A mixed year ahead for SNF providers
It was an eventful year in 2016, especially for the seniors housing and care sector. Aging baby boomers, diminished finances and divestiture of skilled nursing facilities were topics on the mind on many providers in the past 12 months. Although there are still a number of uncertainties, we took a deeper dive into what 2017 may bring for SNFs.
Lancaster Pollard sent an online survey to approximately 4,000 leaders at seniors housing and care facilities throughout the U.S. Over the course of two weeks, 273 participants responded with their predictions for 2017. The report below focuses on the skilled nursing demographic.
Overall, our survey findings depict an environment similar to 2016. Although our respondents indicated skilled nursing was the least likely to grow in 2017, our skilled nursing respondents indicated an active year, with construction and renovation projects on their radar in the following months.
Of the 273 total respondents, 58% (158 respondents) own, develop or manage a skilled nursing facility.
When all survey respondents were asked what elements of the continuum of care will experience the most growth in the next 12 months, affordable seniors housing was higher than all others. Skilled nursing was the lowest. These results are consistent with the results we received in 2016. Respondents could choose as many as applied so the total exceeds 100%.
Reflecting on their expectations for the elements of the continuum of care with construction projects planned in 2017, 16% of all respondents cited skilled nursing, which is consistent with the results from our 2016 survey.
What's in store for SNFs this year?
The following charts illustrate the likelihood of projects in 2017 based on the 158 skilled nursing respondents.
When asked what the likelihood of pursuing a renovation project in the next 12 months is, nearly half of skilled nursing provider participants indicated it is extremely likely. Seventy-two percent of skilled nursing respondents indicated that it is extremely likely or somewhat likely they will pursue a renovation project in 2017.
A majority of skilled nursing providers also predict they will pursue a construction project in 2017. Sixty-six percent of skilled nursing respondents indicated it is extremely likely or somewhat likely that they will pursue a construction project in 2017. Twenty-five percent of respondents indicated it is extremely unlikely.
Thirty-four percent of skilled nursing respondents indicated that they anticipate the presidential administration will have a positive influence on their business. Close behind, thirty percent of skilled nursing providers indicated an unknown influence on their business.
Overall, our findings indicate that although our skilled nursing respondents expect to be active with renovation and construction projects in 2017, when compared to the other components within the continuum of care, skilled nursing is consistently ranked in the least active percentiles. Those results may not come as a surprise to those who are aware of the supply concerns in seniors housing and the diverse operating challenges many skilled nursing operators are facing.
Steve Kennedy is the senior managing director at Lancaster Pollard.