NIC Co-Founder and Strategic Advisor Robert Kramer has identified “Six Key Drivers” that will shape the senior living industry over the next 10 years. Kramer is also Founder & Fellow at Nexus Insights, a think tank to advance the well-being of older adults through innovative models of housing, community and healthcare. NIC Notes will publish a bi-weekly series detailing each key driver. What follows is an introduction to the series.

What will the senior housing and care environment look like in 2032? It’s a question that has broad implications for the decisions we make today.

Do we understand the long-term impact of the pandemic and the changing make-up of our customer base? Can we anticipate their housing and service preferences? How is technology changing the senior living landscape? Where can we find the workers to meet the needs of our residents? How does healthcare fit in? Are we prepared for what’s ahead?

To anticipate the next decade, we need a clear understanding of the social, technological, and economic factors that form an ever-changing senior living environment. As a result, in my role as NIC’s strategic advisor, I have identified “six key drivers” that will shape our industry over the next 10 years.

To put the “six key drivers” in perspective, I’d like to highlight a quote: “The historic challenge for leaders is to manage the crisis while building for the future.” The quote appeared in an April 2020 op-ed in the Wall Street Journal by Henry Kissinger. He was comparing certain aspects of the COVID crisis to World War II.

In both cases, the challenge for leaders has been to manage the crisis, but at the same time to build for the future. That’s where our industry finds itself today.

Internal and External Threats

Our industry faces both internal and external threats. Internally, particularly among operators and their workforce, the mood is one of “exhaustion.” Exhaustion in every sense—physical, emotional and mental.

The senior living workforce from top to bottom is dealing with post-traumatic stress syndrome. But the real internal threat is exactly what Kissinger is talking about. It’s exhaustion that leads to a failure to anticipate and to prepare and therefore to build for the future.

The greatest external threat to senior living has long been considered “the home.” Elders would rather stay put in their long-time residences. But taking a wider perspective, the greatest external threat is from those outside our field who see the opportunity to serve our customers in a different, better and less expensive way than we do presently.

The threat comes at a time when the industry is not only exhausted but also under enormous financial pressure. We are depleted in terms of energy and resources. This is the classic prescription for “disruptive innovation,” the powerful concept developed by Harvard Business School Professor Clayton Christensen.

Big tech is making an advance into healthcare. Google, Microsoft, Apple, and Amazon all see an opportunity. So does big retail. Walmart, Best Buy and even Dollar General have major health initiatives under way. When I talk to the Health Strategy Officer of Walmart about our “Forgotten Middle,” he says: “That’s not only our customer, that’s our workforce. That’s the group we think we have the opportunity to serve.”

Retail pharmacy chains such as CVS and Walgreens see an opportunity too, along with the major insurers, including United Healthcare, Humana, Blue Cross Blue Shield, Anthem, and others. What do many of these outside disruptors have? In contrast to us, they have huge, positive brand recognition. They customize their services for the convenience of the consumer. These companies have great tech platforms that they’re constantly improving. Notably, they aren’t cash strapped, and they aren’t exhausted.

These companies can easily spend $50 million on an initiative and if it doesn’t work, it doesn’t really matter. That kind of money is a rounding error to them. In contrast, a $1 million tech investment for a senior living operator that goes sideways could have a huge impact or at least end any innovation by that operator.

Six Key Drivers

With that backdrop in mind, here are the six key drivers, in brief, which will impact our industry over the next decade. (Individual blog posts detail each driver.) Any futurist is never going to be 100% correct. But these key drivers are meant to serve as a challenge for the industry to think about how to manage the changes ahead.

1. The COVID-19 Pandemic. The crisis has changed the way we work and ushered in the third generation of senior living.
2. The Endemic Staffing Crisis. The labor shortage will continue. How can providers recruit and retain the best workers?
3. A New Customer Arrives with a Different Take on Longevity. Our new customers want their lifespan to match their healthspan or wellspan. We need an engagement view of aging and retirement shaped by growth and opportunity, not by deficits and decline.
4. Reframing Health and Healthcare. The focus will be on well care, not sick care. Senior living and healthcare providers, and insurers will partner to proactively keep our residents out of the expensive acute care system.
5. The Increasing Importance of Data and Analytics. Market data by itself has limited value. In the future, market data will be coupled with personalized health, genomic, social determinants of health (SDOH), lifestyle and psychographic data, and aggregated by local market. The applications for the future use of this kind of data will be transformative for the industry.
6. Moving from Siloed to Seamless. We will see a shift from the current fragmented, single-point healthcare solutions and technology applications to integrated longitudinal solutions that are setting, disease, and payer agnostic.

These six key drivers provide a discussion starter for senior living stakeholders to reflect on where the industry stands today, and how it will respond to emerging trends as the next decade unfolds. We welcome you to be a part of that discussion.  

• Senior housing occupied units vacated during the pandemic are on track for full recovery, across both the NIC MAP Primary Markets and the NIC MAP Secondary Markets.
• Senior housing occupancy bouncing back but remains far below pre-pandemic March 2020 levels.
• The senior housing market continued to experience a high acuity trend, with occupancy for majority assisted living properties recovering relatively fast compared with majority independent living properties.

According to just released quarterly NIC MAP Vision data, the recovery for senior housing regained pace in the second quarter of 2022 after the momentum weakened in the prior quarter due to the Omicron variant. The graphs below depict the recovery progress for senior housing demand and occupancy for both the NIC MAP Primary Markets (Primary Markets) and the NIC MAP Secondary Markets (Secondary Markets).

NIC MAP Primary Markets. Demand, as measured by the change in occupied units, largely outpaced new supply while marking its fifth consecutive quarter of positive increases, with a net absorption gain from the prior quarter of more than 8,600 units, or 1.6% for the Primary Markets. The improved demand dynamics in the second quarter of 2022 increased the share of senior housing units vacated during the pandemic that have been re-occupied to 78%, up 19pps from the prior quarter (59%).

The all-occupancy rate for senior housing for the Primary Markets increased to 81.4% in June 2022, up 0.9pps from March 2022, with a gain of 0.6pps in April 2022, 0.2pps in May 2022 and 0.1pps in June 2022. From its time series low of 78.0% one year ago in June 2021, occupancy increased by 3.4pps but remained 5.8pps below pre-pandemic March 2020 levels of 87.2%.

All-occupancy increased or remained stable in 26 of the 31 Primary Markets for senior housing in the June 2022 reporting period compared with March 2022.

NIC MAP Secondary Markets. Senior housing demand for the Secondary Markets also regained momentum in the second quarter of 2022, with a net absorption gain from the prior quarter of more than 4,500 units, or 1.5%. And now, the share of senior housing units vacated during the pandemic that have been re-occupied increased to 86%.

At 83.0%, the all-occupancy rate for senior housing for the Secondary Markets was up 0.8pps from March 2022 and 4.2pps from its nadir in June 2021, but still 4pps below March 2020 levels of 87.0%. Overall, senior housing occupancy for the Secondary Markets is bouncing back quicker, mainly due to a relatively balanced new supply.

All-occupancy increased or remained stable in 55 of the 68 Secondary Markets for senior housing in the June 2022 reporting period compared with March 2022.

Data highlights by majority property type. Occupancy for majority independent living and majority assisted living properties, inventory growth patterns, and select NIC MAP Primary markets’ performance along with analysis and insights from the NIC Analytics team, including myself and NIC Chief Economist, Beth Mace are provided in the complimentary NIC Intra-Quarterly Snapshot monthly publication, available for download on our website. The data underlying every Intra-Quarterly Snapshot report is available to NIC MAP Vision clients.

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.

The U.S. Bureau of Labor Statistics reported that nonfarm payrolls rose by 372,000 in June 2022 and the unemployment rate held steady at 3.6%. The June increase was in line with the average monthly gain over the prior three months (383,000). Revisions subtracted 72,000 to total payrolls in the previous two months. The market consensus had been for a gain of 268,000. 

Nonfarm payrolls were still down by 524,000 or 0.3% from their pre-pandemic level in February 2020. Notably, private-sector employment has now recovered the net job losses due to the pandemic and is 140,000 higher than in February 2020, while government employment is 664,000 lower.

Employment in business and professional services is 880,000 higher than in February 2020, while manufacturing jobs have returned to its pre-pandemic level. However, employment in leisure and hospitality services are down by 1.3 million or 7.8% since February 2020, while jobs in social assistance which includes child day care services are 2.0% below their February 2020 level.

Employment in health care rose by 57,000 in June, including 8,000 new positions in nursing and residential care facilities. But jobs in health care remain 1.1% or 176,000 less than in February 2020.

The report confirms that the labor market remains strong, despite inflationary pressures, waning consumer confidence, the war in Ukraine and on-going supply-chain pressures. Concerns about rising wage costs and inflation are also supported by this report, although wage pressures appear to be easing. Average hourly earnings for all employees on private nonfarm payrolls rose by $0.10 in June to $32.08. This was a gain of 5.1% from year-earlier levels but was less than the 5.3% gain seen in May and the 5.5% gain seen in April. 

The report supports the Federal Reserve’s intention of continuing to raise interest rates further following the 1.5 percentage point hike in the fed funds rate that has already occurred so far this year. Another 0.75 percentage point hike is anticipated at the next FOMC meeting later this month.

In a separate survey conducted by the BLS, the jobless rate was 3.6% for the fourth month in a row. The jobless rate is only 0.1 percentage point above the pre-pandemic level of 3.5% seen in February 2020, and well below the 14.7% peak seen in April 2020. The number of persons unemployed was essentially unchanged at 5.9 million but was still above the 5.7-million-person level seen prior to the pandemic. 

Among the major worker groups, the June unemployment rates were 3.43% for adult women, adult men (3.3%), teenagers (11.0%), White (3.3%), Black (5.8%), Asian (3.0%), and Hispanic (4.3%).

The labor force participation rate edged down 0.1 percentage point to 62.2% in June and was below the February 2020 level of 63.4%.

The June underemployment rate or the U-6 jobless rate was 6.7%, up from 7.1% in May 2022. This figure includes those who have quit looking for a job because they are discouraged about their prospects and people working part-time but desiring a full work week.

“After increasing in February and March, occupancy was flat in April. Labor is still a serious challenge within the industry and some operators are still unable to admit new patients due to staffing shortages.”

– Bill Kauffman

NIC MAP Vision released its latest Skilled Nursing Monthly Report on June 30, 2022. The report includes key monthly data points from January 2012 through April 2022.

Here are some key takeaways from the report:

Skilled nursing occupancy was flat for the month of April. Skilled nursing property occupancy held steady at 77.3%. However, occupancy has increased 140 basis points since January 2022 as demand seemingly picked up after the Omicron variant subsided. In addition, occupancy has increased 524 basis points since the low of 72.1% in January 2021 and remains at the highest occupancy level since April 2020, in the beginning of the pandemic. Although occupancy has increased in recent months, it is still down considerably (8.9 percentage points) compared to February 2020 before the beginning of the pandemic. There are some positive signs given the increases in occupancy since the low, but many challenges remain including labor shortages, operating expense pressure, and the proposal to claw back Medicare reimbursement as it relates to the Patient Driven Payment Model (PDPM).

Medicare revenue mix declined in the month of April. Decreasing for a second month in a row, Medicare revenue mix declined 72 basis point to end April at 20.6%. After increasing to start 2022, from December 2021 (20.6%) to January 2022 (24.4%), it has now decreased 397 basis points from the 2022 high (24.6%) set in February. The increase to start 2022 was likely due to the elevated number of COVID-19 cases in January and suggests there was a significant uptick in the utilization of the 3-Day Rule waiver as COVID-19 cases increased. The 3-Day Rule waiver was implemented by Centers for Medicare and Medicaid Services (CMS) to eliminate the need to transfer positive COVID-19 patients back to the hospital to qualify for a Medicare paid skilled nursing stay, hence increasing the Medicare census at properties. As cases declined, the Medicare revenue share has declined as well. Meanwhile, Medicare revenue per patient day (RPPD) decreased for the third month in a row to end April at $568. This suggests that due to decreasing COVID-19 cases there was less additional reimbursement needed for COVID-19 positive residents, who require additional measures of care to be implemented.

Managed Medicare revenue per patient day (RPPD) continued its decrease in April. It decreased from $456 to $454 in April and is down 2.1% from last year in April 2021. It has decreased $111 (19.6%) from January 2012 and continues to create pressure on operators’ revenue as managed Medicare enrollment grows around the country. The persistent decline in managed Medicare revenue per patient day continued to result in an expanded reimbursement differential between Medicare fee-for-service and managed Medicare, which accelerated during the pandemic until January 2022. The difference between Medicare fee-for-service and managed Medicare RPPD in January 2022 was $123. Pre-pandemic, in February of 2020, the differential was $91. However, the difference has decreased since January 2022 to end April 2022 at $114. Meanwhile, managed Medicare revenue mix increased 14 basis points from March to end April 2022 at 10.8%. It is up 26 basis points from last year and has increased 269 basis points from the pandemic low of 8.1%. The increase from the pandemic low is likely due to growth in elective surgeries from 2020, which typically creates additional referrals to skilled nursing properties.

Medicaid patient day mix increased for the second month in a row. It increased 79 basis points in April to end the month at 66.0%. It has increased in a similar trend as Medicaid revenue as it also increased for second month in row. Medicaid revenue mix increased 243 basis points from March to end April at 50.7%. Some of this increase is related to what was mentioned above, regarding the decline in COVID-19 cases from January and patients have now moved from Medicare patient days back to Medicaid, after utilizing the 3-Day Rule waiver. Meanwhile, Medicaid revenue per patient day (RPPD) increased from March to end April 2022 at $247. It is up 3.3% from the pre-pandemic period (February 2020) as many states embraced measures to increase reimbursement related to the number of COVID-19 cases to support skilled nursing properties, in addition to fiscal year increases.

Get more trends from the latest data by downloading the Skilled Nursing Monthly Report. 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. NIC maintains strict confidentiality of all data it receives.

With the highly contagious omicron variant seemingly behind us and senior housing occupancy recovery continuing for the third consecutive quarter through Q1 2022, there is waning optimism regarding operating margins. In the Wave 42 survey, almost 60% of survey respondents expect margins to increase in the next six months, although this is down from 75% of respondents in the Wave 38 survey. Rising operating expenses limit the degree to which operating margins will grow in the next six months. Staffing challenges remain top of mind. Only 20% of respondents indicate that staffing challenges will improve in the next year, while 20% indicate it will take until 2024 to see improvement, and 30% signal staffing issues will not improve until 2025 or later. The most effective method cited for attracting new community staff is increasing wages (65%), followed by flexible schedules (15%), and hiring bonuses (5%). Staffing and a slowdown in lead conversions are affecting the pace of move-ins, which slowed for memory care and nursing care properties, but remained consistent for assisted living and independent living properties.

–Ryan Brooks, Senior Principal, NIC

NIC’s Executive Survey of senior housing and skilled nursing operators was implemented in March 2020 to deliver real-time insights into the impact of the pandemic and the pace of recovery. In its third year, the “ESI” is transitioning away from the COVID-19 crisis to focus on timely industry topics. While some standard questions will remain for tracking purposes, in each new survey “wave,” new questions are added.

This Wave 42 survey includes responses from May 31 to June 26, 2022, from owners and executives of 61 small, medium, and large senior housing and skilled nursing operators across the nation, representing hundreds of buildings and thousands of units across respondents’ portfolios of properties. More detailed reports for each wave of the survey and a PDF of the report charts can be found on the NIC COVID-19 Resource Center webpage under Executive Survey Insights.

In the Wave 42 survey, reflecting operator experiences in June 2022, the pace of move-ins in the past 30 days remained steady for independent living residences (44%) and assisting living residences (52%), but declined substantially for memory care residences (20%) and nursing care residences (37%). In the previous Wave 41 survey, 51% of memory care and 68% of nursing care reported an acceleration in the pace of move-ins.

With regards to operators reporting a deceleration in the pace of move-ins, it is the third consecutive wave with an increase in memory care properties reporting a deceleration in the pace of move-ins, up from 4% in Wave 40 and 8% in Wave 41 to 20% in Wave 42.

Of respondents indicating a deceleration in the pace of move-ins, 65% indicate the deceleration is a result of a slowdown in leads conversions or sales, 15% indicate resident or family member concerns, and 15% cite staffing constraints.


Most respondents reported no change in the pace of move-outs. Between 70% and 80% of organizations reported no change in the pace of move-outs, which may aid occupancy stability or improvements in the coming months. While few organizations observed an acceleration in the pace of move-outs, of those that did, fewer than one-half reported residents moving to higher levels of care (41%) —much lower than in the Wave 39 survey (73%). This appears to be reflected in the decreases in the pace of move-ins in care segments serving residents with the highest acuity.

Anticipated increases in operating margins have contracted since Wave 38. Just over one-half of respondents (58%) anticipate their organization’s operating margins to increase in the near future. This is down from 75% of respondents in the Wave 38 survey, the most recent survey to include this question. About one in five respondents (18%) anticipate operating margins to increase by greater than 10%, about one-third (35%) anticipate operating margins to increase by 6%-10%, and few (5%) anticipate operating margins to increase by 1%-5%.

In the Wave 42 survey, the share of respondents anticipating operating margins to decrease in the next six months grew. About one-quarter of respondents (27%) anticipate operating margins to decrease between 1% and 5%, and one-eighth of respondents (13%) anticipate operating margins to decrease between 6% and 10%. In the Wave 38 survey, only 5% of respondents anticipated operating margins to decrease in the next six months, and those decreases were anticipated to be between 1% and 5%.

Driving the contraction in anticipated operating margins is likely increased operating expenses. A significant 84% of respondents reported that operating expenses have increased since the beginning of 2022. About one in ten (11%) reported operating expenses have remained the same, and a meager 5% reported operating expenses have decreased since the beginning of 2022.

Staffing challenges remain a primary concern for respondents as well. Respondents are anticipating staffing challenges to remain much further into the future as compared to the Wave 41 results. Respondents anticipating improvement in staffing challenges in 2024 doubled, from 10% to 20%, and respondents anticipated improvement in 2025 or later tripled from 10% to 30% from Wave 41 to Wave 42.

In the Wave 42 survey, 20% of respondents report the severity of staffing shortages to be severe, 71% report them to be moderate, and 8% report them as minimal. One-fifth of operators have more than 20% of full-time positions open, while another one-fifth have between 16% and 20% of full-time positions open. One-third of operators have 11% to 15% of positions open and one-quarter have between 6% and 10% open. The most effective method cited for attracting new community staff is increasing wages (65%), followed by flexible schedules (15%), and hiring bonuses (5%).

Wave 42 Survey Demographics

• Responses were collected between May 31 and June 26, 2022, from owners and executives of 61 senior housing and skilled nursing operators from across the nation. Owner/operators with 1 to 10 properties comprise roughly two-thirds (67%) of the sample. Operators with 11 to 25 make up 20% and operators with 26 properties or more make up the remaining 13%.
• One-half of respondents are exclusively for-profit providers (52%), more than one-third operate not-for-profit seniors housing and care organizations (38%), and 10% operate both.
• Many respondents in the sample report operating combinations of property types. Across their entire portfolios of properties, 70% of the organizations operate seniors housing properties (IL, AL, MC), 23% operate nursing care properties, and 36% operate CCRCs (aka Life Plan Communities).

This is your survey! Owners and C-suite executives of seniors housing and care properties, please help us tell an accurate story about our industry’s performance. The ESI 2022 questionnaire has been shortened from prior surveys. While some standard questions will remain for tracking purposes, in each new survey wave, new questions can be added based on respondents’ suggestions.

Wave 43 of the ESI is now live. The current survey is available and takes ten minutes to complete. If you are an owner or C-suite executive of seniors housing and care and have not received an email invitation to take the survey, please contact Ryan Brooks at rbrooks@nic.org to be added to the list of recipients.

NIC wishes to thank survey respondents for their valuable input and continuing support for this effort to provide the broader market with a sense of the evolving landscape as we recover from the pandemic.