While AI adoption is emerging as the more immediate priority for nursing home providers, workforce challenges are expected to persist over the long term, according to providers surveyed about the sector outlook.

Nursing home providers said in a survey conducted by Skilled Nursing News in late August ahead of the RETHINK conference that the biggest issue is still people. And, recruiting, retaining and developing staff remain ongoing hurdles.  

However, technology and value-based care are evolving to become important levers to address workforce pressures, improve outcomes and create new opportunities.

Workforce evolution, including staffing and retention challenges, is expected to have the most transformational effect on skilled nursing in the next decade, respondents said, while AI adoption is more top of mind in the next year.

More than a third, or 36.8%, of the respondents said recruiting and retaining clinical staff and caregivers was still the number one greatest challenge that nursing homes faced, followed by 21.1% saying financial pressure from low reimbursement rates against rising costs was the biggest challenge today. 

Also, about 55.6% of nursing home providers in SNN’s survey named workforce as the biggest transformational force, while 50% of providers said the expansion of value-based care and alternative payment models and integration of AI and predictive analytics were the most transformational forces. 

Meanwhile, 22% said an increased demand for skilled nursing services will come out as the top driver for change, while 16.7% chose shifts in referral patterns. A minority of providers chose consolidation and M&A activity as having the greatest transformational effect on the sector, with 11.1% choosing this option on the survey.

New service lines, clinical initiatives and other growth areas 

When asked if the providers planned to launch new service lines in 2026, 57.9% said they were unsure, or that it was a possibility, while 31.6% said they would not be launching a new service line this year. 

For the little over 10% of providers who said they would be launching a new service line, initiatives varied, with some interest in outpatient therapy and dialysis.  

As for clinical initiatives, 31.6% of operators said improving quality measures and outcomes was top of the list, with 21.1% saying building and retaining clinical leaders was their top priority.  

The remaining three clinical initiatives got the same priority, including enhancing interdisciplinary care, reducing hospital readmissions and strengthening clinical documentation.

Opportunities for nursing homes today also mean expanding partnerships with hospitals, ACOs and health systems, respondents said. These include leveraging technology focused on care quality and operational efficiency and enhancing workforce development and career pathways as a way to attract talent. All three areas received top marks from operators, with 33.3% choosing at least one of these.

Issues worrying providers over the next year 

For issues affecting near-term payment, providers see shifts in Medicare and Medicaid reimbursement policies as having a great impact in the next 12 months, with 26.3% choosing this option, and 21.1% opting for labor market dynamics and wage pressures.

In terms of near-term staffing, more than half of nursing home providers expect the recruitment and retention landscape to remain the same in the next 6 months. About 26.3% expect the situation to worsen, and 15.8% believe recruitment and retention will improve.

That said, certain staffing strategies have had a positive impact and may continue to do so in the next 6 months, including flexible scheduling and career development and training. To a lesser degree, higher wages and better benefits, tech and automation, and agency reduction had positive impacts on operators looking for better staffing strategies.

International recruitment was an afterthought with only 11.1% saying this strategy had a positive effect in the past year.

Initiatives holding most promise 

As far as the issue with the greatest impact to care in the next 12 months, most providers chose AI adoption, along with automation in care delivery and operations, followed by rising acuity and complexity of resident care needs, with 42.1% and 36.8% of providers choosing these options, respectively.

And taking a closer look at tech opportunities, providers said remote patient monitoring holds the most promise, followed by workforce management and smart scheduling platforms, then advanced electronic health records.

Five other opportunity areas received the same amount of attention from operator, with 16.7% of providers choosing each. These other areas for opportunity included partnering with payers for value-based models, expanding into high acuity or specialty services, strengthening care transitions, diversifying services and simply capitalizing on an aging population.

If nursing home providers choose to pursue partnership opportunities with hospitals and health systems, certain factors will deliver more clout: demonstrating reduced hospital readmissions and strong clinical outcomes.

Less important factors in developing such relationships, but still things to keep in mind, include faster admissions and care transitions, as well as value-based care capabilities.