Nursing care occupancy remains essentially unchanged
Nursing care occupancy continues to oscillate near its cyclical low. During the third quarter of 2013, nursing care occupancy was 87.6%, which was unchanged from the prior quarter and down 40 basis points from a year ago. Inventory growth and absorption were both nominally negative, with inventory and occupied beds each decreasing by 0.1% during the quarter. The past several years have witnessed a phenomenon of declining inventory from both the closing of properties and a shift from semi-private to private rooms. Although properties that are renovating semi-private rooms into private rooms are not necessarily decreasing their number of licensed beds, with the conversions to private rooms, the operational bed supply of those properties typically does decline.
Private-pay nursing care rents continued to increase during the third quarter of 2013 at an average annual pace of approximately 3%—a pace which rent growth has oscillated around for more than four years. The average per diem private-pay rate was $281 as of the third quarter of 2013. Private-pay residents, however, are a minority among nursing care residents, making up less than 20% of nursing care residents. The largest payor source is Medicaid, which is the payment source for more than 60% of nursing care residents.
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