Dr Watson and the Case of Observation-Level Care

• clinical coding
• health insurance reimbursement
• hospitalized child

Sherlock Holmes accused Dr Watson of seeing but not observing. Were Dr Watson a pediatric hospitalist, utilization reviewers would accuse him of observing but not hospitalizing or, more technically, of providing “observation-level care” rather than “inpatient-level care.” In this issue of Pediatrics, Fieldston et al¹ convincingly demonstrate that there is no consistent difference between these 2 levels of care as applied to the pediatric population. Having excluded all potential rational explanations for these differences in billing status, the sole remaining conclusion (“no matter how improbable,” as Holmes would say) is that this is an arbitrary distinction used by payers to decrease reimbursement to both hospitals and physicians. Because pediatric hospital stays are frequently ≤2 days, hospitals caring for children, pediatricians, and families of hospitalized children are put at increased financial risk from this reduced reimbursement. Instead of spending our energy fighting each individual designation of observation-versus inpatient-level care, the pediatric community should lobby aggressively to change what is a fundamentally flawed construct.

Fieldston et al¹ analyzed 2010 Pediatric Health Information System billing data for ∼200 000 patient stays of ≤2 days at 33 large children’s hospitals. Their assessment revealed marked variability in the use of observation status across hospitals (range: 2%–45% of all 2-day stays designated as observation status) and within individual hospitals according to diagnosis (range: 2%–55% [most >25%]) (Fig 3 …

Address correspondence to Jack Martin Percelay, MD, MPH, ELMO Pediatrics, 1214 Fifth Ave, #35J, New York, NY 10029. E-mail: jpercelaymd{at}gmail.com