Over the past couple years skilled nursing properties have continued to see strong interest from investors in the sector. This has contributed to skilled nursing valuations becoming what some deem as elevated. However, others might argue differently. Regarding the overall skilled nursing market, many continue to see steady demand trends as the industry passes the inflection point where the growth of the senior population accelerates, and more people with higher acuity levels need care. There are headwinds as we are all aware, including the risk of Medicare reimbursement cuts, low occupancy rates, chronic underfunding of Medicaid reimbursement in many states, a staffing crisis, and ongoing elevated inflation including wage rate growth. Given the challenges that are present, why has skilled nursing property price per bed increased?
Pandemic underscores impact of social determinants of health Before the pandemic hit three months ago, one of the hottest industry topics was the social determinants of health. Recognition has been growing over the last several years that a huge amount of healthcare costs is driven by people’s lives outside of the doctor’s office. Factors such as food insecurity, isolation, and lack of access to services are just a few of the social elements that contribute to healthcare outcomes. A frail elder without social support is unlikely to manage the intricacies of a complex healthcare system.