According to quarterly NIC MAP^® data, released by NIC MAP Vision, demand, as measured by the change in occupied units, largely outpaced new supply while marking its sixth consecutive quarter of positive increases, with a net absorption gain from the prior quarter of more than 8,700 units, or 1.6% for the NIC MAP Primary Markets. This advance pushed the share of senior housing units vacated during the pandemic that have been re-occupied to near-full recovery (95%). If this pace of demand growth continues into the next quarter, senior housing may soon start filling new inventory added during the pandemic, on a net basis.

As a result of supply/demand trends, the exhibit below shows that the all-occupancy rate for senior housing for the NIC MAP Primary Markets increased for the fifth consecutive quarter to 82.2% in the September 2022 reporting period, up 1.0 full percentage point (pps) from the June 2022 reporting period on a three-month rolling basis, with a small gain of 0.1pps from August 2022. From its time series low of 77.9% in June 2021, occupancy increased by 4.3pps but remained 5.0pps below pre-pandemic March 2020 levels of 87.2%.

By Majority Property Type. At 84.7%, the all-occupancy rate for majority independent living (IL) properties for the NIC MAP Primary Markets increased 0.9pps from June 2022, with a gain of 0.2pps from August 2022. For majority assisted living properties (AL), the all-occupancy rate for the NIC MAP Primary Markets remained unchanged from August 2022 but was up 1.1pps to 79.7% from June 2022. Occupancy for both independent living properties and assisted living properties remained 4.9pps below March 2020 levels.

All-occupancy increased or remained stable in 27 of the 31 Primary Markets for IL in the September 2022 reporting period compared with June 2022. At 82.2%, Miami saw the largest quarterly improvement in September 2022, up 2.4pps from June 2022. Orlando IL occupancy fell 1.6pps in September 2022 to 84.5%. Orlando had the largest quarterly decline among the 31 NIC MAP Primary Markets.

All-occupancy rose or remained stable in 29 of the 31 Primary Markets for AL in September 2022 compared with June 2022. At 78.4%, Phoenix occupancy saw the largest increase since June 2022 and gained 2.8pps quarter-to-quarter. Seattle’s occupancy remained unchanged from August 2022 but fell by 1.4pps from June 2022 to 77.5%. Seattle had the largest quarterly decline among the 31 NIC MAP Primary Markets.

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 October 2022 IQ Snapshot report will be released on nic.org on Thursday, November 10, 2022, at 5:00pm.

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.

Senior housing and care’s premier event delivered on three days of connections, learning, and engagement.

Bringing together more than 2,800 industry participants, the 2022 NIC Fall Conference surpassed turnout expectations as attendees explored the near-term challenges of the senior housing and care sector, and the long-term opportunities as a demographic wave of older adults begins to arrive. The Conference was held September 14-16 at the Marriott Marquis in Washington, D.C. Highlights included:

• • A detailed economic and industry specific outlook.
  • The inaugural Women’s Networking Meetup.
  • Insightful educational sessions.
  • A NIC white paper defining the emerging active adult segment.
  • New research underscoring the integration of healthcare and housing.
  • Multiple daily, formal and informal, networking opportunities.

More than 70% of all those at the event were executives at the C-suite or managing director levels. Attendees also represented a good balance of both senior living operators and capital providers. Notably, the Conference drew 637 first-time attendees.

In opening remarks, NIC Board Chair Kurt Read, managing director at RSF Partners, noted that NIC is much more than a conference. Rather, he said, “NIC is the collective expression of the passionate commitment to create better environments now and in the future for our nation’s elders and those who serve them.”

The Fall Conference theme— “Forward Together”—highlighted the resilience and perseverance of the industry and the importance of building effective partnerships among operators, healthcare providers, investors, and other capital sources.

“The pace of change is frantic,” said NIC President and CEO Brian Jurutka, who listed the big industry challenges of rising expenses, a workforce shortage, ongoing pandemic-related issues, and the needs of a growing elderly population. “NIC is a platform and resource to help the industry move forward together,” he said.

Valuable Connections

As the premiere industry event, the 2022 NIC Fall Conference engaged attendees in three days of results-oriented networking, information sharing, and timely educational sessions. Industry leaders shared their perspectives and insights on a wide range of topics including the emerging active adult segment, the new consumer, capital market trends, and how to successfully scale operations, among other issues.

NIC Chief Economist Beth Mace was the featured speaker at the inaugural Women’s Networking Meetup, where nearly two hundred women executives exchanged ideas and made connections. Mace offered her insights and advice on the changing role of women in the industry. One tip: Be open to change.

Actionable Content

The Conference offered 10 stand-alone educational sessions. (High quality videos of all educational sessions are available to attendees in the Conference mobile app.)

Attendees packed the Marriott Marquis ballroom for the keynote session, “Economic and Financial Market Outlook.” Financial forecaster Jason Schenker delivered a lively, data-rich analysis of the economy’s bright spots and current risks.

“More people are working than ever before,” said Schenker, president of Prestige Economics and chairman of The Futurist Institute. But wages are rising, and inflation is up 8.3% annually, the highest rate since 1981.

Demographics are a big plus for senior living. “We will have a steady stream of residents,” he said. The healthcare needs of an aging population will greatly impact the workforce. In fact, he noted that 5 of the top 10 areas for job growth are in health-related occupations.

“The next 2-3 years will be tough,” predicted Schenker, citing expense pressures, rising interest rates, and worker shortages. But he was generally optimistic about conditions 24-36 months from now. His advice to attendees: “Plan for long-term upside opportunities.”

Several sessions addressed the new consumer and the growing active adult segment. NIC presented a white paper defining the property type. Key components include age-eligibility, majority market rate, rental, and lifestyle focused.

A panel of experts discussed the investment case for active adult in the aptly titled session: “Rational Exuberance.” Investors like the demographic profile of residents and their extended length of stay.

The panelists parsed the differences between active adult, senior housing, and multifamily properties. The operation of active adult properties is more like that of multifamily projects. But the sales cycle is more akin to that of senior living. “We’re very bullish on the sector,” said panelist Joseph Fox, co-founder and co-CEO, Livingston Street Capital.

Separately, a panel of industry leaders analyzed the new customer—a group much different from the population the industry has been serving. Baby boomers are harder to please than their predecessors. The panelists agreed that baby boomers are seeking an experience, not just a place to live.

“We are too wrapped up in the real estate,” said William Swearingen, senior vice president, marketing and sales, Spectrum Retirement Communities. It’s important to showcase the active lifestyle and the cultural reference points that baby boomers understand, he advised, “Take a chance.”

A CEO roundtable provided a big picture perspective on operations, the new customer, and workforce issues. In a separate panel discussion on repositioning, Tana Gall, president, Merrill Gardens, detailed how the company refashioned a portfolio for the middle market, now named Truewood by Merrill. Other speakers shared strategies on unit mix, tapping untapped workers, and how to reconfigure floor plans to boost staff efficiency.

The session, “Stay Focused and Keep Working: Effectively Scaling Your Operations,” mapped out successful approaches. Experts explored the pluses and minuses of acquisitions, new developments, and management assignments. “You need a plan to scale and grow,” noted panel moderator Bryan Starnes, CFO, ALG Senior.

New research, funded by NIC, was introduced at the Conference. It shows that senior housing residents average more than a dozen chronic conditions. The research was conducted by NORC at the University of Chicago. The study also highlights the opportunities to integrate healthcare and housing to improve health and cut costs.

A number of speakers at the Conference emphasized that the pandemic has secured a place for senior living in the healthcare continuum. Partnerships, in various forms, are growing quickly between senior living providers and healthcare systems.

The investment-focused sessions were well-attended. A panel discussion on environmental, social, and governance (ESG) strategies highlighted its growing role among institutional investors. Speakers also discussed the push for diversity, equity, and inclusion (DEI) initiatives.

Other popular sessions detailed the state of the capital markets and deal-making as operators rebuild occupancy. The consensus was that capital is available for the right product in the right place. Echoing much of the buzz at the Conference, speaker Julie Ferguson, executive vice president at Ryan Co. said, “We believe in the long-term value of senior living.”

“In addition to managing occupancy and staffing challenges, skilled nursing operators need to be laser-focused on reimbursement at the state level as Medicaid represents 51% of revenue.”

– Bill Kauffman          

NIC MAP Vision released its latest Skilled Nursing Monthly Report on September 29, 2022. The report includes key monthly data points from January 2012 through July 2022.

Here are some key takeaways from the report:

Skilled nursing property occupancy was relatively flat in July. It ended the month at 78.1%. In the last five months, skilled nursing occupancy has hovered in the range of 78% which is the highest occupancy level since April 2020, at which time occupancy began to fall rapidly due to the onset of the pandemic. Occupancy continues to recover since the pandemic low of 72.9% set in January 2021 but has encountered challenges such as new COVID-19 variants and staffing shortages. Staffing shortages continue to create difficulties within skilled nursing properties limiting the ability to admit new residents in some markets. However, the current occupancy trend does suggest that demand for skilled nursing properties is recovering, given the 148-basis point increase from January to July this year (2022). Occupancy has increased 151 basis points from one year ago and 517 basis points from its pandemic low.

Managed Medicare revenue per patient day (RPPD) continued its decrease in July. It decreased from $460 to $458 in July and is down 1.1% from last year in July 2021. It has decreased $112 (19.6%) from January 2012. 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 $127. Pre-pandemic, in February of 2020, the differential was $95. However, the difference has decreased since January 2022 to end July 2022 at $115. Meanwhile, managed Medicare revenue mix was flat from June to July at 10.5%. It is up, however, 21 basis points from last year and has increased 244 basis points from the pandemic low of 8.1%. The increase from the pandemic low is likely due to growth in surgeries that require rehab, which typically creates additional referrals to skilled nursing properties.

Medicare revenue mix declined 25 basis points to end July at 21.9%. After increasing to start 2022, from December 2021 (20.7%) to January 2022 (24.8%), it has now decreased 308 basis points from the 2022 high (25.0%) set in February. The increase at the start of 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 to the lowest level of 2022 to end July at $574, which is down 2.6% from January. One possible explanation is there has been lower reimbursement due to relatively fewer COVID-19 cases compared to January 2022. Additional reimbursement is needed for COVID-19 positive residents, which requires additional measures of care to be implemented.  

Medicaid revenue mix increased 99 basis points from June to end July at 51.0%. It has increased 307 basis points since February. Some of this increase is related to what was mentioned above, regarding the decline in COVID-19 cases since the winter months 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 June to end July 2022 at $258. It is up 4.9% 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.

To get more trends from the latest data you can download 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 this participation form. NIC maintains strict confidentiality of all data it receives.

“Just under one-fifth of respondents noted that the severity of staffing shortages across their organization was severe, while two-thirds indicated the problem was moderate. Regarding tenure of newly hired, full-time employees, on average, just under one-third (29%) of organizations kept more than 80% of new staff on the job after one month, which is down from the Wave 39 survey, conducted in March 2022, when just under one-half (46%) of respondents kept more than 80% on the job after one month.

Staffing retention difficulties often lead to increased agency usage, and in turn, both often have a detrimental impact on operating expenses and NOI. Operating expenses continue to rise, with more than one-fifth (21%) of respondents reporting operating expenses that are 20% or more greater than prior to the pandemic. Among the reasons given for the increase in operating expenses are vendor pricing, food costs, overtime and third-party agency usage, utilities, and insurance. Additionally, multiple respondents explicitly underscore industry-specific compensation increases that are above the rate of inflation.”

–Ryan Brooks, Senior Principal, NIC

This Wave 45 survey includes responses from August 22 to September 18, 2022, from owners and executives of 47 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 45 survey, reflecting operator experiences in August and September 2022, the rate of operators reporting an increase in the pace of move-ins in the past 30 days fell for independent living properties (29%), assisted living properties (43%), and nursing care properties (27%), but went up for memory care properties (44%). This marks the third consecutive wave with a decline in assisted living properties reporting an increase in the pace of move-ins.

Just under one-fifth of Wave 45 respondents indicated the severity of their staffing shortages across their organizations was severe (19%), while two-thirds (67%) reported it was moderate. Over 20% of respondents report staffing shortages across the entirety of their portfolio. Approximately one-quarter report staffing shortages at up to 25% of their properties, one-third have staffing shortages at up to 50% of their properties, and one-quarter report shortages at between 50%-99% of their properties.

Regarding tenure of newly hired, full-time employees, on average, just under one-third (29%) of organizations kept more than 80% of new staff on the job after one month. This is down from the Wave 39 survey, conducted in March 2022, when just under one-half (46%) of organizations kept more than 80% on the job after one month. Looking at longer-term retention, on average, just over one-tenth (12%) of organizations retained more than 80% of new staff after one year. This metric is also down from the Wave 39 survey, conducted in March 2022, when just under one-sixth (16%) of organizations retained more than 80% of new staff at the one-year mark.

As indicated in the table below, the average share of newly hired employees that remain on staff after three months and after one year has decreased over each of the last three ESI surveys that included this question (Waves 39, 44, and 45). While the average share of newly hired employees that remain on staff after one month has remained relatively stable, long-term employee retention has become even more challenging.

With employee retention remaining a challenge to operations, agency labor utilization is often turned to as a stopgap measure. When asked about their organizations’ expectations of agency usage in the next six months, 8.5% of Wave 45 respondents anticipate an increased reliance on agency staff, while two-thirds of respondents anticipate reliance on agency staff to decrease. Most respondents – 57% – anticipate their organizations’ agency usage to remain the same as it is currently.

Staffing retention challenges and a heavy reliance on agency usage can have a substantial impact on operating expenses and in turn NOI. When asked about the change in operating expenses since the beginning of 2022, 87% reported operating expenses to be higher and 13% reported operating expenses to have remained the same. No respondents had reduced operating expenses since the beginning of this year. When asked about the change in operating expenses since before the pandemic started, one-fifth of respondents have seen operating expenses increase by 20% or more.

Reasons given for the increase in operating expenses include vendor pricing, food costs, overtime and third-party agency usage, utilities, and insurance. Multiple respondents explicitly underscore industry-specific compensation increases that are above the rate of inflation. One respondent indicated that frontline staff at their organization received an average increase of 24% in compensation. 

However, a promising sign of relief to the long-standing labor market issues may be that 12% expect staffing challenges to improve in the second half of this year. One-third believe labor markets will ease in the first half of 2023, approximately one-third believe staffing challenges will improve in the second half of 2023, and one in four anticipate it will take until 2024 or beyond before staffing challenges ease.

Wave 45 Survey Demographics

• Responses were collected between August 22 and September 18, 2022, from owners and executives of 47 senior housing and skilled nursing operators across the nation. Owners/operators with 1 to 10 properties comprise roughly two-thirds (66%) of the sample. Operators with 11 to 25 properties account for 21%, and operators with 26 properties or more make up the rest of the sample with 13%.
• One-half of respondents are exclusively for-profit providers (49%), just under one-half operate not-for-profit seniors housing and care properties (45%), and 6% operate both.
• Many respondents in the sample report operating combinations of property types. Across their entire portfolios of properties, 66% of the organizations operate seniors housing properties (IL, AL, MC), 21% operate nursing care properties, and 45% operate CCRCs – also known as 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 46 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 senior 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.

An inaugural Women’s Networking Meetup was held last week at the 2022 NIC Fall Conference in Washington, D.C., co-sponsored by ASHA, Argentum’s Women in Leadership, the Senior Housing Women’s Initiative, and NIC. The gathering was designed to support women who remain underrepresented in senior living and allow them to get to know and support each other.

Beth Mace, NIC’s Chief Economist, welcomed meetup attendees and shared some guiding principles and career advice from her own life. Mace’s remarks are shared below. 

“For those of you who don’t know me, my name is Beth Burnham Mace and I am the Chief Economist for NIC and have been in this role for the past eight years. I have been a practicing economist for my entire career in a range of industries from an electric utility to a bank to a think tank to a private equity group to working on Capitol Hill. About 25 years ago, while at AEW Capital Management, I became involved in senior housing and it totally hooked me and have been thrilled ever since to be involved in an industry that cares passionately for older adults.

I am a mother of two sons, and have been married for many, many years. Like most of us, I have also faced a number of challenges along the way as well as a number of incredible opportunities and experiences. Being a woman and being the industry’s first chief economist is among them.

I have also been able to witness first-hand the changing role of women in society and professionally and I can say that while we have a lot of room to go forward, we’ve also come a long way baby as the phrase goes. For example, when I adopted my two sons, no maternity leave was offered since I was not physically pregnant. Today, many business offices provide lactation rooms.

As professionals, we wear many hats. Some of us are mothers, grandmothers, stepmothers, godmothers, wives, singles, widows, aunts, sisters, and cousins. Collectively, we support each other from a distance and from close proximity. Today, we hope to nurture more of those relationships as we support one another.

In preparation for today’s gathering, I thought I might provide you with some of the lessons I have learned along the way of life, with the hope that one of these observations may provide you with some insight, encouragement, or a bit of wisdom.

1. HEALTH: It’s true what they say: if you have your health, you have everything. Indeed, as a multiple-time cancer survivor, I know personally that health is precious—mind your health.
2. BALANCE: Balance is key, prioritization is key, saying no to certain things is okay, even good to do! You can’t do it all well, we need to compromise on some matters; know what’s important to you and make that your priority; and carry no guilt (easier said than done) regarding your family, work, or friends.
3. LIFE IS NOT A DRESS REHEARSAL: Be the best version of yourself; life is not a dress rehearsal; find out what motivates you; do not let fear get in the way of anything.
4. FLEXIBILITY: Be prepared for the shock waves that life sends to you; despite the best laid plans, life may have an alternative view; be flexible and roll with the punches.
5. BE OPEN TO CHANGE: Be open to opportunity, challenge, and change.
6. ATTITUDE: Attitude and narrative matter! You tell your story to the world, make it count and make it be the narrative you want. Look at the world as half full, not half empty: be an optimist.
7. SELF CONFIDENCE: Have confidence in the choices you make and know that you are making the best decision you can at that moment in time with the information that you had at that moment.
8. CARRY NO CHIPS ON YOUR SHOULDER: Try not to have regrets; learn to let go of things; don’t hang on to past angers and grudges; don’t have a chip on your shoulder (as my mother always said) or hold a grudge.
9. PASSION: Find a job/career that energizes you and doesn’t deplete you; follow your passion if you are able.
10. FOCUS: Make your professional hours professional; use them wisely and efficiently; stay focused; don’t hang around at the proverbial water cooler.
11. LEARN: Be a student of life; keep educating yourself, engage with stimulating persons and put yourself in stimulating situations.
12. IT TAKES A VILLAGE: It takes a village, no woman gets there alone. ASK for help and HELP each other personally and professionally. We pave the path for our daughters and next generation of women; help them, don’t add new obstacles for them (or make it tough on them because it was tough on you). Be around friends and family members that support and nurture you; surround yourself with positive role models and mentors, elders, and friends. Reach out to someone to be your mentor/coach.
13. SELF-CARE/DESTRESS: Learn how to destress. Don’t burn out: take time for yourself, engage in self-care in whatever way you need or define it—diet, exercise, journaling, prayer, social activities, clubs, parenting activities, meditation, spirituality, dancing, laughing; find something that fulfills your heart, soul and essence.
14. BEAUTY: Find beauty in your life because it will renew your spirit.
15. FUN: Have fun! Laugh, engage, and party!

I hope you find this meetup beneficial and I hope that you seed a few new female relationships. I, for one, know the benefits of women friends and know that there is nothing better.

As the years go by, I hope the seeds of these relationships will blossom into life-time connections with other women in our profession who carry the same torch you hold for caring for our seniors and older adults. And remember, let’s support each other today and as we move forward!”