Life Plan Operators May Shrink Nursing Wings in Response to Lasting Staffing Headwinds

Elevated staffing costs and difficulty finding workers could affect how some continuing care retirement communities (CCRCs) and life plan communities think about their unit mix in the long-term.

That’s according to a newly released analysis on October 2022 trends from financial services company Fitch Ratings.

It’s no secret that the cost of doing business is among the biggest headwinds for the senior living industry in 2022. Many operators are making do with fewer workers than before the pandemic, and they are facing cost increases related to wages, overtime and agency usage.


Life plan communities reported about 12.6% fewer staffers and a more than 21% increase in average wages than before the pandemic. And those trends are not letting up any time soon, the report notes.

Life plan operators, which have weathered the pandemic in relatively good shape, do have some options at their disposal to mitigate those headwinds. But it might require a change to their unit mix or services offered, according to the report’s authors.

“[Options] include a rightsizing of skilled nursing beds to levels appropriate to the available staff and the needs of internal residents,” the report’s authors wrote.


About 8% of the life plan communities Fitch tracks have already reduced nursing beds since the pandemic began.

The trend of building or remodeling life plan communities to have less exposure to skilled nursing underway is not new, with some recent CCRC projects eschewing the unit type altogether.

As they shift away from nursing beds, life plan communities are likely to invest more in private-pay independent living, assisted living and memory care, “which require less staffing, have a better payor mix … and take advantage of national demographic shifts and senior consumer preference for aging in place,” the report’s authors wrote.

“Fitch expects LPCs with a large exposure to skilled nursing beds to face greater challenges than LPCs with a smaller base of skilled nursing beds,” the report noted.

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