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What Happens When Hospital-Based Skilled Nursing Facilities Close? A Propensity Score Analysis


  • Chapin White,

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    • Address correspondence to Chapin White, M.P.P., Ph.D., Congressional Budget Office, Ford House Office Building, 4th Floor, Second and D Streets, SW, Washington, DC 20515-6925. Susanne Seagrave, Ph.D., is with the Centers for Medicare & Medicaid Services, Baltimore, MD.

  • Susanne Seagrave


Objective. To assess the effects of hospital-based skilled nursing facility (HBSNF) closures on health care utilization, spending, and outcomes among Medicare fee-for-service beneficiaries.

Data Sources. One hundred percent Medicare fee-for-service claims files for 1997–2002 were merged with Medicare Provider of Services files and beneficiary-level enrollment records.

Study Design. Medicare spending, the use of postacute care, and health outcomes, were compared among hospitals that did and did not close their HBSNFs between 1997 and 2001. Hospitals were stratified according to propensity scores (i.e., predicted probability of closure from a logistic regression) and analyses were conducted within these strata.

Principal Findings. HBSNF closures were associated with increased utilization of alternative postacute care settings, and longer acute care hospital stays. Because of increased use of alternative settings, HBSNF closures were associated with a slight increase in total Medicare spending. There are no statistically robust associations between HBSNF closures and changes in either mortality or rehospitalization.

Conclusions. HBSNF closures altered utilization patterns, but there is no indication that closures adversely affect beneficiaries' health outcomes.