Make no mistake: The skilled nursing industry is under threat from a range of forces, and no one is expecting it to end anytime soon.
“[The industry is] under pressure from every imaginable direction, and it’s [only] getting harder,” said Russ DePriest, senior vice president and general manager-skilled nursing at PointClickCare. He spoke at the annual customer summit held by the electronic health record software company last week in Orlando, Florida.
With new sweeping new Medicare requirements and survey process changes coming at the end of November, providers are struggling to adapt to the constant shifts and margin pressure.
In addition, providers are being asked to demonstrate results using data in order to prove that they should be the preferred provider in health care networks.
“Referral partners need to know that they will have a smooth transition into your building,” he added.
Big providers struggle, midsize see opportunities
Last week, one of the largest U.S. SNF providers, Genesis HealthCare (NYSE: GEN), released an earnings report showing that declining census, rising nurse wages and reimbursement pressures are forcing it to restructure leases with landlords.
Genesis CEO George Hager echoed DePriest’s sentiment and said that the recent downturn is the most protracted and complex down cycle in the history of the company.
Rising salaries and the coming shortage of nurses require that providers start to plan for the future generations.
“There are younger people coming in and they don’t want to see paper, they want to deal with an EHR,” said DePriest. “Our workforce within the industry is aging, and a lot of them are starting to retire.”
According to a new survey from AMN Healthcare, 27% of nurses who are planning to retire say they will do so in less than a year. This is a jump from only 16% in 2015.
While other large providers such as HCR ManorCare are also experiencing their own problems, DePreist does see opportunity, particularly for the regional midsize players.
“The midsize chains seem to be expanding and found some sort of sweet spot,” he said. “We are seeing a lot of our midsize customers buying buildings from larger providers.”
When pressed about why regional players are having success, DePriest didn’t claim to have all the answers, but suggested the focus could allow them to understand local dynamics and regulations better than the national companies.
But with so much regulatory change coming and rising wages across the board, operators need to focus on the one common goal everyone shares.
“[Companies] need to remain profitable and keep their doors open,” he said.
Written by John Yedinak