The costs and potential savings associated with nursing home hospitalizations.

Reducing nursing home hospitalizations has been identified as a possible area for cost savings, but little is known about the magnitude of spending associated with these hospitalizations. Using merged hospital and nursing home administrative files from New York State, we found that inflation-adjusted spending on nursing home hospitalizations increased 29 percent from 1999 through 2004. By 2004, aggregate spending totaled roughly $972 million, of which 23 percent was attributable to ambulatory care-sensitive conditions. These data highlight the potential for cost savings associated with programs designed to reduce these potentially avoidable hospitalizations from the nursing home setting.