One health system cut approximately 1,200 bed days and saved $1.92 million in 2024. Another system reduced length of stay by 30 to 60 days per patient for around 800 patients a year. A third system has saved 14,731 bed days since January 2023.
All these results came from the same strategy: leasing nursing facility beds.
Becker’s reached out to almost 200 systems to find the ones leasing nursing facility beds. Of those that responded, only three said they use this strategy, and all of them are based in California.
“I’m genuinely surprised more systems aren’t doing this,” Joseph Galante, MD, chief medical officer at Sacramento-based UC Davis Health, told Becker’s. “It’s one of the few levers we have to influence post-acute care capacity. You can’t control a lot of the external SNF market, but you can lease beds and build a sustainable transition model around them.”
For skilled nursing facilities, leased beds can be a win-win. It guarantees payment and a certain number of patients and helps them build partnerships with a system they trust.
Here is how three systems are structuring their bed leasing programs and the results.
UC Davis Health
UC Davis Health started leasing nursing facility beds in January 2022 after it had issues with inpatient bed crowding and discharge options decreasing. At that point, it had about 3,500 avoidable inpatient days annually and some patients’ length of stay exceeded 100 days, which combined meant $9 million to $12 million in financial losses.
The system needed a change, so it went to a local skilled nursing facility and leased 15 beds. From there, the program expanded. Six months later, UC Davis Health added nine more beds, then two years later it added six more. Now the system has 30 beds — six custodial and 24 traditional skilled nursing beds that it leases for between $250 and $350 per bed, per day.
“This model helps us bypass common denials in SNF admissions — whether due to underfunded medical complexity or a lack of discharge options — and gets patients out of the acute care setting,” Dr. Galante said.
The program serves about 800 patients per year, which equates to one to two inpatient beds turned over per day. Patients can stay in skilled nursing facility beds for up to 50 days, though the average patient stays for 30 to 40 days. While there, patients still receive comprehensive care from a dedicated team that includes a physician, a nurse practitioner, a clinical case manager and a clinical pharmacist.
The program has reduced length of stay by 30 to 60 days per patient and decreased avoidable inpatient days from 5.3 to 3.2 per patient. Moving patients to outpatient settings faster has also increased patient satisfaction because they are not stuck in the hospital, Dr. Galante said.
“Many systems focus on ED boarding and front-end pain points, but often the root cause lies in the back-end — patients who have nowhere to go,” he said. “We’ve found this program to be a reasonable, replicable strategy to address that issue.”
Dr. Galante said one of the biggest reasons the program works is because of UC Davis Health’s strong relationship with the skilled nursing facility. They collaborate on patient throughput, assign direct liaisons on both sides, regularly review financial and clinical outcomes and refine workflows together.
Stanford Health Care
Stanford (Calif.) Health Care analyzed discharge data to find that approximately 45% of discharge delays are due to challenges obtaining post-acute care.
“These avoidable patient days include issues related to uninsured or underinsured patients, complex care needs, a lack of available post-acute beds, authorization requirements, and the need for specialty equipment or medications,” Jill Weeks, BSN, RN, vice president of care continuum at Stanford Health Care, told Becker’s.
To address this, the system launched its leasing bed program in April 2022. The program started with 10 beds across three locations from the same skilled nursing provider. These locations would hold complex patients for whom it was challenging to find placement. Over time, the program has gone through redesigns, with the most recent changing the number of beds to just five at a single facility.
“This narrowed focus allows for improved resource management, enhanced quality control and, ultimately, improved patient outcomes,” Ms. Weeks said. “Currently, we are hoping that our Continuing Care Network will allow for more opportunity to negotiate expectations for facilities to accept a certain number of complex patients. This expansion would allow for potential capacity improvements and enhanced patient care transitions.”
This program, although smaller than others, has still had a large financial impact for the system. In fiscal 2024, Stanford saved approximately 1,200 bed days and realized savings of about $1.92 million through leased beds.
“This is in addition to 667 bed days saved by the memory care contracted beds, which had a cost avoidance of over $1,354,000,” Ms. Weeks said.
The benefits are expected to persist as the country’s population continues to age.
“As our healthcare landscape continues to evolve and we learn to manage our increasingly aging and medically complex populations, the demand for skilled nursing beds will continue to rise,” she said. “Leasing beds is one strategy that other facilities can consider to improve patient flow, which in turn enhances access for those in the community who require hospital-level care. Even transitioning one patient to a skilled nursing facility when medically appropriate frees up a bed for another patient to come in and receive the care that they need.”
Scripps Health
San Diego-based Scripps Health started its leasing bed program during the COVID-19 pandemic. Since January 2023, the system has saved 14,731 bed days with the program.
The number of beds leased depends on the year and need. In 2023, the system leased about 24 beds at four facilities. As of January 2025, it had seven beds at one facility. These beds have improved discharge rates for many patients, but there is still a population that struggles with long hospital stays.
“We desperately need more mental health and behavioral health facilities,” Ghazala Sharieff, MD, Scripps Health chief medical and operations officer and corporate executive vice president, told Becker’s. “These patients have both medical and behavioral health needs, but there’s no comprehensive solution for them yet.”
