Report predicts 'bright future' for nursing homes — with caveats
Despite falling occupancy and mounting Medicare payment pressures, a national consulting firm says some providers are poised to benefit from the changing industry by 2020.
“The Silver Tsunami and the increasing capabilities of SNFs suggest that the future will be bright for facilities that can provide high-quality, cost-efficient care,” Plante Moran said in its inaugural “Make the mark” report, which on Monday accompanied the release of its 2016 benchmarking data.
The publication acknowledges that competition from home health services and a focus on length-of-stay management have driven demand for SNF services down since 2015.
Providers that have aging physical plant or workforce challenges are most vulnerable. But those who can manage care well by episode (and track the data) and adopt flexible labor models will be best prepared for success, the report said.
Using Centers for Medicare & Medicaid Services data from more than 14,000 facilities, Plante Moran found salaries of those providing routine daily services climbed 3% between 2015 and 2016.
A national need for 1.2 million new RNs, 400,000 new LPNs and 500,000 new nurse aides between 2010 and 2020 is only increasing pressure to pay employees well.
Average LPN salaries jumped 25% between 2015 and 2016 at the facilities included, which could mean some buildings are relying more on overtime. The use of staffing agencies to fill vacancies will also continue to push pay rates higher, a trend that's making a dent in laundry, housekeeping and dietary budgets too.
Regional breakdowns also were included.
The report found overall daily routine cost climbed by 4.5%, outpacing revenue growth from Medicare.
But good news is coming, according to the analysts.
“Occupancy in the next 5-10 years for nursing facilities is expected to grow due to the increasing senior population with the ‘Baby Boomer' generation reaching the age of 65 by 2030,” report authors wrote. “Skilled nursing facilities should target for a lower Medicare length of stay to become attractive partners with hospitals. With a strategy of lower length of stay, a skilled nursing facility will need to increase marketing efforts to maintain optimal occupancy levels.”