Skilled Nursing Facilities Outperform Home Health on Readmission Rates: Study

Despite the increasing preference among payers and hospital partners to discharge residents to home health agencies, brick-and-mortar skilled nursing facilities are superior at reducing hospital readmissions — with one key caveat.

After controlling for a variety of factors, residents sent from a hospital to the care of a home health agency had a 5.6-percentage-point higher readmission rate than those who ended up at SNFs, a team led by University of Pennsylvania professor of medicine Rachel Werner found.

At the same time, Werner and the team uncovered no significant differences in 30-day mortality rates or improved functional status outcomes between the two sites of care, but the lowered readmissions came at a price: Sending a hospital resident to a home health agency reduced the average Medicare spend on post-acute care by $5,384, and cut the overall 60-day episodic cost by $4,514, according to a study published this week in the journal JAMA Internal Medicine.


The results, based on more than 17 million hospital discharges between 2010 and 2016, highlight the overall complexity of attempting to lower Medicare costs. In general, skilled nursing operators have seen an increased emphasis on reducing readmissions under payment models both new and old, from Medicare Advantage to accountable care organizations (ACOs) to the new SNF Value-Based Purchasing (VPB) program — which institutes a mandatory 2% cut on Medicare reimbursements that providers can win back in part by lowering hospital readmissions.

Because hospital stays typically account for the most expensive part of any single Medicare episode, these initiatives are supposed to result in lower overall spending. But Werner’s results show that the through line isn’t so clean.

“These incentives may push hospitals to favor the use of high-acuity settings such as SNFs, and our results suggest that this strategy may be effective at reducing readmissions,” Werner and the group wrote. “At the same time, alternative payment models such as accountable care organizations and bundled payments hold providers accountable for costs of care across settings and clinicians, an incentive that may push patients toward lower-cost care.”


The researchers noted that SNFs’ readmissions supremacy could simply stem from the fact that unlike in the home setting, residents receive round-the-clock monitoring and care, with a wider array of medical equipment.

“SNFs are better at reducing hospitalizations, but I would hypothesize it’s because of their existing infrastructure,” Werner told SNN.

The research team — which received support from the Agency for Healthcare Research and Quality (AHRQ) and the National Institute on Aging — also noted that the final results apply only to so-called “marginal patients”; that is, residents who have equal access to home health agencies and SNFs and were thus not sent to one or the other out of necessity. Still, they assert that these either-or cases are the most susceptible to potential substitutions by hospitals, and that their conditions are generally similar to those in the overall population.

Werner also brought up another consideration: Most older people would rather to receive care in the comfort of their homes, regardless of the macro-level pros and cons.

“Patients often prefer a home-based setting rather than an institutional setting such as SNFs, so trying to balance the benefits, such as reduced readmissions, with patient preferences is a challenge,” she said. “I think the solution to that is to find better ways to balance the financial incentives to reward outcomes and quality of care in addition to reducing cost.”

Bailey Bryant contributed reporting to this story.

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