Cost Of Nursing Home Care Rose 27.4% To $95400 By First Quarter 2021: The National Investment Center for Seniors Housing & Care (NIC) reported in its November 2022 Insider Newsletter: In late 2019, the price per nursing care bed averaged $80,000 before slipping 1.8% to $78,600 in the first quarter of 2020. Due to the pandemic, pricing declined another 4.6% to $74,900 in the third quarter of 2020, its pandemic low. The decline made sense at the time because many properties were struggling during the pandemic due to low census
counts, staffing challenges, regulatory requirements, and other factors.
However, the price per nursing care bed remarkably increased 27.4% to $95,400 by the first quarter of 2021 during a period of very low occupancy levels. Since then, occupancy has partially increased from 74.0% to 79.3% but remains
challenged with 7.1 percentage points of recovery required to get back to pre-pandemic levels. Nevertheless, the price per bed averaged $97,300 as of the preliminary data for the third quarter. This was 21.6% above the level in the fourth
quarter of 2019 before the beginning of the pandemic.
There is not simply one answer as to the reason behind why skilled nursing price per bed is relatively high, especially considering the challenging operating fundamentals. There are likely many factors involved. These include strong
private buyer interest, compelling demographic trends favoring the necessary care required for aging adults who have higher acuity needs as well as their more complex medical needs, changes in capital and debt markets, financial support from the federal government during COVID, and other factors and trends.
Through the third quarter of 2022 private buyers represented 94% of buying activity, in 2021 they were 90% of activity, and in 2020 closed transaction dollar volume attributed to the private buyers was 82%. This activity has contributed to higher prices as these buyers bid up prices to win the deals.
The author of the article further stated:
Skilled nursing property pricing has been stronger than many would have expected during these challenging times for various reasons. However, the risk of higher interest rates and labor market challenges could provide additional reasons for sellers to bring properties to market. If more sellers do come to market and the cost of capital increases as inflation and interest rates continue to stay elevated, the pace of increases in the price per bed for skilled nursing properties may be limited in the near-term.
If you or a loved one suffered injuries (or worse) while a resident of a nursing home in the United States due to a nursing home fall, nursing home neglect, nursing home negligence, nursing home abuse, nursing home under-staffing, or a nursing home failing to properly care for a vulnerable adult, you should promptly find a nursing home claim lawyer in your state who may investigate your nursing home claim for you and file a nursing home claim on your behalf or on behalf of your loved one, if appropriate.
Visit our website to be connected with nursing home attorneys in your U.S. state who may assist you with your claim, or call us toll-free in the United States at 800-295-3959.
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