In the years ahead, millions of aging middle-income Americans will need a reasonably priced housing and care option. But innovative ideas are vital to solve the issue of affordability.

Cutting-edge strategies for the senior housing middle market will be shared by the industry’s top leaders and stakeholders at a session during the 2022 NIC Spring Conference in Dallas (March 23-25.)

“The middle market represents a huge opportunity” said NIC Senior Principal Ryan Brooks. He will be a co-speaker at the session, “The Forgotten Middle Market: Vision to Execution.”

A presentation by Brooks during a panel discussion with industry experts will be followed by attendees participating in facilitated breakout group discussions— to take a deep dive into topics addressed by the panel, and strategies to apply these ideas to their business models.

To preview what attendees can expect to learn at the session, Brooks recently spoke with session moderator Diane Burfeindt, managing partner at Trilogy Connect; and co-facilitator Jim Thompson, senior vice president and director of senior housing investments, BOK Financial.

The theme of opportunity will be explored at the session. The need is growing for the product, first identified by NIC in its study “The Forgotten Middle.” It shows that millions of seniors will not be able to afford most of today’s private-pay senior housing communities. These seniors don’t qualify for Medicaid or other government assistance either. So, what’s the best approach?

Repurposing properties is emerging as a key strategy and will be discussed at the session. The high cost of new construction makes it difficult to provide an affordable middle-market property, according to Thompson. However, the pandemic may have provided a “window of opportunity” for developers and investors to acquire older properties at a discounted price. “Repurposing properties can provide an affordable real estate component,” said Thompson.

Other creative real estate strategies will be explored. These include partnering with affordable housing developers or designing new types of developments that combine affordable senior living with retail or multi-generational apartment properties.

“Affordable care is a big issue,” said Burfeindt. She added that it depends on how “care” is defined. Is it medical care? Service coordination? “What should a middle-market product provide?” she asked. Instead of a community that offers everything for the resident, the middle-market product could create an environment where residents can do things for themselves or link them to outside services.

Panelists will discuss creative care solutions, such as partnering with Medicare Advantage programs to help defray assisted living costs. Residents could be tapped as volunteers for some duties along with volunteers from the wider community. Funding may also be available from local social service groups. “What we’re finding is that organizations are developing strategies that are not one-size-fits-all. They are identifying the targeted income in their community and working towards partnerships and solutions that bring existing tools together in a new way that is ultimately less resource-intensive,” Burfeindt remarked.

Session attendees will hear how investors view the middle market. The sheer size of the market is of interest to investors, according to Thompson. A high, stable census and dependable cash flow will be a characteristic of the middle market for years to come, he said. He added that though returns could be lower than traditional private-pay senior housing, multifamily investors may see a middle market senior living product as a way to diversify their portfolio’s cash flow.

Middle-market staffing strategies will also be addressed during the session. Attendees will learn how technology and other innovations will help improve affordability and ease staffing pressures. “Staffing in the middle-market will look very different than we’re accustomed to seeing in other senior housing and care settings,” said Thompson.

Mark your calendar for this can’t-miss session at the 2022 NIC Spring Conference:

“The Forgotten Middle Market: Vision to Execution”
Thursday, March 24, 1:30-3:15, Level 3, Trinity Ballroom

The Labor Department reported that nonfarm payrolls rose by 678,000 in February 2022. This was stronger than market expectations of an increase of 423,000 and occurred despite the impact of omicron on the economy. Revisions added 92,000 to total payrolls in the previous two months. Nevertheless, nonfarm payrolls were still down by 2.1 million or 1.4% from their pre-pandemic level in February 2020.

Concerns about rising wage costs and inflation are further supported by this report. While average hourly earnings for all employees on private nonfarm payrolls rose by a mere $0.01 in February to $31.58, this was still a gain of 5.1% from year-earlier levels. This was less than the 5.7% rise seen in January, however.

February’s stellar job growth along with the year-over-year increase in wages will support the Federal Reserve’s intention of raising interest rates at its upcoming March meeting. Chair (pro tempore) Jerome Powell indicated in his congressional testimony this week that, with Russia’s attacks on Ukraine roiling markets and creating additional uncertainty, he was inclined to support a 25-basis point hike later this month and that the Fed should “proceed cautiously” with plans to tighten policy this year.

“The Omicron variant has challenged the skilled nursing recovery given the staffing shortages around the country as skilled nursing properties are unable to hire enough staff to admit more residents.”

– Bill Kauffman

NIC MAP^® data, powered by NIC MAP Vision, released its latest Skilled Nursing Monthly Report on March 3, 2022. The report includes key monthly data points from January 2012 through December 2021.

Here are some key takeaways from the report:

Occupancy

Skilled nursing property occupancy increased 24 basis points in the month of December, ending the month at 76.0%. This was the highest occupancy level since May 2020. After not changing from October to November, occupancy continued its slow recovery, which was challenged by the Delta variant and, more recently, the Omicron COVID-19 variant. Occupancy has increased 411 basis points from the low of 71.8% set in January 2021. The fact that occupancy held steady through the Delta variant and the early stage of Omicron suggests that the demand for skilled nursing properties remains, but a significant challenge for many skilled nursing operators around the country has been the staffing shortages that limit the ability to admit new residents. The already difficult labor shortage has grown increasingly worse as staff infected with Omicron have been forced to quarantine.

Managed Medicare

Managed Medicare revenue mix increased 20 basis points from November to end December at 9.9%, reversing the 20-basis point decline that occurred from October to November. It remains well below its 2021 high of 10.8% seen in February 2021 but was up by 204 basis points from the pandemic low set in May 2020 of 7.9%. The increase from the pandemic low is likely due to growth in elective surgeries from 2020, which typically creates additional referrals to skilled nursing properties. Meanwhile, Managed Medicare revenue per patient day (RPPD) decreased again, albeit slightly, ending December at $451. In addition, it is down 3.4% from December 2020. It has decreased $107 (19.2%) from January 2012 when the data series began to be reported as managed Medicare enrollment continues to grow across the country.

Medicare

Medicare revenue per patient day (RPPD) increased slightly from November to end December 2021 at $580. It has decreased 1.0% from $585 in June 2020 when severe cases in skilled nursing properties were increasing significantly during the early stages of the pandemic. The federal government implemented many initiatives to aid properties for cases of COVID-19, including increases in Medicare fee-for-service reimbursements to help care for COVID-19 positive patients requiring isolation. Meanwhile, Medicare revenue mix also trended higher in December, increasing 57 basis points ending December at 20.7%. However, it has been falling since January 2021 when it was 24.5%.

Medicaid

Medicaid revenue per patient day (RPPD) was relatively flat from November to end December 2021 at $248. Medicaid RPPD declined 1.1% from February of 2021 to September 2021 but has since increased 1.6% from September to December. This increase is likely due to some states adjusting their Medicaid budgets and increasing reimbursement for the 2022-2023 fiscal year. Medicaid RPPD increased 0.90% from a year ago in December 2020 and has increased 5.0% from pre-pandemic levels of February 2020 ($236). Medicaid reimbursement has increased more than usual as many states embraced measures to increase reimbursement related to the number of COVID-19 cases to support skilled nursing properties.

To get more trends from the latest data you can download the Skilled Nursing Monthly Report. There is no charge for this report.

The report provides aggregate data at the national level from a sampling of skilled nursing operators with multiple properties in the United States. NIC continues to grow its database of participating operators to provide data at localized levels in the future. Operators who are interested in participating can complete a participation form. NIC maintains strict confidentiality of all data it receives.

Relationships are the heart of the senior housing and care industry and are key to future success. Expertly designed to foster collaboration, the NIC Spring Conference features a myriad of innovative networking opportunities throughout the three-day event. In addition to scheduled events like our networking lounges and receptions, the popular Braindate™ platform is also returning this year, which offers intimate, curated discussions tailored to attendees’ interests. 

Beginning March 1, attendees can post topics they’re interested in discussing on the Braindate platform’s Topic Market. In these one-on-one or group discussions, participants can tap into the experiences and expertise of operators, capital providers, and other care partners through deep, knowledge sharing conversations.  

One-on-one Braindates are 30-minute conversations that you book with another attendee. You can either post a topic or request a meeting with a topic author and meet in the Braindate Lounge onsite at the conference.  

Group Braindates are 45-minute collaborative conversations with up to five people. The group will meet at the Braindate Lounge and the topic author will serve as the moderator to ensure that all participants can share their unique perspectives.  

All attendees have insights and experiences that can benefit others and anyone can post a topic or join a Braindate. We highly recommend taking advantage of this opportunity to engage in meaningful conversation (not sales pitches) while making connections and building new relationships. 

For more information about Braindates, visit the 2022 NIC Spring Conference website. 

The 2022 NIC Spring Conference will be held March 23-25 in Dallas, TX, at the Omni Dallas. Register today.

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Curious about what happened with asking rates and actual rate discounting in 2021 or how move-in patterns differed by care segment? Then read on for key takeaways from the recently released 4Q2021 NIC MAP^® Seniors Housing Actual Rates Report, available to NIC MAP^® subscribers.

In the recently released report, national monthly data through December 2021 of actual rates and leasing velocity is presented, including data on rate discounting and move-in/move-out trends. NIC MAP subscribers have access to the full report, which includes national data and additional key takeaways as well as data for the Atlanta, Philadelphia, and Phoenix metropolitan markets. 

Select takeaways from the 4Q2021 NIC MAP^® Seniors Housing Actual Rates Report are listed below. These key takeaways are pulled from the Segment Type report. Care segments refer to the levels of care and services provided to a resident living in an assisted living, memory care, or independent living unit.

Key Takeaways

• All three senior housing segment types—independent living, assisted living, and memory care—experienced the highest growth in year-over-year asking rates in the fourth quarter of 2021 since NIC MAP began reporting the data in 2017. Assisted living (6.6%) had the highest increase of the three levels of care, followed by independent living (6.0%), then memory care (3.5%). These gains continue the trend of growth in asking rates that started earlier in 2021 following the immense pandemic-related pressures of 2020.

• For the third quarter in a row, move-ins outpaced move-outs for all three care segments (independent living, assisted living, memory care) in fourth quarter 2021. This marks ten consecutive months of move-ins outpacing move-outs from March 2021 through December 2021. Move-ins for assisted living segments were at 3.4% in October and December of 2021, down from the recorded high of 3.9% in June 2021.
• Average initial rates for residents moving in were discounted below asking rates for all three care segments. Initial rate discounts were slightly greater in the fourth quarter of 2021 than in the third quarter for independent living segments and memory care segments. Of the three segments, memory care had the largest initial rate discounting of 10.2% ($719) in December 2021. On an annualized basis, this discount is equivalent to 1.2 months. This discounting is comparable to the discounting one year earlier in December 2020 of 10.3% ($702 or 1.2 months.) The least discounting in the year 2021 for memory care segments was still high at 7.9% ($547) in August.

• Of the three metropolitan markets that are currently reported, the largest discounting in initial rates from asking rates for residents moving into senior housing was Atlanta’s assisted living segment (December 2021) and Phoenix’s independent living segment (November 2021) which were both at 17.1% (or 2.1 months on an annualized basis).
  

NIC MAP Vision CEO Explains the Importance of Actual Rates Data Initiative

Arick Morton, CEO of NIC MAP Vision, discusses the importance of the actual rates data initiative for the company and the senior housing industry at large. Operators can learn more about actual rates by visiting the NIC MAP Vision actual rates page.

Our Software Partners Support this Initiative

At the 2021 NIC Fall Conference in Houston, Texas, Glennis Solutions and Eldermark were proudly announced as certified Actual Rates Software Partners. Glennis Solutions and Eldermark now offer their senior housing operator customers the ability to share their data more efficiently in the official NIC Actual Rates format. To receive certification, a software provider works with the NIC MAP Vision team to develop reports that meet the NIC Actual Rates standard format. They are then required to provide six months of actual rates data for two or more operators using those reports.

NIC and NIC MAP Vision appreciate the time, effort, and commitment from our software partners and thank them for their partnerships .

The Actual Rates Data Initiative is driven by the need to continually increase transparency in the senior housing sector and achieve greater parity to data that is available in other real estate asset types. Now, more than ever, having access to accurate data on the actual monthly rates that a senior housing resident pays as compared to property level asking rates helps the sector achieve this goal.

About the Report

The NIC MAP^® Seniors Housing Actual Rates Report provides aggregate national data from approximately 300,000 units within more than 2,600 properties across the U.S. operated by 25 to 30 senior housing providers. The operators included in the current sample tend to be larger, professionally managed, and investment-grade operators as we currently require participating operators to manage 5 or more properties. Note that this monthly time series is comprised of end-of-month data for each respective month.

While these trends are certainly interesting aggregated across the states, actual rates data are even more useful at the metro level. NIC MAP Vision is continuing to work towards reporting more markets.

Interested in Participating?

The Actual Rates Data Initiative is an effort to expand senior housing data and we are looking for operators who have five or more properties to participate. We have expertise in extracting data from industry leading software systems, such as Yardi, PointClickCare, Alis, MatrixCare, Glennis Solutions, and Eldermark and can facilitate the process for you.

Operators contributing data to the NIC MAP^® Actual Rates report receive a complimentary report which allows them to compare their own data against national, and metropolitan market benchmarks.

In addition to receiving a complimentary report, your organization benefits through:

• More informed benchmarking, strategic planning, and day-to-day business operations,
• Increased transparency, aligning with other commercial real estate assets in terms of data availability,
• Saved time, Actual Rates data is collected electronically directly from operators’ corporate           offices, removing the need for telephone calls to individual properties, and
• Enhanced investment and efficiency across the sector.

Learn more.