Per-Bed Skilled Nursing Prices Trickling Downward

After a year that saw reports of eye-popping prices for skilled nursing beds, the trend appears to be headed in the opposite direction.

The per-bed price for skilled nursing facilities dropped 1% between the third and fourth quarters of 2017, falling to $83,800 according to the most recent data from the National Investment Center for Seniors Housing and Care (NIC).

While that dip seems small, NIC senior principal Bill Kauffman pointed out that the fourth quarter results represent a 16.5% fall from the same time last year, when per-bed prices topped $100,000.

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“It looks like the nursing care price-per-bed drop has stabilized somewhat this past quarter, but we will see how it holds up over the next few quarters,” Kauffman wrote in an analysis of the results.

Still, prices for SNF beds remain at historic highs when compared to previous valleys. Last summer, Irving Levin Associates found that average prices had tripled since 2003, with a 42% gain in median SNF bed prices between 2015 and 2016.

In 2016, 21 SNFs had price tags of $150,000 per bed or more, with a further 69 at $125,000, Irving Levin’s analysis found.

Back in the recession-era days of 2009, the industry hit a “cyclical low” of $48,700 per bed, Kauffman noted; the most recent quarter’s price represents a 72% gain from then, or 6.4% in compound annual growth.

But Kauffman also contrasted skilled nursing’s fate with that of senior housing, which saw price-per-unit gains of 9.3% between the fourth quarters of 2016 and 2017 — as well as a 208% gain from its cyclical low in 2010.

“The storyline for seniors housing and nursing care pricing has started to diverge over the past year,” Kauffman wrote.

Written by Alex Spanko

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