Senior care executives now predict higher margins in 2022

LONDON: More than half of the senior care executives who participated in a recent Seniors Housing & Care survey said they anticipate operating margins to improve in the next six months, albeit diminished due to continued high labor costs.

One-third of respondents expect a 1% to 5% improvement, while 16% are more hopeful, looking toward a 6% to 10% operating margin increase. Owners and executives from 66 small, medium and large skilled nursing and seniors housing operators participated in the latest NIC Executive Survey – responses were submitted between Dec. 6 and Jan. 9.

Nine out of 10 operators use agency staff now – between seniors housing and SNFs – and “nearly all” respondents said they have been paying staff overtime since July as well, NIC Senior Principal Lana Peck said in an analysis of the results.

What may be a silver lining: the ability to hire from outside the seniors housing and care industry has grown “modestly” from 11% to 25%, Peck added. Just 10% of organizations said they backfill staffing shortages using volunteers.

Anecdotal reports obtained by NIC indicate net operating income (NOI) growth is further supported by “rate increases to counterbalance pandemic and recovery-related cost pressures,” according to Peck.

Fewer skilled nursing operators are seeing an acceleration of move-ins compared to the last NIC Executive Survey, from 44% to 33%. The trend matches independent living, while assisted living and memory care experienced an acceleration of move-ins, suggesting an “increase in needs-based moves,” NIC researchers noted.

Move-outs accelerated for skilled nursing facilities in the past 30 days – 22% of SNF respondents said move-outs accelerated into the new year, compared to 17% in the fall of 2021.

“Roughly one-quarter of organizations with nursing care beds and/or memory care units reported an acceleration in the pace of move-outs typically due to discharges, natural attrition, and moves to higher levels of care,” the report stated.

Between one-quarter and one-third of operators with nursing beds and memory care units reported declining occupancy into the new year.

NIC MAP Vision reported an increase in occupancy from September to October to sit at 75.4%, per data released Dec. 30. The increase negates the first decline in occupancy after a seven-month positive track record in 2021.

About 12% more executives now believe occupancy recovery won’t happen until 2023 compared to a month ago, according to NIC responses. In comparison, NIC data from September show only 8% of executive respondents stretched out occupancy recovery to 2023; 73% of respondents still believed recovery would happen in 2022 during that time.