Nursing home occupancy recovery rates will be market and operator specific in 2022 and beyond, with COVID-19 still steering industry expectations and resident choices.
Still, more than half of nursing home industry leaders believe occupancy levels will improve in the next 12 months for both long-term and short-term care – 53.6% and 52.8%, respectively, according to the Skilled Nursing News 2022 outlook survey.
The survey was conducted online late last year as a way to identify the top sources of concern and opportunities leaders saw in the year ahead.
Of the 248 respondents, half said skilled nursing was their primary business, followed by consulting firms, rehab and therapy providers, technology/software companies, public and private real estate investment trusts (REITs) and hospital systems, among others.
About 27% of respondents anticipated no change in occupancy in 2022 for both markets; 20.1% and 18.5% of respondents felt occupancy would decrease this year for short-term and long-term care, respectively.
Before omicron hit, PruittHealth Chairman and CEO Neil Pruitt Jr. told Skilled Nursing News the operator had increased its occupancy rate from 69% to 74%, only to be slowed by the latest surge. Currently, PruittHealth has a 70.5% occupancy level on average.
“As soon as the omicron wave is finished, we do expect occupancy to start recovering,” Pruitt said.
The omicron surge hit Georgia and Florida before the Carolinas, Pruitt said – facilities in those first two states are already seeing cases taper off and referral volume increase.
The Georgia-based operator has 100-plus SNF facilities across the four states, as well as home health, hospice, palliative care and senior living services.
In terms of market-specific recovery, Pruitt expects short-term rehab to take “a little longer” than long-term care, citing a hospital backlog of elective surgeries as COVID patients continue to fill up acute care facilities.
For long-term care, the referrals are there but staffing is barring the way to a speedy recovery, Pruitt added.
Be sure to download the report to see the full set of results — and where your organization stacks up against the crowd.
‘Residual’ COVID thinking
When society eventually reaches a point where COVID-19 is not top of mind for most people anymore, the pandemic’s lingering impact on industry executive’s business plans, and the thinking of prospective residents and their families, will still inform occupancy recovery expectations.
“Clearly COVID has changed the landscape, right? There’s no question. But I think as we observe this and as we try to be part of a solution to the recovering rebound of occupancy, we think about the residual of that impact, you know, once it’s in the rearview mirror,” said Martha Schram, president and CEO of Aegis Therapies. “Let’s talk about the residuals and how that informs our thinking about forecasting occupancy rebound.”
Residual COVID thinking applies to prospective residents too; people are “more than ever” thinking about safety and the consequences of isolation when choosing where to receive care, Schram said.
“There’s increasing energy and resources brought to bear on alternatives for short-term rehab. An alternative to that is occurring in the SNF,” said Schram. “I think it’s part of a bigger shift, and a bigger emphasis on wellness; people want to be safe … I think we will continue to see that trend.”
Still, there will be plenty of prospective patients to care for with the 80 and older demographic reaching a “tipping point,” as Schram calls it.
“That’s good news for the sector,” Schram noted. “These are people who are going to be needing both short-term rehab because you have that whole group that might still be needing stroke rehab, Parkinson’s rehab.”
The same goes for a higher level of care offered in a SNF environment, Schram said, with people having more complex comorbidities and behavioral health issues.
Occupancy recovery hinges on staffing
Staffing challenges – the main factor standing in the way of faster occupancy rebound – has deeply affected short-term rehab services too, Schram said. About 50% of workers that have left Aegis are leaving the sector altogether.
About 82% of SNN survey respondents chose staffing as its greatest non-COVID challenge this year, an overwhelming majority; only 10% of respondents chose occupancy as their greatest challenge, the second highest response.
The question now is, how many of those people will return in a few years.
Rethinking the staffing model has been central for Aegis to bring staff back to the sector, and in turn boost occupancy.
Expanding staffing availability in restorative and activities departments, which are viewed positively by prospective staff, is one way Aegis is rethinking its staffing model. Giving staff more flexibility with working hours is another way the short-term rehab provider is recruiting and retaining staff.
“What we’re trying to do, especially as we support restorative and activities departments, is create a career versus a job so that people really feel they can, they can embrace a [career],” Schram said.
PruittHealth will rely on its size to regain staffing.
“I do think that the breadth of our organization allows us to have the resources to address the staffing problems rather directly,” Pruitt said.
PruittHealth has centralized its talent acquisition process and quadrupled the size of the department, a move Pruitt says is key to attracting and retaining some of the best caregivers in the profession.
“We expect that it’s going to pay dividends,” Pruitt said.
Government funding and occupancy recovery
States like North Carolina and South Carolina have been “very generous” in providing financial assistance to long-term care providers, Pruitt said. Rate add-ons in North Carolina specifically have helped decrease the loss that the operator typically sees with Medicaid patients.
From a Medicare standpoint, the ability to skill in place has helped PruittHealth keep patients in-house instead of sending them to the hospital.
“That temporary emergency relief has really helped us. Obviously if we keep the patient in-house that’s going to help our recovery efforts,” Pruitt said.
Short-term rehab, along with other ancillary health care providers, have had “little attention” given to them by government entities in the wake of extended public health emergencies (PHEs), Reliant Rehabilitation CEO Chris Bird said in a January SNN article.
Reductions to the physician fee schedule were partly mitigated by a one-year delay, “ensuring additional disruption to this sector,” Bird said.
Schram maintains that recovery is market and operator specific, even through the lens of a potential reduction or sunset of federal and state support.
“At some point, everybody has to stand back up on their two feet in the sustainable future,” Schram said.
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