The nursing home sector is undergoing a significant transformation in real time, driven by a recognition that the traditional, reactive model is no longer sustainable.

Changes in occupancy patterns, increasing patient acuity, evolving workforce dynamics, and shifting payment structures are all contributing to this redefinition, according to Austin Steele, chief strategy officer for Indiana-based operator Journey.

Steele, who spoke at last year’s RETHINK conference in Chicago, said that nursing homes are becoming essential players in the broader post-acute and population health continuum rather than providing solely custodial care. This shift requires a more proactive approach and data-driven care models aligned with modern health care expectations and outcomes.

“We’re seeing a shift for operators, moving from crisis mode to strategic stabilization. I think operators are getting smarter about building culture, creating pipelines and investing in staff development,” Steele said of staffing trends.

In a broad ranging conversation with Skilled Nursing News, Steele also spoke about broader industry themes, including increased scrutiny of Medicare Advantage plans by the Centers for Medicare and Medicaid Services (CMS), rising acuity that makes nursing homes more like step-down hospitals, and regulatory shifts that show a split between federal deregulation and intensified state-level oversight.

“We see the future of MA being tighter and a little bit more of an accountable ecosystem. Less games, more data and closer alignment between outcomes and reimbursement,” Steele told SNN.

In the midst of all this, Steele anticipates a year of transformation for Journey, which has made some big investments into its operations in addition to expanding its footprint.

“We’ve invested heavily on our operational infrastructure, our culture, our clinical quality, and we’re shifting that toward innovation,” he said.

This interview has been edited for length and clarity. This year’s RETHINK conference will be taking place from Aug. 18 to 20 in Chicago.

What has changed when it comes to rethinking the nursing home sector?

There’s a growing realization that the old model is not coming back … occupancy, acuity, workforce, and payment structures have all shifted. The sector is being redefined in real time, not just as a place for custodial care but as a vital part of the post acute and population health continuum.

What are you most excited about for the next era of skilled nursing?

I’m most excited about the opportunity to lead. We talk about the old model versus the new model … skilled nursing was reactive, it always seemed to be a step behind, and now we have the tools and the data to be proactive partners in that care continuum. Operators should be thinking about clinical excellence, talent development and digital transformation. Companies who can do those three things and keep their culture people focused and serving with the heart will not only survive, they’ll set the standard for what’s next.

What does the year have in store for staffing, considering the past couple years of incremental retention and recruiting improvement for the industry?

We’re seeing a shift for operators, moving from crisis mode to strategic stabilization. I think operators are getting smarter about building culture, creating pipelines and investing in staff development. For Journey, we’re looking at retention first, focusing on mentorship, onboarding, early career support and other ancillary services that we’re providing to [staff].

Recruiting is going to remain tough, but operators who act like marketers and treat caregivers like the precious resource that they are, they’re going to gain the edge.

Any insight into the future of Medicare Advantage in the years ahead? Especially considering the recent audits announced by the CMS?

Medicare Advantage is evolving and scrutiny is intensifying. The CMS memo signals a more aggressive stance on oversight, which could have big implications, right? I think that as we see MA penetration grow, operators have to become more sophisticated and understand our risk adjustments, documentation and partnering with those plans and potentially partnering with other operators in those plans. We see the future of MA being tighter and a little bit more of an accountable ecosystem. Less games, more data and closer alignment between outcomes and reimbursement.

How do you think rising acuity will continue to share the skilled nursing industry?

Acuity isn’t creeping up anymore … it’s surging at this point. I think SNFs are now effectively step-down hospitals, and the gap between what’s expected clinically and what’s reimbursed operationally is becoming harder to ignore. Operators who win in this space will be those who invest in clinical infrastructure, interdisciplinary care teams and better data interoperability. We’re responding by scaling up. Our clinical competencies, empowering our care teams and preparing our buildings and our people for a more intensive level of care.

Any trends in regulation you’d like to share?

There’s two areas as far as trends. One, the deregulation rhetoric at the federal level, but tighter state level oversight. Two, CMS’ tone has become sharp around survey reform and enforcement. As operators, we have to stay nimble. Survey teams, they’re changing the way that they evaluate quality. There’s less of a checklist, more focus on the resident experience and outcome. Staying survey ready these days means embedding quality into every single thing that you do and making that a daily rhythm, and not just preparing for your survey window.

Any thoughts on the future of immigration and the nursing home sector?

It’s a tough area. Immigration remains a critical pressure valve for our long term care workforce. We hope that we will see expansion into visas for health care workers, but we feel like that’s going to be slow. In the meantime, we have to take that time and start investing in a global recruitment strategy and building the infrastructure to support any international staff.

What’s in store for Journey for the rest of the year?

The rest of the year for Journey is really about turning the momentum that we have into transformation. We’ve invested heavily on our operational infrastructure, our culture, our clinical quality, and we’re shifting that toward innovation.

We’re redefining our care models to be ready for higher acuity, rethinking all of our staffing strategies, looking at technology that can help with that, and aligning our growth with where value-based care is headed. Reimagining Journey is all about asking how we can be a better operator and how we can lead the next era of skilled nursing.