Have SNFs Become the Stepchild of the Senior Care Industry?
This is a short blog post, but it is a meaningful one. Something we all need to take a hard look at as we evaluate the future of SNFs and their role in senior care and how paying attention to the data can help you prosper.
What’s Happening to the SNF Investment Community?
We are specifically referring to a mid-May 2022 piece in McKnight’s Long-Term Care News about Invesque, a Toronto-based real estate trust (REIT), and its continued shift away from skilled nursing facilities as part of its portfolio.
The article read:
“Following several dispositions over the last three quarters, nearly 60% of the company’s net operating income (NOI) is now coming from senior housing, according to Chief Investment Officer Adlai Chester. Seventy-five percent of the company’s NOI came from skilled nursing five years ago in comparison.
Invesque Chairman and CEO Scott White stressed a more robust market in private-pay senior housing. That’s quite a turnaround and one that should alarm the corporate offices in SNFs and those independents looking at buyout opportunities as part of their exit strategy.
The reasons for this are primarily twofold. As the article points out, the first is the lethargic bounce-back of census in SNFs as the pandemic eases up.
The numbers are sobering. The National Investment Center for Seniors Housing & Care (NIC) monitors occupancy numbers for SNFs. Their latest figures are only through Q3 2020, showing us that SNFs have experienced the most significant occupancy drop of any senior care setting since the start of the pandemic, by nearly 11 percentage points since COVID began.
This does not consider the darkest days of the pandemic, nor does it account for the impact of the worst of the COVID variants, including delta and omicron.
Anecdotally the stories are grim since 2020: census in SNFs is not rebounding.
SNF’s Getting the “Stink Eye”
The second factor is regulation. CMS regulations, and those from the individual states, continue to get tighter and tighter. Five-star ratings are more and more challenging to attain and then maintain the next time your facility is rated.
As John O’Connor, editorial director for McKnight’s, so aptly observed in a recent editorial, this is an environment wherein “… regulators, the White House, and many consumer groups keep giving nursing homes the stink eye.”
The Senior Population Trends Show a Need for SNFs
O’Connor also points to investors who are optimistic about SNF investment opportunities, pointing out that a “rapidly aging nation will soon push skilled care demand to unprecedented levels.”
America’s Health Foundation reports that about 16.5% of the nation’s population, more than 54 million, are adults aged 65 and older. This is according to Census Bureau records. In 2050, the total number of adults aged 65 and older will grow to nearly 20% of the U.S. population, an estimated 85.7 million.
At some point, the government will have to put away the stink eye and deal with the issue of how to address senior care.
SNFs Must Prepare for the Future
For some SNFs, the next few years present challenges. Many think that COVID has yet to play out, and with it the concerns of residents and their families about going into an SNF, whether for post-acute or long-term care.
Fortune and success favor the prepared, especially in capturing, presenting, and analyzing data. This information attracts the best employees, helps build census by knowing where residents are coming from, enables the best outcomes, and informs marketing choices. CareWork’s software platform pulls together all the data silos in your operations, whether you are an SNF, long-term care, or senior housing operator. CareWork provides leadership and management teams the ability to see vital information and make the best decisions.
Interested? Call us today or visit our website.