|September 26, 2012||
From Health Affairs
Better Use of Dedicated Hospital Observation Units Could Save $3.1 Billion a Year
Bethesda, MD -- The rising demand for acute care has caused more crowding in emergency departments in US hospitals. Because hospital care accounted for more than 30 percent of total 2009 health care expenditures, alternative solutions are badly needed to bring costs under control. A hospital observation unita dedicated space usually near or within an emergency department, which about one-third of hospitals havecan be a viable alternative to an inpatient admission for many patients who cannot be safely discharged to their homes following an emergency department visit. In what is believed to be the first attempt to quantify the potential financial impact of observation unit expansion, a new study from Health Affairs created a simulation model and estimated that if a hospital added an observation unit, it would save $4.6 million per year, and the national annual savings would be $3.1 billion.
The study first conducted a systematic literature review to find
the average cost savings per observation unit visit; it used national
survey data to estimate the number of hospitals with sufficient
emergency department visits to justify acquiring a dedicated observation
unit. The study considered the impact of specific diagnoses on its
cost-saving estimates. The lead author, Christopher Baugh from Brigham
and Womens Hospital, concludes that the wider use of
observation units may create cost savings and should be a model
for acute care redesign to increase value in the US health care
|About Health Affairs|
Health Affairs is the leading journal at the intersection of health, health care, and policy. Published by Project HOPE, the peer-reviewed journal appears each month in print, with additional Web First papers published periodically and health policy briefs published twice monthly at www.healthaffairs.org. You can also find the journal on Facebook and Twitter. Read daily perspectives on Health Affairs Blog. Download weekly Narrative Matters podcasts on iTunes.