Finally, some good occupancy news

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John O'Connor
John O'Connor

In case you didn't notice, skilled care occupancy levels have not exactly been reaching new heights lately.

Actually, what we've seen in recent years has been a steady downturn. How bad has it been? This bad: The 86.8% rate reported for the fourth quarter was the worst on record since 2005, according to the National Investment Center for Seniors Housing & Care.

As if that's not bad enough, this has been taking place at a time when skilled facility construction has been virtually nonexistent. So it's not like we have an excess supply problem on our hands here. It's pretty clear the market has been voting with its feet, er heads. And the unmistakable conclusion is that skilled care has clearly fallen out of favor, at least from an occupancy standpoint.

To be sure, there have been some complicating factors. Perhaps most notable has been a skilled care shift to keeping patients/residents for shorter durations. Much as Diagnosis Related Groups forced hospitals to move-'em-out as quickly as possible, Resource Utilization Groups are doing the same on the skilled care side. The result is that many facilities now have average lengths of stay hovering in the low teens, if not single-digit days. 

Certainly, many operators are now opting for quality (higher payments) over quantity (more occupants).  And we're also seeing limited but a growing number of examples of hospitals discharging patients to assisted living settings — or just sending them home.

Still, declining occupancy is declining occupancy.

So you could almost hear the collective sigh of relief when NIC released its first-quarter tally. Admittedly, the 87.2% rate is not exactly a cause for celebration.

Then again, maybe it is. Because up until that turnaround, things were falling faster than my 401k balance during the Great Recession.

To be sure, it remains to be seen whether this quarterly uptick is a blip or the start of better days to come.

Either way, it comes as welcome news for a sector than can use all it can get.

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Daily Editors' Notes

McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Emily Mongan.

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