ED flow and has many benefits

Purpose ofPurpose ofObservation MedicineObservation Medicine

Purpose ofPurpose ofObservation MedicineObservation Medicine

What Is Observation?What Is Observation? What Is Observation?What Is Observation?

While there are different interpretations, for Medicare from HIM-10 §455 (Pub. 100-2,Medicare Benefits Policy Manual, Chapter 6, §70.4):

Observation services are those services:

• (a) Furnished on a hospital’s premises

• (b) Includes use of a bed and periodic monitoring by nursing or other staff

• (c) Reasonable and necessary

• (d) To evaluate an outpatient’s condition

• (e) Determine the need for possible admission as an inpatient

• (f) Ordered by physician

• (g) Usually do not exceed one day

• (h) May go for up to 48 hours

• (i) Under unusual circumstances may exceed 48 hours

Why Observation MedicineWhy Observation MedicineWhy Observation MedicineWhy Observation Medicine

• Better patient care

• ↓ missed diagnoses

• Cost effective

• Rapid, efficient, evaluation / work-ups and treatment

• Risk management and malpractice, ↓ liability

• Psychosocial advantages

• Fiscal benefits

• Provided there are mechanisms for Observation Unit (OU) set up / maintenance

• OM is a process and a mindset, not a location

Organizational FrameworkOrganizational FrameworkOrganizational FrameworkOrganizational Framework• Patient criteria: inclusion, exclusion, OU

management, specific time frame

• Personnel: clinical and administrative

• Resources: location, equipment, supplies

• Specific policies and procedures

• Strong leadership empowered to clinically and administratively manage the OU

• Using policies, procedures, guidelines, clinical pathways, order sets, other tools

• Multidisciplinary teamwork approach / meetings

Admission Criteria for Admission Criteria for Observation Observation

Admission Criteria for Admission Criteria for Observation Observation

• Stable vital signs

• Non-critical, stable, “low maintenance”

• Do not need “intensive” nursing care

• Do not need “intensive” physician care

• Expected to have a disposition in a “reasonable” short time frame: observation, diagnosis,

treatment for < 24 hours

Acceptable Diagnoses for Acceptable Diagnoses for ObservationObservation

Acceptable Diagnoses for Acceptable Diagnoses for ObservationObservation

• Cardiac: chest pain*, CHF, syncope

• Respiratory illnesses: asthma, pneumonia-not acceptable: respiratory failure, epiglottitis, severe

hypoxemia, hypercapnia

• GI / dehydration: gastritis, vomiting, diarrhea-not acceptable: shock

• GU: kidney stone-not acceptable: obstruction with renal failure

* May want to start with chest pain: ensure success, then expand

Acceptable Diagnoses for Acceptable Diagnoses for ObservationObservation

Acceptable Diagnoses for Acceptable Diagnoses for ObservationObservation

• Infections: cellulitis, lymphangitis

• Neurology: seizures, viral meningitis, minor head injury

• Toxicology: ingestions, overdose

• Hematologic: sickle cell, hemophilia

• Chronic illnesses: DM glucose (not DKA)

• S/p procedures: oversedated, s/p LP etc.

Patient Exclusion for Patient Exclusion for ObservationObservation

Patient Exclusion for Patient Exclusion for ObservationObservation

• Critically ill

• Unstable vital signs

• Need “intensive” nursing care

• Need “intensive” physician care

• Anticipated length of stay > 24 hours

Unacceptable Diagnoses for Unacceptable Diagnoses for ObservationObservation

Unacceptable Diagnoses for Unacceptable Diagnoses for ObservationObservation

• Shock

• Coma

• Respiratory failure

• Bacterial Meningitis

• Neutropenic fever

• Critically ill

Advantages of ObservationAdvantages of ObservationPrimary Care, SpecialistsPrimary Care, Specialists

Advantages of ObservationAdvantages of ObservationPrimary Care, SpecialistsPrimary Care, Specialists

• Expands patient base referrals, office visits, procedures, admits

• Easier to coordinate care

• Better, faster evaluation

• Improved MD profile

• Clinical pathways

• Quality, cost containment– ACOs

– Disease management

– Variation reduction

– Other initiatives

Advantages of ObservationAdvantages of ObservationHospitalHospital

Advantages of ObservationAdvantages of ObservationHospitalHospital

• New product line• Expanded referral base• Better use of services at cost lengthy inpatient admits trend outpatient services outliers: 1 day LOS• PEPPER report

Healthcare in CrisisHealthcare in CrisisHealthcare in CrisisHealthcare in Crisis

• The 2.2 trillion healthcare sector is now mired in deep crisis related to safety, quality, cost and access that pose serious threats to the health and welfare of many Americans1

• An estimated 30 to 40 cents of every dollar spent on health care, or roughly three quarters of a trillion dollars per year is spent on costs

associated with “overuse, underuse, misuse, duplication, system failures, unnecessary repetition, poor communication, and inefficiency” 2

1 CMS2 Lawrence National Academy Press

Per Capita Medicare Spending: Per Capita Medicare Spending: Regional VariationsRegional Variations

Per Capita Medicare Spending: Per Capita Medicare Spending: Regional VariationsRegional Variations

Congressional Budget Office. Research on Comparative Effectiveness of Medical Treatments. 2008

CMS: Value BasedCMS: Value BasedPurchasing PlanPurchasing Plan

CMS: Value BasedCMS: Value BasedPurchasing PlanPurchasing Plan

• Clinical quality

• Adverse events

• Patient safety

• Patient centeredness

• Avoid unnecessary costs

• Investment in structural/system components: IT capability, care management processes/tools

• Consumer driven: Performance results/Transparency

Success Depends UponSuccess Depends UponSuccess Depends UponSuccess Depends Upon

• Prompt physician decision making• Excellent documentation• “Empowered” observation nursing staff• Superb coding → ↑ reimbursement • Strong physician leadership

- Administrative support• Buy in from other hospital departments, physicians,

health care providers• Tools for success

- Policies and procedures: includes inclusion/exclusion criteria, evaluation, treatment, disposition plan

- Guidelines, clinical pathways

Success

Time (Length of Stay)

Observation Medicine

How to Succeed or Fail at How to Succeed or Fail at Observation MedicineObservation Medicine

How to Succeed or Fail at How to Succeed or Fail at Observation MedicineObservation Medicine

Observation = $$ SuccessObservation = $$ SuccessObservation = $$ SuccessObservation = $$ Success

• Major benefits

• Easiest way to build beds

• ↑ revenue per bed

• ↓ labor costs/RN ratio

• ↓ exposure to risk

• ↑ quality

• ↑ patient satisfaction

• ↓ cost

Observation AdvantagesObservation AdvantagesObservation AdvantagesObservation Advantages

• Improved patient care: missed diagnosis / severity

• Improved patient outcome risk, malpractice ED patient throughput, ED LOS patient satisfaction

• Better public relations ED volume

• Financial: revenue, denials, penalties

Recovery Audit Contractors (RAC)Recovery Audit Contractors (RAC)Recovery Audit Contractors (RAC)Recovery Audit Contractors (RAC)

• Private corporations under contract via contingency to CMS

• Review all claims submitted by Medicare providers in order to prevent

overpayments/underpayments• Akin to a whistle blower or bounty hunter• Focus: high-risk DRGs, 1 day stay, observation

United States Department of JusticeUnited States Department of JusticeUnited States Department of JusticeUnited States Department of Justice

Marcos Daniel Jimininez United States Attorney for the Southern District of Florida99 N.E. Fourth Street, Miami, Fl. 33132

Press ReleaseFor Immediate Release – Feb.11, 2005For information, contact public affairs

Carlos B. CastillosSpecial counsel for public affairs(305) 961-9425

Cleveland Clinic pays U.S. 2.75 million

QuestionsQuestions