M any chronic conditions, such as diabetes or asthma, can be successfully managed in the community. Appropriate screening, ongoing monitoring, prescribing of medications, providing patient education and other supportive measures that help keep these conditions under control are provided in primary healthcare settings. However, sometimes people with such conditions require hospitalization. Although not all admissions for these conditions are avoidable, timely and effective ambulatory care can potentially reduce the risk of hospitalization by possibly preventing or controlling the onset of an illness or condition or by managing the chronic condition (World Health Organization 2005). These conditions are often referred to as ambulatory care sensitive conditions (ACSC). The conditions used to define ACSC in this analysis include angina, asthma, chronic obstructive pulmonary disorder (COPD), diabetes, grand mal status and other epileptic convulsions, heart failure and pulmonary edema and hypertension (Canadian Institute for Health Information 2008). This is based on an adaptation of the widely used definition of ACSC by Billings et al. (1993). Research shows that variations in ACSC hospitalization rates may be related to factors such as differences in access to and quality of primary healthcare (Ansari et al. 2006; Caminal et al. 2004). They may also be due to differences in community-or hospital-based practice patterns or other factors.

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Background The Centers for Medicare and Medicaid Services publicly reports hospital risk-standardized readmission rates (RSRRs) as a measure of quality and performance; mischaracterizations may occur because observation stays are not captured by current measures. Objectives To describe variation in hospital use of observation stays, the relationship between hospitals observation stay use and RSRRs. Methods Cross-sectional analysis of Medicare fee-for-service beneficiaries discharged after acute myocardial infarction (AMI), heart failure, or pneumonia between July 2011 and June 2012. We calculated three hospital-specific 30 day outcomes: 1) observation rate, the proportion of all discharges followed by an observation stay without a readmission; 2) observation proportion, the proportion of observation stays among all patients with an observation stay or readmission; and 3) RSRR. Results For all 3 conditions, hospitals’ observation rates were < 2.5% and observation proportions were < 12%, although there was variation across hospitals, including 28% of hospital with no observation stay use for AMI, 31% for heart failure, and 43% for pneumonia. There were statistically significant, but minimal, correlations between hospital observation rates and RSRRs: AMI (r=−0.02), heart failure (r=−0.11), and pneumonia (r=−0.02) (p<0.001). There were modest inverse correlations between hospital observation proportion and RSRR: AMI (r=−0.34), heart failure (r=−0.26), and pneumonia (r=−0.21) (p<0.001). If observation stays were included in readmission measures, <4% of top performing hospitals would be recategorized as having average performance. Conclusions Hospitals’ observation stay use in the post-discharge period is low, but varies widely. Despite modest correlation between the observation proportion and RSRR, counting observation stays in readmission measures would minimally impact public reporting of performance.

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