Skip to content
Globe Icon

Recovery from hospitalization among the elderly: a comparison of skilled nursing facilities and home health care

2018 Conference Presentation

Policy developments United States

10 September 2018

Recovery from hospitalization among the elderly: a comparison of skilled nursing facilities and home health care

Rachel Werner, University of Pennsylvania, United States


Background: As the population ages and lengths of hospital stays shorten, older adults have increasingly used post-acute care to recover from hospitalizations. As a result, the use of post-acute care has grown substantially over the past few decades, at a great cost to Medicare. Despite the proliferation of post-acute care, it is uncertain whether post-acute care benefits patients or whether the choice of specific post-acute care setting matters (i.e. choosing SNF versus HHA).

Objective: To investigate the impact of hospital discharge to SNF versus HHA on outcomes of older adults.

Methods: We use data from 2010-2014 on all Medicare fee-for-service beneficiaries who are discharged from the hospital and receive post-acute care in either SNF or HHA. We estimate the effect of post-acute care setting on the following patient-level outcomes: death within 30 days of hospital discharge, readmission within 30 days of hospital discharge, successful discharge to the community, and improvement in functional status during the post-acute care episode. To address the endogeneity of treatment choice, we use an instrumental variables approach, using as an instrument the differential distance between the beneficiary’s home ZIP code and the closest HHA and the closest SNF. The instrument passes standard tests of first-stage strength. In all regressions, we include measures of patient case mix, diagnosis related groups, year fixed effects, and hospital fixed effects.

Results: 11,455,638 hospitalized patients were discharged either home with home health care or to SNF over the study period. Using ordinary least squares regression, we find substantial differences in patient outcomes by discharge setting. After risk adjustment, discharges to home health had lower rates of readmission (by 1.9 percentage points), lower rates of mortality (by 4.6 percentage points), and higher rates of improvement in functional status (by 54.4 percentage points). Discharges to home health also had lower Medicare payment for hospitalization (-$828; p-value <.001), post-acute care (-$8,259; p-value <.001), and total payment within 60 days after admission (-$9,276; p<.001). These findings are consistent with selection; healthier patients are more likely to be discharged with home health. In the instrumental variable specifications which account for this selection bias, these results change. Discharge home was associated with a 5.6 percentage point higher readmission rate at 30 days (p-value=0.01). There were no significant differences in 30-day mortality or functional outcomes. Medicare payment were significantly lower among patients discharged home. Conclusions: These results suggest there are important trade-offs between home health and SNF for patients needing post-acute care. While current policies may incentivize the use of lower-intensity settings (such as home health care) for patients needing post-acute care, lower intensity settings may have adverse outcomes that need to be taken into account and balanced against the lower cost of using home health.