Study Confirms the Metrics Hospitals Want from Preferred Skilled Nursing Partners

As hospitals’ preferred discharge networks narrow, high-level thinkers and consultants in the skilled nursing space have long preached the importance of certain key metrics: shorter lengths of stay, lower readmissions, and less overall Medicare spend.

Now a new study shows those concerns are grounded in reality.

In the years leading up to the creation of six preferred networks, the SNFs that eventually made the cut generally had all three of those factors — as well as lower mortality rates — as compared to their peers, according to a study published in Health Services Research.


“Preferred SNFs exhibited better performance across publicly reported quality measures,” the researchers — led by Peter Huckfeldt of the University of Minnesota — concluded. “Patients admitted to preferred SNFs exhibited shorter stays, lower Medicare payments, and lower probability of SNF readmission relative to non-preferred SNFs.”

The team focused on health systems that had established both accountable care organizations (ACOs) and preferred SNF networks, including the Cleveland Clinic in Ohio, the Henry Ford Health System in Michigan, and Partners HealthCare in the Boston metropolitan area. In general, these providers entered the ACO market first, with SNF networks to follow; under the ACO model, providers have a financial incentive from Medicare to provide quality care across multiple individual settings.

So the researchers set out to analyze the differences between preferred and non-preferred SNFs during the period immediately before those networks were established, focusing on admission data from January 1, 2012 to September 30, 2013. In those days before preferred networks, health systems scattered their patients to a wide swath of skilled nursing partners, ranging from 91 at the low end to 349 at the high end. The establishment of the network culled that herd significantly, with emphasis on a few important data points.


After adjusting for several factors, the team found that preferred SNFs had lengths of stay that were 2.8 days shorter than their non-preferred counterparts, with $320 per day less in Medicare expenses and a lower skilled nursing readmission rate by 1.1 percentage points.

In addition, the researchers determined that preferred SNFs were also less likely to accept residents who were also eligible for Medicaid or a low-income subsidy under Medicare Part D, meaning they generally had a more affluent clientele than the non-preferred buildings in the same area. Furthermore, preferred SNFs had a higher proportion of joint-replacement patients, who generally have fewer comorbidities than residents admitted for other reasons.

“Increasing reliance on preferred SNFs may still improve overall costs and patient outcomes. However, one caveat is that preferred SNFs might have limited capacity to absorb new admissions,” the team concluded, noting that occupancy already sat at 82% for preferred SNFs before the networks were established.

Written by Alex Spanko

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