The Shifting Landscape in Utilization of Inpatient, Observation, and Emergency Department Services Across Payers

Hospital costs and reimbursement for short-stay inpatient versus observation status hospitalizations for children with medical complexity

BACKGROUND

There is a lack of uniformity across hospitals in applying inpatient versus observation status for short-stay (<48 h) pediatric hospitalizations, with negative financial implications associated with observation. Children with medical complexity (CMC) represent a growing population and incur high costs of care. The financial implications of inpatient and observation status for CMC have not been studied.

OBJECTIVES

To compare costs and reimbursement for short-stay hospitalizations for CMC by inpatient and observation status, overall and stratified by payor.

METHODS

We performed a cohort study of short-stay hospitalizations for CMC from 2016 to 2021 at 10 children's hospitals reporting reimbursement in the Pediatric Health Information System and Revenue Management Program. The primary outcome was the cost coverage ratio (CCR), defined as an encounter's reimbursement divided by the estimated cost.

RESULTS

There were 89,282 encounters included. The median costs per encounter were similar across observation ($5206, IQR $3604-$7484) and inpatient ($6547, IQR $4725-$9349) encounters. For government payors, the median CCR was 0.6 (IQR 0.2-0.9) for observation encounters and 1.2 (IQR 0.8-1.9) for inpatient. For nongovernment payors, the median CCR was 1.6 (IQR 1.3-1.9) for observation and 1.6 (IQR 1.4-2) for inpatient. Government reimbursement was associated with increased risk for financial loss (OR 13.91, 95% CI 7.23, 26.77) and with a median net loss of $985,952 (IQR $389,871-$1,700,041) per hospital annually for observation encounters.

CONCLUSIONS

Government-paid observation encounters for CMC are associated with significant financial loss at children's hospitals. This reimbursement model may pose a threat to children's hospitals' ability to care for CMC.

Key factors for sustainable working conditions in emergency departments: an EUSEM-initiated, Europe-wide consensus survey

BACKGROUND AND IMPORTANCE

Modern emergency medicine (EM) is a complex, demanding, and occasionally stressful field of work. Working conditions, provider well-being, and associated health and performance outcomes are key factors influencing the establishment of a sustainable emergency department (ED) working environment.

OBJECTIVES

This multinational European Delphi survey aimed to identify unequivocal major factors for good and poor ED working conditions and their possible effects on health care provider well-being.

DESIGN/SETTING AND PARTICIPANTS

A total of 18 experts from six European countries (Belgium, Finland, Germany, Italy, Romania, and the UK) covering three different hospital sizes (small, medium, and large) in their respective countries participated in the two-round Delphi survey. All panelists held leadership roles in EM.

OUTCOME MEASURES AND ANALYSIS

The first step involved conducting an extensive literature search on ED working conditions. The second step involved the first Delphi round, which consisted of structured interviews with the panelists. The survey was designed to obtain information concerning important working conditions, comments regarding work-life factors identified from the literature, and ratings of their importance. Interviews were transcribed and analyzed following a standardized protocol. In the second Delphi round, experts rated the relevance of items consolidated from the first Delphi round (classified into ED work system factors, provider health outcomes, and ED work-life intervention approaches).

RESULTS

A nearly unequivocal consensus was obtained in four ED work condition categories, including positive (e.g. job challenges, personal motivation, and case complexities) and negative (e.g. overcrowding, workflow interruptions/multitasking, medical errors) ED work conditions. The highly relevant adverse personal health events identified included physical fatigue, exhaustion, and burnout. Concerning intervention practices, the panelists offered a wide spectrum of opportunities with less consensus.

CONCLUSION

Work system conditions exert positive and negative effects on the work life of ED providers across Europe. Although most European countries have varying health care systems, the expert-based survey results presented herein strongly suggest that improvement strategies should focus on system-related external stressors common in various countries. Our findings lay the scientific groundwork for future intervention studies at the local and systemic levels to improve ED provider work life.

Trends in observation stays for Medicare beneficiaries with and without Alzheimer's disease and related dementias

BACKGROUND

There has been a marked rise in the use of observation care for Medicare beneficiaries visiting the emergency department (ED) in recent years. Whether trends in observation use differ for people with Alzheimer's disease and Alzheimer's disease-related dementias (AD/ADRD) is unknown.

METHODS

Using a national 20% sample of Medicare beneficiaries ages 68+ from 2012 to 2018, we compared trends in ED visits and observation stays by AD/ADRD status for beneficiaries visiting the ED. We then examined the degree to which trends differed by nursing home (NH) residency status, assigning beneficiaries to four groups: AD/ADRD residing in NH (AD/ADRD+ NH+), AD/ADRD not residing in NH (AD/ADRD+ NH-), no AD/ADRD residing in NH (AD/ADRD- NH+), and no AD/ADRD not residing in NH (AD/ADRD- NH-).

RESULTS

Of 7,489,780 unique beneficiaries, 18.6% had an AD/ADRD diagnosis. Beneficiaries with AD/ADRD had more than double the number of ED visits per 1000 in all years compared to those without AD/ADRD and saw a faster adjusted increase over time (+26.7 vs. +8.2 visits/year; p < 0.001 for interaction). The annual increase in the adjusted proportion of ED visits ending in observation was also greater among people with AD/ADRD (+0.78%/year, 95% CI 0.77-0.80%) compared to those without AD/ADRD (+0.63%/year, 95% CI 0.59-0.66%; p < 0.001 for interaction). Observation utilization was greatest for the AD/ADRD+ NH+ population and lowest for the AD/ADRD- NH- population, but the AD/ADRD+ NH- group saw the greatest increase in observation stays over time (+15.4 stays per 1000 people per year, 95% CI 15.0-15.7).

CONCLUSIONS

Medicare beneficiaries with AD/ADRD have seen a disproportionate increase in observation utilization in recent years, driven by both an increase in ED visits and an increase in the proportion of ED visits ending in observation.

Accounting for the Growth of Observation Stays in the Assessment of Medicare's Hospital Readmissions Reduction Program

IMPORTANCE

Decreases in 30-day readmissions following the implementation of the Medicare Hospital Readmissions Reduction Program (HRRP) have occurred against the backdrop of increasing hospital observation stay use, yet observation stays are not captured in readmission measures.

OBJECTIVE

To examine whether the HRRP was associated with decreases in 30-day readmissions after accounting for observation stays.

DESIGN, SETTING, AND PARTICIPANTS

This retrospective cohort study included a 20% sample of inpatient admissions and observation stays among Medicare fee-for-service beneficiaries from January 1, 2009, to December 31, 2015. Data analysis was performed from November 2021 to June 2022. A differences-in-differences analysis assessed changes in 30-day readmissions after the announcement of the HRRP and implementation of penalties for target conditions (heart failure, acute myocardial infarction, and pneumonia) vs nontarget conditions under scenarios that excluded and included observation stays.

MAIN OUTCOMES AND MEASURES

Thirty-day inpatient admissions and observation stays.

RESULTS

The study included 8 944 295 hospitalizations (mean [SD] age, 78.7 [8.2] years; 58.6% were female; 1.3% Asian; 10.0% Black; 2.0% Hispanic; 0.5% North American Native; 85.0% White; and 1.2% other or unknown). Observation stays increased from 2.3% to 4.4% (91.3% relative increase) of index hospitalizations among target conditions and 14.1% to 21.3% (51.1% relative increase) of index hospitalizations for nontarget conditions. Readmission rates decreased significantly after the announcement of the HRRP and returned to baseline by the time penalties were implemented for both target and nontarget conditions regardless of whether observation stays were included. When only inpatient hospitalizations were counted, decreasing readmissions accrued into a -1.48 percentage point (95% CI, -1.65 to -1.31 percentage points) absolute reduction in readmission rates by the postpenalty period for target conditions and -1.13 percentage point (95% CI, -1.30 to -0.96 percentage points) absolute reduction in readmission rates by the postpenalty period for nontarget conditions. This reduction corresponded to a statistically significant differential change of -0.35 percentage points (95% CI, -0.59 to -0.11 percentage points). Accounting for observation stays more than halved the absolute decrease in readmission rates for target conditions (-0.66 percentage points; 95% CI, -0.83 to -0.49 percentage points). Nontarget conditions showed an overall greater decrease during the same period (-0.76 percentage points; 95% CI, -0.92 to -0.59 percentage points), corresponding to a differential change in readmission rates of 0.10 percentage points (95% CI, -0.14 to 0.33 percentage points) that was not statistically significant.

CONCLUSIONS AND RELEVANCE

The findings of this study suggest that the reduction of readmissions associated with the implementation of the HRRP was smaller than originally reported. More than half of the decrease in readmissions for target conditions appears to be attributable to the reclassification of inpatient admission to observation stays.

Did the Hospital Readmissions Reduction Program Reduce Readmissions without Hurting Patient Outcomes at High Dual-Proportion Hospitals Prior to Stratification?

Since the implementation of Medicare’s Hospital Readmissions Reduction Program (HRRP), safety-net hospitals have received a disproportionate share of financial penalties for excess readmissions, raising concerns about the fairness of the policy. In response, the HRRP now stratifies hospitals into five quintiles by low-income Medicare (dual Medicare–Medicaid eligible) stay proportion and compares readmission rates within quintiles. To better understand the potential effects of the revised policy, we used difference-in-differences models to compare changes in 30-day readmission, 30-day mortality, and 90th-day community-dwelling rates after discharge of fee-for-service Medicare beneficiaries hospitalized for acute myocardial infarction, heart failure and pneumonia during 2007-2014, for hospitals in the highest (N = 677) and lowest (N = 678) dual-proportion quintiles before and after the original HRRP implementation in fiscal year 2013. We find that high dual-proportion hospitals lowered readmissions for all three conditions, while their patients’ health outcomes remained largely stable. We also find that for heart failure, high dual-proportion hospitals reduced readmissions more than low dual-proportion hospitals, albeit with a relative increase in mortality. Contrary to concerns about fairness, our findings imply that, under the original HRRP, high dual-proportion hospitals improved readmissions performance generally without adverse effects on patients’ health. Whether these gains could be retained under the new policy should be closely monitored.

Medicare Two-Midnight Rule Accelerated Shift To Observation Stays

During the past two decades several policies have attempted to replace inappropriate hospital inpatient stays with observation hospital stays, where patients receive hospital care but are classified as outpatients. The Two-Midnight rule, adopted in October 2013 by the Centers for Medicare and Medicaid Services, states that more highly reimbursed inpatient payment is appropriate if care is expected to last at least two midnights; otherwise, observation stays should be used. For hospitals, the administrative burden associated with making these status determinations is substantial. We found that after the Two-Midnight rule was implemented, potentially inappropriate short inpatient stays decreased immediately by 2.0 stays per 1,000 beneficiaries and potentially more appropriate short outpatient stays increased immediately by 1.8 stays per 1,000 beneficiaries, hastening a preexisting trend in this direction. However, after this initial improvement, the rate of change slowed to a new steady state. Given the steady state and ongoing administrative resources needed, it is time to reconsider the value of status determination required by the Two-Midnight rule.

Traditional Medicare Spending on Inpatient Episodes as Hospitalizations Decline

OBJECTIVE

To describe Medicare inpatient episode spending trends between 2009 and 2017 as inpatient use declined among traditional Medicare beneficiaries.

METHODS

Inpatient episodes included claims for all traditional Medicare inpatient, outpatient, and Part D services provided during the 30 days prehospitalization, the inpatient stay, and the 90 subsequent days. We describe the mean number of episodes per 1000 beneficiaries, mean episode-related spending per beneficiary, and mean spending per episode for all beneficiaries and for specific populations and types of episodes. Spending measures are reported with and without adjustment for payment rate increases over the study period.

RESULTS

The number of inpatient-initiated episodes per 1000 beneficiaries declined by 18.2% between 2009 and 2017 from 326 to 267. After adjusting for payment rate increases, Medicare spending per beneficiary on episode- related care declined by 8.9%, although spending per episode increased by 11.4% over this period. Between 2009 and 2017, all subgroups defined by age, sex, race, or Medicaid status experienced declines in inpatient use accompanied by decreased overall episode-related spending per beneficiary and increased spending per episode. Larger declines in the number of episodes per 1000 beneficiaries were seen among episodes that began with a planned admission (28.8%) or involved no use of post-acute care services (23.9%). When comparing admissions according to medical diagnosis, the largest decline occurred for episodes initiated by a hospitalization for a cardiac or circulatory condition (31.8%).

CONCLUSION

Medicare inpatient episodes per beneficiary decreased, but spending decreases due to declining volume were offset by increased spending per episode.

Transforming public health using value lens and extended partner networks

INTRODUCTION

Organizational transformations have focused on creating and fulfilling value for customers, leveraging advanced technologies. Transforming public health (PH) faces an interesting challenge. The value created (preventive practices) to fulfill policy makers' desire to reduce healthcare costs is realized by several external partners with varying goals and is practiced by the public (value in use), which often places low priority on prevention.

METHODS

This paper uses value lens to argue that PH transformation strategy must align the goals of all stakeholders involved. This may include allowing partners and the public to contextualize the preventive practices to see the value in near term and as relevant. It also means extending the number of partners PH uses and helping them connect with the public to seek shared alignment in shared goals of value fulfillment and value-in-use.

RESULTS

Using lessons from Covid-19 and PH experience with partners in four different sectors: business, healthcare, public and community, the paper illustrates how PH transformation strategy can be implemented going forward.

CONCLUSIONS

We conclude the paper with five distinct directions for future research to create and sustain value using the framework of learning health systems.

Thirty-Day Re-observation, Chronic Re-observation, and Neighborhood Disadvantage

OBJECTIVE

To determine whether neighborhood socioeconomic disadvantage, as determined by the Area Deprivation Index, increases 30-day hospital re-observation risk.

PARTICIPANTS AND METHODS

This retrospective study of 20% Medicare fee-for-service beneficiary observation stays from January 1, 2014, to November 30, 2014, included 319,980 stays among 273,308 beneficiaries. We evaluated risk for a 30-day re-observation following an index observation stay for those living in the 15% most disadvantaged compared with the 85% least disadvantaged neighborhoods.

RESULTS

Overall, 4.5% (270,600 of 6,080,664) of beneficiaries had index observation stays, which varied by disadvantage (4.3% [232,568 of 5,398,311] in the least disadvantaged 85% compared with 5.6% [38,032 of 682,353] in the most disadvantaged 15%). Patients in the most disadvantaged neighborhoods had a higher 30-day re-observation rate (2857 of 41,975; 6.8%) compared with least disadvantaged neighborhoods (13,543 of 278,005; 4.9%); a 43% increased risk (unadjusted odds ratio [OR], 1.43; 95% CI, 1.31 to 1.55). After adjustment, this risk remained (adjusted OR, 1.13; 95% CI, 1.04 to 1.22). Discharge to a skilled nursing facility reduced 30-day re-observation risk (OR, 0.63; 95% CI, 0.57 to 0.69), whereas index observation length of stay of 4 or more days (3 midnights) conferred increased risk (OR, 1.29; 95% CI, 1.09 to 1.52); those living in disadvantaged neighborhoods were less likely to discharge to skilled nursing facilities and more likely to have long index stays. Beneficiaries with more than one 30-day re-observation (chronic re-observation) had progressively greater disadvantage by number of stays (adjusted incident rate ratio, 1.08; 95% CI, 1.02 to 1.14). Observation prevalence varied nationally.

CONCLUSION

Thirty-day re-observation, especially chronic re-observation, is highly associated with socioeconomic neighborhood disadvantage, even after accounting for factors such as race, disability, and Medicaid eligibility. Beneficiaries least able to pay are potentially most vulnerable to costs from serial re-observations and challenges of Medicare observation policy, which may discourage patients from seeking necessary care.

Using Visualization to Build Transparency in a Healthcare Blockchain Application

With patients demanding services to control their own health conditions, hospitals are looking to build agility in delivering care by extending their reach into patient and partner ecosystems and sharing relevant patient data to support care continuity. However, sharing patient data with several external stakeholders outside a hospital network calls for the development of a digital platform that is trusted by both hospitals and stakeholders, given that there is often no single entity supporting such coordination. In this paper, we propose a methodology that uses a blockchain architecture to address the technical challenge of linking disparate systems used by multiple stakeholders and the social challenge of engendering trust by using visualization to bring about transparency in the way in which data are shared. We illustrate this methodology using a pilot implementation. The paper concludes with a discussion and directions for future research and makes some concluding comments.

Trends in Costs of Care for Medicare Beneficiaries Treated in the Emergency Department From 2011 to 2016

IMPORTANCE

There is little evidence regarding how total costs of care associated with an emergency department (ED) visit have changed, despite increasing policy focus on the value of acute care.

OBJECTIVE

To examine trends in total standardized 30-day costs of care associated with an ED visit.

DESIGN, SETTING, AND PARTICIPANTS

This cross-sectional study of 14 113 088 ED visits at 4730 EDs from 2011 to 2016 included a 20% national sample of traditional Medicare beneficiaries aged 65 years and older. Data analysis was conducted from August 2018 to April 2020.

EXPOSURES

Time (year) as a continuous variable.

MAIN OUTCOMES AND MEASURES

Trends in disposition from the ED and 30-day total standardized costs for all ED visits as well as the following spending components: index visit cost, physician costs, subsequent ED visit costs, subsequent inpatient costs, subsequent observation costs, non-ED outpatient care, postacute care, and aggregated total spending after the index ED visit.

RESULTS

The analytic sample consisted of 14 113 088 ED visits at 4730 EDs. The mean (SD) beneficiary age was 78.6 (8.6) years, 8 573 652 visits (60.7%) were among women, and 11 908 691 visits (84.7%) were among white patients. The proportion of patients discharged from the ED rose from 1 233 701 of 2 309 563 visits (53.4%) in 2011 to 1 279 701 of 2 268 363 visits (56.4%) in 2016. Total adjusted 30-day standardized costs of care declined from a mean (SE) of $8851 ($35.3) in 2011 to a mean (SE) of $8143 ($35.4) in 2016 (-$126/y; 95% CI, -$130 to -$121; P < .001) for all ED visits. This decrease was primarily associated with a decline in total spending on the index ED visit (-$48/y; 95% CI, -$50 to -$47; P < .001) as well as lower spending on postacute care (-$42/y; 95% CI, -$44 to -$41; P < .001) and subsequent inpatient care (-$34/y; 95% CI, -$36 to -$32; P < .001). There was an increase in spending after the index visit on downstream observation care ($3.6/y; 95% CI, $3.5 to $3.7; P < .001), outpatient ED care ($4.6/y; 95% CI, $4.4 to $4.8; P < .001), and other outpatient care ($15/y; 95% CI, $12 to $18; P < .001).

CONCLUSIONS AND RELEVANCE

In this study, total 30-day standardized costs of ED care for Medicare beneficiaries decreased in recent years. It may be that more intensive ED spending up front is associated with reductions in total costs of an acute episode.

Multiyear Rehospitalization Rates and Hospital Outcomes in an Integrated Health Care System

IMPORTANCE

Since the introduction of the rehospitalization rate as a quality measure, multiple changes have taken place in the US health care delivery system. Interpreting rehospitalization rates without taking a global view of these changes and new data elements from comprehensive electronic medical records yields a limited assessment of the quality of care.

OBJECTIVE

To examine hospitalization outcomes from a broad perspective, including the implications of numerator and denominator definitions, all adult patients with all diagnoses, and detailed clinical data.

DESIGN, SETTING, AND PARTICIPANTS

This cohort study obtained data from 21 hospitals in Kaiser Permanente Northern California (KPNC), an integrated health care delivery system that serves patients with Medicare Advantage plans, Medicaid, and/or Kaiser Foundation Health Plan. The KPNC electronic medical record system was used to capture hospitalization data for adult patients who were 18 years of age or older; discharged from June 1, 2010, through December 31, 2017; and hospitalized for reasons other than childbirth. Hospital stays for transferred patients were linked using public and internal sources.

EXPOSURES

Hospitalization type (inpatient, for observation only), comorbidity burden, acute physiology score, and care directives.

MAIN OUTCOMES AND MEASURES

Mortality (inpatient, 30-day, and 30-day postdischarge), nonelective rehospitalization, and discharge disposition (home, home with home health assistance, regular skilled nursing facility, or custodial skilled nursing facility).

RESULTS

In total, 1 384 025 hospitalizations were identified, of which 1 155 034 (83.5%) were inpatient and 228 991 (16.5%) were for observation only. These hospitalizations involved 679 831 patients (mean [SD] age, 61.4 [18.1] years; 362 582 female [53.3%]). The number of for-observation-only hospitalizations increased from 16 497 (9.4%) in the first year of the study to 120 215 (20.5%) in the last period of the study, whereas inpatient hospitalizations with length of stay less than 24 hours decreased by 33% (from 12 008 [6.9%] to 27 108 [4.6%]). Illness burden measured using administrative data or acute physiology score increased significantly. The proportion of patients with a Comorbidity Point Score of 65 or higher increased from 20.5% (range across hospitals, 18.4%-26.4%) to 28.8% (range, 22.3%-33.0%), as did the proportion with a Charlson Comorbidity Index score of 4 or higher, which increased from 28.8% (range, 24.6%-35.0%) to 38.4% (range, 31.9%-43.4%). The proportion of patients at or near critical illness (Laboratory-based Acute Physiology Score [LAPS2] ≥110) increased by 21.4% (10.3% [range across hospitals, 7.4%-14.7%] to 12.5% [range across hospitals, 8.3%-16.6%]; P < .001), reflecting a steady increase of 0.07 (95% CI, 0.04-0.10) LAPS2 points per month. Unadjusted inpatient mortality in the first year of the study was 2.78% and in the last year was 2.71%; the corresponding numbers for 30-day mortality were 5.88% and 6.15%, for 30-day postdischarge mortality were 3.94% and 4.22%, and for nonelective rehospitalization were 12.00% and 12.81%, respectively. All outcomes improved after risk adjustment. Compared with the first month, the final observed to expected ratio was 0.79 (95% CI, 0.73-0.84) for inpatient mortality, 0.86 (95% CI, 0.82-0.89) for 30-day mortality, 0.90 (95% CI, 0.85-0.95) for 30-day nonelective rehospitalization, and 0.87 (95% CI, 0.83-0.92) for 30-day postdischarge mortality. The proportion of nonelective rehospitalizations meeting public reporting criteria decreased substantially over the study period (from 58.0% in 2010-2011 to 45.2% in 2017); most of this decrease was associated with the exclusion of observation stays.

CONCLUSIONS AND RELEVANCE

This study found that in this integrated system, the hospitalization rate decreased and risk-adjusted hospital outcomes improved steadily over the 7.5-year study period despite worsening case mix. The comprehensive results suggest that future assessments of care quality should consider the implications of numerator and denominator definitions, display multiple metrics concurrently, and include all hospitalization types and detailed data.

Thirty-Day Postdischarge Mortality Among Black and White Patients 65 Years and Older in the Medicare Hospital Readmissions Reduction Program

IMPORTANCE

The Medicare Hospital Readmissions Reduction Program (HRRP) has disproportionately penalized hospitals that treat many black patients, which could worsen health outcomes in this population.

OBJECTIVE

To determine whether short-term mortality rates increased among black and white adults 65 years and older after initiation of the HRRP and whether trends differed by race.

DESIGN, SETTING, AND PARTICIPANTS

In a cohort study using an interrupted time-series analysis conducted from March 15, 2018, to January 23, 2019, in 3263 eligible acute care hospitals nationally, risk-adjusted mortality rates observed after Medicare started to impose penalties (October 1, 2012, to November 30, 2014) were compared with projections based on pre-HRRP trends (January 1, 2007, to March 31, 2010) among adults 65 years and older with acute myocardial infarction (AMI), heart failure (HF), or pneumonia. Observed-to-projected differences were then compared between racial groups.

EXPOSURES

Hospital discharge during pre-HRRP and HRRP penalty periods.

MAIN OUTCOMES AND MEASURES

Thirty-day postdischarge all-cause mortality.

RESULTS

In the 3263 acute care hospitals included in the analysis, black patients (627 373 index discharges) were more likely than white patients (5 845 130 index discharges) to be younger (mean [SD] age, 77.8 [8.3] vs 80.5 [8.2] years; P < .001), women (60.5% vs 53.7%; P < .001), dually covered by Medicare and Medicaid (45.7% vs 17.2%; P < .001), and treated at a penalized hospital (AMI, 82.8%; HF, 83.8%; and pneumonia, 82.6% vs 69.6%; 73.3%; and 71.7%; all P < .001). Pre-HRRP mortality rates for black vs white patients were 7.04% (95% CI, 6.75% to 7.33%) vs 7.47% (95% CI, 7.37% to 7.57%) for AMI, 6.69% (95% CI, 6.56% to 6.82%) vs 8.56% (95% CI, 8.48% to 8.64%) for HF, and 8.08% (95% CI, 7.88% to 8.27%) vs 8.27% (95% CI, 8.19% to 8.35%) for pneumonia. By the HRRP penalty period, observed mortality for AMI decreased more, relative to projections, among black than white patients (difference-in-differences, -1.65 percentage points; 95% CI, -3.19 to -0.10; P = .04). For HF, mortality increased relative to projections among white patients but not among black patients; however; mortality trends did not differ by race (difference-in-differences, -0.37 percentage points; 95% CI, -1.08 to 0.34; P = .31). For pneumonia, observed mortality was similar to projections in both racial groups, and trends did not differ by race (difference-in-differences, -0.54 percentage points; 95% CI, -1.66 to 0.59; P = .35). At both penalized and nonpenalized hospitals, mortality trends were similar or decreased more among black patients than white patients.

CONCLUSIONS AND RELEVANCE

In this study of patients 65 years and older, short-term postdischarge mortality did not appear to increase for black patients under the HRRP, suggesting that certain value-based payment policies can be implemented without harming black populations. However, mortality seemed to increase for white patients with HF and this situation warrants investigation.

Identifying Observation Stays In Medicare Data: Policy Implications of a Definition

Observation stays are increasingly common, yet no standard method to identify observation stays in Medicare claims is available, including events with status change. To determine the claims patterns of Medicare observation stays, define comprehensive claims-based methodology for future Medicare observation research and data reporting, and identify policy implications of such definition, we identified potential observation events in a 2014 20% random sample of Medicare beneficiaries with both Part A and B claims and at least 1 acute care stay (1,667,660 events). Observation revenue center (ORC) and Healthcare Common Procedure Coding System codes occurring within 30 days of an inpatient hospitalization were recorded. A total of 125,920 (7.6%) events had an ORC code, and 75,502 (4.5%) were in the outpatient revenue center. Claims patterns varied tremendously, and almost half (47.3%, 59,529) of the ORC codes were associated with an inpatient claim, indicating status change and demonstrating a need for clarity in observation policy. The proposed University of Wisconsin method identified 72,858 of 75,502 (96.5%) events with ORC codes as observation stays, and provides a comprehensive, reproducible methodology.

The Impact of Maryland's Global Budget Payment Reform on Emergency Department Admission Rates in a Single Health System

BACKGROUND

In 2014, the state of Maryland (MD) moved away from fee-for-service payments and into a global budget revenue (GBR) structure where hospitals have a fixed revenue target, independent of patient volume or services provided. We assess the effects of GBR adoption on emergency department (ED) admission decisions among adult encounters.

METHODS

We used hospital medical record and billing data from adult ED encounters from January 1, 2011, through December 31, 2015, with four MD hospitals and two District of Columbia (DC) hospitals within the same health system. We performed difference-in-differences analysis and calculated the effects of the GBR model on ED admission rates (inpatient and observation) using hospital fixed-effect regression adjusted for patient, hospital, and community factors. We also examined changes in the distribution of acuity among ED admissions with GBR adoption.

RESULTS

The study sample included 1,492,953 ED encounters with a mean ED admission rate of 20.5%. The ED admission rate difference pre- and post-GBR was -1.14% (95% confidence interval [CI] = -0.89 to -1.40) for MD hospitals and -0.04% (95% CI = -0.24 to 0.32) for DC hospitals with a difference-in-differences result of -1.10% (95% CI = -1.34 to -0.86). This change was attributable to a -3.3% (95% CI = -3.54 to -3.08) decline in inpatient admissions and 2.7% (95% CI = 2.53 to 2.79) increase in observation admissions. Declines in admissions were observed primarily among mild-to-moderate severity of illness encounters with a low risk of mortality.

CONCLUSIONS

Within the same health system, implementation of global budgeting in MD hospitals was associated with a decline in ED admissions-particularly lower-acuity admissions-compared to DC hospitals that remained under fee-for-service payments.

Postdischarge Unplanned Care Events Among Commercially Insured Patients With an Observation Stay Versus Short Inpatient Admission

STUDY OBJECTIVE

Observation stays are composing an increasing proportion of unscheduled hospitalizations in the United States, with unclear consequences for the quality of care. This study used a nationally representative data set of commercially insured patients hospitalized from the emergency department (ED) to compare 30-day postdischarge unplanned care events after an observation stay versus a short inpatient admission.

METHODS

This was a retrospective analysis of ED hospitalizations using the 2015 Truven MarketScan Commercial Claims and Encounters data set. Adult observation stays and short inpatient hospitalizations of 2 days or less were identified and followed for 30 days from hospital discharge to identify unplanned care events, defined as a subsequent inpatient admission, observation stay, or return ED visit. A propensity score analysis was used to compare rates of unplanned events after each type of index hospitalization.

RESULTS

Among the propensity-weighted cohorts, patients with an index observation stay were 28% more likely to experience any unplanned care event within 30 days of discharge compared with those with a short inpatient admission (20.4% versus 15.9%; risk ratio 1.28; 95% confidence interval [CI] 1.21 to 1.34). Specifically, patients in the observation stay group had substantially higher rates of postdischarge observation stays (4.8% versus 1.9%; odds ratio 2.60; 95% CI 2.15 to 3.16) and ED revisits with discharge (11.1% versus 8.8%; odds ratio 1.26; 95% CI 1.21 to 1.44) compared with those in the inpatient group, but were less likely to be readmitted as inpatients (6.4% versus 7.2%; odds ratio 0.90; 95% CI 0.83 to 0.96).

CONCLUSION

Commercially insured patients with an observation stay from the ED have a higher risk of postdischarge acute care events compared with similar patients with a short inpatient admission. Additional research is necessary to determine the extent to which quality of care, including care transitions, may differ between these 2 groups.

Returns to Emergency Department, Observation, or Inpatient Care Within 30 Days After Hospitalization in 4 States, 2009 and 2010 Versus 2013 and 2014

BACKGROUND

Nationally, readmissions have declined for acute myocardial infarction (AMI) and heart failure (HF) and risen slightly for pneumonia, but less is known about returns to the hospital for observation stays and emergency department (ED) visits.

OBJECTIVE

To describe trends in rates of 30-day, all-cause, unplanned returns to the hospital, including returns for observation stays and ED visits.

DESIGN

By using Healthcare Cost and Utilization Project data, we compared 210,007 index hospitalizations in 2009 and 2010 with 212,833 matched hospitalizations in 2013 and 2014.

SETTING

Two hundred and one hospitals in Georgia, Nebraska, South Carolina, and Tennessee.

PATIENTS

Adults with private insurance, Medicaid, or no insurance and seniors with Medicare who were hospitalized for AMI, HF, and pneumonia.

MEASUREMENTS

Thirty-day hospital return rates for inpatient, observation, and ED visits.

RESULTS

Return rates remained stable among adults with private insurance (15.1% vs 15.3%; P = 0.45) and declined modestly among seniors with Medicare (25.3% vs 25.0%; P = 0.04). Increases in observation and ED visits coincided with declines in readmissions (8.9% vs 8.2% for private insurance and 18.3% vs 16.9% for Medicare, both P ≤ 0.001). Return rates rose among patients with Medicaid (31.0% vs 32.1%; P = 0.04) and the uninsured (18.8% vs 20.1%; P = 0.004). Readmissions remained stable (18.7% for Medicaid and 9.5% for uninsured patients, both P > 0.75) while observation and ED visits increased.

CONCLUSIONS

Total returns to the hospital are stable or rising, likely because of growth in observation and ED visits. Hospitalists' efforts to improve the quality and value of hospital care should consider observation and ED care.