I have been reading SHM’s recent White Paper on Observation Status and getting depressed about the implications for our patients and our care. I don’t enjoy having conversations with patients and family explaining how in spite of them being in an actual hospital bed, and sleeping in an actual hospital room (ok, maybe not sleeping so well), and getting all care that modern medicine can deliver, their status has been deemed to be “observation,” AKA, not a “real” hospital admission. You see a “real” hospital admission is one in which everything that is happening to you in observation status still happens (you know, the bed, the upstairs room, the care, etc.), but a doctor has been forced to give an educated guess, ummm gut call, umm cough cough… about how long you will be in the hospital.
Then it occurred to me that maybe we could turn this around? This system seems to be working so well at controlling costs for the payers, what if we and our patients utilized it out in the real world, you know, when WE are the payers.
Saturday Morning, Valvoline Rapid Oil Change
Technician: Sir, your car is ready. That’ll be $79.99. We did an oil change, air filter replacement, and rotated your tires.
Me: [Looking at my watch.] Great, I see that you only had my car for 1 turn of the big hand past 12, therefore, I will be calling this an “observation status” Here’s $40 and let’s call it even.
Technician: That’s not fair
Me: [Showing him my watch.] Next time, maybe you can justify keeping the patient, I mean my car, over three turns of the big hands past 12. That might justify getting the full benefit.
September 2, Lil’ Wonders Child Care
Pre-School Teacher: Welcome, Dr Kealey and Little Zane! Dr, we are so excited to have him in our pre-school this year. Trust me, we’ll have him ready for Kindergarten in no time!
Me: Yes, I can already see he loves it here! The staff are so caring, the facilities top notch. It’s just… It’s just…
Pre-School Teacher: What is it? Is there something wrong?
Me: Well, Zane comes from very good genes. My wife and I were both reading by age 4 you know. And your teaching methods come highly recommended. It’s clear to me that you will have him up to speed and ready for school in just a few months.
Pre-School Teacher: I am certain we will!
Me: Good, then you understand that I will have to classify this as an “observation status” learning environment and pay only a partial payment.
Pre-School Teacher: But sir, we cannot do our work on only partial payments.
Me: Perhaps you could pass on your costs directly to Zane, but honestly, he’s too young even for an allowance. Good luck with that!
April 15, My CPA
Me: Bill, I don’t know what I would do without you. Tax season is just so stressful. You just take a load off my shoulders.
CPA: Dr Kealey, thank you for your business. I’m so glad I have helped.
Me: Now, Bill, I see the invoice you submitted this year is again for full tax preparation services. Your bill has gone up every year that we’ve been working together. But correct me if I’m wrong, but doesn’t it just get easier every year to do my return? Most items carry over from the prior year, right?
CPA: Well, yes, but one has to keep up with tax law. And I have to make sure I am getting you every deduction you are due.
Me: Oh, I get it, but I have been working with these people at the hospital who have helped me look at things differently. They have helped me see that these last three years, your services, while excellent, maybe don’t fall into the full tax preparation bucket. They are more consistent with “observation status” tax preparation.
Me: Don’t be alarmed. I know I am no finance person, and I’m much too busy to do this myself, so I’ve asked these new friends of mine, the recovery audit specialists, to just take a look at the full scope of services you’ve performed for me the last three years. There is nothing to worry about… if you can pull all your documentation and justify your charges to me. If not, well then we can just have you refund your fees and maybe tack on a little fine. It’s not like anyone is going to jail or anything!
Observation status started out as a good thing, a way to recognize those cases in the emergency department that truly needed an additional period of 6-8 hours of observation, but when patients are brought into the hospital, spending the night, getting full services, and full care, they should not arbitrarily be given a less intense status that shifts the payment burden back on them and deprives them of their medicare benefits. Hospitalists and Emergency Physicians should not seen by their patients as the arbiters of an unfair system. Patients should have the luxury of trusting their physician, knowing that they are doing all they can to advocate for them.
Burke Kealey, MD, SFHM is the Senior Medical Director for Hospital Specialties at HealthPartners Medical Group in Bloomington, Minnesota. Dr. Kealey began his career as a hospitalist in 1995 and has worked in medical leadership since 2000. In 2003 he was awarded SHM’s Award for Clinical Excellence. He has Chaired SHM’s Practice Analysis Committee and helped produce several of SHM’s Compensation and Productivity surveys. Dr. Kealey is a past president of SHM’s board of directors and has served as secretary and treasurer in past terms.
Dr. Kealey has a strong interest in ensuring that hospital medicine practices are effectively managed with a strong focus on the triple aim of affordability, great experience, and best health for our patients.
Raised in Texas, Dr. Kealey received his undergraduate degree from Texas A&M University, his medical degree from the University of Texas at Houston, and then moved north for Internal Medicine training at the University of Minnesota Hospitals and Clinics. While in chief residency he met his lovely wife Samantha, a Minnesota native and current Emergency Medicine physician. Together, they have 4 children.