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 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 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

                                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.
                                • COVID-19 vaccinations are associated with over 650,000 fewer hospitalizations and 300,000 fewer deaths in the Medicare population through December 2021, according to a study conducted by the US Department of Health and Human Services. COVID-19 vaccinations have saved an estimated $16 billion in direct medical costs.
                                • 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.
                                • About 98% of nursing home operators are having trouble hiring, 59% said they are losing money, and 73% said staffing issues could force them to close, according to an American Health Care Association survey. Nearly all nursing homes are asking staff to work more and 61% are limiting new admissions.
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