Pediatric Observation vs. Admission Designation: Optimizing Performance Through Rapid‐Cycle Improvement

1Cleveland Clinic Foundation, Cleveland, OH

Meeting: Hospital Medicine 2007, May 23-25, Dallas, Texas

Abstract number: 88


In the age of declining reimbursement and insurance‐driven health care, it has become increasingly important for hospital systems to proactively address their compliance and revenue patterns. In 2003 our institution began to designate all patients anticipated to stay less than 24 hours as having observation status. We successfully decreased our denial rate from 15% to less than 5%. Unintended consequences included increased administrative work to remedy observation versus admission status discrepancies and unrealized revenue for patients who truly met admission criteria but were billed as observation. At the beginning of this project, the hospitalist service designated 47% of patients as having observation status.


We sought to decrease this observation percentage and lessen administrative rework without increasing denials.


The hospitalists at our institution are a cohesive group of 5 physicians who discharge one third of all patients from our hospital. Amultidisciplinary team was assembled, and a rapid‐cycle process improvement model was employed. The team looked at every aspect of the patient designation process from initial reservation until the patient charge was generated. The project team's output included improved communication between key members of the process, a simplified admission orderform, and a streamlined process of reconciling inappropriate patient designation. Using pediatric Interqual guidelines, admission criteria were developed for the 5 most common hospitalist diagnoses: bronchiolitis, asthma, pneumonia, dehydration, and cellulitis.


The initial outcomes of this project include a 50% decrease in the percentage of status errors from pediatrics, a 17% decrease in rework related to improper form use, and a statistically significant decrease in observation designation from 47% to 32% within the pediatric hospitalist service. Estimated year‐to‐date revenue impact based on this reduction is $586,000. Ourfuture goals are to sustain current gains with ongoing training and periodic reassessments while monitoring trends in denials. Interqual criteria will be implemented for the 5 most common diagnoses, and criteria for other high volume diagnoses will be developed.

Author Disclosure:

M. Marks, None.

To cite this abstract:

Marks M. Pediatric Observation vs. Admission Designation: Optimizing Performance Through Rapid‐Cycle Improvement. Abstract published at Hospital Medicine 2007, May 23-25, Dallas, Texas Abstract 88. Journal of Hospital Medicine. 2007; 2 (suppl 2). Accessed March 28, 2020.

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