Skilled Nursing Midyear Outlook
Daily Rates Advance Despite Unparalleled Adversity;
Supply Reduction Sets Stage for Future Occupancy Boost
Rates sustain growth momentum. Mass vaccination is beginning to ease prospective residents’ fear of COVID-19 transmission inside facilities. Still, the sector will endure an occupancy recovery beyond 2021, with significant ground to make up. Roughly 104,000 beds were vacated during the past year ended in the first quarter. According to NIC Map® Data Service, the national stabilized occupancy rate plummeted 1,270 basis points year over year to 73.8 percent in March. The sharpest contractions were in areas that had pronounced initial virus outbreaks and prolonged lockdowns, like the Pacific and Northeast regions. Nevertheless, average daily rates increased annually in every U.S. region, led by a 2.8 percent hike in the Pacific region. Daily rates are bolstered by forces beyond occupancy, such as reimbursement via government healthcare programs. Ample federal stimulus also provided a buffer for skilled nursing operators while enduring lower revenue. Headwinds remain, though, with assistance drying up and an exacerbated labor shortage requiring providers to offer aggressive wages to attract staff.