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Special Report

Skilled Nursing Report

First Half 2020

Managing Costs Key to Skilled-Nursing Operations

Operating fundamentals stabilize, encouraging efficiency to generate new revenue. According to NIC MAPĀ® Data Service, occupancy increased in 2019, reversing a long trend of declining occupancy despite a reduction in beds. Developers have slowed the pace of construction to just 0.4 percent of existing inventory, keeping the threat of oversupply at bay despite relatively flat demand. Reimbursement, meanwhile, has been stabilizing, bringing the rise in daily revenue near the inflation rate. As a result, operators are searching for alternative methods to increase revenue, including managing labor costs, which have skyrocketed in recent years and moved to the forefront of issues facing skilled-nursing performance. Another potential strategy employed by operators is shifting the census to include more attractive payor sources.

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