NIC: Skilled Nursing Occupancy Continues Slide, Hits Record-Low 81.7%

ANNAPOLIS, Md. — Occupancy in the skilled nursing segment has been declining for years, a slide to a record-low 81.7 percent in second-quarter 2018, according to data compiled by the National Investment Center for Seniors Housing & Care (NIC).

Annapolis-based NIC is an organization that tracks and analyzes data in the seniors housing community. For its skilled nursing occupancy report, NIC collects data on a monthly basis from 24 operators representing 1,431 facilities in 47 states.

The new occupancy rate represents a 79-basis-point drop from the previous quarter and a decline of 137 basis points year over year.

The decline in occupancy is not unexpected as the data has shown a decrease from the first quarter to the second quarter in past years as well, the report notes. The second quarter decrease, although evident across all geographic areas, saw the sharpest decline in rural markets, which dropped 89 basis points quarter-over-quarter.

“Overall we see occupancy trends persist downward,” says Bill Kauffman, senior principal at NIC. “We do have to keep in mind that these are the overall trends and most local markets have different characteristics throughout the country and different areas can reflect very different trends, as we see with the urban vs. rural area comparisons in the data.”

Other reasons for the decline cited by NIC include continued implementation of the Affordable Care Act, which affects lengths of stay, and increased competition from assisted living and home health.

“We used to see skilled nursing occupancy spike during the winter months during a particularly strong flu season,” says Liz Liberman, NIC’s healthcare analyst. “Major health policy changes — some related to Affordable Care Act provisions that affect care delivery and payment — and business trends attributable to broader competition have resulted in continued occupancy declines.”

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