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.

“An investment in knowledge pays the best interest.”  

So said Benjamin Franklin, who had good experience creating, building, and partnering with others to build some significant and (lasting!) things.   

We are strong believers in the power of education and have been a valued source for several educational opportunities in senior housing and care investment over the years with our sold-out boot camps and curated insightful sessions at our NIC Spring and NIC Fall conferences. We saw that the industry lacked a true provider of comprehensive professional education for investment and finance professionals in the senior housing and care space, which is why we are excited to announce the launch of NIC Academy. 

Fundamentals of Underwriting Senior Housing & Care Certificate Program — A first-of-its-kind professional certification program dedicated solely to senior housing and care investment.  

Upon completion of the program, graduates receive a certificate from NIC Academy in Fundamentals of Underwriting Seniors Housing & Care Certificate Program and a professional designation of Certified Senior Housing Investment Professional (CSHIP). This prestigious designation can be applied on LinkedIn profiles, and email signatures and will signal to industry leaders that this candidate has learned directly from industry experts and is different from the rest.   

This new Certification for Underwriting in Senior Housing and Care program is an invaluable resource that focuses on the six pivotal topics critical for underwriting success. In just 90 days, students acquire the essential skills to kickstart their careers and fortify their organizations. This innovative program not only equips individuals with expertise but also offers a substantial benefit to employers. With this Certificate, employers can save both time and money, all while fostering the professional development tool for existing employees in need of upskilling or reskilling. The courses within the certification program are led by industry experts who draw from decades of experience in the sector, providing unparalleled insights and knowledge. 

Candidates will gain insights and skills that would typically require years of on-the-job training. The curriculum has been meticulously crafted and course offerings range from comprehensive discussions to deep case studies on real-world issues.  

The following six courses are designed to take about eight hours each:  

• Introduction to Senior Housing and Care Industry 
• Fundamentals of Operations
• Market Analysis 
• Capital Markets 
• Transactions 
• Capstone Experience 

Thanks to NIC’s extensive resources, thoughtfully designed curriculum, accomplished faculty, and effective teaching methodologies, students can promptly apply their acquired knowledge to create meaningful contributions within their organizations. This empowers them to delve into pertinent topics such as property valuation in senior housing and care, ensuring their learning translates into actionable insights. 

Learning at your convenience 

All NIC Academy program courses are offered online, multiple times per year, or on-demand. Online discussion rooms are seamlessly integrated with the courses to help answer questions, expand perspectives, and strengthen the community. 

The NIC Academy is dedicated to consistently providing high-quality educational opportunities and we’re proud to offer this new certification program.  

Learn more about our certificate program as well as other NIC Academy offerings. 

“NIC Academy’s Fundamentals of Underwriting Senior Housing and Care Certificate Program fills the void for comprehensive training of financial and investment professionals in our industry. As we ramp up hiring to meet demand growth, this gold standard Certificate Program will be our go-to resource to quickly get our team up to speed.” 

-John Rijos, Co-founder and Operating Partner, Chicago Pacific Founders  

NIC launched its Executive Survey Insights (ESI) series in March 2020 to provide timely insights on key property operational metrics within the senior housing and skilled nursing sectors during a critical time. Since this survey series was launched, more than 50 waves of the survey captured the property market’s performance through numerous challenges – COVID-19, labor deficiencies, supply shortages, threats of a looming recession, inflation, and rising expenses.  

As the industry navigated these circumstances, the real-time insights captured in the ESI reports and accompanying chart packs provided industry stakeholders with perspective on these issues and ensured the narrative on senior housing and care operational trends was accurate.  

Future NIC Surveys 

To continuously improve transparency within our industry, NIC is pausing the ESI survey while we evaluate our surveying opportunities going forward. As the senior housing and care industry is now at a pivotal point, NIC’s forthcoming surveys will focus on the forward-looking perspectives of the industry’s leaders to provide actionable insights for developing strategies for navigating our dynamic and evolving market.  

Executive Survey Insights’ Hot Topics 

While we are taking the time to re-engineer our survey tools, let’s revisit a couple of the most pressing issues addressed by NIC’s Executive Survey Insights during the past few years. 

Impact of COVID-19 Variants on Occupancy  

A question throughout the entirety of the ESI series investigated the pace of move-ins and move-outs over the prior 30-day period. Within each wave, respondents also gave insights about the primary causes behind the changes in the pace of move-ins, including organization or state-imposed ban, resident or family member concerns, delays in lead conversions, or potential residents’ fear of an unstable economy. 

Impact of Labor Shortages on FTE Recruitment 

Labor shortages were an unfortunate hallmark of the COVID-19 pandemic. Questions pertaining to the severity of staffing shortages, agency utilization, and attracting and retaining employees were always of great interest.  

These survey questions provided reference points on where other organizations stood and insights into strategies to address the situation and which of those strategies were most successful. For example, in June 2022, the most effective method cited for attracting new community staff was increasing wages, followed by flexible schedules, and hiring bonuses. 

Upcoming NIC Launch 

NIC’s ESI findings have garnered great interest from media and have provided the senior housing and care industry with timely information on relevant market trends. Keep an eye out for NIC’s launch of its new survey series in the coming months!  

The occupancy recovery for senior housing will likely be sustained during the near-term given current supply and demand conditions.

The all-occupancy rate for senior housing for the NIC MAP Primary Markets increased to 84.2% in the July 2023 reporting period, up 0.5 percentage point (pps) from the June 2023 reporting period on 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 from the pre-pandemic March 2020 level of 87.1%.

Occupancy Recovery by Majority Property Type. At 85.8%, the all-occupancy rate for majority independent living (IL) properties for the NIC MAP Primary Markets increased 0.3pps from June 2023 but remained 3.8pps below March 2020 levels. For majority assisted living properties (AL), the all-occupancy rate for the NIC MAP Primary Markets was up 0.6pps to 82.5% from June 2023 and is now 2.0pps below March 2020 levels. Occupancy for AL continued to recover relatively fast compared with IL. From pandemic related low, all-occupancy for AL increased by 8.6pps, more than double the increase for IL (up 4.2pps since March 2021).

The senior housing market is demonstrating a steady recovery, with demand and occupancy continuing to rise. A new ratio developed by NIC Analytics offers further insights into these encouraging trends. This new measure offers a nuanced perspective on the balance between demand and supply and occupancy outlook. Called the absorption-to-inventory velocity (AIV), this ratio serves as an indicator of how effectively the market absorbs or leases the newly supplied units on a net basis. 

In the second quarter of 2023, the AIV ratio (on a rolling 4-quarter basis) for majority assisted living was 38:10 for the Primary Markets. This means that for every 10 new units added, there was positive absorption of 38 units in the Primary Markets. The AIV ratio for majority assisted living properties reached an all-time high, far exceeding any level recorded since NIC MAP Vision began reporting data in 2005, suggesting an ongoing trend of high acuity demand in the senior housing market and that the recovery will likely be sustained during the near-term given current supply and demand conditions. In the August 2023 NIC Insider Newsletter, we explore the AIV ratio in greater detail.

The inventory of majority independent living properties for the NIC MAP Primary Markets increased by 1.2% or 4,097 units from year-earlier levels in the July 2023 reporting period. AL inventory increased by 1.3% over this same period.

Occupancy Recovery Across Select Metropolitan Markets. The all-occupancy rate for majority independent living properties increased or remained stable in 27 of the 31 Primary Markets in the July 2023 reporting period compared with June 2023. At 86.8%, Riverside IL occupancy saw the largest increase from the prior month, up 1.5pps and is now 3.2pps above March 2020 levels. San Antonio IL occupancy fell by 0.5pps in July 2023 to 86.0%, marking the largest decline from June 2023. However, this rate is still 0.8pps higher than the pre-pandemic level in March 2020.

For AL, the all-occupancy rate increased or remained stable in 28 of the 31 Primary Markets in July 2023. At 78.3%, Houston AL occupancy saw the second largest increase, up 1.3pps from June 2023. The AL occupancy rate in Miami had the largest decline and fell 0.7pps from June 2023 to 83.2%. Both Houston and Riverside occupancy rates remained 1.4pps below pre-pandemic levels.

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 August 2023 Intra-Quarterly Snapshot report will be released on our website on Thursday, September 14, 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.