Skilled nursing occupancy hovers near 8-year low
Nursing care occupancy continues to oscillate near its cyclical low. During the first quarter of 2013, nursing care occupancy was 88.0%, which was down 10 basis points from the prior quarter and down 30 basis points from a year ago. Inventory growth and absorption both turned nominally positive, with each rising by 0.1% during the quarter. Aside from this past quarter, the past several years have witnessed a phenomenon of declining inventory and negative absorption 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 first 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 $278 as of the first 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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