Nursing Homes & Assisted Living

Industry Profile Report

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

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

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

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

Industry Profile Excerpts

Industry Overview

The 9,000 nursing homes in the US provide inpatient nursing and rehabilitative services to the elderly and patients with chronic conditions or prolonged illness. Primary services include skilled nursing care, assistance with activities of daily living, rehabilitation, and hospice care. The industry includes group homes for the disabled and convalescent homes and hospitals.

Dependence on Government Funding

Nursing homes receive the majority of revenue from Medicaid and Medicare.

Nursing Shortage

The shortage of nurses has been an ongoing problem for nursing homes.

Industry size & Structure

The average nursing home company employs about 175 workers and generates between $10 million and $15 million annually.

    • The nursing home industry consists of about 9,000 firms that employ over 1.5 million workers and generate almost $20 billion annually.
    • The industry is concentrated at the top and fragmented at the bottom; the top 50 companies account for 25% of industry revenue.
    • The nursing home industry includes chains, non-profit organizations, and independent operators. No truly national companies exist; even some of the largest firms operate regionally.
    • Large companies include Genesis Healthcare, The Ensign Group, Life Care Centers of America, and ProMedica Senior Care.
    • About 80% of firms are for-profit entities, while about 20% are non-profit tax-exempt organizations.
                                Industry Forecast
                                Nursing Homes & Assisted Living Industry Growth
                                Source: Vertical IQ and Inforum

                                Coronavirus Update

                                Apr 25, 2022 - CMS Waivers Cancelled
                                • The Centers for Medicare and Medicaid Services (CMS) issued guidance in early April that terminates numerous blanket waivers applicable to skilled nursing facilities (SNFs), inpatient hospices, intermediate care facilities for individuals with intellectual disabilities (ICF/IIDs), and end-stage renal disease (ESRD) facilities. CMS expressed concern “about how residents’ health and safety has been impacted by the regulations that have been waived, and the length of time for which they have been waived.” CMS said that it is removing some operational flexibilities not directly related to infection control. A CMS waiver of the requirement for physicians and non-physician practitioners to perform in-person visits for nursing home residents is among those cancelled. The waiver allowed visits to be conducted, as appropriate, via telehealth options.
                                • Nursing facilities were most likely to report a shortage of aides and least likely to report a shortage of clinical staff as of February 27, 2022, according to the nonprofit Kaiser Family Foundation. Among the approximately 14,000 nursing facilities reporting complete and reliable data for the week ending February 27th, 27% reported aide shortages while just 3% reported clinical staff shortages. Staff shortages were nearly as high for nursing staff as they were for aides, with 25% of facilities reporting nursing staff shortages. About 15% reported other staff shortages during the period.
                                • The Centers for Disease Control and Prevention is not changing the definition of "fully vaccinated," but is instead "pivoting the language" to get people "up to date" on their vaccinations, CDC director Rochelle Walensky said. Nursing homes and assisted living facilities may be affected by federal guidance, directives, and mandates regarding vaccination. "If you are eligible for a booster and you haven't gotten it, you're not up to date and you need to get your booster in order to be up to date," Walensky said. "What we really are working to do is pivot the language to make sure everybody is as up to date with their COVID-19 vaccines as they personally could be,"
                                • The US Supreme Court allowed a 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."
                                • Only a quarter of nursing homes and assisted living communities surveyed in 2021 by The American Health Care Association and National Center for Assisted Living are confident they can last a year or more. About 84% of nursing homes said they are losing revenue due to fewer post-acute patients coming from hospitals. The top three costs that facilities have incurred due to COVID-19, regardless of whether they have had cases or not, are additional pay for staff, hiring additional staff, and personal protective equipment.
                                • Nursing homes are excepted from recently released guidance from the Centers for Disease Control and Prevention stating that fully vaccinated people — those who have received their final Covid-19 vaccination at least two weeks earlier — no longer need to wear masks outdoors or in most indoor settings.
                                • The Centers for Disease Control and Prevention said that cleaning once a day is usually enough to minimize the chance of coronavirus transmission in most settings. Nursing homes and assisted living centers are likely to benefit if the guidance results in lower pandemic-related cleaning costs. The CDC did identify one appropriate situation for deep cleaning: an indoor environment where a case of COVID-19 had been confirmed within the past 24 hours.
                                • Complying with COVID-19 testing requirements for staff members could cost larger nursing homes up to $15,000 per week to, according to non-profit industry advocate LeadingAge. Testing equipment and processes and personal protective equipment are the primary costs. New federal regulations mandate that workers be tested only once per month if a community’s positivity rate is below 5%, once a week if the positivity rate is between 5% and 10%, and twice a week if the positivity rate is over 10%.
                                Get A Demo

                                Vertical IQ’s Industry Intelligence Platform

                                See for yourself why nearly 40,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.

                                Build valuable, lasting relationships by having smarter conversations -
                                check out Vertical IQ today.

                                Request A Demo