By the industry’s own definition, continuing care retirement communities (CCRCs) include skilled nursing care — but there is a growing trend of developing similar communities that lack such care, according to a report from the commercial real estate services firm CBRE.
In addition, some established CCRCs have either closed or significantly cut back on their nursing care units. On top of that, many skilled units are being converted to rehabilitation, Jeanette Rice, head of multi-family research for the Americas, at CBRE, told Skilled Nursing News.
The demand for nursing care has waned during the years following the Great Recession, in CBRE’s analysis, while demand for non-nursing care units has been strong throughout the seniors housing sector.
It’s not likely to improve anytime soon. Occupancy levels in the skilled nursing space are likely to stay challenged and decline modestly this year, according to the report, while similar data from the National Investment Center for Seniors Housing & Care (NIC) has shown consistent declines in recent quarters.
“Demand has been falling for a variety of reasons, including healthier seniors, shorter time spent in nursing care due to changes in Medicare and Medicaid reimbursement policies, and more care being provided in non-nursing care seniors living, especially in assisted living,” the report said. “Telemedicine and other technological advances in the delivery of health care are keeping seniors with significant health-care needs in non-nursing care environments longer.”
Another factor, albeit a more distant one, could be investor skittishness. Acquisitions of CCRCs have been fairly modest in recent years, the CBRE report noted, and one reason for that could be the range of care they provide. Many new and existing investors prefer narrower segments such as assisted or independent living — and are wary of skilled nursing.
“Most buyers realize that nursing care has its unique operational characteristics and do not feel educated enough to make a prudent investment in this segment,” the report said.
CBRE joins a growing chorus of voices that have predicted a skilled nursing retreat in the CCRC space. Back in May, the Chicago-based specialty investment bank Ziegler reported that while the median number of SNF beds has held steady at 72 per CCRC since 2013, those numbers are likely to decline in the future. And a few months before that, a Ziegler survey found that skilled nursing and post-acute care offerings rank among the highest worries for CFOs at non-profit senior living operators.
“The more evident pattern is the number of providers building independent living and assisted living, but not skilled care,” Ziegler director of senior living research and development Lisa McCracken told SNN in May. “We have also seen some providers who are historically life plan communities, but they have elected to drop the skilled nursing. That is a very clear trend in the western part of the U.S.”
One recent example came from the Oregon-based Avamere Family of Companies, which announced the development of a so-called “micro CCRC” in Utah. That site is slated to include independent living, assisted living, and memory care offerings across two buildings and 300 units — but no SNF beds.
One way CCRCs have been able to counteract the effects of decreased skilled beds is by providing more services at the assisted living level, Rice told SNN.
Another tool is the use of partnerships to help take care of more acute residents.
“Certainly throughout the industry, CCRCs are building more networks with health care service providers as well as community service providers,” she said. “That takes care of some of the complications where people need more care. If you have a CCRC without the nursing care, some people may ultimately have to be transferred.”
Written by Maggie Flynn
Tim Regan contributed reporting.