Einstein's new Montco hospital emphasizes growing outpatient numbers

Einstein Healthcare Network's new hospital in Montgomery County has all the bells and whistles one would expect in a new medical center: Wall-to-wall windows, separate WiFi networks for staff and visitors, and all private rooms.

But among the most carefully thought-out areas of the facility, opening Saturday and called Einstein Medical Center Montgomery, is a set of eight rooms next to the emergency department. That's where Einstein will treat patients who do not qualify for inpatient admission according to insurers, including Medicare, but who need to be observed for up to 48 hours.

Such patients wallop hospitals financially, because insurers are classifying an increasing number of patients this way and pay about 70 percent less for their treatment, even though, hospital executives say, "observation" patients require just as much work as regular inpatients.

Einstein hopes it has found a better way in its $350 million hospital in East Norriton.

Beth Duffy, chief operating officer of the hospital, said the Einstein network, which has about $1 billion in annual operating revenue and employs 8,000, had experimented with other configurations for observation patients.

Starting from scratch in the 146-bed Montgomery County hospital, management decided that putting emergency department staff in charge and locating the observation unit between the emergency department and the suite where patients go for X-rays and other diagnostic tests would be most efficient.

"The model that we tried within our network that didn't work so well is just placing these patients" on a regular floor where there was an empty bed, Duffy said.

Duffy said Einstein started seeing increases in the numbers of patients classified at the observation rate about five years ago.

Every hospital has been hit. Between the first quarter of 2011 and the first quarter of 2012, the number of observation stays rose nearly 30 percent at 36 hospitals and health systems in Southeastern Pennsylvania, according to a survey by the Delaware Valley Healthcare Council.

During that period, total patient encounters at the hospitals were down less than 1 percent, said Pam Clarke, vice president of managed care and finance at the health-care council.

"They are treating the same number of patients, but the reimbursement is significantly lower" because so many patients are approved only for observation stays by the insurers, Clarke said.

Gerry Blaney, interim chief financial officer and vice president of finance at Einstein Healthcare Network, said the financial impact was devastating. "You're getting about $5,000 less in reimbursement" per patient, he said.

Many Philadelphia-area hospitals have observation units, but, given the restraints of older buildings, they are often far from the emergency room and are overseen by general medicine physicians.

At the Einstein Medical Center in Philadelphia, "the observation unit is on the fourth flour, and two buildings away" from the emergency department, Blaney said. "You can get there through underground tunnels. It's not very efficient," he said.

The Hospital of the University of Pennsylvania may be the only hospital besides Einstein Montgomery in Southeastern Pennsylvania to have an observation unit adjacent to the emergency department. It's been there for three years, said Susan E. Phillips, senior vice president for public affairs at the University of Pennsylvania Health System. She said the number of observation stays in the health system climbed 22 percent in the year ended June 30, but accounted for just 8 percent of patients.

In the Einstein system, that figure was nearly 24 percent, though the bulk of Einstein's observation stays were at the Philadelphia hospital rather than at Montgomery Hospital Medical Center in Norristown, which the new hospital on 87 acres of a former golf course is replacing.

Asked for her favorite feature of the new hospital, Duffy said: "I certainly think the ability to bring in the natural light, the wall-to-wall windows, and the views are extraordinary. That has less to do with the clinical side of it than it has to do with the healing piece of it."