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Medicare and Hospitals Must Work Together to Improve Care


Contact Media Relations: 202-434-2560

"Decisions about a patient’s care should be based on her health condition, not on how to generate the most revenue."

WASHINGTON—Medicare recently wrote to groups representing the nation’s hospitals to gather information about how hospitals decide when a patient requires admission, observation or out-patient treatment. Recent media attention has brought to light an increasingly widespread practice in which hospitals sometimes “observe” Medicare patients when they could receive better care if admitted.  While observation is appropriate in many cases, its misuse may lead to higher out-of-pocket costs for patients and prevent them from getting proper follow-up care. Medicare has noted the practice of observing patients for more than two days doubled between 2006 and 2008. A statement from AARP Executive Vice President John Rother follows:

“Decisions about a patient’s care should be based on her health condition, not on how to generate the most revenue. AARP expects Medicare and hospitals to work together to address this disturbing trend that can lead to higher costs and lower quality care for people in Medicare who visit the hospital. Patients who are observed when they should be admitted may face higher costs, and may not receive the follow-up benefits—like time in a skilled nursing facility—that they need.”

For more information about this topic, or to schedule an interview with an AARP expert, please contact the Media Relations office at or 202-434-2560.

AARP is a nonprofit, nonpartisan membership organization that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. AARP does not endorse candidates for public office or make contributions to either political campaigns or candidates. We produce AARP The Magazine, the definitive voice for 50+ Americans and the world's largest-circulation magazine with over 35.1 million readers; AARP Bulletin, the go-to news source for AARP's millions of members and Americans 50+; AARP VIVA su Segunda Juventud, the only bilingual U.S. publication dedicated exclusively to the 50+ Hispanic community; and our website,  AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

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