Most hospitals and health systems left the skilled nursing facility business long ago, leaders told Becker’s. However, amid higher boarding, an expanding older population and fewer overall SNFs, many healthcare leaders are now leasing nursing home beds to improve throughput.
Systems have been testing multiple post-acute options to overcome discharge bottlenecks. Despite efforts, many of the options have not gotten the results leaders are looking for.
“We had earlier attempts at building preferred networks to improve alignment of the post-acute continuum to secure placement for our patients,” Michael Ellison, head of partnerships and affiliations at Orange, Calif.-based UCI Health, told Becker’s. “Those attempts had limited success — with only about 30% of patients discharging to preferred facilities. It’s difficult to hold facilities accountable when they’re free to cherry-pick Medicare patients selectively, so the network wasn’t effectively managing UCI Health patients post-discharge. That’s when we realized we needed to build our own controllable capacity through bed leasing.”
Last year, 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 — San Diego-based Scripps Health, Stanford (Calif.) Health Care and Sacramento, Calif.-based UC Davis Health.
This year, Becker’s reached out to more than 240 systems and found at least five more are leasing nursing home beds across the nation.
“The way I see leasing beds isn’t necessarily about creating capacity in the hospital — it’s about making sure patients who are ready to be transitioned off are getting the right care at the right time, and along the way, we’re not keeping beds tied up in the hospital,” Aashka Mehta, vice president of post-acute care at Greensboro, N.C.-based Cone Health, told Becker’s. “So we wanted to try this innovative approach.”
What makes leasing nursing home beds challenging
There are a number of challenges that prevent hospitals from leasing nursing home beds.
One of the greatest challenges is finding the right partner. Across the nation, nursing homes are shutting down due to low funding, and in some areas it can be difficult to find a high-quality facility.
“You want a partner with a track record of high-quality facilities, since quality is a key part of the ACO structure,” Nathan Shinagawa, COO and senior vice president with UCI Health, told Becker’s. “Finding a partner willing to work within a legal and regulatory framework that works for everyone, who’s reputable and has facilities patients actually want to go to, can be tough.”
Providing quality care is paramount for hospitals, since one of CMS’ metrics is 30-day readmissions, which includes patients discharged to SNFs. Higher readmissions from SNFs can impact hospital reimbursements and penalties.
Another problem is that most SNFs are already full, meaning many are only willing or able to lease a handful of beds.
“That demonstrates how much capacity they’re willing to put at risk with a health system,” Mr. Ellison said.
However, when hospitals and SNFs come together “it’s a win-win,” Ezz-Eldin Moukamal, MD, chief quality officer at Pittsburgh-based Allegheny Health Network/Highmark Health, told Becker’s.
Leasing beds “creates more access for medically cleared, difficult to place patients and it makes the hospital more efficient overall,” Mr. Ellison said. It can also help manage risk longitudinally across the continuum for a patient group who are at higher risk for readmission.
“This model gives us greater flexibility to address discharge barriers that can delay a patient’s transition to the appropriate level of care. It’s not about replacing the payer but supplementing existing resources when needed to help patients transition safely to the right care setting,” Mr. Ellison said.
Here are the systems leasing nursing home beds.
Allegheny Health Network/Highmark Health
Allegheny Health Network/Highmark Health leases 44 beds across 11 facilities in western Pennsylvania. It first started leasing beds in February 2023 and most recently signed on another facility in late August.
Leaders selected partner facilities within each of their hospital regions to ensure there was no drastic change in referral patterns or geography, Alex Brennsteiner, director of operations for the clinically integrated network at the system, told Becker’s.
“It is actually more patient-centric that way, because you’re matching the patient to where you’d expect them to be, and where their families would expect to be able to visit and stay involved with their care,” Dr. Moukamal said.
About 20% of overall discharges to SNFs go to one of the leased beds. Each month, the system places about 150 to 200 patients in those facilities. As a result, length of stay for these patients has decreased, and capacity management has improved.
Next, Dr. Moukamal and Mr. Brennsteiner and working on refining clinical insights into the program and identifying emerging clinical needs for patients. “I think it’s also more important than ever to keep expanding the integration of our providers into these facilities so we can be boots on the ground, partnering with facility teams to deliver great care,” Mr. Brennsteiner said.
Cone Health
Cone Health started leasing 10 beds at a four-star facility in 2025. Currently, these beds are reserved for Medicaid-pending patients only because “North Carolina takes at least a month, sometimes two to three months, to get Medicaid approved, and patients are just sitting in a hospital bed in the meantime. That’s not fair to them,” Ms. Mehta said. This has allowed patients to transition out of hospital beds in a timely manner.
Leaders from Cone Health and the SNF meet weekly to discuss patient care and clinical outcomes, as well as keep tabs on bed use and payments.
“If we did post-acute care right, we wouldn’t have to lease beds at all — that’s how I see it,” she said. “Big picture, if we care for patients where they are — think care at home, SNF at home, hospital at home — if we develop those models, patients wouldn’t need to come to the hospital as much. Beds would be available because patients are already being taken care of wherever they are.”
Denver Health
Denver Health started leasing beds in 2012. The system leases a minimum of five beds at one SNF operator, who has about 22 facilities. Its contract allows the system the flexibility to increase the number of beds as needed, Mara Prandi-Abrams, patient flow administrator at Denver Health, told Becker’s.
These beds are reserved for patients who cannot discharge to home health or home, and who lack benefits, including patients who applied for long-term care Medicaid or would apply but are waiting on a guardian or conservator to access their funding. For patients who do not qualify for benefits, the system pays for the cost itself, she said.
The leased beds, along with its guardianship program, have helped Denver Health reduce patients with a 30-plus-day stay by 50%, and effectively opened up 10% of acute care hospital beds.
Harborview Medical Center
Seattle-based Harborview Medical Center, part of University of Washington Medicine, has been leasing nursing home beds since 2017. Currently the hospital leases 99 beds across two facilities in Seattle — but in the past, it has leased up to 119 beds before.
Over the years, Harborview Medical Center has worked with a handful of facilities, while maintaining long-term relationships with two that work with them through fluctuations in census. One of these partners went from a two-star facility to a five-star facility after joining the hospital’s bed-readiness program — the name of their leasing program, Bianca Caballero, director of social work-ambulatory, bed readiness, inpatient social work, care management department at the hospital, told Becker’s.
The program helps complex patients — mostly patients with histories of substance use, mental health conditions alongside medical conditions — find placement. These are typically the “patients that nobody else wants,” Ms. Caballero said, but having hospital resources behind them makes it manageable for SNFs to work with these patients successfully. Inside the facilities, hospital physicians, social workers and enhanced case management workers provide care and resources to patients.
Since launching, the hospital has seen a significant decrease in length of stay in the bed readiness program, improved throughput for the hospital and SNF, reduced cost of care and improved access to specialist care for SNF patients which in turn improved patient outcomes after complications. This program has also helped the hospital serve more Medicaid, and Black and Brown patients.
The program has been so successful that they’ve been able to decrease the number of leased beds.
“We’re always looking to decrease our beds,” she said. “Is there a way for the community to take on these patients? We want to figure out how to break down the barriers so patients can get home — that’s more systemic, and it’s really what we’re always trying to do.”
Santa Clara Valley Medical Center
San Jose, Calif.-based Santa Clara Valley Medical Center, a public hospital system, started leasing 15 beds several years ago, and has graduated to leasing 45 beds at a local SNF.
The leasing program has helped reduce non-acute hospital days by more than 5,000 per year, improved throughput, and resulted in readmission rates that are at or below the general readmission rate, Sanjay Kurani, MD, hospital medical director for the center, told Becker’s.
The system has also created a specialized post acute care transition team, comprising two geriatricians, a physician assistant and social worker support. This team manages the behavioral and medical issues during care, as well as transition back to the community.
“We have hospital patients that are non-acute that can be difficult to place due to their medical and personal circumstances,” he said. “We created a patient flow team to find a solution and this has led to diminished overcrowding in the hospital and emergency department.”
The team has saved the hospital money by providing more efficient care in the proper setting. The team also has “virtually no staff turnover,” Dr. Kurani said.
UCI Health
UCI Health launched its leased bed pilot program this summer with a nearby SNF facility. They started with 30 beds and are ramping up to 48, which accounts for the full facility.
“For a system doing more than 8,000 discharges a year to SNF, filling around 50 beds is well within our ability,” Mr. Ellison said.
So far, 30 patients have already been discharged to a leased bed and many of those patients had higher-than-average length of stay in the hospital at two to three times longer than a less complex patient stay.
When finding a partner, the system prioritized larger operators and found a group that was revamping a previous facility. They began talking in January and officially opened its first leased beds in August. The timing allowed UCI to arrange for dedicated capacity as the facility opened.
WellSpan Health
York, Pa.-based WellSpan launched its bed leasing program, Omega Bed Program, in 2017. It was established after data showed more than 4,000 avoidable acute-care bed days annually were attributable to patients who could not be discharged to an appropriate care setting due to significant social, legal or financial obstacles, Katie Wilt, senior director of population health at the system, told Becker’s.
In the Omega Bed Program, WellSpan partners with local nursing facilities to place patients into short- and long-term nursing homes. It has supported more than 200 patients annually and saved more than 5,500 acute-care bed days each year.
“For WellSpan, leased nursing home beds are an important strategy to improve patient flow, reduce avoidable hospital days, and ensure vulnerable patients receive care in the most appropriate setting while addressing the underlying social factors that impact their long-term health outcomes,” Ms. Wilt said.
