Thirty-Day Re-observation, Chronic Re-observation, and Neighborhood Disadvantage.

Objective: To determine whether neighborhood socioeconomic disadvantage, as determined by the Area Deprivation Index, increases 30-day hospital re-observation risk.

Participants And Methods: This retrospective study of 20% Medicare fee-for-service beneficiary observation stays from January 1, 2014, to November 30, 2014, included 319,980 stays among 273,308 beneficiaries. We evaluated risk for a 30-day re-observation following an index observation stay for those living in the 15% most disadvantaged compared with the 85% least disadvantaged neighborhoods.

Results: Overall, 4.5% (270,600 of 6,080,664) of beneficiaries had index observation stays, which varied by disadvantage (4.3% [232,568 of 5,398,311] in the least disadvantaged 85% compared with 5.6% [38,032 of 682,353] in the most disadvantaged 15%). Patients in the most disadvantaged neighborhoods had a higher 30-day re-observation rate (2857 of 41,975; 6.8%) compared with least disadvantaged neighborhoods (13,543 of 278,005; 4.9%); a 43% increased risk (unadjusted odds ratio [OR], 1.43; 95% CI, 1.31 to 1.55). After adjustment, this risk remained (adjusted OR, 1.13; 95% CI, 1.04 to 1.22). Discharge to a skilled nursing facility reduced 30-day re-observation risk (OR, 0.63; 95% CI, 0.57 to 0.69), whereas index observation length of stay of 4 or more days (3 midnights) conferred increased risk (OR, 1.29; 95% CI, 1.09 to 1.52); those living in disadvantaged neighborhoods were less likely to discharge to skilled nursing facilities and more likely to have long index stays. Beneficiaries with more than one 30-day re-observation (chronic re-observation) had progressively greater disadvantage by number of stays (adjusted incident rate ratio, 1.08; 95% CI, 1.02 to 1.14). Observation prevalence varied nationally.

Conclusion: Thirty-day re-observation, especially chronic re-observation, is highly associated with socioeconomic neighborhood disadvantage, even after accounting for factors such as race, disability, and Medicaid eligibility. Beneficiaries least able to pay are potentially most vulnerable to costs from serial re-observations and challenges of Medicare observation policy, which may discourage patients from seeking necessary care.