“The pace of move-ins has slowed as the COVID-19 delta variant spreads primarily among the unvaccinated. In Wave 32, about one-quarter of organizations with assisted living apartments and/or nursing care beds, and about one in five with memory care units reported a deceleration in the pace of move-ins across their portfolio of properties in the past 30-days. Nursing care occupancy has taken a jolt with nearly 40% of organizations indicating that occupancy declined.Respondents to the Wave 32 survey want prospective residents and their family members to know that senior living is safe. Much has been learned over course of the pandemic and operating with COVID-19 has become routine. Operators want the media to know that they are better equipped to care for residents than last when little was known about the virus—and infection mitigation protocols are working. Indeed, according to NIC data analyst Omar Zahraoui in a recent blog post, overall case counts within skilled nursing facilities relative to cases among the general population on August 1 remained low.”

—Lana Peck, Senior Principal, NIC

NIC’s Executive Survey of operators in seniors housing and skilled nursing is designed to deliver transparency into market fundamentals in the seniors housing and care space as market conditions continue to change. This Wave 32 survey includes responses collected August 9 to September 6, 2021, from owners and executives of 92 small, medium, and large seniors housing and skilled nursing operators from across the nation, representing hundreds of buildings and thousands of units across respondents’ portfolios of properties.

Detailed reports for each “wave” of the survey and a PDF of the report charts can be found on the NIC COVID-19 Resource Center webpage under Executive Survey Insights.

Wave 32 Summary of Insights and Findings

• As shown in the timeline below, across the survey time series from March 24, 2020 to September 6, 2021, NIC’s Executive Survey Insights results have shown clear trends that have corresponded with the broad incidence of COVID-19 infection cases in the United States. By Wave 18 (in the latter half of December), the COVID-19 vaccine had begun to be distributed across the country through the Long-Term Care Vaccination Program and more and more respondents noted that the pace of move-ins accelerated in Waves 19 through 31. In Wave 32, the shares of organizations reporting an acceleration in the pace of move-ins in the past 30-days dropped notably, presumably due to the spread of the COVID-19 delta variant primarily among the unvaccinated.

• Between roughly 30% and 40% of organizations report that the pace of move-ins accelerated in the past 30-days—compared to roughly 55% and 60% in Wave 31. Of note, about one-quarter of organizations with assisted living apartments and/or nursing care beds, and about one in five with memory care units reported a deceleration in the pace of move-ins. However, more than half (59%) of organizations with independent living residences reported no change in the pace of move-ins.
• Currently, about 20% of respondents note that their organization has a backlog of residents waiting to move in, up from about 10% in Wave 28 (5/3-5/16, 2021), but down from about 35% in Wave 16 (11/9-11/22, 2020). Furthermore, one-third of organizations reported a decline in lead volume in the past 30-days specifically due to COVID-19 and new variants (32%).

• In Wave 32 between roughly 45% and 55% of organizations with independent living, assisted living and/or memory care units reported an increase in occupancy across their portfolios of properties in the past 30-days. However, only about one-third (32%) saw an increase in nursing care occupancy. This is down significantly from Wave 30 (6/14-7/11) when three-quarters of organizations with nursing care beds saw occupancy increases in the 30-days prior (76%).
• Indeed, of each of the four care segments, nursing care occupancy has taken a jolt with nearly 40% of organizations indicating that occupancy declined across their portfolios of properties in Wave 32 (and about 20% reported a decline in occupancy of 3-percentage points or more).

• The chart below shows the shares of organizations with nursing care beds that saw an increase, decrease or no change in occupancy, across their portfolio of properties in the past 30-days, across 32 waves of survey data since near the beginning of the pandemic.
• The shares of organizations with nursing care occupancy declines in the Waves 31 and 32 surveys show a similar trend compared to Waves 11 and 12 (8/17-9/27, 2020) leading up to the Fall surge in COVID-19 cases across the country. Whether or not the pattern of declining occupancy rates will continue to trend is uncertain until the delta variant spread is muted by increasing vaccinations and natural immunity from prior infection.

• A new question was asked in Wave 32: “A year and a half into the pandemic, my organization wants (a) prospective residents/family and (b) the media and others to know ___ about seniors housing…” Regarding what operators want prospective residents/family to know, most respondents cited senior living is safe/being better than being isolated at home. Most respondents want the media to know that they are better equipped to care for residents than they were last year, and infection protocols are working. Some select quotes from respondents are shown below:

Wave 32 Survey Demographics

• Responses were collected between August 9 and September 6, 2021, from owners and executives of 92 seniors housing and skilled nursing operators from across the nation. Owner/operators with 1 to 10 properties comprise roughly two-thirds (63%) of the sample. Operators with 11 to 25 and 26 properties or more make up 20% and 16% of the sample, respectively.
• Approximately one-half of respondents are exclusively for-profit providers (51%); more than one-third operate not-for-profit (37%) and 12% operate both.
• Many respondents in the sample report operating combinations of property types. Across their entire portfolios of properties, 66% of the organizations operate seniors housing properties (IL, AL, MC), 23% operate nursing care properties, and 37% operate CCRCs (aka Life Plan Communities).

Referenced by The Wall Street Journal on August 31 — Senior Housing Industry Faces Higher Costs as It Plays Lead Role in Vaccine Mandates — NIC’s Executive Survey Insights continues to be closely watched by the media, and we ask for your continued support.

The current survey is available and takes under ten minutes to complete. If you are an owner or C-suite executive of seniors housing and care and have not received an email invitation to take the survey, please contact Lana Peck at lpeck@nic.org to be added to the list of recipients.

NIC wishes to thank survey respondents for their valuable input and continuing support for this effort to bring clarity and create a comprehensive and honest narrative in the seniors housing and care space at a time when trends are continuing to change in our sector.

Top 20 firm helps turn obstacles into opportunities.

To learn about the direction of the growing firm, Ryan Brooks, NIC senior principal, healthcare strategy, recently talked with three Wipfli healthcare service leaders: Tiffany Karlin, partner, consulting services and director of healthcare; John Oeltjen, partner, risk management services; and Shasta McClary-Brocious, healthcare billing supervisor and reimbursement consultant.

Here’s a recap of that conversation:

Brooks: As an organization focused on providing assurance, accounting, tax, and consulting solutions, can you tell me about the range of services that you provide specifically for senior living providers?

Karlin: I’d like to answer that question by pointing out three key services we’re providing – and how we’re different from other firms.

The total investment return for the seniors housing sector was a positive 0.54% in the second quarter of 2021. This marked the fourth consecutive quarterly gain after one quarter of negative returns in the second quarter of 2020 when total returns were negative 1.00%; that marked the first negative total return since 2012 and prior to that in 2009.

The income return in the second quarter was the same as in the first quarter, but at 0.78% it was the smallest quarterly gain on record as far back as 2003. The valuation (capital/appreciation) return fell 0.24%, the seventh consecutive quarterly decline. This contrasts with the NPI and apartments, where the valuation return turned positive in the fourth quarter and saw gains of 2.54% and 2.71%, respectively, in the second quarter of 2021. Many investors have reduced their appreciation expectations for seniors housing as the impact of the coronavirus has weighed heavily on their view of the sector. The valuation return is the change in value net of any capital expenditures incurred during the quarter.

The one-year valuation return for seniors housing was a positive 2.26%, the strongest annual return since the onset of the pandemic in the second quarter of 2020. The 2.26% total return compared favorably to retail (-1.32%) and hotel (-8.27%), but was smaller than the other major property types, including the overall NPI (7.37%). Meanwhile, the industrial sector enjoyed an eye-popping 22.98% appreciation return on a one-year basis.

Note that the performance measurement cited above for seniors housing reflects the returns of 149 seniors housing properties valued at $7.9 billion in the second quarter. This represents the highest property count and market value in the NCREIF time series for seniors housing.

For more details, download the full article here.

Reimbursement differential between Medicare fee-for-service and managed Medicare has accelerated during the pandemic.

NIC MAP^® Data Service, powered by NIC MAP Vision, released its latest Skilled Nursing Monthly Report on September 2, 2021, which includes key monthly data points from January 2012 through June 2021.

Here are some key takeaways from NIC Analytics regarding the data covered in the report:

The upward trend in skilled nursing occupancy continued in June. Occupancy increased for the fifth month in a row, rising 86 basis points from May to end June at 74.2%. Occupancy is now up 297 basis points from the 71.2% low point reached in January. There continues to be optimism, especially from investors, given the success of the vaccines but the second half of 2021 will be crucial in terms of the occupancy trend. The expectation is that admissions will continue to increase with rising demand and elective surgeries will continue to provide support for additional admissions to skilled nursing properties. However, occupancy still is very low relative to pre-pandemic levels and cash flow and liquidity is a concern at some properties. Occupancy is down 11.2 percentage points from the pre-pandemic February 2020 level of 85.4%. In addition, the Delta variant does pose a threat, especially in some states with lower vaccinated populations.

Managed Medicare revenue per patient day (RPPD) held steady in June but is down 4.2% from last year in June 2020. The continued decline in managed Medicare revenue per patient day poses a challenge to skilled nursing operators as the reimbursement differential between Medicare fee-for-service and managed Medicare has accelerated during the pandemic. Medicare fee-for-service RPPD ended June 2021 at $560 and managed Medicare ended at $453, representing a $107 differential. Pre-pandemic, in February of 2020, the differential was $92. As managed Medicare continues to grow, operators and investors should pay attention to this trend and adjust accordingly.

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Medicare revenue mix and RPPD continue to decline as fewer COVID-19 cases in properties have resulted in less need for utilizing the 3-Day rule waiver and per day reimbursement for COVD-19-positive patients. Medicare revenue mix ended June at 20.0% and is down from its pandemic high of 24.8% set in January 2021. Medicare RPPD is down 2.5% from its pandemic peak of $574 in June 2020. Meanwhile, managed Medicare revenue mix was essentially flat at 10.5%.  However, this is 240 basis points above the pandemic low of 8.1% set in May 2020.

Medicaid patient day mix continued to increase, albeit slowly, ending June at 66.5%. It has increased 292 basis points from the pandemic low of 63.6% set in January 2021. Meanwhile, Medicaid revenue mix was flat from the prior month, ending June at 49.7%. One element of the Medicaid revenue share of a property’s revenue is RPPD and that has declined 1.4% since the pandemic high of $243 set in February 2021. RPPD has likely declined due to less reimbursement support from most states as COVID-19 cases within skilled nursing properties declined.

To get more trends from the latest data you can download the Skilled Nursing Monthly Report here. 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 in order to provide data at localized levels in the future. Operators who are interested in participating can complete a participation form at https://www.nic.org/skilled-nursing-data-initiative. NIC and NIC MAP Vision maintain strict confidentiality of all data received.

Interested in learning more about NIC MAP data? To learn more about NIC MAP data, powered by NIC MAP Vision, and about accessing the data featured in this article, schedule a meeting with a product expert today.

The Labor Department reported that nonfarm payrolls rose by a weaker than expected 235,000 in August 2021. The consensus had been for an increase of 725,000. This was a sharp deceleration from July when jobs grew by 1.1 million and June when jobs increased by 962,000. Through August, monthly job growth has averaged 586,00 per month. Nonfarm payrolls are now up by 17.0 million since April 2020 but remain down by 5.3 million or 3.5% from pre-pandemic levels of February 2020.

The data show that the U.S. recovery from the pandemic continues but at a slower pace. The COVID-10 Delta variant may be weighing on the economy as evidenced by the limited growth in the high-contact leisure and hospitality sectors which had been expanding rapidly prior to August. Businesses may be holding off hiring and workers may be holding off taking jobs amid heightened fear of the Delta variant.

Today’s report is important as the Federal Reserve wants to see “substantial progress” in the economy before it shifts monetary policy and begins “tapering” when it will purchase fewer long-term securities for its balance sheet and before it starts to shift toward a higher interest rate regime. That said, Fed concerns about upward pressures on wages may have been exacerbated by the 4.3% annual increase in average hourly earnings.

Indeed, average hourly earnings for all employees on private nonfarm payrolls rose by $0.17 in August to $30.73, a gain of 4.3% from a year earlier and up from a revised 4.1% in July. August marked the fourth consecutive month of increases. The data suggests that rising demand for labor associated with the recovery from the pandemic is putting upward pressure on wages. That said, the Labor Department warns that the pandemic has affected the ability to fully interpret the wage data due to the wide swings in employment trends.

Job levels continued to contract for nursing care facilities which fell by 7,100 jobs to a seasonally adjusted 1,364,000 and were down from year-earlier levels of 1,464,600. Jobs also contracted for community care facilities for the elderly, falling by 2,600 to 887,200 and are down from 914,400 one year ago.

Separately and from a different survey, the Labor Department reported that the unemployment rate fell by 0.2 percentage points to 5.2% in August and the number of unemployed persons fell to 8.4 million, still higher than the 5.7 million persons prior to the pandemic. The jobless rate is now 1.6 percentage points above the pre-pandemic level of 3.5% seen in February 2020, but well below the 14.7% peak seen in April 2020. The underemployment rate or the U-6 jobless rate was 8.8% down from 9.2% in July 2021. This figure includes those who have quit looking for a job because they are discouraged about their prospects and people working part-time but desiring a full work week.

Among the major worker groups, the unemployment rates were lowest for Whites at 4.6%, adult women at 4.8% and adult men at 5.1%. The jobless rate was highest for teenagers at 11.2%, Blacks at 8.8%, Hispanics at 6.4%, and Asians at 4.6%.

The number of long-term unemployed (those jobless for 27 weeks or more) decreased by 246,000 to 3.2 million but is 2.1 million higher than in February 2020, suggesting that this continues to be a very challenging time for many Americans. Long-term unemployed persons account for 37.4% of the total number of unemployed persons.

The labor force participation rate, which is a measure of the share of working age people who are employed or looking for work was steady at 61.7% in August and has remained within a narrow range of 61.4% to 61.7% since June 2020. Many workers have dropped out of the labor force since the pandemic began to take care of family members or out of fear of working and catching the virus.

The change in total nonfarm payroll employment for June was revised up by 24,000 from a gain of 938,000 to 962,000 and the change for July was revised up by 110,000 from 943,000 to 1,053,000. With these revisions, employment in July and June combined is 134,000 higher than previously reported. Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.