There are nearly 120 million visits to emergency departments each year, one for every three people in the United States. Fifty percent of all hospital admissions come from this group, a marked change from the mid-1990s when the emergency department was a source of only a third of admissions. As the population increases and ages, the growth rate for emergency department visits and the resulting admissions will exceed historical trends creating a surge in demand for inpatient beds. Current health care reform efforts are highlighting deficiencies in access, cost, and quality of care in the United States. The need for more inpatient capacity brings attention to short-stay admissions and whether they are necessary. Emergency department observation units provide a suitable alternate venue for many such patients at lower cost without adversely affecting access or quality. This article serves as a literature synthesis in support of observation units, with special emphasis on the clinical and financial aspects of their use. The observation medicine literature was reviewed using PubMed, and selected sources were used to summarize the current state of practice. In addition, the authors introduce a novel conceptual framework around measures of observation unit efficiency. Observation units provide high-quality and efficient care to patients with common complaints seen in the emergency department. More frequent use of observation can increase patient safety and satisfaction while decreasing unnecessary inpatient admissions and improving fiscal performance for both emergency departments and the hospitals in which they operate. For institutions with the volume to justify the fixed costs of operating an observation unit, the dominant strategy for all stakeholders is to create one.

Using observation units in hospitals to provide care to certain patients can be more efficient than admitting them to the hospital and can result in shorter lengths-of-stay and lower costs. However, such units are present in only about one-third of US hospitals. We estimated national cost savings that would result from increasing the prevalence and use of observation units for patients whose stay there would be shorter than twenty-four hours. Using a systematic literature review, national survey data, and a simulation model, we estimated that if hospitals without observation units had them in place, the average cost savings per patient would be $1,572, annual hospital savings would be $4.6 million, and national cost savings would be $3.1 billion. Future policies intended to increase the cost-efficiency of hospital care should include support for observation unit care as an alternative to short-stay inpatient admission.

Puerto Rico produces 44% of the intravenous (IV) fluid bags used in the United States.¹ On September 20, 2017, Hurricane Maria struck the island, causing a humanitarian crisis and widespread devastation that escalated a critical shortage of IV fluids throughout the United States. Initially, small-volume bags — 50- and 100-ml bags used to dilute medications — became scarce. Today, the larger 500- and 1000-ml IV-fluid bags are also in short supply. U.S. hospitals are scrambling to develop strategies for rationing IV fluids to ensure availability for the patients who need them most.