Concentration of For-Profit, Chain SNFs Grew Over Last Six Years

For-profit skilled nursing operators captured a gradually larger share of the United States SNF market from 2009 and 2015, while non-profits increasingly ceded ground to governments.

In 2015, for-profits accounted for 68.4% of the nation’s 15,583 certified nursing facilities, according to a Tuesday report from the Kaiser Family Foundation. That’s compared to a 23.8% share for non-profit operators, while government agencies represented a further 7.1%.

Those numbers represent subtle shifts from 2009, when for-profits claimed 66.9% of the market and government agencies controlled just 5.8%. The chunk of the shift came at the expense of non-profits, which at the end of the 2000s operated 26.3% of all SNFs. Chains of all types, meanwhile, steadily increased their control over SNFs during that period, climbing from 54.1% to 56.9% between 2009 and 2015, while hospital-based SNFs lost ground, from 7.0% to 5.3%.

The ownership snapshot comes from a comprehensive breakdown of SNF statistics that the Menlo Park, Calif.-based advocacy and research firm released this week, including staffing levels — they’re slightly on the rise — and reported deficiencies, which are gaining again after a four-year drop between 2009 and 2013.

Most distressingly for the team at Kaiser, one in five facilities in 2015 received a citation for “actual harm or jeopardy,” with some jurisdictions racking up more issues than others. The District of Columbia, for instance, appeared among the top 10 worst offenders for nine separate types of deficiencies, with Alaska, Delaware, and Wyoming achieving that dubious distinction for seven citation types.

Kaiser then uses the data points to make a larger point about the state of the skilled nursing industry in 2017. Overall capacity remained the same between the six years included in the study while occupancy declined, which Kaiser attributes to the continued shift toward less expensive home- and community-based services (HCBS) as states seek Medicaid efficiencies.

“However, overall demand for long-term care services may increase in coming years as the ‘baby boom’ generation ages,” the report authors, Charlene Harrington and Helen Carrillo of the University of California, San Francisco, and Rachel Garfield of Kaiser, wrote in their conclusion. “The next few decades will require states and policy makers to determine sufficient capacity to accommodate long-term care user choice in both institutional and community-based settings.”

That could be a growing area of focus for the SNF industry as a whole, in Kaiser’s analysis, due to the historically higher concentration of care issues at for-profit facilities as compared to their non-profit and government-operated counterparts.

“These facility characteristics are important to policy makers and consumers because of their link to poorer quality of care,” the authors write. “States vary in the distribution of facilities by ownership, so continued monitoring of facility ownership by states can help to ensure that a high quality of care is provided at these facilities.”

Read the entire report on Kaiser’s website.

Written by Alex Spanko

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