Why Observaion Units Fail

Many hospitals across the US utilize observation units in some capacity. However the success of these units is quite variable. Although there are many reasons why such units can fail, I will highlight 3 of the biggest culprits:
1) Purpose
Vision is critical. It is important to know the purpose of the observation unit prior to making any other decision. This may seem obvious, but it is surprising the number of observation units without a clear definition of purpose. That purpose should be very specific regarding the primary goal:
  • Are we seeking to improve ED flow?
  • Are we seeking to reduce inpatient congestion from over capacity?
  • Are we seeking to reduce overall hospital length of stay?
  • Are we seeking to positively impact revenue?
  • Are we seeking to build an OBS unit to satisfy a regulatory requirement?
It is perfectly acceptable to have more than one goal in mind, but I strongly encourage you to pick a main goal. That will help you when you encounter a conflict between goals. For example, what will you do when faced with the decision to spend more money to improve flow or spending less and maintain a positive financial outlook? If you know in advance wether your main goal financial or patient flow related, this decision isn’t difficult and everyone can be held accountable to the unit’s purpose.
2) Target Population
Once the main purpose is set, it becomes easier to answer the next question. Is this observation unit targeting a specific patient population?
  • The young and simple medical cases
  • the geriatric
  • the frequent fliers
  • the bounce backs (ie. recently admitted)
  • all short stay patients, regardless of diagnosis
  • chest pain only patients
The answer to the question of target population provides key insight into the design of the observation unit. If your population is the young and uncomplicated, you do not require as many case management resources but your volume will be low. If your population is the aged then your volume will he higher and your length of stay will be higher as well. In addition, patients above 60 frequently require significantly more resources as part of the discharge process and full time case management presence becomes critical. Lastly, if your intent is to reduce bounce backs, staffing the unit with emergency physicians may not be the best choice as returning patients are medically complex with a generally high length of stay. Having your hospitalists involved may provide better continuity as they bring knowledge from the prior admission and awareness of prior difficulties.
3) Physician Leadership
Third is the item that is most important.  You will need a physician expert. There will be a multitude of other decisions necessary but physician involvement is critical to the operation of the unit. Most importantly, the physician expert or “champion” must understand the vision for this unit. This person will be taxed with helping mold the unit and staffing, and more importantly he/she will be responsible for monitoring and teaching providers. Each provider will require individual performance measure data in regular intervals with predetermined goals. For example: the target length of stay should be known and each physician should know where they fall relative to their partners. Also, it should be understood what protocols are to be used and when deviations are acceptable.
This final step is where many units fail. Good intentions with a specific purpose may all be in place but without strong, knowledgeable physician leadership, the unit will not meet its goals. Recruit an experienced director and stay focused on the purpose of the unit.
As you begin the process of designing your own observation unit, spend some time reading and learning from others who have succeeded. Here are some good free resources I have found helpful:

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