Staff writer Cathleen Crowley's article, "Observation status, and a nasty surprise," Dec. 11, offers a vivid glimpse at a large and insidious problem: Medicare's hospital reimbursement policies are harming patients. The article noted that hospitals are increasingly placing patients on "observation" status in response to federal pressure to reduce overall Medicare spending. Medicare is imposing stiff financial penalties on hospitals that admit patients whom Medicare decides should have been treated as outpatients.