The following analysis examines occupancy and year-over-year changes in inventory, and same-store asking rent growth—by care segment—within CCRCs and non-CCRCs in the 99 combined NIC MAP Primary and Secondary Markets. The analysis also explores the distribution of occupancy rates by payment type across all care segments during the second quarter of 2023.

NIC MAP^®, powered by NIC MAP Vision, collects primary data on occupancy, asking rents, demand, inventory, and construction for about 16,200 independent living, assisted living, memory care, skilled nursing, and continuing care retirement communities (CCRCs—also referred to as life plan communities) across 140 U.S. metropolitan markets. The dataset includes more than 1,165 not-for-profit and for-profit entrance fee and rental CCRCs in these 140 combined markets, including 1,087 in the 99 combined Primary and Secondary Markets.

2Q 2023 Market Fundamentals by Care Segment – CCRCs vs. non-CCRCs

The exhibit below illustrates the relative market performance of CCRCs vs. non-CCRCs by care segment in the second quarter of 2023 and includes year-over-year changes in occupancy, inventory, and asking rent growth.

Occupancy. Overall, the occupancy rate for CCRCs continued to outpace that of non-CCRCs across all care segments. The difference in the second quarter 2023 occupancy rates between CCRCs and non-CCRCs was largest for the independent living segment (6.5pps) and the assisted living segment (4.4pps), and smallest for the nursing care segment (1.4pps).

The CCRC independent living segment had the highest occupancy (90.0%) in the second quarter of 2023, followed by CCRC assisted living and memory care segments (86.9% and 86.4%, respectively).

In terms of occupancy improvements from one year ago, the largest occupancy gains for both CCRCs and non-CCRCs were seen across assisted living and memory care segments, while the smallest gains were seen across independent living segments.

Asking Rent. The monthly average asking rent for CCRCs remained higher across all segments. However, non-CCRCs had relatively larger rate increases from year-earlier levels across all segments except nursing care. The highest year-over-year asking rent growth for non-CCRCs was seen in the assisted living and memory care segments (5.9% to $6,006 and 5.9% to $7,671, respectively). Similarly, asking rent for CCRCs recorded the largest annual growth in the assisted living and memory care segments (5.0% to $6,555 and 5.3% to $8,292, respectively).

Note, these figures are for asking rates and do not consider any discounting that may be occurring.

Inventory. From year-earlier levels, nursing care inventory for both CCRCs and non-CCRCs experienced the largest declines (negative 1.9% and 0.9%, respectively). The highest year-over-year inventory growth was reported for the non-CCRC independent living segments (3.4%) and memory care segments (1.8%).

Negative inventory growth can occur when units/beds are temporarily or permanently taken offline or converted to another care segment, outweighing added inventory.

2Q 2023 Occupancy Distribution by Care Segment – Entrance Fee CCRCs vs. Rental CCRCs

The exhibit below explores the distribution of occupancy rates across entrance fee and rental CCRC care segments and shows a greater prevalence of entrance fee and rental CCRC care segments within the higher occupancy rate ranges.

Entrance Fee CCRCs. The combination of the 80-90% occupancy range and >90% occupancy range shows that 89% of entrance fee independent living segments reported an occupancy rate above 80% in the second quarter of 2023. This represents the largest share across all care segments and payment types. Assisted living follows closely at 82%, while memory care stands at 78%, and nursing care stands at 68%.

Rental CCRCs. Approximately 74% of independent living segments reported an occupancy rate above 80%, followed by assisted living and memory care segments both at 75%, and nursing care segments at 66%.

In conclusion, as the senior housing occupancy recovery continues and shows encouraging trends, it’s important to recognize that even high-end properties, with their premium amenities and enhanced living standards, are not immune to the sensitivities of their residents regarding rate increases. Even residents who can theoretically afford these rate hikes may become resistant after a certain limit. It is also important to understand what both current and prospective senior housing residents are prepared to pay and the potential impacts of rate increases on the pace of move-ins and move-outs.

Look for future blog posts from NIC to delve deep into the performance of CCRCs.  
Are you interested in learning more?  To learn more about NIC MAP Vision data, and about accessing the data featured in this article, schedule a meeting with a product expert today.

This article originally appeared in Ziegler’s Senior Living Finance Z-News. 

Senior housing all-occupancy is on track for a ninth consecutive quarterly gain, with a half percentage point increase in the first two months of the third quarter of 2023, i.e., July and August. The all-occupancy rate for senior housing for the 31 NIC MAP Primary Markets edged up to 84.2% in the August 2023 reporting period, up 0.1 percentage points (pps) from the July 2023 reporting period on a three-month rolling basis, according to intra-quarterly NIC MAP® data, released by NIC MAP Vision. From its pandemic record low of 77.8% in June 2021, senior housing all-occupancy increased by 6.4pps and is now 2.9pps below pre-pandemic March 2020 levels of 87.1%.

Occupancy Recovery Varies by Majority Property Type. At 85.8%, the all-occupancy rate for majority independent living (IL) properties for the NIC MAP Primary Markets inched up 0.1pps from July 2023 but remained 3.7pps below March 2020 levels. For majority assisted living properties (AL), the all-occupancy rate for the NIC MAP Primary Markets was up 0.3pps to 82.7% from July 2023 and is now 1.9pps below March 2020 levels. Additionally, as a result of this positive momentum and consistency, the all-occupancy rate for majority assisted living properties for the 68 NIC MAP Secondary Markets (84.4%) has fully recovered and is now 0.2pps above March 2020 levels of 84.2%.

The inventory of majority independent living properties for the NIC MAP Primary Markets increased by 1.0% or 3,561 units from year-earlier levels in the August 2023 reporting period. AL inventory increased by 1.2% over this same period. The pace of year-over-year inventory growth for both IL and AL continued to be relatively slow compared with pre-pandemic levels.

Occupancy Recovery Varies Across Select Metropolitan Markets. The all-occupancy rate for majority independent living properties increased or remained stable in 20 of the 31 Primary Markets in the August 2023 reporting period compared with July 2023. At 84.1%, Sacramento IL occupancy saw the largest increase from the prior month, up 1.9pps but remained 6.6pps below March 2020 levels. Los Angeles IL occupancy had the largest decline and fell by 0.7pps in August 2023 to 85.5% and is now 8.6pps below pre-pandemic March 2020 levels.

For AL, the all-occupancy rate increased or remained stable in 27 of the 31 Primary Markets in August 2023. At 82.0%, St. Louis occupancy saw the largest increase, up 1.3pps from July 2023 but still 3.0pps below March 2020 levels. The AL occupancy rate in Las Vegas fell 1.6pps from the prior month to 78.2% on a three-month rolling basis and remained 3.4pps below the pre-pandemic March 2020 level.

A recent regional analysis of supply, demand trends, and Absorption-to-Inventory Velocity (AIV) ratios showed that the senior housing market’s arena is not homogenous. Distinct regional trends, influenced by factors such as demographics, economic conditions, business development policies and attitudes, supply constraint factors such as physical land barriers, operator performance and reputation, and historical patterns, shape the AIV ratios we observe today. Some regions have shown resilience, moving closer to pre-pandemic occupancy levels, while others still grapple with the ramifications of the pandemic years. As we move forward, it is essential for stakeholders to recognize these regional nuances, tailoring strategies that cater to specific regional needs, opportunities, and resident profiles. In the ever-evolving world of senior housing, being attuned to such regional patterns and insights could very well be the key to future success.

Keep track of the most timely comprehensive review of the sector’s market fundamentals and trends. The NIC Intra-Quarterly Snapshot monthly publication, available for complimentary download on our website, continues to provide a powerful and closely watched means to stay ahead of industry trends, even as senior housing markets sustain a fast pace of evolution and adaptation, amidst an apparent recovery.   

The September 2023 Intra-Quarterly Snapshot report will be released on our website on Thursday, October 5, 2023, at 4:30pm.  

Interested in learning more about NIC MAP Intra-Quarterly data? To learn more about NIC MAP Vision data, schedule a meeting with a product expert today. 

Data from the recently released 2Q 2023 NIC MAP Vision Actual Rates Report showed growth for asking rates was at near-record highs on a year-over-year basis for all three care segments (independent living, assisted living, and memory care) for the data contributors to this data collection. In the recently released report, monthly data of actual rates and leasing velocity are presented through June 2023, including data on rate discounting and move-in/move-out trends. Key takeaways from the report, specifically from the Segment Type report, are presented below. Care segments refer to the levels of care and services provided to a resident living in an assisted living, memory care or independent living unit.  

The year-over-year pace of growth in all rates for all care segments reached near record highs. 

• At 9.8% in June 2023, year-over-year asking rate growth for the independent living care segment was the strongest pace of the three rate categories. Separately, in-place rates were up by 9.4% from year-earlier levels, and initial or move-in rates were up by 8.0%. These were nearly the highest rates of growth in the time series for these rates, except for January 2022, when many rates rose with lease renewals and annual adjustments.  
• For assisted living, growth in asking rates was a very high 10.6% in May 2023, the largest year-over-year increase in the time series. June gains decelerated only modestly to 9.7%. Initial rates were also quite high at 9.9%. In-place rents were also strong at 9.1% in June from year-earlier levels.  
• Of the three tracked memory care rate categories (in-place, asking and initial/move-in), the fastest pace of growth occurred for in-place rates, which were up by 9.2% from year-earlier levels in June 2023. Asking rates were up by 8.5% from year-earlier levels in June 2023 and initial rates were up by 8.1%.  
  

Discounts are highest in the independent living care segment. 

• Discounts between asking rates and move-in rates (initial rates) within the independent living segment rose to 1.4 months in June, the highest on record, but have hovered between 1.0 months and 1.3 months on an annualized basis since February 2022. The June discount was the equivalent of $463 (1.4 months). Compared with asking rates, in-place rates had a 0.6 month annualized equivalent discount, near its past 11-month average.

The pace of move-ins generally strengthened during the second quarter of 2023 for assisted living, independent living, and memory care.  

• Move-ins generally exceeded move-outs for independent living segments since May 2023, after four months of move-ins being weaker than move-outs.  
• Move-ins for assisted living segments averaged 3.4% of inventory in June 2023, and have averaged 3.4% of inventory since March 2021. At its lowest point in the early months of the pandemic, move-ins averaged 1.1% of inventory in April 2020.  
  

Additional key takeaways are available to NIC MAP Vision subscribers in the full report. 

NIC MAP Vision continues to work to onboard new data contributors and is dedicated to reporting more metros. It is only with the support of Actual Rates data contributors and officially certified Actual Rates software partners that expanded metro-level reporting is now available. For more information on which metropolitan markets are now available to NIC MAP Vision subscribers, please contact a product expert at NIC MAP Vision today.  

About the Report 

The NIC MAP Vision Seniors Housing Actual Rates Report provides aggregate national data from approximately 300,000 units within more than 2,700 properties across the U.S. operated by 35 to 40 senior housing providers. The operators included in the current sample tend to be larger, professionally managed, and investment-grade operators as we currently require participating operators to manage 5 or more properties. Note that this monthly time series is comprised of end-of-month data for each respective month, and that the set of properties included in each month’s data set is subject to change. The sample is not “same store,” and occupancy is inclusive of newly opened properties in lease-up. NIC MAP Vision is working on including same-store rate metrics in a future release. 

Interested in Participating? 

The Actual Rates Data Initiative is an effort to expand senior housing data and we are looking for operators who have five or more properties to participate. NIC MAP Vision has expertise in extracting data from industry leading software systems, such as Yardi, PointClickCare, Alis, MatrixCare, Glennis Solutions, Vitals, Move-N, and Eldermark and can facilitate the process for you.  

Operators contributing data to the actual rates report receive a complimentary report which allows them to compare their own data against national and metropolitan market benchmarks. In addition to receiving a complimentary report, your organization benefits through: 

• More informed benchmarking, strategic planning, and day-to-day business operations, 
• Increased transparency, aligning with other commercial real estate assets in terms of data availability, 

• Saved time, Actual Rates data is collected electronically directly from operators’ corporate offices, removing the need for telephone calls to individual properties, and 
• Enhanced investment and efficiency across the sector. 

Visit NIC Map Vision’s website for more information. 

In a discussion addressing gaps in care at the 2023 NIC Spring Conference, Dr. Bruce Leff, Director of The Center for Transformative Geriatric Research and Professor of Medicine at Johns Hopkins University, addressed the importance of understanding the functional status of residents.  

“Functional status is the biggest empty spot in most of the data discussions we have – and functional status predicts everything.”  – Dr. Bruce Leff 

Leff also emphasized the importance of being able to accurately describe the resident populations that live within a senior housing community when working with payors or having policy discussions with Centers for Medicare and Medicaid Services (CMS). Unfortunately, as he highlights, getting to this data is no easy feat.  

Assessing Resident Health Status

Nursing care communities collect a standard set of data on every resident, known as the Minimum Data Set (MDS). The MDS is a standardized assessment tool that measures the health status of every resident, and this assessment occurs on a regular, recurring basis. Unlike nursing care communities, however, there is no standard set of care metrics that are consistently collected on residents entering senior housing communities.  

It is with these thoughts in mind that NIC engaged NORC at the University of Chicago to collaborate on further research into the topic of frailty across senior housing and care settings. With the aim of giving more insight into the issue, the research study looks to improve care for older adults across the care continuum as well as drive new investment into the senior housing and care sectors.  

Understanding Frailty

Frailty is a state of age-related decline and vulnerability characterized by decreased physiological reserves and vulnerability typically seen with advanced age. Frailty is a key determinant of health status and outcomes of health care interventions in older adults. Falls, impairment, disability, hospitalization, and mortality are all associated with frailty.  

On average, frailty impacts one in six community-dwelling older adults, but the prevalence differs by setting and by population characteristics. There is current consensus, however, that frailty is potentially reversible with appropriate interventions including physical activity, nutrition, and cognitive training in older adults. As such, monitoring frailty indicators in senior housing settings is recommended to identify residents who could benefit from disability prevention programs.  

Measuring Frailty

Despite frailty being of such high importance, it has not been readily measured using Medicare data until recently. Over the last several years, there has been increasing effort to measure frailty using U.S. Medicare data.  

One such effort is Harvard University’s Claims-Based Frailty Index (CFI). The CFI measures frailty from administrative claims data over a twelve-month period using CPT, ICD, and HCPCS diagnoses codes. Unique weights attached to each diagnoses code are used to create a CFI score for each individual.  

The CFI goes beyond simply identifying a Medicare beneficiary as frail or not. In these indices, frailty is stratified by risk – non-frail, pre-frail, mildly frail, moderately frail, and severely frail. These frailty stratifications can be used to broadly anticipate changes in hospitalization rates and healthcare spending. 

The methodology employed for the NIC-sponsored NORC research study is done by linking Medicare administrative and claims data with the NIC MAP Vision property database, which includes over 14,000 senior housing and care properties. This methodology, along with the Claims-Based Frailty Index, enables NORC to gain insight into the prevalence of various conditions – heart disease, pulmonary disease, mental health, diabetes, chronic kidney disease, and dementia, for example – by property type as well as identify useful patterns leading to move-in at a senior housing and care community. Findings will also provide insight into the proportion of risk-stratified frailty within each care segment. 

Using Frailty Measures in Senior Housing

For senior housing and care operators and investors, the benefits that come with an improved understanding of frailty and its impacts on the senior population are extremely important. Operators and investors alike would be able to know which market areas had the highest prevalence of frail seniors, which would be pivotal when looking at opportunities for new communities.  

Taken even further, frailty measures could be used to identify inflection points in health and functional status that result in moves to senior housing. Across a given market area, these inflection points could characterize near-term demand for senior housing and care communities. The ability to predict move-in to senior housing and care based on Medicare claims data could be immensely valuable. 

Because of how impactful these predictions could be for the senior housing and care industry, there is mounting interest in the study findings.  

The research study will aim to answer the following questions: 

• What are common medical events and diagnoses that may precede a move to senior housing? 
• How does the relative gradual decline compare to certain precipitating events? 
• What do frailty levels look like within each care segment (IL, AL, MC, NC, and CCRC)? 

The frailty study being conducted by NORC at the University of Chicago is currently underway. Study deliverables are slated to be released in September 2023 and will be addressed at the inaugural NIC Data & Analytics Conference, being held September 27-28, 2023, in Minneapolis, MN. 

NIC MAP Vision released its latest Skilled Nursing Monthly Report on August 31, 2023. The report includes key monthly data points from January 2012 through June 2023.

Here are some key takeaways from the report:

Skilled nursing property occupancy increased in June, after decreasing slightly the previous month. It increased 31 basis points from May to end the month at 81.2%. There was positive momentum in occupancy throughout 2022 and it has increased 77 basis points since December 2022. It is up 6.6 percentage points since the low (74.6%) point reached in January 2021. However, staffing in the sector is still a significant burden on skilled nursing operators and is limiting additional admissions in many markets around the country. Occupancy is down 7.5 percentage points from the pre-pandemic February 2020 level of 88.8%. As staffing continues to be a challenge, skilled nursing property wage growth expense has declined which may provide some relief to operators. However, higher debt costs are a concern.

Medicare revenue mix declined as the revenue per patient day increased slightly in June. However, both are down from December 2022. Medicare revenue mix is down 615 basis points from the most recent in high in February 2022 which was a time when increased cases of COVID-19 resulted in additional need for utilizing the 3-Day rule waiver and per day reimbursement for COVID-19 positive patients. Medicare revenue mix ended June at 18.0%. Medicare RPPD ended June at $590 and is up 1.38% from one year ago. Meanwhile, Managed Medicare revenue mix was up 61 basis points to 12.0% in June. It is up 280 basis points above the pandemic low of 9.2% set in May 2020.

Managed Medicare revenue per patient day (RPPD) increased in June, but it is down 0.5% from last year in June 2022. Depending on an operator’s business model, the continued decline in managed Medicare revenue per patient day can pose a challenge as the reimbursement differential between Medicare fee-for-service and managed Medicare continues to increase. However, some operators see opportunity to capture patient volume with the growth of managed care. Medicare fee-for-service RPPD ended June 2023 at $590 and managed Medicare ended at $490, representing a $101 differential. In June of 2022, the differential was $90.

Medicaid patient day mix continued the upward trend in June, ending at 66.7%. However, it has increased 353 basis points from the pandemic low of 63.2% set in February 2022.   Meanwhile, Medicaid revenue mix increased 130 basis points from the prior month, ending June at 52.7%. One element of the Medicaid revenue share of a property’s revenue is RPPD and that increased 0.31% from May. It is up 3.2% since last year in June 2022.

To get more trends from the latest data you can download the Skilled Nursing Monthly Report here. There is no charge for this report.

The report provides aggregate data at the national level from a sampling of skilled nursing operators with multiple properties in the United States. NIC continues to grow its database of participating operators to provide data at localized levels in the future. Operators who are interested in participating can complete a participation form here. NIC maintains strict confidentiality of all data it receives.