Skilled Nursing Occupancy Stabilizes After Pandemic's Lows
Occupancy is improving as COVID-19 cases dropped 98% since December at skilled nursing facilities.
The hard-hit skilled nursing industry is finally showing signs of recovery.
While still 13.7 percentage points below its pre-pandemic level, occupancy at US skilled nursing facilities increased to 71.2% in February 2021 from 70.7% in January, according to NIC MAP data prepared and released by NIC MAP Vision. February’s increase pulled occupancy back to the December 2020 level.
Occupancy is improving as COVID-19 cases dropped 98% since December at skilled nursing facilities. The increased confidence in safety in nursing facilities seems to be spawning more leads. NIC’s latest Executive Survey Insights says that more than four in five operators in senior housing and skilled nursing are reporting an increase in lead volume since the beginning of 2020.
“February’s NIC MAP data underscores what some skilled nursing facility operators have been saying the past few months: they are starting to see occupancy stabilization,” said Beth Burnham Mace, NIC’s chief economist in a prepared statement. “Data from the next few months will be extremely important, as it will signal whether this is the start of a longer trend toward recovery.”
Traditional Medicare revenue per patient day stayed steady at $555, but the share of Medicare revenue declined to 23.4% from 25.1% in January, according to NIC MAP data. The share of Medicare Advantage revenue increased to 11.1%. In May 2020, it recorded its pre-pandemic low of 8.3%.
“Hospitals resuming elective surgeries and discharging patients to skilled nursing facilities may be responsible for greater share of Medicare Advantage revenue, thereby boosting occupancy,” said Bill Kauffman, senior principal at NIC in a prepared statement. “Occupancy is still near historic lows and many facilities will need to see substantial increases in occupancy in order to stabilize the balance sheet.”
NIC says that occupancy will be an important indicator of recovery in the skilled nursing sector as the pandemic passes. As adults get older they will continue to need an array of options for long-term care, given personal preferences and health and mobility status.
Despite struggles in the sector, large deals are still getting done. In late April, Michigan-based investment firm Mitchell Family Office secured a $168 million bridge loan by Lument to acquire the skilled nursing division of American Health Partners, a play that was part of a larger plan by MFO to acquire all interests of AHP.