U.S. Skilled Nursing Facility Market Size, Share & Trends Report

U.S. Skilled Nursing Facility Market Size, Share & Trends Analysis Report By Ownership (For-Profit, Non-Profit, Government), By Type (Freestanding, Hospital), And Segment Forecasts, 2019 - 2026

  • Published Date: Nov, 2019
  • Base Year for Estimate: 2018
  • Report ID: GVR-4-68038-059-0
  • Format: Electronic (PDF)
  • Historical Data: 2015 - 2017
  • Number of Pages: 100

Industry Insights

The U.S. skilled nursing facility market size was estimated at USD 176.1 billion in 2018. Skilled nursing facilities (SNFs) provide high-quality care services at a much lower cost as compared to hospitals, generating tremendous demand among investors. The growing incidence of chronic diseases in the U.S., along with a large aging population base, is fueling the market growth. According to the American Heart Association, about 83.6 million adults in the U.S. suffer from one or more types of cardiovascular diseases, of which, about 42.2 million adults are estimated to be more than 60 years of age.

The most common hospital conditions of patients being transferred to SNFs include heart failure and shock, septicemia, hip and femur procedures, joint replacement (except major joint replacement), chronic obstructive pulmonary disease, kidney and urinary tract infections, renal failure, and pneumonia. 

U.S. skilled nursing facility Market

According to the Medicare Payment Policy, in 2017, almost 1.6 million fee-for-service (FFS) beneficiaries used SNF services at least once. Therefore, the availability of reimbursement and favorable investment returns are boosting the growth of the market. More than 90% of SNFs are dually certified and Medicare covers 100 days of SNF care after an inpatient hospital stay of at least three days.

Skilled nursing facilities are inpatient healthcare facilities in need of nursing, rehabilitation, and related services but do not require hospitalization. Most SNFs are dually certified as SNFs and nursing homes. According to the Medicare Payment Policy, in 2017, Medicare fee-for-service (FFS) spending on skilled nursing facility services was USD 28.4 billion.

Reimbursement rate pressures or the introduction of new payment systems are also impacting the market. According to PharMerica Corporation, in October 2019, the Centers for Medicare & Medicaid Services (CMS) implemented the Patient-Driven Payment Model (PDPM), a new system for categorizing SNF patients in a Medicare Part A stay. This new system is anticipated to decrease the emphasis on the volume of services and administrative burdens.

Type Insights

Based on type, the U.S. skilled nursing facility(SNFs)  market has been segmented into freestanding and hospital. Freestanding accounted for the dominant share in the market in 2018 and estimated to register the fastest growth through 2026. Freestanding SNFs offer 24-hour skilled nursing and personal care and are more affordable compared to hospital-based facilities. Also, increased Medicare payments will boost the market growth. According to MedPAC Medicare Payment Policy, in 2017, the average Medicare margin for freestanding SNFs was 11.2%. According to California Hospital Association, Centers for Medicare & Medicaid Services (CMS) issued a new payment system to be effective from October 2020, with Medicare payments to SNFs to increase by 2.4% i.e. USD 85 million.

Ownership Insights

Based on ownership, the U.S. market is segmented into for-profit facilities, non-profit facilities, and government facilities. For-profit facilities accounted for the largest share in 2018 and are expected to emerge as the fastest-growing segment over the forecast period. A for-profit facility emphasizes maximizing profits for owners and shareholders as well as looks to stabilize the delivery of high-quality care and treatment all the while ensuring financial ability in an increasingly competitive environment.

U.S. skilled nursing facility Market

For-profit organizations can provide incentives to operate at lower costs compared to non-profit organizations by focusing on maximizing return on invested capital. On the other hand, a not-for-profit facility is dedicated to serving seniors. They reinvest their income to focus on staff retention and increasing wages and explore ways to improve policy and procedures to benefit the residents and the organization. According to Ziegler Investment Banking, approximately 220 not-for-profit communities have been acquired by private companies in the past several years.

U.S. Skilled Nursing Facility Market Share Insights

Some of the key players operating in the market are Brookdale Senior Living Solutions; Genesis HealthCare; The Ensign Group, Inc.; EXTENDICARE; Sunrise Senior Living, LLC; Life Care Services; HCR ManorCare; Golden LivingCenters; Life Care Centers of America Corporate; and SavaSeniorCare Administrative Services LLC.

Prominent players are strengthening their position in the industry through activities such as collaborations, partnerships, mergers, and accusations. For instance, in February 2019, Genesis Healthcare entered into a partnership with Next Healthcare Capital to operate 15 skilled nursing facilities previously leased from Welltower Inc. with 46% ownership. In August 2019, The Ensign Group, Inc. acquired Surprise Health and Rehabilitation Center with 100 skilled nursing beds located in Arizona. Strategic initiatives like these make the business larger by increasing the service portfolio and providing financial strength to gain a competitive edge over other market players.

Report Scope

Attribute

Details

The base year for estimation

2018

Actual estimates/Historical data

2015 - 2017

Forecast period

2019 - 2026

Market representation

Revenue in USD Billion & CAGR from 2019 to 2026

Country scope

The U.S.

Report coverage

Revenue forecast, company share, competitive landscape, growth factors & trends

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Segments
Covered in the Report

This report forecasts revenue growth at the country level and provides an analysis of the latest industry trends in each of the sub-segments from 2015 to 2026. For this study, Grand View Research has segmented the U.S. skilled nursing facility market report based on type and ownership:

  • Type Outlook (Revenue, USD Billion, 2015 - 2026)

    • Freestanding

    • Hospital

  • Ownership Outlook (Revenue, USD Billion, 2015 - 2026)

    • For-Profit

    • Non-Profit

    • Government

  • Country Outlook (Revenue, USD Billion, 2015 - 2026)

    • The U.S.

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