The Effects of Skilled Nursing Facility Care

Among the elderly population that is hospitalized, about 20 percent are discharged to skilled nursing facilities (SNFs), at a cost of over $30 billion annually. SNFs provide high-level care in an outpatient setting with the intent of reducing individuals’ time in the hospital and preventing readmissions. I leverage a Medicare policy that induces a discontinuity in the probability of being transferred to a SNF to estimate the effectiveness of SNF care. I find that SNF care reduces the probability of readmission to the hospital within 30 days by 33 percent, suggesting that SNF care substantially improves patient outcomes.