SNFs, Hospitals with Shared Ownership Could See Bundled Payment Success

Bundled payment initiatives tend to work best if participating hospitals and skilled nursing facilities are part of the same institutional ownership structure, according to findings published this month in The Journal of Arthroplasty.

The study investigated whether creating partnerships between hospitals and SNFs, with the shared goals of improving care coordination and maintaining appropriate length of stay, could decrease post-discharge costs within the 90-day bundled payment period.

Ran Schwarzkopf of the NYU Langone Hospital for Joint Diseases and colleagues analyzed a cohort of 615 total hip and knee replacement subjects who were discharged to an SNF under the initiative from 2014 to 2016. They were grouped into one of three types of SNFs: those operated by third parties, facilities run by operators that had partnership agreements with the hospital, and SNFs owned by the same parent company as the hospital.


The mean index hospital length of stay (LOS) was statistically the shortest for patients discharged to SNFs that were institution-owned partners, at 2.7 days, the researchers found.

Patients discharged to institution-owned SNFs also had the shortest SNF LOS, with an average of 11 days, compared with an average of 19 and 21 days in the partnership agreement and third-party groups, respectively.

Though calculation of daily costs between the SNF groups showed no statistical difference, total SNF costs and total 90-day costs were statistically lowest in the institution-owned partner group. In addition, the costs were lower in the agreement-based partner group as compared with non-partners, though to a lesser degree.


The study found no statistical difference in readmission rate between the three groups, as well as no statistical difference between partner or non-partner SNFs in terms of readmission costs in the study sample.

“SNFs may be incentivized to reach agreements regarding costs, if they stand to benefit from access to a larger patient base through the institution’s partnership and network,” the authors wrote. “However, the results of this study suggest that this alone may not incentivize these facilities to cut costs as much as facilities with direct financial incentives, such as gain sharing or other financial incentives.”

Written by Maggie Flynn

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