Outcomes and Affordability of Observation Status for Children (OASIS)

PROJECT ABSTACT It is estimated that ~500,000 (34%) pediatric hospital stays each year in the United States (US) are designated as outpatient under “observation status” and often referred to as observation stays. The concept of observation status was created, initially, as a clinical designation, primarily for Emergency Department (ED) clinicians to “observe” the patient for a period of time to determine the need for inpatient care (e.g., inpatient admission). Over the past three decades, observation status has evolved and now is used as an administrative assignment for patients who have a “short-term” hospital stay, typically falling “under the 2-midnight rule,” as originally defined for Medicare patients and now widely adopted by commercial insurers and Medicaid agencies. Our team recently found that observation stays are now common for pediatric hospital stays, especially for children undergoing surgery. For example, more than 50% of pediatric post-appendectomy admissions at Children's Hospitals were billed as observation stays in 2019. Studies from adult patients have found significant impact of omitting observation stay data on quality measures and financial implications of observation stays on patient Out-Of-Pocket (OOP) costs, yet there is a paucity of information about the impact and implications on pediatric patients. To fill the crucial knowledge gaps, we propose a retrospective observational study entitled Outcomes and Affordability of Observation Status for Children (OASIS) to characterize the shift in observation stay assignment of pediatric patients, evaluate the impact of omitting observation stay data on Pediatric Quality Indicators (QIs), and assess OOP costs for pediatric observation stays. We focus on Agency for Healthcare Research and Quality (AHRQ) Pediatric QIs and propose to evaluate the impact of omitting observation stay data on these QIs using Healthcare Cost and Utilization Project state specific databases from 2010 through 2019. Specifically, we will quantify the overall and specific trends in observation stay assignment by patient characteristic (e.g., race/ethnicity), evaluate the impact of omitting observation stay data on the Pediatric QIs, and examine if there are any disparities in the trends and QIs calculations. We also propose to assess OOP costs for pediatric observation stays by leveraging claims data from statewide All-Payer Claims Databases and Optum. We will first characterize unexpected OOP cost components that are typically covered by inpatient insurance benefits, such as medications, and identify conditions for which OOP costs are higher as an observation stay than as an inpatient stay. The OASIS study will provide pediatric specific evidence to refine quality measures, to develop advice for patients to recognize financial implications of observation stays on OOP costs, and to inform future policies to protect patients in observation stays from paying more than they would as inpatients.