U.S. Skilled Nursing Facility Market Size, Share & Trends Analysis Report By Ownership (For-profit, Non-profit, Government), By Type (Freestanding, Hospital), And Segment Forecasts, 2023 - 2030

Report Overview

The U.S. skilled nursing facility market size was valued at USD 179.0 billion in 2022 and is projected to expand at a compound annual growth rate (CAGR) of 3.43% from 2023 to 2030.  Skilled nursing facilities (SNFs) provide high-quality care services at a much lower cost as compared to hospitals, generating tremendous demand among investors. The increasing geriatric population and high prevalence of multiple chronic diseases in the U.S. are boosting the market growth. According to the United States Census Bureau, there are currently about 54 million adults aged 65 and up in the U.S., accounting for around 16.5 % of the population. The number of elderly people in the country is significant and is expected to continue to rise until 2050 when the total number of adults aged 65 and more is expected to reach 85.7 million. This equates to roughly 20% of the total population of the United States.

The elderly population is suffering from chronic diseases such as cancer, heart problems, diabetes, cerebral palsy, Parkinson's disease, multiple sclerosis, dementia, Alzheimer’s disease, and mental stress. According to the American Heart Association, about 82.6 million adults in the U.S. suffer from one or more types of cardiovascular disease making it a leading cause of death for both men and women. Owing to the growing elder population, the prevalence of rising chronic diseases in the U.S. has significantly increased the demand for skilled nursing facilities.

Skilled nursing facilities are residential health facilities that provide nursing, rehabilitation, and related services. In SNFs, Medicare covers short-term skilled nursing and rehabilitation services for beneficiaries after staying in an acute care hospital. In 2019, approximately 15,000 SNFs provided 1.5 million fee-for-service (FFS) beneficiaries with approximately 2 million Medicare-eligible stays which are 4% of Medicare FFS beneficiaries.

COVID-19 U.S. Skilled Nursing Facility market impact: 1.3% growth from 2020 to 2021

Most SNFs are also certified as nursing homes providing long-term care services not covered by Medicare. Therefore, the availability of reimbursement and favorable investment returns are boosting the growth of the market. For beneficiaries who qualify for a covered stay, Medicare pays 100% of the payment for the first 20 days of the spell of disease. The beneficiary is responsible for the self-pay from the 21st day through the day of 100 of the covered stay. For the fiscal year 2021, the co-payment was USD 185.50 per day.

Type of Facility Insights

Based on type, the market is bifurcated into freestanding and hospital. The freestanding segment accounted for the largest market share of 90.20% in 2022 and is expected to register the fastest CAGR of 3.57% during the forecast period. Freestanding is the most affordable type of facility that provides patients with 24-hour service. High Medicare payments are a key driver of growth in this segment. According to MedPac, the average Medicare margin for self-supporting and skilled nursing facilities was over 11%. According to the California Hospital Association, in 2022, Medicare payments to skilled nursing facilities will increase by 5%. As a result, increased spending on Medicare is expected to drive market growth for freestanding facilities.

The hospital SNFs segment, on the other hand, is expected to grow significantly during the forecast period. Hospital-based nursing facilities provide better professional nursing services through the joint operation of hospitals and their skilled nursing facilities. The adoption of better infrastructure and superior communication and coordination in hospitals helps nursing facilities improve services based on patient needs.

Hospital SNFs have experienced an increase in medically complex hospitalizations, however, the daily costs of hospital SNFs have increased due to the increase in qualified staff and shorter stays. By moving the patient to the SNF bed, hospitals can shorten the length of stay (LOS) of the inpatient, thereby freeing the inpatient's bed for additional inpatient treatment.

Ownership Insights

The SNF market has been bifurcated into three categories based on ownership, for-profit facilities, non-profit facilities, and government facilities. For-Profit segment accounted for the largest market share of 71.44% in 2022 and is expected to register the fastest CAGR of 3.58% during the forecast period. By focusing on maximizing the return on investment capital, for-profit organizations can provide incentives to operate at a lower cost than non-profits.

Non-profit SNFs, are estimated to be the fastest-growing segment during the forecast period. This is due to the improving service, increasing staff, and reinvesting the revenue generated to serve older people at much lower or minimal costs. Non-profit nursing homes accelerate market growth by offering benefits such as fewer incidence of bedsores, lower ulcer prevalence, fewer hospitalization rates, lower government-led shortages, and higher staffing ratios.

Government SNFs had a smaller market share than for-profit and non-profit facilities during the forecast period. This can be due to poor quality of care, high health deficit, and low availability of compensation. High staff ratings compared to for-profit housing drive the growth of government nursing facilities.

Key Companies & Market Share Insights

The U.S. skilled nursing facility market is fragmented due to the presence of several local businesses. These market players seek to gain higher market share through strategies such as investments, partnerships, acquisitions, and mergers. Companies are also investing in improving their service portfolios. In addition, they are also focused on maintaining competitive prices.

For instance, in November 2021, EnsignTM Group's parent company, Ensign Group, Inc., invested in and provided skilled care and elderly living services, physiotherapy, vocational therapy, language therapy, other rehabilitation, and healthcare services, by acquiring properties in the skilled and long-term care facilities in Arizona, California, and Kansas. In February 2021, OMEGA Healthcare signed a $150 million contract with HealthPeak Property to acquire Brookdale Senior Living in the U.S. Some of the prominent players in the U.S. skilled nursing facility market include:

• Genesis Healthcare

• Brookdale Senior Living Solutions

• Lincare, Inc.

• The Ensign Group, Inc

• Extendicare

• Sunrise Senior Living, LLC

• Life Care Services

• Golden Living Centers

• LifeCare Centers of America Corporate

• Peninsula behavioral health

• Sava Senior Care Administrative Services LLC 

U.S. Skilled Nursing Facility Market Report Scope

U.S. Skilled Nursing Facility Market Segmentation

This report forecasts revenue growth at the country level and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the U.S. skilled nursing facility market report based on the type of facility and ownership:

• Type of Facility Outlook (Revenue, USD Billion, 2017 - 2030)

  • Freestanding

  • Hospitals

• Ownership Outlook (Revenue, USD Billion, 2017 - 2030)

  • For-Profit

  • Non-Profit

  • Government