Observation medicine and its dedicated units provide hospitals with a high quality, safe, and efficient space to provide care while avoiding increased costs. Observation units (OUs) positively impact inpatient capacity, reduce audits, and improve revenue capture making them a value-added asset for hospitals and their administrators. OUs can turn unprofitable admissions into profitable observation stays. Private and government insurance companies benefit from the structure and efficiency of OUs which provide care at an outpatient payment level that is far less than the payments for inpatient care. Furthermore, by freeing up acute care beds for undifferentiated patients within the waiting room, OUs alleviate strains on emergency department resources – a benefit to both physicians and patients. The medical and financial benefits of OUs, and their viability, ultimately requires the support of several key stakeholders including physicians, advanced practice providers, nurses, hospital administrators, payers and patients.