Eighty-five percent.
Of the roughly 130,000 people enrolled nationwide in institutional special needs plans, or I-SNPs, about 85% reside in nursing homes1. That represents approximately 12% of the total nursing home population. And it represents a major opportunity for skilled care providers.
Skilled nursing facilities operate in a financially constrained environment. At the same time, residents are arriving with more complex medical and behavioral health needs, placing additional pressure on already stretched care teams and margins.
Just how challenging is today’s SNF landscape? In a recent survey of nursing homes from Optum, 45% noted they are operating at a loss, while 56% report low occupancy2.
I-SNPs have emerged as a strategy that, when properly implemented, can help SNFs respond to these challenges with a distinct approach to managing cost, quality and care delivery within the nursing home setting. Here is a look at the three major challenges in today’s skilled nursing landscape, and five statistics that reveal the clinical benefits for SNFs of I-SNPs.
3 Challenges of Today’s SNF
Optum Home & Community partners with health plans to deliver integrated, value-based care across home and community settings. Offering a clinical delivery model of physician offices and surgical centers that includes I-SNP plans, Optum’s approach begins with the care and training they provide to their own clinicians.
This is a critical piece of how I-SNPs help SNFs at a time when SNFs are navigating a complex landscape marked by financial pressures, staffing challenges, high regulatory administration and more complex care needs among patients. Optum’s whole-person approach helps ensure members receive the right care at the right time.
Skilled care providers face three critical challenges: financial strain, staffing shortages and burnout, and complex care needs among patients. I-SNPs are helping with each.
1. Financial strain
Financial pressures are intensifying operational strain for SNFs. As noted, nearly half of nursing homes are operating at a loss, while more than half report low occupancy as a serious challenge. These factors restrict revenue growth and financial stability.
Labor and operating costs have also risen, threatening to outpace reimbursement increases from public payers.
2. Staffing shortages and burnout
Staffing has been a major challenge for years in all sectors of healthcare, and it seems that no matter how bad staffing is generally in the space, SNFs always have it the worst.
There are two major reasons.
First, SNFs are competing with new types of employers, namely hospitals, that hire more licensed practical nurses (LPNs) than they used to. Second, the employees that SNFs do have are burning out due to lopsided patient-to-employee ratios and the need to care for more complex patients.
As a result, SNFs are attempting solutions that ultimately increase staffing costs, such as filling in the workforce with agency nurses and pro re nata staff or partnering with or creating certified nursing assistant programs with LPN courses to “grow” nursing staff in-house. Optum clinicians spend an average of more than 26 hours per year with each member.
“As a family member and a provider, it has made me feel better knowing they were getting the best care,” says Karen Lally, Retired President and CFO of Charlesgate Nursing Center in Providence, Rhode Island. “My whole family’s been on Optum — my grandmother, my mother and my brother.”
3. More complex health care and behavioral needs among patients
SNFs report a shift in patient acuity and complexity, with administrators and nursing directors noting that residents are arriving sicker, accompanied by increased rates of adverse events, such as falls and wound development. At the same time, facilities are seeing more residents with dementia or psychiatric conditions, many of whom may have limited awareness of their physical limitations or exhibit behavioral challenges.
Together, these trends heighten the need for specialized behavioral health support, closer supervision and more careful roommate placement, further complicating care delivery and staffing demands.
The 5 Stats Reveal the Clinical Benefits of I-SNPs for SNFs
I-SNPs are a type of Medicare Advantage (MA) coordinated care plan designed for people who require an institutional level of care, such as long-term residents of SNFs or nursing homes. These plans serve MA-eligible individuals who live in a participating facility for at least 90 days, or who have required — or are expected to require — long-term SNF-level services with no intention of moving out.
A defining feature of I-SNPs is its model of care, which is tailored to frail, high-need individuals. Upon enrollment, each member receives a comprehensive health risk assessment that informs an individualized care plan outlining their specific medical, functional and psychosocial needs.
This structured approach is intended to support more proactive and coordinated care management, particularly for residents with complex chronic conditions and functional limitations that require ongoing monitoring and intervention. Compared to non-I-SNP populations, beneficiaries in I-SNPs experience lower mortality rates, fewer hospital discharges, reduced readmissions and fewer emergency department visits.
Five stats reveal why SNFs turn to I-SNPs3. Let’s start with these four differences between those in I-SNPs versus general MA plans:
- 50% are less likely to visit the emergency department
- 29% are less likely to experience pressure ulcers
- 27% are less likely to be readmitted within 30 days after an inpatient stay
- 21% have a lower mortality rate than members of other MA plans
Lastly, 6% of I-SNP members have lower mortality rates than traditional Medicare members.
“It’s not just the extra in-community care that makes the plan so valuable. It’s the people Optum puts on its teams,” says David Dunn, Chief Operating Officer of Shannon Gray Rehabilitation & Recovery Center. “It’s the caring, the corporate support they provide. They’re very important members of our team.”
This Views is sponsored by Optum and is an excerpt from their new white paper, “How I-SNPs are enhancing nursing home care and economics.” To download the entire white paper for free, with more data and a step-by-step guide on when to build an I-SNPs program versus when to partner, visit business.optum.com/en/insights/how-isnps-help-nursing-homes-strengthen-care.html.
- Rollins E. Institutional Special-Needs Plans: Provision of services, network-adequacy requirements, and star ratings. Medpac. April 10, 2026 ↩︎
- State of the Nursing Home Sector: Survey of 441 nursing home providers highlights persistent staffing and economic crisis. American Health Care Association. March 2024. ↩︎
- Institutional Special Needs Plan (I-SNP) enrollment and outcomes in long-term care settings. ATI Advisory. May 21, 2026 ↩︎
