Do Skilled Nursing Facilities Selected to Participate in Preferred Provider Networks Have Higher Quality and Lower Costs?

Peter Huckfeldt, Lianna Weissblum, José J. Escarce, Pinar Karaca Mandic, Neeraj Sood

Research output: Contribution to journalArticlepeer-review

4 Scopus citations


Objective: To determine whether skilled nursing facilities (SNFs) chosen by health systems to participate in preferred provider networks exhibited differences in quality, costs, and patient outcomes relative to other SNFs after accounting for differences in case mix. Data Sources: Medicare provider and claims data, 2012 and 2013. Study Design: We compared SNFs included in preferred networks relative to other SNFs in the same market, prior to the establishment of preferred provider networks. Data Extraction Methods: We linked the SNFs in our sample to facility characteristics and quality data. We identified SNF admissions and hospitalizations in claims data and limited the analysis to patients discharged from the hospitals in our sample. We obtained patient characteristics from Medicare summary files and the preceding hospital stay. Principal Findings: Preferred SNFs exhibited better performance across publicly reported quality measures. Patients admitted to preferred SNFs exhibited shorter stays, lower Medicare payments, and lower probability of SNF readmission relative to nonpreferred SNFs. Conclusions: Our results imply that health systems selected SNFs with lower resource use and better performance on quality measures. Thus, the trend toward preferred provider networks could have implications for Medicare spending and patient health.

Original languageEnglish (US)
Pages (from-to)4886-4905
Number of pages20
JournalHealth services research
Issue number6
StatePublished - Dec 2018

Bibliographical note

Funding Information:
Joint Acknowledgment/Disclosure Statement: This research was supported by the National Institute on Aging (R01AG046838). Pinar Karaca-Mandic provides consulting services to Tactile Medical and Precision Health Economics. Those activities are not related to this manuscript. Lianna Weissblum is employed by Medtronic. Her activities at Medtronic are not related to this manuscript. Disclosures: None. Disclaimer: None.


  • Health economics
  • referrals and referral networks
  • rehabilitation services

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