While staffing dynamics are changing for nursing homes, labor issues still represent a significant pain point as facilities continue to rebuild. In the meantime, operators are prioritizing inorganic expansion and technology investments to tackle critical issues, including staffing shortfalls.

Labor costs and inflation remain top challenges for the industry for 2025, but interestingly recruitment and retention aren’t as pressing as in previous years, according to a survey conducted by Skilled Nursing News and electronic health record company Net Health. 

Recruitment and retention concerns dropped by 23% year over year, even as 40% of the respondents felt that the staffing climate wouldn’t improve until beyond 2026. That said, underlying factors shaping this prediction do indeed point to reasons for rejoicing, survey results indicate.

The online survey – conducted between Sept. 9 and Dec. 13 of 2024 – aimed to determine how companies of all sizes were navigating the shifting landscape of business, planning to drive growth, investing in technology and embracing artificial intelligence (AI). The survey collected the views of 100 skilled nursing industry professionals, with about 70% of the participants being C-Suite leaders, VPs and directors, and each offering an executive outlook on the state of the skilled nursing industry in the year ahead.

Key insights from the survey, aside from those on staffing, included how more skilled nursing organizations are looking outward for growth opportunities this year.

Larger mergers and acquisitions than in years past are expected for 2025, with 38% of respondents planning to buy skilled nursing assets this year. In the end, private equity might be the biggest buyer, with 47% of respondents expecting this group to scoop up the most deals.

Forty-five percent of operators also cited banks and finance companies as the top source of financing this year.

Tech as top investment

In terms of technology investments, 29% of qualified respondents said tech platforms will be their top investment area in 2025. Moreover, over 30% of operators are looking to invest in deepening relationships with accountable care organizations (ACOs). About 24% of operators are seeking involvement in institutional special needs plans (I-SNPs), and another 24% are planning to launch an ancillary business such as home health or behavioral health. Finally, about 22% are planning to invest in specialty care services, including dialysis and ventilators.

Meanwhile, an overwhelming 85% believe that technology can help providers develop patient-centered care plans and better address patient needs. For artificial intelligence specifically, 40.4% of respondents said they were highly supportive of using AI-based programs in skilled nursing facilities.

About 73% believe AI will take on a larger role in helping skilled nursing staff with decision making and improving quality of care. In fact, when it comes to areas providers would like to see impacted by AI, 71.2% of respondents see it as useful in improving quality of care, while 63% said AI could be used to identify areas in need of improvement.

About 57.5% see AI helping with managing costs, and 52.1% hope AI will reduce unnecessary hospital readmissions.

Key value-based care metrics

Looking ahead to value-based care programs this year, respondents said that their programs should emphasize achieving patient satisfaction as the top key performance indicator, and operators will need to make adjustments to strengthen this metric moving forward.

Other metrics that needed improving included reducing urinary tract infections, falls and other areas that might align with ACO reimbursement structures ranking second overall, followed by functional improvement and reducing readmissions.

About 64% said they are seeing gaps in care in certain strategic areas, as operators work to integrate with value-based care models. When it comes to better care coordination, 64% of respondents felt transitioning patients from the hospital to the skilled nursing facility was at the top of the list, followed by communication among multidisciplinary care teams (52.4%), transition from facility to the community (49.2%), and data sharing from the nursing home to the ACO (31.7%).