Continuing Care Retirement Communities

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 3,700 firms classified as continuing care retirement communities (CCRCs) in the US operate 5,300 facilities. Services include assisted living with on-site skilled nursing facilities, independent living, assisted living, and skilled nursing services either on campus or at nearby facilities. These facilities involve a contract each resident signs, entitling them to a continuum of care in exchange for payment of an entrance fee and ongoing monthly fees.

Sensitivity to Capital Markets

Difficulty in obtaining financing or in re-financing existing debt can force CCRCs to delay needed renovations, postpone planned expansions, or prevent them from breaking ground.

Demographic Trends Grow Demand

Since January 2011, baby boomers have been turning age 65 at a rate of 10,000 per day - and this will continue for 20 years.

Industry size & Structure

The average CCRC has about 128 employees and generates $10.5 million in annual revenue.

    • There are about 3,700 CCRC firms in the US operating 5,300 facilities with $40 billion in annual revenue and 485,000 employees.
    • About half of facilities are "true" CCRCs offering care from independent living through skilled nursing under a contract that guarantees a continuum of care in exchange for an entrance fee and ongoing monthly fees.
    • About half of "true" CCRCs are affiliated with faith-based organizations, such as Presbyterian, Lutheran, Methodist, or Catholic churches.
    • Companies that own and operate multiple communities include Life Care Services and Erickson Living.
    • CCRCs are located in a range of geographical areas from urban to suburban to rural.
                              Industry Forecast
                              Continuing Care Retirement Communities Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Nov 2, 2022 - Flu Season Off To A Strong, Early Start
                              • Influenza is hitting the US unusually early and hard, according to the US Centers for Disease Control and Prevention (CDC). Between 70% and 85% of seasonal flu-related deaths have occurred in people 65 years and older, and between 50% and 70% of seasonal flu-related hospitalizations have occurred among people in this age group, according to the CDC. Flu season usually lasts from October to May, peaking in December and January. A record number of people were hospitalized in October. “It’s unusual, but we’re coming out of an unusual covid pandemic that has really affected influenza and other respiratory viruses that are circulating,” said Lynnette Brammer, an epidemiologist who heads the CDC’s domestic influenza surveillance team. Activity is high in the south and southeast and is starting to move up the Atlantic coast.
                              • The director of the Centers for Disease Control and Prevention (CDC) said that the organization had failed to respond quickly enough to the coronavirus pandemic and needed to be overhauled. Dr. Rochelle Walensky said that the CDC's future depended on whether it could absorb the lessons of the last few years, during which much of the public lost trust in the agency’s ability to handle a pandemic. Her admission of the agency’s failings came after she received the findings of an examination that she ordered in April in response to criticism of the CDC’s performance. Dr. Walensky said that the CDC must refocus itself on public health needs, respond much faster to emergencies and outbreaks of disease, and provide information in a way that ordinary people and state and local health authorities can understand and put to use.
                              • The annual Inpatient Prospective Payment System final rule issued by the Centers for Medicare and Medicaid Services (CMS) includes a 2.7% year-over-year increase in Medicare Part A payments to skilled nursing facilities for fiscal year 2023. The federal government fiscal year begins on October 1 and ends on September 30 of the following calendar year. CMS is also finalizing a permanent 5% cap on annual wage index decreases to mitigate instability in SNF prospective payments due to significant wage index decreases that may affect providers in any given year. The cap is intended to smooth year-to-year changes in providers’ wage index payments.
                              • The US Supreme Court allowed a federal vaccine mandate to stand for medical facilities that take Medicare or Medicaid payments. "We agree with the Government that the [Health and Human Services] Secretary's rule falls within the authorities that Congress has conferred upon him," said the majority, writing that the rule "fits neatly within the language of the statute. After all, ensuring that providers take steps to avoid transmitting a dangerous virus to their patients is consistent with the fundamental principle of the medical profession: first, do no harm."
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