The Revolving Door of Rehospitalization from Skilled Nursing Facilities

Year in Research Nominee for 2010

Almost one-fourth of Medicare beneficiaries discharged from the hospital to a skilled nursing facility were readmitted to the hospital within 30 days; this cost Medicare $4.34 billion in 2006. Especially in an elderly population, cycling into and out of hospitals can be emotionally upsetting and can increase the likelihood of medical errors related to care coordination. Payment incentives in Medicare do not encourage providers to coordinate beneficiaries’ care. Revising these incentives could achieve major savings for providers and improved quality of life for beneficiaries.

Little research documenting the frequency and costs of rehospitalization has been published. Moreover, little is known about the underlying nature of these rehospitalizations or how they vary geographically. This paper aims to fill that gap. Using Medicare inpatient claims data from 2000–06, it explores three key questions related to rehospitalization from the skilled nursing facility. (1) What is the frequency and cost of such rehospitalizations within 30 days after hospital discharge, for both nursing home residents and beneficiaries living in the community? (2) How do these rehospitalizations vary across states? (3) What is the correlation between the rate of skilled nursing facility rehospitalizations and other Medicare spending?