Industry leaders, including nursing home executives, believe margins will increase between 1% and 5% in the next six months, thanks to an easing pandemic and occupancy recovery.
Only 5% of long-term care leaders expect their margins to decrease during that time, according to the latest National Investment Center for Seniors Housing & Care (NIC) executive survey published on Thursday.
Rising operating expenses were cited as a limiting factor in margin growth.
This stands in stark contrast to a recent report published by CliftonLarsonAllen, which projected negative operating margins for the sector in 2022.
In the NIC survey, about 75% of respondents expect margins to increase – about a quarter of respondents operate nursing homes, and 35% operate Continuing Care Retirement Communities (CCRCs), which have an element of skilled nursing.
Sixty-seven seniors housing and skilled nursing operator leaders participated in the most recent NIC executive survey – responses were collected between Feb. 7 and March 6.
The pace of move-ins at nursing homes has improved as well, the survey found.
The number of executives that said their move-in pace accelerated increased from 21% to 33% compared to NIC’s last executive survey, which covered most of January.
For comparison, independent living and memory care occupancy slowed, while assisted living occupancy remained strong.
Deceleration in move-ins was connected to omicron, lack of available staff and a slowdown of hospital admissions, executives said.
When taking a look at company size, NIC found smaller operators were less likely to have achieved pre-pandemic lead volumes compared to larger organizations. Only 15% of single-site operators have reached pre-pandemic lead levels.
Nearly three-quarters of respondents told NIC they are optimistic that labor and staffing challenges will ease in the second half of 2022 and into 2023.
All respondents said they are paying staff overtime and four of five rely on agency staff to cover shifts, the survey found. About half of respondents don’t expect agency reliance to change this year, but 40% believe use will decrease.
In one question related to staffing, nine out of 10 respondents said they’d support federal investigations into anticompetitive practices by nursing and staffing agencies, perhaps unsurprising given the shifting relationship between agencies and facility operators.
Some nursing home operators, Georgia-based A.G. Rhodes among them, have been paying agency workers three to four times what they pay their own staff to fill the gap.
The American Health Care Association and National Center for Assisted Living (AHCA/NCAL) as well as the American Hospital Association (AHA) sent a letter to White House Covid-19 Response Team Coordinator Jeffrey Zients requesting assistance in the face of what some operators have called price gouging.
The Federal Trade Commission (FTC) has yet to respond to another letter also penned by AHCA/NCAL late last year.
Companies featured in this article:
AHCA/NCAL, American Hospital Association, Federal Trade Commission, NIC
