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Nursing care occupancy continues slow decline

September 18, 2012
by National Investment Center for the Seniors Housing & Care Industry
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Nursing care occupancy continued its slow decline, which is a trend that has been in place since 2007, reports NIC MAP. During the second quarter of 2012, nursing care occupancy was 87.9 percent, which was a 30 basis point decline from the prior quarter and 40 basis points lower than a year ago. Absorption continued to post modest declines, with the number of occupied beds decreasing by 0.4 percent during the second quarter of 2012. The negative absorption coinciding with the essentially flat inventory resulted in the declining occupancy.

While inventory remained essentially flat in the most recent quarter, the past several years have witnessed a phenomenon of net 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 conversion to private rooms, the operational bed supply of those properties typically does decline.

Private-pay nursing care rents continued to increase during the second quarter of 2012 at an average annual pace of approximately 3 percent–a pace which rent growth has oscillated around for more than three years. The average per diem private-pay rate was $274 as of the second quarter of 2012. Private-pay residents, however, are a minority among nursing care residents, making up less than 20 percent of nursing care residents. The largest payor source continues to be Medicaid, which was the payment source for 66.0 percent of nursing care residents during the second quarter of 2012.

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