Faced with financial penalties from Medicare if they run patients in and out too frequently, many hospitals around the country are holding off admitting many of them in the first place. Instead, they're holding more patients for "observation" -- several hundred thousand more in 2009 than two years before. The more recent trend has been for hospitals to convert floors of unneeded inpatient beds to observation wards, where many tests and even treatments can move ahead without patients officially being "in" the hospital.
