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NIC Skilled Nursing Data Report: Key Takeaways from the Fourth Quarter 2018

  • Occupancy in Narrow Range Since April 2018 
  • Managed Medicare Revenue Mix Now at 11% 

NIC released its fourth quarter 2018 Skilled Nursing Data Report last week, which includes key monthly data points from January 2012 through December 2018.  The report also includes the latest urban vs. rural comparative data points as well as revenue mix trends. 

Here are some key takeaways from the report: 

  1. Occupancy continued to hold in a narrow range as it has over the past several months.  Overall occupancy ended the fourth quarter of 2018 at 82.4% which was virtually unchanged from the third quarter and down 35 basis points from 82.8% in the fourth quarter of 2017.  It has hovered around 82.5% since April 2018. The fourth quarter occupancy trend varied by geographic area with urban areas experiencing an increase, while occupancy in rural and urban cluster areas declined from the third to fourth quarter of 2018. The occupancy rate ended 2018 at 80.4% in rural areas and 83.7% in urban areas, representing a significant difference of 330 basis points.  


  1. Managed Medicare revenue per patient day (RPPD) increased in the fourth quarter of 2018, albeit slightly, ending the year at $430. Any ease in pressure on managed Medicare RPPD would be a positive for skilled nursing operators as the last few years have seen a continued downward trend. The managed Medicare RPPD has decreased from $495 in January of 2012 to $430 as of December 2018. There has not been a quarterly increase in managed Medicare RPPD since the fourth quarter of 2016 when the RPPD was at $449. However, RPPD is down 1.7% compared to a year ago in December of 2017 when managed Medicare RPPD was at $437. Managed Medicare RPPD trends varied by geography as rural areas saw a decrease and urban areas represented a slight increase. Urban cluster areas increased as well. 
  2. Private revenue per patient day was relatively flat from the third quarter to the fourth quarter of 2018. It has continued to be range bound over the past few months, but it has declined since February 2018. This is notable because it has steadily increased over the past few years. However, the latest data suggest there has been a slowdown since last year. Whereas the private pay RPPD did grow at 1.7% compared to a year ago in December of 2017, it oscillated around the $262 range for several months.  Private RPPD decreased the most in rural areas representing a quarterly decrease of 1%.  It was relatively steady in both urban and urban cluster areas. Meanwhile, patient day mix continued to hold steady as it has the last several months. 
  3. Skilled mix held steady in the fourth quarter 2018 at 24.8% which is somewhat common from a seasonal perspective when comparing the third to fourth quarters.  The data usually shows a flat to slight increase from the third to fourth quarters. The quarterly change was driven by an increase in Medicare patient day mix and a decrease in managed Medicare mix. However, compared to December 2017, skilled mix decreased 56 basis points as the pressure on skilled mix persists. The continued pressure over the years has been mainly due to the decline of Medicare patient day mix which was down 110 basis points from a year ago. Managed Medicare patient day mix was up 28 basis points compared to a year ago. The decline in skilled mix over the past year was most pronounced in urban areas as rural areas saw a slight increase. 
  4. Managed Medicare revenue mix was the only main payer type that increased from third quarter 2018 and is now at 11% overall. This highlights the importance of continuing to follow the trends of managed Medicare for operators and investors.  Compared to one year ago, Medicaid and managed Medicare revenue mix increased while Private and Medicare decreased.  


The NIC Skilled Nursing Data Report is available 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 here. NIC maintains strict confidentiality of all data it receives. 


About the Author

Bill Kauffman

Senior Principal Bill Kauffman works with the research team in providing research and analysis in various areas including sales transactions and skilled nursing. He has lead roles in creating new and enhanced products and implementation of new processes. Prior to joining NIC he worked at Shelter Development in investing/acquiring, financing, and asset management for over $1 billion in assets. He also had key roles in the value creation and strategic planning and analysis for over 65 entities. He received his Master of Science in Finance from Loyola College in Maryland. He also holds the Chartered Financial Analyst Designation (CFA).
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