NIC Draws Skilled Nursing Investors With New Data Launch

This coverage of the 2016 National Investment Center for Seniors Housing & Care Spring Investment Forum is brought to you by Mainstreet. As the nation’s largest developer of transitional care properties, Mainstreet specializes in real estate development, value investments and health care. With Mainstreet’s support, SHN is bringing live event coverage of the NIC conference, which draws developers, providers and operators within the post-acute and preventative health care services space.

The skilled nursing sector is often talked about in a separate conversation from other senior care providers, including research collected by national organizations to help inform about the sector and draw investors to it. The National Investment Center for Seniors Housing & Care (NIC) had attracting these investors in mind when it released its first-ever NIC Skilled Nursing Data Report on Thursday.

The report presents monthly data on approximately 1,500 skilled nursing properties gathered by NIC from October 2011 to December 2015. It is the first report to break out managed Medicare census and rates that investors and operators can use as a tool for their modeling, according to NIC.

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“There’s a tremendous opportunity in skilled nursing,” NIC Senior Principal Bill Kauffman said during a press briefing on the report at the 2016 NIC Senior Investment Forum in Dallas. Half of the skilled nursing facilities in the top 99 U.S. metro markets were built before 1980, and both skilled nursing buildings and technology are in need of being updated or replaced.

Still, investors often see skilled nursing as a high-risk, mysterious environment with data that is, well, out-of-date.

The current government data, which is usually at least 12- to 18-months old, is inadequate to portray a sector that is going through such rapid change, NIC CEO Robert Kramer said during the press briefing. The new NIC report, meanwhile, provides data on a few key metrics that are just 60 to 90 days old, he said.

Having this up-to-date data is a “game changer” for understanding the skilled nursing sector, Kauffman said. It has the potential to win over investor confidence in the sector.

So what, exactly, does the data show? For one, occupancy decreased by 180 basis points between October 2011 to December 2015—likely due to higher turnover resulting from a drop in average length of stay, particularly for short-stay residents, the report says. Because of this, the falling occupancy numbers do not necessarily equate to lower profits for providers, Kramer emphasized in comments to Senior Housing News.

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Additionally, managed Medicare increased by 1.3% within the patient day mix, which implies the increase in Medicare Advantage (MA) plan employees. Managed Medicare rates, meanwhile, fell by 10.1% as managed care companies have boosted their enrollments, granting them greater pricing power to negotiate with providers.

NIC expects a new version of the Skilled Nursing Data Report to be released quarterly. The organization hopes to increase the pool of participating operators to be able to differentiate the data on state and metropolitan levels, Kramer said.

NIC is working with a software provider to obtain the data, he added, explaining that the organization is essentially “getting corporate rent rolls.”

The metrics that can be found in the report include properties’ quality mix, occupancy, skilled mix, patient day mix and revenue per patient day by payor source.

Written by Mary Kate Nelson

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