OUs and Patient Outcomes

Hospital Selection and Hospital Characteristics

The study sample was drawn from the 31 hospitals that reported observation‐status patient data to PHIS in 2011. Analyses were conducted in 2013, at which time 2011 was the most recent year of data. We categorized 14 hospitals as having a dedicated OU during 2011 based on information collected in 2013.⁷ To summarize briefly, we interviewed by telephone representatives of hospitals responding to an email query as to the presence of a geographically distinct OU for the care of unscheduled patients from the ED. Three of the 14 representatives reported their hospital had 2 OUs, 1 of which was a separate surgical OU. Ten OUs cared for both ED patients and patients with scheduled procedures; 8 units received patients from non‐ED sources. Hospitalists provided staffing in more than half of the OUs.

We attempted to identify administrative data that would signal care delivered in a dedicated OU using hospital charge codes reported to PHIS, but learned this was not possible due to between‐hospital variation in the specificity of the charge codes. Therefore, we were unable to determine if patient care was delivered in a dedicated OU or another setting, such as a general inpatient unit or the ED. Other hospital characteristics available from the PHIS dataset included the number of inpatient beds, ED visits, inpatient admissions, observation‐status stays, and payer mix. We calculated the percentage of ED visits resulting in admission by dividing the number of ED visits with associated inpatient or observation status by the total number of ED visits and the percentage of admissions under observation status by dividing the number of observation‐status stays by the total number of admissions under observation or inpatient status.

Visit Selection and Patient Characteristics

All observation‐status stays regardless of the point of entry into the hospital were eligible for this study. We excluded stays that were birth‐related, included intensive care, or resulted in transfer or death. Patient demographic characteristics used to describe the cohort included age, gender, race/ethnicity, and primary payer. Stays that began in the ED were identified by an emergency room charge within PHIS. Eligible stays were categorized using All Patient Refined Diagnosis Related Groups (APR‐DRGs) version 24 using the ICD‐9‐CM code‐based proprietary 3M software (3M Health Information Systems, St. Paul, MN). We determined the 15 top‐ranking APR‐DRGs among observation‐status stays in hospitals with a dedicated OU and hospitals without. Procedural stays were identified based on procedural APR‐DRGs (eg, tonsil and adenoid procedures) or the presence of an ICD‐9‐CM procedure code (eg, 331 spinal tap).

Measured Outcomes

Outcomes of observation‐status stays were determined within 4 categories: (1) LOS, (2) standardized costs, (3) conversion to inpatient status, and (4) return visits and readmissions. LOS was calculated in terms of nights spent in hospital for all stays by subtracting the discharge date from the admission date and in terms of hours for stays in the 28 hospitals that report admission and discharge hour to the PHIS database. Discharge timing was examined in 4, 6‐hour blocks starting at midnight. Standardized costs were derived from a charge master index that was created by taking the median costs from all PHIS hospitals for each charged service.[17] Standardized costs represent the estimated cost of providing any particular clinical activity but are not the cost to patients, nor do they represent the actual cost to any given hospital. This approach allows for cost comparisons across hospitals, without biases arising from using charges or from deriving costs using hospitals' ratios of costs to charges.[18] Conversion from observation to inpatient status was calculated by dividing the number of inpatient‐status stays with observation codes by the number of observation‐statusonly stays plus the number of inpatient‐status stays with observation codes. All‐cause 3‐day ED return visits and 30‐day readmissions to the same hospital were assessed using patient‐specific identifiers that allowed for tracking of ED return visits and readmissions following the index observation stay.

Data Analysis

Descriptive statistics were calculated for hospital and patient characteristics using medians and interquartile ranges (IQRs) for continuous factors and frequencies with percentages for categorical factors. Comparisons of these factors between hospitals with dedicated OUs and without were made using [2] and Wilcoxon rank sum tests as appropriate. Multivariable regression was performed using generalized linear mixed models treating hospital as a random effect and used patient age, the case‐mix index based on the APR‐DRG severity of illness, ED visit, and procedures associated with the index observation‐status stay. For continuous outcomes, we performed a log transformation on the outcome, confirmed the normality assumption, and back transformed the results. Sensitivity analyses were conducted to compare LOS, standardized costs, and conversation rates by hospital type for 10 of the 15 top‐ranking APR‐DRGs commonly cared for by pediatric hospitalists and to compare hospitals that reported the presence of an OU that was consistently open (24 hours per day, 7 days per week) and operating during the entire 2011 calendar year, and those without. Based on information gathered from the telephone interviews, hospitals with partially open OUs were similar to hospitals with continuously open OUs, such that they were included in our main analyses. All statistical analyses were performed using SAS version 9.3 (SAS Institute, Cary, NC). P values <0.05 were considered statistically significant.

Hospital Characteristics

Dedicated OUs were present in 14 of the 31 hospitals that reported observation‐status patient data to PHIS (Figure 1). Three of these hospitals had OUs that were open for 5 months or less in 2011; 1 unit opened, 1 unit closed, and 1 hospital operated a seasonal unit. The remaining 17 hospitals reported no OU that admitted unscheduled patients from the ED during 2011. Hospitals with a dedicated OU had more inpatient beds and higher median number of inpatient admissions than those without (Table 1). Hospitals were statistically similar in terms of total volume of ED visits, percentage of ED visits resulting in admission, total number of observation‐status stays, percentage of admissions under observation status, and payer mix.

Figure 1

Observation‐Status Patients by Hospital Type

In 2011, there were a total of 136,239 observation‐status stays69,983 (51.4%) within the 14 hospitals with a dedicated OU and 66,256 (48.6%) within the 17 hospitals without. Patient care originated in the ED for 57.8% observation‐status stays in hospitals with an OU compared with 53.0% of observation‐status stays in hospitals without (P<0.001). Compared with hospitals with a dedicated OU, those without a dedicated OU had higher percentages of observation‐status patients older than 12 years and non‐Hispanic and a higher percentage of observation‐status patients with private payer type (Table 2). The 15 top‐ranking APR‐DRGs accounted for roughly half of all observation‐status stays and were relatively consistent between hospitals with and without a dedicated OU (Table 3). Procedural care was frequently associated with observation‐status stays.

Outcomes of Observation‐Status Stays

A greater percentage of observation‐status stays in hospitals with a dedicated OU experienced a same‐day discharge (Table 4). In addition, a higher percentage of discharges occurred between midnight and 11 _am in hospitals with a dedicated OU. However, overall risk‐adjusted LOS in hours (12.8 vs 12.2 hours, P=0.90) and risk‐adjusted total standardized costs ($2551 vs $2433, P=0.75) were similar between hospital types. These findings were consistent within the 1 APR‐DRGs commonly cared for by pediatric hospitalists (see Supporting Information, Appendix 1, in the online version of this article). Overall, conversion from observation to inpatient status was significantly higher in hospitals with a dedicated OU compared with hospitals without; however, this pattern was not consistent across the 10 APR‐DRGs commonly cared for by pediatric hospitalists (see Supporting Information, Appendix 1, in the online version of this article). Adjusted odds of 3‐day ED return visits and 30‐day readmissions were comparable between hospital groups.

We found similar results in sensitivity analyses comparing observation‐status stays in hospitals with a continuously open OU (open 24 hours per day, 7 days per week, for all of 2011 [n=10 hospitals]) to those without(see Supporting Information, Appendix 2, in the online version of this article). However, there were, on average, more observation‐status stays in hospitals with a continuously open OU (median 5605, IQR 42077089) than hospitals without (median 3309, IQR 26784616) (P=0.04). In contrast to our main results, conversion to inpatient status was lower in hospitals with a continuously open OU compared with hospitals without (8.52% vs 11.57%, P<0.01).

Limitations

The primary limitation to our analyses is the lack of ability to identify patients who were treated in a dedicated OU because few hospitals provided data to PHIS that allowed for the identification of the unit or location of care. Second, it is possible that some hospitals were misclassified as not having a dedicated OU based on our survey, which initially inquired about OUs that provided care to patients first treated in the ED. Therefore, OUs that exclusively care for postoperative patients or patients with scheduled treatments may be present in hospitals that we have labeled as not having a dedicated OU. This potential misclassification would bias our results toward finding no differences. Third, in any study of administrative data there is potential that diagnosis codes are incomplete or inaccurately capture the underlying reason for the episode of care. Fourth, the experiences of the free‐standing children's hospitals that contribute data to PHIS may not be generalizable to other hospitals that provide observation care to children. Finally, return care may be underestimated, as children could receive treatment at another hospital following discharge from a PHIS hospital. Care outside of PHIS hospitals would not be captured, but we do not expect this to differ for hospitals with and without dedicated OUs. It is possible that health information exchanges will permit more comprehensive analyses of care across different hospitals in the future.

Hospital Selection and Hospital Characteristics

The study sample was drawn from the 31 hospitals that reported observation‐status patient data to PHIS in 2011. Analyses were conducted in 2013, at which time 2011 was the most recent year of data. We categorized 14 hospitals as having a dedicated OU during 2011 based on information collected in 2013.⁷ To summarize briefly, we interviewed by telephone representatives of hospitals responding to an email query as to the presence of a geographically distinct OU for the care of unscheduled patients from the ED. Three of the 14 representatives reported their hospital had 2 OUs, 1 of which was a separate surgical OU. Ten OUs cared for both ED patients and patients with scheduled procedures; 8 units received patients from non‐ED sources. Hospitalists provided staffing in more than half of the OUs.

We attempted to identify administrative data that would signal care delivered in a dedicated OU using hospital charge codes reported to PHIS, but learned this was not possible due to between‐hospital variation in the specificity of the charge codes. Therefore, we were unable to determine if patient care was delivered in a dedicated OU or another setting, such as a general inpatient unit or the ED. Other hospital characteristics available from the PHIS dataset included the number of inpatient beds, ED visits, inpatient admissions, observation‐status stays, and payer mix. We calculated the percentage of ED visits resulting in admission by dividing the number of ED visits with associated inpatient or observation status by the total number of ED visits and the percentage of admissions under observation status by dividing the number of observation‐status stays by the total number of admissions under observation or inpatient status.

Visit Selection and Patient Characteristics

All observation‐status stays regardless of the point of entry into the hospital were eligible for this study. We excluded stays that were birth‐related, included intensive care, or resulted in transfer or death. Patient demographic characteristics used to describe the cohort included age, gender, race/ethnicity, and primary payer. Stays that began in the ED were identified by an emergency room charge within PHIS. Eligible stays were categorized using All Patient Refined Diagnosis Related Groups (APR‐DRGs) version 24 using the ICD‐9‐CM code‐based proprietary 3M software (3M Health Information Systems, St. Paul, MN). We determined the 15 top‐ranking APR‐DRGs among observation‐status stays in hospitals with a dedicated OU and hospitals without. Procedural stays were identified based on procedural APR‐DRGs (eg, tonsil and adenoid procedures) or the presence of an ICD‐9‐CM procedure code (eg, 331 spinal tap).

Measured Outcomes

Outcomes of observation‐status stays were determined within 4 categories: (1) LOS, (2) standardized costs, (3) conversion to inpatient status, and (4) return visits and readmissions. LOS was calculated in terms of nights spent in hospital for all stays by subtracting the discharge date from the admission date and in terms of hours for stays in the 28 hospitals that report admission and discharge hour to the PHIS database. Discharge timing was examined in 4, 6‐hour blocks starting at midnight. Standardized costs were derived from a charge master index that was created by taking the median costs from all PHIS hospitals for each charged service.[17] Standardized costs represent the estimated cost of providing any particular clinical activity but are not the cost to patients, nor do they represent the actual cost to any given hospital. This approach allows for cost comparisons across hospitals, without biases arising from using charges or from deriving costs using hospitals' ratios of costs to charges.[18] Conversion from observation to inpatient status was calculated by dividing the number of inpatient‐status stays with observation codes by the number of observation‐statusonly stays plus the number of inpatient‐status stays with observation codes. All‐cause 3‐day ED return visits and 30‐day readmissions to the same hospital were assessed using patient‐specific identifiers that allowed for tracking of ED return visits and readmissions following the index observation stay.

Data Analysis

Descriptive statistics were calculated for hospital and patient characteristics using medians and interquartile ranges (IQRs) for continuous factors and frequencies with percentages for categorical factors. Comparisons of these factors between hospitals with dedicated OUs and without were made using [2] and Wilcoxon rank sum tests as appropriate. Multivariable regression was performed using generalized linear mixed models treating hospital as a random effect and used patient age, the case‐mix index based on the APR‐DRG severity of illness, ED visit, and procedures associated with the index observation‐status stay. For continuous outcomes, we performed a log transformation on the outcome, confirmed the normality assumption, and back transformed the results. Sensitivity analyses were conducted to compare LOS, standardized costs, and conversation rates by hospital type for 10 of the 15 top‐ranking APR‐DRGs commonly cared for by pediatric hospitalists and to compare hospitals that reported the presence of an OU that was consistently open (24 hours per day, 7 days per week) and operating during the entire 2011 calendar year, and those without. Based on information gathered from the telephone interviews, hospitals with partially open OUs were similar to hospitals with continuously open OUs, such that they were included in our main analyses. All statistical analyses were performed using SAS version 9.3 (SAS Institute, Cary, NC). P values <0.05 were considered statistically significant.

Hospital Characteristics

Dedicated OUs were present in 14 of the 31 hospitals that reported observation‐status patient data to PHIS (Figure 1). Three of these hospitals had OUs that were open for 5 months or less in 2011; 1 unit opened, 1 unit closed, and 1 hospital operated a seasonal unit. The remaining 17 hospitals reported no OU that admitted unscheduled patients from the ED during 2011. Hospitals with a dedicated OU had more inpatient beds and higher median number of inpatient admissions than those without (Table 1). Hospitals were statistically similar in terms of total volume of ED visits, percentage of ED visits resulting in admission, total number of observation‐status stays, percentage of admissions under observation status, and payer mix.

Figure 1

Observation‐Status Patients by Hospital Type

In 2011, there were a total of 136,239 observation‐status stays69,983 (51.4%) within the 14 hospitals with a dedicated OU and 66,256 (48.6%) within the 17 hospitals without. Patient care originated in the ED for 57.8% observation‐status stays in hospitals with an OU compared with 53.0% of observation‐status stays in hospitals without (P<0.001). Compared with hospitals with a dedicated OU, those without a dedicated OU had higher percentages of observation‐status patients older than 12 years and non‐Hispanic and a higher percentage of observation‐status patients with private payer type (Table 2). The 15 top‐ranking APR‐DRGs accounted for roughly half of all observation‐status stays and were relatively consistent between hospitals with and without a dedicated OU (Table 3). Procedural care was frequently associated with observation‐status stays.

Outcomes of Observation‐Status Stays

A greater percentage of observation‐status stays in hospitals with a dedicated OU experienced a same‐day discharge (Table 4). In addition, a higher percentage of discharges occurred between midnight and 11 _am in hospitals with a dedicated OU. However, overall risk‐adjusted LOS in hours (12.8 vs 12.2 hours, P=0.90) and risk‐adjusted total standardized costs ($2551 vs $2433, P=0.75) were similar between hospital types. These findings were consistent within the 1 APR‐DRGs commonly cared for by pediatric hospitalists (see Supporting Information, Appendix 1, in the online version of this article). Overall, conversion from observation to inpatient status was significantly higher in hospitals with a dedicated OU compared with hospitals without; however, this pattern was not consistent across the 10 APR‐DRGs commonly cared for by pediatric hospitalists (see Supporting Information, Appendix 1, in the online version of this article). Adjusted odds of 3‐day ED return visits and 30‐day readmissions were comparable between hospital groups.

We found similar results in sensitivity analyses comparing observation‐status stays in hospitals with a continuously open OU (open 24 hours per day, 7 days per week, for all of 2011 [n=10 hospitals]) to those without(see Supporting Information, Appendix 2, in the online version of this article). However, there were, on average, more observation‐status stays in hospitals with a continuously open OU (median 5605, IQR 42077089) than hospitals without (median 3309, IQR 26784616) (P=0.04). In contrast to our main results, conversion to inpatient status was lower in hospitals with a continuously open OU compared with hospitals without (8.52% vs 11.57%, P<0.01).

Limitations

The primary limitation to our analyses is the lack of ability to identify patients who were treated in a dedicated OU because few hospitals provided data to PHIS that allowed for the identification of the unit or location of care. Second, it is possible that some hospitals were misclassified as not having a dedicated OU based on our survey, which initially inquired about OUs that provided care to patients first treated in the ED. Therefore, OUs that exclusively care for postoperative patients or patients with scheduled treatments may be present in hospitals that we have labeled as not having a dedicated OU. This potential misclassification would bias our results toward finding no differences. Third, in any study of administrative data there is potential that diagnosis codes are incomplete or inaccurately capture the underlying reason for the episode of care. Fourth, the experiences of the free‐standing children's hospitals that contribute data to PHIS may not be generalizable to other hospitals that provide observation care to children. Finally, return care may be underestimated, as children could receive treatment at another hospital following discharge from a PHIS hospital. Care outside of PHIS hospitals would not be captured, but we do not expect this to differ for hospitals with and without dedicated OUs. It is possible that health information exchanges will permit more comprehensive analyses of care across different hospitals in the future.

Hospital Selection and Hospital Characteristics

The study sample was drawn from the 31 hospitals that reported observation‐status patient data to PHIS in 2011. Analyses were conducted in 2013, at which time 2011 was the most recent year of data. We categorized 14 hospitals as having a dedicated OU during 2011 based on information collected in 2013.⁷ To summarize briefly, we interviewed by telephone representatives of hospitals responding to an email query as to the presence of a geographically distinct OU for the care of unscheduled patients from the ED. Three of the 14 representatives reported their hospital had 2 OUs, 1 of which was a separate surgical OU. Ten OUs cared for both ED patients and patients with scheduled procedures; 8 units received patients from non‐ED sources. Hospitalists provided staffing in more than half of the OUs.

We attempted to identify administrative data that would signal care delivered in a dedicated OU using hospital charge codes reported to PHIS, but learned this was not possible due to between‐hospital variation in the specificity of the charge codes. Therefore, we were unable to determine if patient care was delivered in a dedicated OU or another setting, such as a general inpatient unit or the ED. Other hospital characteristics available from the PHIS dataset included the number of inpatient beds, ED visits, inpatient admissions, observation‐status stays, and payer mix. We calculated the percentage of ED visits resulting in admission by dividing the number of ED visits with associated inpatient or observation status by the total number of ED visits and the percentage of admissions under observation status by dividing the number of observation‐status stays by the total number of admissions under observation or inpatient status.

Visit Selection and Patient Characteristics

All observation‐status stays regardless of the point of entry into the hospital were eligible for this study. We excluded stays that were birth‐related, included intensive care, or resulted in transfer or death. Patient demographic characteristics used to describe the cohort included age, gender, race/ethnicity, and primary payer. Stays that began in the ED were identified by an emergency room charge within PHIS. Eligible stays were categorized using All Patient Refined Diagnosis Related Groups (APR‐DRGs) version 24 using the ICD‐9‐CM code‐based proprietary 3M software (3M Health Information Systems, St. Paul, MN). We determined the 15 top‐ranking APR‐DRGs among observation‐status stays in hospitals with a dedicated OU and hospitals without. Procedural stays were identified based on procedural APR‐DRGs (eg, tonsil and adenoid procedures) or the presence of an ICD‐9‐CM procedure code (eg, 331 spinal tap).

Measured Outcomes

Outcomes of observation‐status stays were determined within 4 categories: (1) LOS, (2) standardized costs, (3) conversion to inpatient status, and (4) return visits and readmissions. LOS was calculated in terms of nights spent in hospital for all stays by subtracting the discharge date from the admission date and in terms of hours for stays in the 28 hospitals that report admission and discharge hour to the PHIS database. Discharge timing was examined in 4, 6‐hour blocks starting at midnight. Standardized costs were derived from a charge master index that was created by taking the median costs from all PHIS hospitals for each charged service.[17] Standardized costs represent the estimated cost of providing any particular clinical activity but are not the cost to patients, nor do they represent the actual cost to any given hospital. This approach allows for cost comparisons across hospitals, without biases arising from using charges or from deriving costs using hospitals' ratios of costs to charges.[18] Conversion from observation to inpatient status was calculated by dividing the number of inpatient‐status stays with observation codes by the number of observation‐statusonly stays plus the number of inpatient‐status stays with observation codes. All‐cause 3‐day ED return visits and 30‐day readmissions to the same hospital were assessed using patient‐specific identifiers that allowed for tracking of ED return visits and readmissions following the index observation stay.

Data Analysis

Descriptive statistics were calculated for hospital and patient characteristics using medians and interquartile ranges (IQRs) for continuous factors and frequencies with percentages for categorical factors. Comparisons of these factors between hospitals with dedicated OUs and without were made using [2] and Wilcoxon rank sum tests as appropriate. Multivariable regression was performed using generalized linear mixed models treating hospital as a random effect and used patient age, the case‐mix index based on the APR‐DRG severity of illness, ED visit, and procedures associated with the index observation‐status stay. For continuous outcomes, we performed a log transformation on the outcome, confirmed the normality assumption, and back transformed the results. Sensitivity analyses were conducted to compare LOS, standardized costs, and conversation rates by hospital type for 10 of the 15 top‐ranking APR‐DRGs commonly cared for by pediatric hospitalists and to compare hospitals that reported the presence of an OU that was consistently open (24 hours per day, 7 days per week) and operating during the entire 2011 calendar year, and those without. Based on information gathered from the telephone interviews, hospitals with partially open OUs were similar to hospitals with continuously open OUs, such that they were included in our main analyses. All statistical analyses were performed using SAS version 9.3 (SAS Institute, Cary, NC). P values <0.05 were considered statistically significant.

Hospital Characteristics

Dedicated OUs were present in 14 of the 31 hospitals that reported observation‐status patient data to PHIS (Figure 1). Three of these hospitals had OUs that were open for 5 months or less in 2011; 1 unit opened, 1 unit closed, and 1 hospital operated a seasonal unit. The remaining 17 hospitals reported no OU that admitted unscheduled patients from the ED during 2011. Hospitals with a dedicated OU had more inpatient beds and higher median number of inpatient admissions than those without (Table 1). Hospitals were statistically similar in terms of total volume of ED visits, percentage of ED visits resulting in admission, total number of observation‐status stays, percentage of admissions under observation status, and payer mix.

Figure 1

Observation‐Status Patients by Hospital Type

In 2011, there were a total of 136,239 observation‐status stays69,983 (51.4%) within the 14 hospitals with a dedicated OU and 66,256 (48.6%) within the 17 hospitals without. Patient care originated in the ED for 57.8% observation‐status stays in hospitals with an OU compared with 53.0% of observation‐status stays in hospitals without (P<0.001). Compared with hospitals with a dedicated OU, those without a dedicated OU had higher percentages of observation‐status patients older than 12 years and non‐Hispanic and a higher percentage of observation‐status patients with private payer type (Table 2). The 15 top‐ranking APR‐DRGs accounted for roughly half of all observation‐status stays and were relatively consistent between hospitals with and without a dedicated OU (Table 3). Procedural care was frequently associated with observation‐status stays.

Outcomes of Observation‐Status Stays

A greater percentage of observation‐status stays in hospitals with a dedicated OU experienced a same‐day discharge (Table 4). In addition, a higher percentage of discharges occurred between midnight and 11 _am in hospitals with a dedicated OU. However, overall risk‐adjusted LOS in hours (12.8 vs 12.2 hours, P=0.90) and risk‐adjusted total standardized costs ($2551 vs $2433, P=0.75) were similar between hospital types. These findings were consistent within the 1 APR‐DRGs commonly cared for by pediatric hospitalists (see Supporting Information, Appendix 1, in the online version of this article). Overall, conversion from observation to inpatient status was significantly higher in hospitals with a dedicated OU compared with hospitals without; however, this pattern was not consistent across the 10 APR‐DRGs commonly cared for by pediatric hospitalists (see Supporting Information, Appendix 1, in the online version of this article). Adjusted odds of 3‐day ED return visits and 30‐day readmissions were comparable between hospital groups.

We found similar results in sensitivity analyses comparing observation‐status stays in hospitals with a continuously open OU (open 24 hours per day, 7 days per week, for all of 2011 [n=10 hospitals]) to those without(see Supporting Information, Appendix 2, in the online version of this article). However, there were, on average, more observation‐status stays in hospitals with a continuously open OU (median 5605, IQR 42077089) than hospitals without (median 3309, IQR 26784616) (P=0.04). In contrast to our main results, conversion to inpatient status was lower in hospitals with a continuously open OU compared with hospitals without (8.52% vs 11.57%, P<0.01).

Limitations

The primary limitation to our analyses is the lack of ability to identify patients who were treated in a dedicated OU because few hospitals provided data to PHIS that allowed for the identification of the unit or location of care. Second, it is possible that some hospitals were misclassified as not having a dedicated OU based on our survey, which initially inquired about OUs that provided care to patients first treated in the ED. Therefore, OUs that exclusively care for postoperative patients or patients with scheduled treatments may be present in hospitals that we have labeled as not having a dedicated OU. This potential misclassification would bias our results toward finding no differences. Third, in any study of administrative data there is potential that diagnosis codes are incomplete or inaccurately capture the underlying reason for the episode of care. Fourth, the experiences of the free‐standing children's hospitals that contribute data to PHIS may not be generalizable to other hospitals that provide observation care to children. Finally, return care may be underestimated, as children could receive treatment at another hospital following discharge from a PHIS hospital. Care outside of PHIS hospitals would not be captured, but we do not expect this to differ for hospitals with and without dedicated OUs. It is possible that health information exchanges will permit more comprehensive analyses of care across different hospitals in the future.