Hospitals with Post-Acute Services Produce Better Outcomes than SNFs

At first, the conclusion seems obvious: Hospitals that sink more money into post-acute services provide better care to patients than their lower-spending counterparts. But those findings, released this week by researchers at the Massachusetts Institute of Technology, have stark implications for skilled nursing providers.

“We find that patients who go to hospitals that rely more on skilled nursing facilities after discharge, as opposed to getting them healthy enough to return home, are substantially less likely to survive over the following year,” Joseph Doyle, the MIT School of Management professor who coauthored the recent hospital study, told MIT News.

Doyle and his coauthors — Jonathan Gruber, an MIT economics professor, and Vanderbilt University health policy professor John A. Graves — set out to investigate wasteful health care spending, noting that the United States shells out 40% more on medical expenses than its nearest counterpart.


The group tracked mortality statistics for more than 1.5 million Medicare patients aged 66 and older at a variety of different hospitals between 2002 and 2011, and made some startling conclusions about the efficacy post-acute SNF care. Patients at hospitals that spent more money on third-party skilled care had a higher one-year mortality rate by five percentage points, while hospitals achieved a two-percentage-point reduction in deaths for every $8,500 they spent on in-house care.

“We see this as a potentially novel quality measure for hospitals,” Doyle told MIT News. “Hospitals that have that profile where they send patients to skilled nursing facilities have higher spending downstream, and they have worse outcomes.”

Doyle, Gruber, and Graves then use this conclusion to come up with a policy argument: Given the lower mortality rates, bundled-payment Medicare plans should offer higher reimbursements for inpatient care than external SNF services, they claim.


“If you look at the bundled payments that pay for an episode of care, it’s the composition of spending that matters, since high initial spending and low downstream spending is much better associated with good outcomes,” Doyle told MIT News.

Read the full recap of the research here.

Written by Alex Spanko

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