Healthcare Policies, Focus of Patient Care Challenge Operators

Operators leverage healthcare policy changes to drive profitability. Nursing care communities, also known as skilled nursing properties or facilities, account for the largest share of the seniors housing industry. Operators at these properties treat both long-stay custodial care patients as well as short-stay post-acute care patients. Unlike other seniors housing property types, the segment is highly dependent on Medicaid and Medicare reimbursement programs, deriving 71 percent of revenue from these sources. National and state healthcare policies have a more direct impact on the property sector and expanded managed-care and value-based care policies must be navigated by operators to maximize returns.

Trend toward short-stay post-acute care patients contributes to falling occupancy. According to the NIC MAP® Data Service, nursing care community occupancy rates have fallen from more than 90 percent in 2008 to nearly 86 percent in the third quarter. The nursing care sector has faced a number of challenges impacting demand and driving down the length of stays, thus impacting stabilized occupancy rates. The heightened emergence of assisted living facilities over the past two decades has given individuals another option to long-term care. Meanwhile, healthcare policy changes to lower costs and drive efficiency in post-acute care have resulted in shorter stays. Both have placed downward pressure on stabilized occupancy rates, forcing operators to consider other factors, such as the number of patients cared for, when looking at th health of nursing care properties

National Trends and Challenges

  • According to the Social Security Administration, a person turning 65 today will live, on average, well into his or her 80s, with 25 percent of those individuals’ lives extending past age As the 65 and older population is set to rise by more than 17 million individuals over the next 10 years, more than half of this growth will occur in Americans older than 75.
  • Demand for seniors housing facilities is anticipated to rise substantially over the next several years, and staffing shortages for nursing aids and assistants are already posing a problem in some areas of the These employees have realized a slower pace of wage growth when compared with other industry segments, leading to many workers choosing employment in other economic sectors.


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