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The American Journal of Managed Care November 2014
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Influence of Hospital and Nursing Home Quality on Hospital Readmissions
Kali S. Thomas, PhD; Momotazur Rahman, PhD; Vincent Mor, PhD; and Orna Intrator, PhD

Influence of Hospital and Nursing Home Quality on Hospital Readmissions

Kali S. Thomas, PhD; Momotazur Rahman, PhD; Vincent Mor, PhD; and Orna Intrator, PhD
This study examines the joint influence of the quality of the hospital and of the nursing home to which a patient was discharged on the likelihood of re-hospitalization.
To determine whether the quality of the hospital and of the nursing home (NH) to which a patient was discharged were related to the likelihood of rehospitalization.

Study Design
Retrospective cohort study of 1,382,477 individual hospitalizations discharged to 15,356 NHs from 3683 hospitals between 2006 and 2008.

Data come from Medicare claims and enrollment records, Minimum Data Set, Online Survey Certification and Reporting Dataset, Hospital Compare, and the American Hospital Association Database. Cross-classified random effects models were used to test the association of hospital and NH quality measures and the likelihood of 30-day rehospitalization.

Patients discharged from higher-quality hospitals (as indicated by higher scores on their accountability process measures and high nurse staffing levels) and patients who received care in higher-quality NHs (as indicated by high nurse staffing levels and lower deficiency scores) were less likely to be rehospitalized within 30 days.

The passage of the Affordable Care Act changed the accountability of hospitals for patients’ outcomes after discharge. This study highlights the joint accountability of hospitals and NHs for rehospitalization of patients.

Am J Manag Care. 2014;20(11):e523-e531
The underlying reasons for the high rates of nursing home (NH) rehospitalization are numerous and complicated, but our initial results suggest that patients discharged from higher-quality hospitals to higher-quality NHs experience significantly lower 30-day readmission rates.
  • These findings offer an important first step toward understanding the relative influence of both players, hospitals and NHs, in rehospitalization rates, and the importance of adequate risk adjustment.
  • Furthermore, our findings set the stage for additional, more sophisticated analyses required to better understand which entity is ultimately “more” accountable
For Medicare patients 65 years and older, about 20% of all hospitalizations are followed by a rehospitalization within 30 days.1 The passage of the Affordable Care Act (ACA) changed the accountability of hospitals for patients’ outcomes after discharge. As of October 2012, Medicare began financially penalizing hospitals for “excess” readmissions as part of the ACA. Specifically, hospitals are penalized for all-cause 30-day rehospitalization in excess of the “expected” risk-adjusted rate for individuals initially admitted with congestive heart failure (CHF), heart attack, or pneumonia.2

In 2010, approximately 1.7 million Medicare fee-for-service beneficiaries used short-term skilled nursing care in nursing homes (NHs) primarily for daily rehabilitation services following a hospital stay.3 The goal of this care is to prepare patients for discharge back to the community at close to premorbid functioning at costs lower than would have been the case had they remained in the hospital. However, recent reports indicate that nearly one-fourth of Medicare skilled nursing patients are readmitted to the hospital within 30 days, costing Medicare $4.3 billion in 2006 alone.4,5 Mor and colleagues (2010) found that the rate of rehospitalization from NHs had been increasing over the last several years and was higher than the overall rate of rehospitalization of all Medicare patients. These hospitalizations are known to be frequent,6 costly,7 and often preventable.8,9

Research suggests that a number of NH characteristics (eg, nurse staffing levels, size, and ownership) are related to hospitalization and rehospitalization of NH residents.6,10-13 However, the literature on hospital characteristics associated with rehospitalization is quite limited. Furthermore, there is no research, to our knowledge, that considers the contribution of both the hospital and NH to rehospitalization. Prior literature generally examines one or the other, and a more comprehensive view is sorely needed. Therefore, we sought to determine whether the contribution of the quality of the hospital and the quality of the NH to which a patient was discharged were related to the likelihood of rehospitalization. This analysis is among the first to examine the potential joint influence of hospitals and NHs on the likelihood of hospitalization. Despite the dearth of background literature, we hypothesize that:

Patients discharged from a hospital to an NH are less likely to be rehospitalized within 30 days if their discharge was to an NH with better quality, all other factors being equal (including the discharge hospital's reported quality).

Patients discharged from a hospital to an NH are less likely to be rehospitalized within 30 days if their discharge is from a hospital with better quality, all other factors being equal (including the admitting NH's reported quality).



The analyses rely on individual-level, hospital-level, and NH-level data. Individual-level data come from the 2006-2008 Medicare Claims and Enrollment records and the 2006-2008 NH Minimum Data Set (MDS) resident assessments completed after admission to NH. The MDS includes data on over 400 assessment items that measure the clinical, functional, behavioral, and social needs of residents. In this study, we used data from the closest MDS assessment completed following hospital discharge: 55% were admission assessments and 44% were those required for Medicare reimbursement.

Hospital-level data came from the 2007 American Hospital Association (AHA) Annual Survey and 2007 Hospital Compare. The AHA survey includes information on organizational structure, facilities and services, utilization, community orientation indicators, physician arrangements, managed care relationships, expenses, and staffing. Hospital Compare is a consumer-oriented website created and maintained by CMS that provides information on how well hospitals provide recommended care to their patients ( The clinical measures focus on acute myocardial infarction (AMI), congestive heart failure (CHF), and pneumonia, and indicate how often hospitals give recommended treatments known to achieve superior results for patients with certain medical conditions. Information about these treatments was taken from the patients’ medical records and converted into a percentage.

NH-level data came from the CMS 2007 Online Survey Certification and Reporting (OSCAR) data. OSCAR is a national dataset of all NH data elements collected by state survey agencies during the required annual onsite Medicare and Medicaid Certification inspection. OSCAR provides information on facility characteristics, resident census, conditions of residents, and deficiency measurements.


We used the Residential History File methodology14 to identify a cohort of fee-for-service Medicare patients who were discharged to a NH during 2007 directly following an acute hospital stay, with no more than a day between hospital discharge and nursing home admission, and had not been in an NH any time in the 120 days preceding the index hospitalization (1,514,690 patients). Therefore, these were considered new, post acute admissions. We restricted the population to individuals that were able to be matched to MDS, OSCAR, AHA, and Hospital Compare, resulting in a final sample of 1,382,477 individual hospitalizations discharged to 15,356 NHs from 3683 hospitals.


Outcome variable. We used the National Quality Forum’s readmission measure (NQF; and defined rehospitalization as returning to any acute general hospital within 30 days of the date of discharge to NH from a hospital, compared with not being rehospitalized or dying during that time period. To be sensitive to the possible bias of competing risk, we undertook a sensitivity analysis excluding residents who died within 30 days of discharge. Results from this model can be found in the eAppendix (available at

Patient-level control variables. We included patient characteristics to control for the risk of rehospitalization when these characteristics could be confounded with either NH or hospital quality. Characteristics included age (both a linear and a quadratic form of age), race, and sex,15 taken from the enrollment data; and intensive care unit (ICU) use while in the hospital, length of stay in the hospital, and comorbidity, constructed using the Elixhauser index16 from the Medicare claims. We also controlled for characteristics derived from MDS assessments including cognitive status, functional impairment, Resource Utilization Groups (RUGs) III case-mix reimbursement classification index, and presence of an advanced directive (Do Not Resuscitate and/or Do Not Hospitalize). Cognitive status was measured using the Cognitive Performance Scale, ranging from 0 (intact) to 6 (very severe impairment).17 Functional impairment in activities of daily living (ADL) was measured using the ADL scale scored between 0 (totally independent in all of 7 of the ADLs) to 28 (totally dependent in 7 ADLs).18 We used the hierarchical classification of the RUGs-III system, where the groups are assigned values based on severity from 1 to 7, with 1 indicating reduced physical functions and 7 indicating extensive services required.

Hospital-level measures. Hospital quality was assessed using staffing levels and processes of care measures. We used the National Quality Forum measure #0204 for skill mix of nursing staff calculated as the percentage of licensed nurses who were registered nurses (RNs).19 We also used the condition-specific summary scores of process measures, 1 for each of the 3 clinical areas: AMI, CHF, and pneumonia. We selected Joint Commission on Accreditation of Healthcare Organizations (JCAHO)-endorsed, publicly reported accountability measures from Hospital Compare.20 Included are process of care measures that are based on a strong foundation of research, capture whether evidence-based care has been delivered, address a process quite proximate to the desired outcome, and have minimal or no unintended adverse consequences. (See eAppendix B for a list of specific items included in each measure.) The average score for 3 accountability summary scores of the hospitals in our sample were as follows: AMI mean score of 84.4 (SD = 15.6); pneumonia mean score of 88.9 (SD = 7.3); and CHF mean score of 86.3 (SD = 13.8). To classify hospitals into those that perform well or do not do so, and consistent with previous research, we dichotomized the measures to indicate the accountability as either less than 90% or greater than or equal to 90%.21,22

We controlled for hospital characteristics that have been shown to be related to hospital mortality and rehospitalization rates.23,24 As a measure of financial performance, we included hospital occupancy (the average daily census divided by the total number of facility beds set up and staffed during the year). We also controlled for size using a measure of total number of beds, for-profit status, JCAHO accreditation, and membership in the Council of Teaching Hospitals. In addition, we controlled for whether the hospital was located in an urban area, because that factor is believed to be related to discharge and readmission patterns25 and is a proxy for unmeasured market characteristics.

Nursing home-level measures. NH quality was measured using RN, licensed practical nurse (LPN), and certified nursing assistant (CNA) hours per resident day staffing levels. We also measured quality using the state-adjusted weighted deficiency citations that facilities received during their annual inspection.26 The annual survey includes a number of possible citations given in 1 of 6 categories: administration, quality of care, resident rights, dietary services, physical environment, and other services (including dental, pharmacy, and specialized rehab).

Because researchers have suggested that NH size, chain affiliation, and profit status may differentiate treatment patterns and NH outcomes,8 we controlled for chain affiliation and profit status. We also controlled for the facility occupancy rate, total number of beds, resident acuity index, percent of Medicaid residents, the number of admissions per bed, and whether or not the NH was part of a hospital. Presence of a nurse practitioner or physician assistant (NP/PA) was included because it has been shown to be related to hospitalization of NH residents.6,8,27

All continuous variables at the hospital and NH level were standardized for ease of interpretation.


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