Medicare patients are being kept for observation at hospitals more often than they're being admitted, thanks to pressure from the federal government. According to a recent study, the number of individuals who have been kept for observation has risen dramatically over the past several years. And while the decision not to admit those on Medicare may help cut costs down the road, the end result, unfortunately, is more out-of-pocket costs at the expense of the patients.
Researchers at Brown University in Providence, Rhode Island poured over nearly 29 million records from Medicare beneficiaries to analyze the data, which yielded some interesting statistics. In 2009, patients recommended for observation numbered in the millions. However, in 2007, only around 815,000 individuals weren't immediately admitted. In turn, the number of admissions feel sharply during the same time frame, indicating that doctors are being a bit more careful about who they admit and who they decide to observe.
Here's the problem with this setup: Those who are admitted to hospitals often pay a lot less than those who are kept for observation. Since these individuals are classified as "outpatient" per Medicare rules, their co-payments are often considerably higher. Additionally, these individuals may be turned down for subsequent care in nursing facilities should they require it.
"The dual trends of increasing hospital observation services and declining inpatient admissions suggest that hospitals and physicians may be substituting observation services for inpatient admissions -- perhaps to avoid unfavorable Medicare audits targeting hospital admissions," study author Zhanlian Feng said in a Brown University press release.