The Association of Vertically Integrated Care with Healthcare Use and Outcomes

A recent study sought to examine whether vertically integrated hospital and skilled nursing facility (SNF) care is associated with more efficient use of healthcare and better patient outcomes.

The authors compared facility characteristics, metrics for quality of care, and healthcare use between hospital-based SNFs and “virtually integrated” SNFs relative to nonintegrated freestanding SNFs. “Virtually integrated” SNFs are defined as freestanding SNFs with a close referral relationship with a single hospital. The researchers then estimated differences in healthcare use and outcomes among stroke patients admitted to integrated SNFs, comparing patients originating from parent hospitals versus other hospitals.

Prior research has shown that integrated SNFs have lower resource use and similar or better patient outcomes compared to nonintegrated SNFs. This study clarifies whether the better patient outcomes are due to better coordination within vertically integrated health systems or due to other attributes of integrated SNFs.

Using Medicare data, the researchers identified SNF episodes, preceding hospital stays, patient characteristics, healthcare use, and patient outcomes.

Consistent with prior research, the results show that integrated SNFs performed better on quality measures and healthcare use relative to nonintegrated SNFs. Hospital-based SNFs had 11-day shorter stays and virtually integrated SNFs had 2.2-day shorter stays on average compared to nonintegrated SNFs. Additionally, admittance to an SNF from the parent hospital was associated with a shorter preceding stay and shorter initial SNF stay. Stroke patients admitted to hospital based SNFs from the parent hospital had a 1.2-day shorter preceding hospital stay and 2.7-day shorter initial SNF stay compared to patients admitted from a non-affiliated hospital. Notably, these results suggest that a large portion of the substantial differences in SNF length of stay (11-day shorter stays for vertically integrated SNFs) existed for all hospital-based SNFs and only a small portion of that difference was associated with receiving vertically integrated care.

The data found more robust differences between SNF patients admitted from the parent hospital versus other hospitals in vertically integrated SNFs compared to virtually integrated facilities. This means that the beneficial effects of vertically integrated SNFs are highest when there is a formal hospital relationship. However, the results found limited evidence that the better performance of integrated SNFs was related specifically to patients receiving vertically integrated care. There was mixed evidence as to whether improved information sharing between integrated hospitals and SNFs led to reduced resource use among patients receiving vertically integrated care.

These results have important implications for health systems and policymakers. While previous research has indicated better outcomes among vertically integrated SNFs, it would be misguided to conclude that these differences wholly represent coordination benefits from vertical integration. It would be fair to suggest that lower resource use or better outcomes for patients admitted to integrated SNFs were in large part experienced by all patients in these facilities, regardless of whether they received vertically integrated care.

Read the full study in Health Service Research here.