Almost Half of CCRCs Plan to Downsize Skilled Nursing Footprint

Citing operational challenges, 44.5% of life plan communities (LPCs) or Continuing Care Retirement Communities (CCRCs) are looking to downsize their skilled nursing services on campus.

Minimizing, but not eliminating, the use of skilled nursing will fall to “independent living internal use,” CliftonLarsonAllen (CLA) said in a report published at the end of December. 

In other words, skilled nursing will increasingly be offered as a service within the independent living arm of an LPC within the next decade. Adapting and enhancing nursing to better fit residents will be a focus in the next ten years as well, CLA said in its report.

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“The lines will be blurred,” a survey participant said. “Services provided will keep people in their homes longer. We will continue to see a decline in skilled services needed.”

Despite plans to downsize, 75% of LPCs said they believe having a skilled nursing unit or facility on campus will be important in the future.

The disconnect between a need for skilled nursing and the decision to downsize it is further highlighted in CLA’s section on workforce pressures – 98% of respondents said access to labor will continue to be challenging in 2022.

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Respondents described a strong, competitive environment for skilled nursing labor in increasingly expensive operating conditions.

“Labor already consumes 55-60% of [our] operating budget. Pressure on this segment of spending forces us to cut in other areas or price ourselves out of the market,” a participant said.

Aging in place, a hallmark of LPCs, requires every stage of aging to be represented, including higher acuity settings normally found in a skilled nursing facility.

The way that aging in place is marketed is critical at this point in the pandemic, CLA found. About 79% of surveyees agree wrapping higher acuity services like skilled nursing within an independent living setting is the best way to ensure residents have the best care as they age in place.

A majority of LPC operators plan to add their own home care agency as well, coupled with reducing nursing beds.

“This topic seems to excite the passions around two different philosophies: aging through a continuum versus more time aging in independent living,” CLA researchers wrote.

Operators should consider current utilization of assisted living and skilled nursing, the next generation of consumers, the pros and cons of developing a home care arm, and marketing impact of an “older, more frail” independent living demographic.

“We have a product to serve a market and like in many industries we need to change with the demand of the consumer,” another survey participant said. “As long as we do so, we expect people will continue to desire our product.”

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