In 2007, there was an average of 86.9 observation stay events per 1,000 inpatient admissions per month among Medicare beneficiaries, while in 2009 there were 116.6. In addition, Medicare patients under observation stay were being held for a longer period of time per episode, with some being held for longer than 72 hours.
Observation stays can increase Medicare patients’ out-of-pocket expenses if they are eventually admitted to skilled nursing facilities, according to the study.
The rise in observation stays may be due to Medicare payment policies “designed to constrain hospital admissions,” the authors wrote. They suggest additional research to identify the causes and effects of increased observation stays.
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