Following the Affordable Care Act (ACA), more hospitals vertically integrated into skilled nursing facilities (SNFs). Hospitals are now being penalized for avoidable readmissions, creating a greater demand for better coordination of care between hospitals and SNF. We created a longitudinal panel data set by merging data from the American Hospital Association's Annual Survey, CMS' Hospital Compare, and the Rural Urban Commuting Area data. Hospital and year fixed-effects models were used to examine the relationship between hospital vertical integration into SNF and 30-day pneumonia and heart failure (HF) readmission rates between 2008 and 2011. Our primary analyses modeled the impact of hospital vertical integration into SNF on 30-day readmissions for both pneumonia and HF using hospital and year fixed effects. Our secondary analyses examined whether hospital vertical integration into SNF was associated with a change in readmissions rates among different types of hospitals. Our results indicate that hospitals that vertically integrated into SNF were associated with a reduction in hospital 30-day pneumonia readmission rates (β = -0.233, p = .039). Vertical integration into SNF was not significantly associated with 30-day HF readmissions. Our secondary analyses found variation in the impact of vertical integration on readmission rates among different hospital organizational types.
