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

U.S. Skilled Nursing Facility Market Size, Share & Trends Analysis Report By Type Of Facility (Freestanding, Hospital), By Ownership (For-profit, Non-profit, Government), And Segment Forecasts, 2021 - 2028

  • Published Date: Dec, 2021
  • Base Year for Estimate: 2020
  • Report ID: GVR-4-68038-059-0
  • Format: Electronic (PDF)
  • Historical Data: 2016 - 2019
  • Number of Pages: 73

Report Overview

The U.S. skilled nursing facility market size was valued at USD 173.8 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 2.80% from 2021 to 2028. Skilled nursing facilities (SNFs) provide high-quality care services at a much lower cost as compared to hospitals, thereby generating tremendous demand among investors. The increasing geriatric population and high prevalence of multiple chronic diseases in the U.S. are boosting the market growth. According to the National Institute on Aging (NIA), around 8.5% of the population worldwide is aged 65 and above. As per data published by Population Reference Bureau, the number of people in the U.S. aged 65 and above is projected to reach 95 million by 2060 from 52 million in 2018, thus accounting for an increase from 16% in 2018 to 23% by 2060.

U.S. skilled nursing facility market size, by type of facility, 2018 - 2028 (USD Billion)

The prevalence of chronic diseases is rising in the U.S. at a significant rate. The elderly population is suffering from chronic diseases such as cancer, heart problems, diabetes, cerebral palsy, Parkinson's disease, multiple sclerosis, dementia, Alzheimer’s disease, and mental stress. For instance, according to the American Heart Association, about 83.6 million adults in the U.S. suffer from one or more types of cardiovascular diseases.

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, 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.

COVID-19 U.S. Skilled Nursing Facility Market Impact: 1% growth from 2019 - 2020

Pandemic Impact

Post COVID Outlook

The COVID-19 pandemic had a negative impact on the U.S. skilled nursing facility market. The skilled nursing facilities were COVID-19 infection hotspots, thus resulting in restrictions on the operations of the skilled nursing facilities.

SNFs are installing wireless videoconferencing technologies for avoiding infection among patients and staff. These systems provide patients with internet access in their rooms, thus facilitating easy communication with friends and family, and staff.

Lack of occupancy owing to the continued restrictions due to the pandemic has resulted in significant financial losses and declined Medicare reimbursement, which has further worsened financial problems for skilled nursing facilities

SNFs will have increasing preference over hospitals as they are cost-effective compared to the hospitals and will be a safer option for avoiding COVID-19 infection in the later ending stages of the pandemic.

 

Skilled nursing facilities are reimbursed by Medicare Part A (inpatient or hospital) or Medicare Part B (outpatient or medical), considering the status of the patient. To qualify for a skilled nursing facility stay under Part A, the Medicare receiver must have a qualifying hospital inpatient stay of a minimum of 3 days. In October 2019, the Centres 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.

Type Of Facility Insights 

Freestanding SNFs dominated the market in 2020 and are anticipated to maintain their lead throughout the forecast period. This is attributed to the lower costs as compared to hospital-based facilities and increased Medicare payments. According to California Hospital Association, the Centres for Medicare & Medicaid Services (CMS) issued a new payment system to be effective from October 2020. Medicare payments to SNFs will increase by 2.4%.

Hospital-based SNFs witnessed an increase in medically complex admissions, whereas routine costs in hospital-based SNFs were greater due to higher-skilled staffing and shorter stays. Hospitals can reduce their inpatient Length of Stay (LOS) through SNFs by transferring patients to their SNF beds, thus making inpatient beds available to treat additional inpatient admissions.

Ownership Insights

In 2020, for-profit facilities accounted for the largest revenue share and are anticipated to maintain their lead during the forecast period. For-profit organizations can provide incentives to operate at a lower cost than non-profit organizations by focusing on maximizing return on invested capital. Therefore, increased acquisitions or greater local competition from for-profit chains increase the chance of a non-profit facility to be acquired by a for-profit chain, thus driving the market.

U.S. skilled nursing facility market share, by ownership, 2020 (%)

Non-profit facilities are dedicated to serving seniors and reinvesting their income to focus on staff retention and increasing wages. Non-profit nursing homes offer advantages such as fewer incidence of bedsores, lower prevalence of ulcers, lower hospitalization rates, fewer government-cited deficiencies, and higher staffing ratio, which is expected to boost the growth of the market.

Government skilled nursing facilities held a comparatively lower share compared to for-profit and non-profit facilities in 2020. This can be attributed to the low quality of care, higher health deficiencies, and low availability of reimbursement. Higher staffing rating as compared to for-profit homes is boosting the growth of the government skilled nursing facilities.

Key Companies & Market Share Insights

Prominent players are strengthening their position in the industry through activities such as collaborations, partnerships, mergers, and accusations. For instance, in December 2020, The Ensign Group, Inc. acquired Hays Nursing and Rehabilitation Center, a 116-bed skilled nursing facility located in Texas. In Feb 2021, Brookdale Senior Living was acquired by Omega Healthcare, a USD 510 million deal with Healthpeak properties. Some prominent players in the U.S. skilled nursing facility market include-

  • Genesis Healthcare

  • Brookdale Senior Living Solutions

  • The Ensign Group, Inc.

  • Extendicare

  • Sunrise Senior Living, LLC

  • Life Care Services

  • Golden Living Centres

  • LifeCare Centres of America Corporate

  • Peninsula Behavioral Health

  • Sava Senior Care Administrative Services LLC 

U.S. Skilled Nursing Facility Market Report Scope

Report Attribute

Details

Market size value in 2021

USD 176.2 billion

Revenue forecast in 2028

USD 213.7 billion

Growth Rate

CAGR of 2.80% from 2021 to 2028

Base year for estimation

2020

Historical data

2016 - 2019

Forecast period

2021 - 2028

Quantitative units

Revenue in USD billion and CAGR from 2021 to 2028

Report coverage

Revenue forecast, company ranking, competitive landscape, growth factors, and trends

Segments covered

Type of facility, ownership

Country scope

U.S.

Key Companies Profiled

Genesis Healthcare; Brookdale Senior Living Solutions; The Ensign Group, Inc.; Extendicare; Sunrise Senior Living, LLC; Life Care Services; Golden Living Centres; Life Care Centres of America Corporate; Peninsula Behavioral Health; Sava Senior Care Administrative Services LLC

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Free report customization (equivalent to up to 8 analysts' working days) with purchase. Addition or alteration to country and segment scope.

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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 and opportunities in each of the sub-segments from 2016 to 2028. For this study, Grand View Research has segmented the U.S. skilled nursing facility market report on basis of type of facility and ownership:

  • Type of Facility Outlook (Revenue, USD Billion, 2016 - 2028)

    • Freestanding

    • Hospital

  • Ownership Outlook (Revenue, USD Billion, 2016 - 2028)

    • For-profit

    • Non-profit

    • Government

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