The association of vertically integrated care with health care use and outcomes

Peter J. Huckfeldt, Jing Gu, José J. Escarce, Pinar Karaca Mandic, Neeraj Sood

Research output: Contribution to journalArticlepeer-review


Objective: To determine whether vertically integrated hospital and skilled nursing facility (SNF) care is associated with more efficient use of postdischarge care and better outcomes. Data Sources: Medicare provider, beneficiary, and claims data from 2012 to 2014. Study Design: We compared facility characteristics, quality of care, and health care use for hospital-based SNFs and “virtually integrated” SNFs (defined as freestanding SNFs with close referral relationships with a single hospital) relative to nonintegrated freestanding SNFs. Among patients admitted to integrated SNFs, we estimated differences in health care use and outcomes for patients originating from the parent hospital (ie, receiving vertically integrated care) versus other hospitals using linear regressions that included SNF fixed effects. We estimated bounds for our main estimates that incorporated potential omitted variables bias. Data Extraction Methods: We identified hospital-based SNFs based on provider data. We defined virtually integrated SNFs based on patient flows between hospitals and SNFs. We identified SNF episodes, preceding hospital stays, patient characteristics, health care use, and patient outcomes using Medicare data. Principal Findings: Consistent with prior research, integrated SNFs performed better on quality measures and health care use relative to nonintegrated SNFs (eg, hospital-based SNFs had 11-day shorter stays compared with nonintegrated SNFs adjusting for patient characteristics, P <.001). Stroke patients admitted to hospital-based SNFs from the parent hospital had shorter preceding hospital stays (adjusted difference: −1.2 days, P =.001) and shorter initial SNF stays (adjusted difference: −2.7 days, P =.049); estimates were attenuated but still robust accounting for potential omitted variables bias. For stroke patients, associations between vertically integrated care and other outcomes were either statistically insignificant or not robust to accounting for potential omitted variables bias. Conclusions: Vertically integrated hospital and SNF care was associated with shorter hospital and SNF stays. However, there were few beneficial associations with other outcomes, suggesting limited coordination benefits from vertical integration.

Original languageEnglish (US)
JournalHealth services research
StateAccepted/In press - 2021

Bibliographical note

Funding Information:
This project received financial support from the National Institute on Aging (R01 AG‐046838). We thank Brendan Rabideau for assistance in constructing analytic files from Medicare data. In the past 36 months, Peter Huckfeldt received grant funding from the Florida Medical Malpractice Joint Underwriting Association unrelated to this study. He consulted with the Urban Institute on a research project funded by the Department of Health and Human Services‐ Office of the Assistant Secretary of Planning and Evaluation. He has also consulted for the RAND Corporation on NIH‐funded research and serving as a peer reviewer for research reports. These activities are unrelated to the submitted work. In the past 36 months, Pinar Karaca‐Mandic provided consulting services to Tactile Medical, Precision Health Economics and Sempre Health for work unrelated to this project. Dr Sood reported receiving grants from Jedel Foundation, Abbott Diagnostics, the Agency for Healthcare Research and Quality, the National Institutes of Health, the National Institute for Health Care Management Foundation, Health Care Services Corporation, and the Patient‐Centered Outcomes Research Institute outside the submitted work; he reported serving as an expert witness for Goldman, Ismail, Tomaselli, Brennan, and Baum; serving as a scientific expert for the American Medical Association, the China Development Research Foundation, and the Pharmaceutical Research and Manufacturers of America; serving as strategic advisor for Payssurance. Dr Gu was a PhD student at the University of Southern California School of Pharmacy while this study was conducted and became employed at Regeneron Pharmaceuticals after the initial submission of this paper. Her work at Regeneron Pharmaceuticals is unrelated to the content of this study. Jose Escarce: No disclosures. Joint Acknowledgment/Disclosure Statement:

Publisher Copyright:
© 2021 Health Research and Educational Trust


  • health care costs
  • health economics
  • Medicare
  • referrals and referral networks
  • rehabilitation services

PubMed: MeSH publication types

  • Journal Article


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