The notion that senior living communities aren’t part of the healthcare continuum was dramatically undercut by the pandemic. Operators now know their role is critical to the health of their residents, and to the long-term success of their business.  

This realization comes at a time when the healthcare system itself is undergoing a substantial change. The fee-for-service paradigm is being replaced by value-based care. The goal is to create better health outcomes at a lower cost.

“What does value-based care mean now for senior living?” asked NIC Co-Founder and Strategic Advisor Bob Kramer introducing a main stage session on the current state of value-based care at the 2025 NIC Spring Conference. “Value-based care represents an incredible opportunity and an incredible challenge for senior living.”

The session was led by Stephanie Boreale, Watermark Retirement Communities. She was joined by Larry Leisure, Chicago Pacific Founders; Andy Eby, Bickford Senior Living; and Brian Fuller, ATI Advisory.

Setting the discussion in context, Fuller explained that value-based payments shift responsibility for costs and quality to the entity delivering care. Reimbursement is no longer a payment based on the delivery of a service — the traditional fee-for-service arrangement.

Fuller noted that different value-based care models are emerging and highlighted these key data points:

• Growth in healthcare spending accelerated in 2023, topping $4.9 trillion.
• Healthcare spending represents a 17.4% share of the economy, which is set to eclipse 20% by 2032.
• Medicare enrollment will increase by almost 50% by 2030.
• About 54% of Medicare beneficiaries are enrolled in Medicare Advantage plans, a value-based care model.
• About 14 million Medicare beneficiaries are covered by ACOs or other value-based care arrangements.  
• The value-based healthcare market is projected to grow at a compound annual growth rate of 17.2% from 2024 to 2031, reaching $43.39 billion by 2031.

Value-based care remains the primary solution to slow rising healthcare costs, Fuller said, but he cautioned that adoption of the model must accelerate. The government’s goal is to have every Medicare beneficiary in a value-based care arrangement by 2030. “We need to double down on value-based care to overcome demographic and political realities,” he said. But, he added, “Culture change is a significant lift.”

Unlock the Potential

The upside is that value-based care payments represent a revenue growth opportunity for senior living owners and operators. Medicare premium dollars can potentially be tapped for items such as transportation, wellness programs and support services. Enhanced value-based care services can improve resident health, satisfaction, retention, and length of stay.

“There is an opportunity here,” said Leisure. “Senior living operators are in a unique position.”  Many of the services already provided by senior living communities are part of the value-based care model. “We touch lives every day,” said Leisure, adding that investors are looking for successful models of how value-based care can boost the operator’s bottom line.

One example is Bickford Senior Living, which improved net operating income by 17% year-over-year by implementing a healthcare integration strategy. “Operators have a responsibility to prove to payors and insurers what we can do and how we can drive outcomes,” said Eby, who belongs to several industry initiates on value-based care. “We’ve leaned into value-based care to differentiate our properties by making them more attractive to residents.” 

Watermark’s Boreale asked: How do payors view senior living?

Payors want to contract with medical groups and shift the risk to those parties. Leisure suggested that owners and operators consider on-site health care, Medicare Advantage plans that wrap around medical teams, and virtual care.

Fuller said that payors focus on three factors: Enrolling beneficiaries and keeping them; CMS star ratings of quality, service and member experience; and the management of their loss ratio. “Figure out how to play in one or several of those areas,” he advised. “Take ownership.”

There’s another way to think about value-based care, said Fuller. “It’s the right thing to do.” His grandmother died while living in a memory care community. But the last 12 months of her life were horrific for her and Fuller’s family. She cycled in and out of the emergency room and the hospital.

Fuller would have loved to have had an interdisciplinary care team to discuss what the family wanted for her and what she wanted. That could have avoided the turnstile of care, not to mention the huge cost to the Medicare system. “Let’s not lose the resident’s story,” said Fuller. “That is the anchor of value-based care.”

Leverage Technology

Technology also plays a major role in value-based care strategies.

Senior living providers have a wealth of resident data that healthcare providers and payors are eager to access. The challenge is how to aggregate that data, analyze it, integrate care, and demonstrate that senior living improves health outcomes.

New and emerging technologies will help reach that goal, according to the panelists. For example, Bickford joined the Senior Living Transformation Company to develop a tech-enabled model that integrates with value-based care frameworks.

New fall detection technologies can help reduce hospitalizations and emergency room visits.  Technologies that monitor biomarkers can help to anticipate issues related to chronic illnesses. Development is underway of $9-an-hour artificial intelligence nurses to consult with patients in real time.

Where to start? Senior living owners and operators need a strategy and a roadmap. “Get started,” said Fuller. “Look for successful models and potential partnerships,” added Leisure.

Eby said implementing a value-based care strategy isn’t as complicated as it seems. There is no path to follow. “Make the path by walking,” he said. “Get moving.”

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Learn how to implement value-based care in your properties. NIC Academy’s Value–Based Care specialty course offers tools and strategies for navigating the complexities of value-based care to help you realize its potential benefits.

Senior housing operators face a critical challenge when expanding: how to grow efficiently without compromising operational quality, controls, and consistency. Successful expansion demands a strategic approach, specifically emphasizing community support and well-defined branding. By thoughtfully integrating these two pillars, operators can optimize their own resources, while more closely aligning with the strategic objectives of ownership groups and investors. 

Clustered Operations: Leveraging Localized Support and Expertise 

A clustering strategy significantly enhances operational effectiveness by centralizing support and fostering local expertise. Communities positioned in close proximity can benefit from shared resources and more focused oversight. A tight geography also makes these critical regional support roles more desirable by allowing staff and leadership teams to live in the markets they serve. They can spend less time on the road, and more time in communities (and more nights at home).   Ultimately this leads to stronger retention and better recruitment of top talent. 

Furthermore, local depth supports workforce stability by creating development pathways. Employees have greater opportunities for internal transfers and career progression without relocating, boosting satisfaction and retention. Additionally, regional teams possess critical insight into local labor market dynamics, including competitor practices and wage trends, enabling proactive and competitive compensation strategies. Over time, a strong local employer brand emerges, offering significant competitive advantages in attracting and retaining talent. 

Clustered growth strategies also develop and fortify local market expertise. Long-standing and meaningful relationships with community partners such as hospitals and affinity organizations become valuable strategic assets. Clustered operators intimately understand local consumer preferences, enabling tailored, effective sales and marketing strategies. This community-specific insight is very durable—and continues to provide continuity in operations even as individual buildings transition in and out of the portfolio. 

Finally, as local regulatory landscapes continue to shift and intensify for this industry, operators that are deeply familiar with specific state and local regulators can stay ahead of changing guidelines or policies.  These relationships take time to develop and become much more meaningful—for both operator and the regulatory body—when managing a large portfolio of buildings.  High quality relationships with these regulatory bodies are a distinct competitive advantage for operators seeking to expand their footprint. 

Brand Strategy: Aligning Communities, Staff, and Operations for Scalable Growth 

At scale, brand strategy can become just as crucial as geographic strategy. How a senior living community operates and who it serves can define its identity as much as its location. Adopting practices from the hospitality industry, leading senior housing operators often develop multiple, distinct brands tailored to specific customer segments, such as luxury independent living, middle-market seniors, or specialized higher-acuity care communities, each delivering a uniquely targeted experience. Aligning brands with distinct price points, care levels, and lifestyle expectations allows operators to leverage each community’s inherent strengths. A targeted branding approach prevents the common industry pitfall of “one-size-fits-all” management, enhancing both resident satisfaction and operational efficiency. Successful brand strategies highlight and amplify each property’s unique attributes, ensuring residents receive services aligned precisely with their expectations and needs. 

Branding is just as important internally for employees as it is for prospective residents. While external branding attracts prospective residents by communicating lifestyle promises, internal branding ensures that community teams consistently fulfill these promises. Clear internal brand standards guide staffing models, purchasing processes, job roles, programming, and daily operations, creating uniformity in service and operations. Critically, over time this also enables home office support teams to instinctively understand how each community should operate, streamlining decision-making and reducing the need for repetitive deliberation. 

Managing multiple senior living brands, however, requires investment and operational scale to be financially viable. Costs associated with professional brand development, differentiated training, specialized quality assurance programs, and other infrastructure needs can be significant. While challenging for smaller operators or individual communities to sustain, larger portfolios can effectively distribute these costs, making the strategic investments feasible. 

Differentiated brands provide senior housing operators with unique access to new management opportunities by providing alignment with a diverse range of property types and owner objectives. Owners and investors increasingly value partners capable of clearly defining and delivering on unique customer segments. By cultivating distinct brand identities, operators enhance their marketability as versatile and knowledgeable partners, effectively positioning themselves to pursue new, varied opportunities. Ultimately, robust brand differentiation empowers operators to build long-term, mutually beneficial relationships with a wider array of stakeholders. 

A Solid Foundation for Growth

Thoughtful expansion in senior housing combines a strategic positioning of operations with a clearly articulated brand and operational strategy tailored to each community’s strengths. Concentrating communities geographically allows operators to build robust support networks, enhance local expertise, and maintain productive regulatory relationships. Concurrently, effective branding aligns community identity with customer expectations, driving consistent operational excellence internally and externally. Together, these strategies create a solid foundation for sustainable growth and enduring market competitiveness. 

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For further support on how to grow operations, the NIC Growth Conference, May 7-8 in Indianapolis, IN, offers small– to mid-sized and regional operators and their partners the tools to scale smart and drive results.  Learn more.  

During the 2025 NIC Spring Conference held recently in San Diego, NIC leadership shared the organization’s perspective on the key forces that are shaping the senior housing and care sector today and into the next several years. The goal is to understand how each of these areas is currently impacting our operations, investments, and sector growth as well as how each of these themes define who we need to be moving forward.

1. Escalating Demand: Demand for senior housing and care will be driven by the significant demographic growth of the 80+ population. The baby boomer population is on our doorstep, and they will access housing and services across the full continuum. What is less clear is where and how certain services, such as skilled nursing care, will be provided. The path forward for nursing-like services will not only rely on the traditional nursing home, but on a variety of programs, platforms and innovative models with the goal of providing high-quality care in a less costly setting.
2. Decreasing Supply Growth Rate: While demand is accelerating, the senior housing supply growth rate is declining with minimal new additions to inventory. While exciting to see escalating demand, that can be an indicator of a less-desirable imbalance in what we are able to deliver as a sector. We need to find a path forward to growing our sector and finding new ways to meet the needs and preferences of the aging population.
3. Improving Operating Fundamentals: With the supply/demand imbalance, operating performance is showing strong, positive momentum. Forecasts of national occupancies for senior housing in the mid-90s and growth in NOI margins have contributed to our industry becoming a hot spot in commercial real estate.
4. Increasing Investor Interest: In the world of commercial real estate, the senior housing sector has come into the spotlight. We not only have the committed partners who have historically been invested in our space, but also new types of capital partners allocating dollars to be a part of the future growth of this sector.
5. Stabilizing Capital Markets: We remain cautiously optimistic that we are on a path in the capital markets that is better than what we experienced in 2024 and 2023. Things that we hear today include: there is plenty of private capital out there to invest; 2025 is going to be a strong year for transactions; new capital is coming into our space; and bank lending is improving. We are a growing and maturing sector, and we will need to attract new capital sources along with traditional capital partners. There are also wounds from recent pains that continue to heal and some unknowns in 2025. We are working through a sizeable number of loan maturities this year that, despite Fed rate reductions in the second half of 2024, will still face a different environment than when the loans were originated. Policy changes proposed by the current administration may also have inflationary impacts to the U.S. economy that may ripple through the economy and our sector.
6. Shrinking Workforce: As the population is aging, we are seeing a wave of individuals exiting the workforce. Additionally, estimates are that roughly one-quarter of the senior housing and care workforce are immigrants. Our workforce is shrinking, and we need to find innovative ways to be smarter and more efficient. We are firm in our belief that there are ways to align the ‘high touch’ of what we do every day with the technological advancements in our space.
7. Changing Customer Preferences: What we have offered as our value proposition in prior decades needs to shift. What can we do to ensure that the housing and services that we provide do not simply support additional lifespan but also support years lived in a healthier state, both mentally and physically? In 2023, the U.S. Surgeon General released an advisory on the public health crisis of loneliness and social isolation. Our settings are absolutely positioned to address this crisis and in fact, do so every day. Prevention and wellness efforts that move the needle on health outcomes and reduce difficult acute episodes, such as a fall or a hospitalization, will need to be at the center of our operational models. If we do not adapt, pivot our business models, and continue to grow options (such as Active Adult), we will have failed.
8. Declining Affordability: Rising expenses are resulting in continual rate increases. There are indeed a significant number of seniors in the baby boomer cohort who have the ability to pay for the housing and services they will likely need as they age. However, we have only made incremental progress as a sector in moving the needle on those who cannot afford most of what we have to offer today – the Forgotten Middle. In many consumer circles we are seen as out of touch with the everyday older adult. We are serving some middle-income seniors, but not at the scale or pace that we need to. We need to have the fierce determination to figure out solutions to this problem. A combination of public-private partnerships may be the formula necessary to address affordability in a meaningful way. 

At NIC, we stand by the ‘cautious optimism’ sentiment. As evidenced by the poll of attendees at the conference, most would agree that the outlook is positive. We need to use this time to strategically position ourselves and the industry for the big task ahead.  

Nearly 2,100 attendees took part in the 2025 NIC Spring Conference in San Diego and the overall industry sentiment was overwhelmingly positive. Upon check-in, all attendees were asked to rate their outlook for the senior housing & care sector for the year ahead. As detailed in the chart below, nearly 90% responded “extremely positive” or “positive” and less than 1% shared a negative or extremely negative outlook.

The sentiment from attendees is notably higher than one year ago and is also above what was measured at the 2024 NIC Fall Conference. The percentage of conference attendees with a positive outlook climbed by more than 9% across the past year. 

Similar to other polls, there were differences across respondent type. The financial intermediaries in attendance at the conference had the most positive outlook, with 95% reporting a ‘positive’ or ‘extremely positive’ outlook for the year ahead. The lowest ratings came from healthcare providers. Roughly 85% of this group responding positively. 

The NIC Research and Analytics team will continue to conduct the industry sentiment poll at upcoming conferences, including the 2025 NIC Fall Conference, September 8-10 in Austin, TX.

Data from the recently released 4Q 2024 NIC MAP Actual Rates Report show that: 

As 2024 ended, the senior housing market witnessed a notable shift in pricing dynamics between independent living (IL) and assisted living (AL) properties. Historically, initial rate growth in both property types moved nearly in tandem (see exhibit below), with operators adjusting pricing strategies in response to similar macroeconomic and demand trends. However, since mid-2024, a clear divergence emerged, with IL properties accelerating initial rate growth and reducing discounting, while AL properties experienced a slowdown in initial rate growth alongside increased discounting.  

This shift marked a departure from previous years, when IL operators relied more heavily on discounting to drive lease-ups. Instead, December 2024 data reflected a market where pricing power returned to operators.

While move-ins continued to exceed move-outs in the fourth quarter of 2024 for both IL and AL properties, this break in historical alignment between IL and AL initial rate trends signals a change, and affordability likely played a role in shaping these new market dynamics, particularly in the need-based AL property type, where margin compression poses risks.

Going into 2025 and as care costs continue to rise, price sensitivity in AL is increasing, leading operators to recognize that IL and AL require distinct pricing strategies. IL properties can capitalize on rate elasticity due to their choice-based nature, while AL operators need to navigate the affordability equation strategically to maintain occupancy growth momentum while preserving financial health.

Independent Living Properties: Strong Pricing Momentum and Reduced Discounting

Year-over-year growth in initial rates for independent living properties continued to set new time-series highs in the fourth quarter of 2024, building on the record growth seen in the previous quarter. Initial rates surged 12.9% year-over-year in December 2024, more than doubling the 5.4% increase seen in December 2023. Operators also reduced discounts, with initial rates averaging 5.5% ($238) below asking rates in December 2024, compared to 8.9% ($359) in December 2023. This equated to a 0.7-month discount on an annualized basis, down from 1.1 months the previous year.  

Assisted Living Properties: Slower Rate Growth and Widening Discounts

In December 2024, initial rates grew just 1.7% year-over-year, down sharply from 6.9% in December 2023. Unlike IL, discounting in AL widened, with initial rates averaging 8.6% ($567) below asking rates, compared to 6.4% ($402) in December 2023. This resulted in a 1.0-month discount in December 2024, up from 0.8 months the previous year.  

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

About the Report   

The NIC MAP 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 a requirement for participation is restricted to operators who manage 5 or more properties. Visit the NIC MAP website for more information.