Hospitals say observation units can cut costs

Ohio hospitals are joining a national trend of expanded use of observation units, a practice they say can cut billing by a third (Source: “Hospital observation units prove efficient, cost-effective,” Columbus Dispatch, Feb. 3, 2010).

More hospitals are creating units where patients can be observed for up to 23 hours in most cases.

"A lot of patients are on the bubble -- not well enough to go home, but not sick enough for inpatient," said Janet Susi, the OSU Medical Center observation unit's clinical nurse director. "If patients don't get turned around in 23 hours, we admit them."

Added Kelly McGivern, president of insurance industy trade association the Ohio Association of Health Plans, "Being admitted is a higher standard of care than in observation; prices are higher in an admission."