The skilled nursing industry faces an existential crisis over its future, and 2017 was a year filled with threats — financial and regulatory woes at top providers, plummeting occupancy, and continued reimbursement pressures.
But it was also a year that saw promising research illustrating the utility of SNF care and successes in new payment models, as well as companies experimenting with new strategies that could change the look and feel of the industry — both on the whole, and on the facility level.
So as we enter the final week before Christmas, let’s take a look at the biggest stories from the year in skilled nursing.
Top Five Most-Read Stories
Skilled Nursing ‘Under Siege,’ Quarter of Beds to Disappear by 2022 — Speaking at an industry conference in Chicago back in June, Lincoln Healthcare Leadership president and founder David Ellis declared the industry “under siege,” and predicted that about one-fourth of all current SNF beds will be gone in five years. But he also offered a path forward for the struggling industry, including turning to transitional care and building partnerships with home health and personal care providers, as well as hospitals.
Kindred Strikes Deal to Sell SNF Business for $700 Million — Easily the biggest M&A headline of the year, Kindred sent a shockwave through the industry by announcing a deal to exit the SNF business entirely in late June. The process, which as of year’s end is nearly complete, has seen buyer BM Eagle Holdings, Inc. already flip some of the properties to other owners — and also proved to be a boon for Ventas, Inc. (NYSE: VTR), which received $700 million for the SNFs in the portfolio that it had owned. Kindred, meanwhile, claimed that its benefits would come in the form of reduced capital requirements and cash benefits from net operating losses.
QCP Seeks Receivership for HCR ManorCare Properties — Quality Care Properties (NYSE: QCP) has spent the year locked in a bitter battle with top tenant HCR ManorCare, with missed rent payments, leading the real estate investment trust (REIT) to pursue a third-party receiver for ManorCare’s operations. But QCP has granted the Toledo, Ohio-based SNF provider multiple extensions for the deadline to respond to the action, with the most recent deadline pushed back to mid-January 2018.
Symphony Shares Secrets of the ‘Super SNF’ — Symphony Post Acute Network used its platform at the Post Acute Link Care Continuum Conference in Chicago to show off its “super SNF,” a higher-end type of facility that blends traditional SNF care with resort-style features commonly seen in settings such as independent and assisted living. Symphony’s model includes branded clinical programming, hospital-competitive pay for its nursing staff, and former hotel employees to lead its hospitality efforts.
Skilled Nursing Operator Fortis Files for Receivership — Fortis Management Group skipped the drama and filed for receivership in July, turning over its management team to a court-appointed replacement and signaling the end of an era for the 60-site chain with locations across the Midwest and Pacific Northwest. The Milwaukee-based Fortis was formed in 2015 after Extendicare decided to focus on its Canadian assets and sold off its U.S. buildings in a $870 million deal.
Top Five Editor’s Picks
These stories may not have topped our list of most-read stories, but they were among the most interesting to report, write, and edit.
The Rise of the Mid-Sized Skilled Nursing Buyer — Multiple players in the skilled nursing M&A space this year predicted the end of the national chain, with regional players filling the void — after all, the local owners, operators, and investors are intimately familiar with the regulatory and demographic issues that affect SNFs on the local level, and multiple large national companies have struggled in recent years.
Why Sabra Bet on Skilled Nursing While Other REITs Bailed — Sabra Health Care REIT (Nasdaq: SBRA) made significant moves in the SNF space this year, snapping up “pure play” SNF REIT Care Capital Properties (NYSE: CCP) and an additional 24 skilled nursing and transitional care units on the West Coast. CEO Rick Matros told Skilled Nursing News that the move was largely a diversification play, but he also emphasized the continuing necessity of SNFs in the overall care marketplace.
From Buses to Putting Greens, SNFs Align Rehab with Everyday Life — From a full-sized city bus at a Chicago SNF to video games that help residents re-learn how to swallow, SNN took a look at the unique ways operators are integrating rehab into their care offerings — and tailoring their strategies to the specific goals of their residents. That’s why the Chicago site has a bus and a replica of a condo, while a Kansas City chain uses cars and areas where residents can practice moving from sidewalks to grass surfaces.
Demand for Skilled Nursing Services Substantially Greater Than Expected — The RAND Corporation found that 56% of older Americans will spend at least one night in a nursing home over the course of their lives, a substantially higher figures than the 35% consistently found in other studies. In addition to demographic shifts, RAND pointed to an increased emphasis in short stays in explaining the findings: Stints of 21 nights or fewer accounted for 34% of all stays in 2010, up from 28% in 1998.
Advanced Practice Nurses Cut Hospitalizations from SNFs by Almost Half — Multiple studies revealed the importance of advanced practice nurses to improving SNF care, with a CMS-backed program showing significant promise. And as for the additional costs and hiring headaches that might come along with bringing more well-trained nurses into a SNF, one of the researchers involved in the study says it’s completely feasible for most operators.
We’ve reached the end of our first year in operation, and I’d like to thank our readers and all of the sources who’ve been kind enough to dedicate some of their time to us. Without your tips, explanations, and occasional corrections, we wouldn’t have a publication.
On behalf of all of us at SNN, happy holidays, and we’re looking forward to bringing you the latest industry news in 2018 and beyond.
Written by Alex Spanko