Skilled nursing demand increasing, but staffing remains issue

Skilled nursing occupancy increased by 48 basis points from July to August to end the month at 78.8%, according to the National Investment Center for Seniors Housing & Care’s most recent skilled nursing monthly report, released Thursday.

Operators remain challenged by staffing issues, however, making it difficult for operators to fully meet the need.

The occupancy level was the highest for skilled nursing since April 2020, according to the report, but it is still 8.4 percentage points below the pre-pandemic February 2020 level of 87.2%

“Occupancy has increased throughout 2022, which suggests demand for skilled nursing is growing. However, retaining adequate staff is still challenging and limits the ability to increase patient admissions,” NIC Senior Principal Bill Kauffman wrote in a blog post.

Along with staffing, operators are feeling pressure from wage growth and general inflationary challenges, according to NIC. The good news, Kauffman said, is that demographics suggest that long-term demand for skilled nursing will grow over time. 

According to the data, managed Medicare revenue per patient day decreased in August and is down 1.2% from the previous year. Revenue per patient day ended August at $453 for  managed Medicare and at $573 for Medicare fee-for-service, representing a $120 differential. In August 2020, the differential was $105. 

“Depending on an operator’s business model, the continued decline in managed Medicare revenue per patient day can pose a challenge as the reimbursement differential between Medicare fee-for-service and managed Medicare has increased during the past two years,” Kauffman wrote. “However, some operators see [an] opportunity to capture patient volume with the growth of managed care.”

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