The 2023 HIDA Post-Acute Market Report

The 2023 HIDA Post-Acute Market Report

Market At-A-Glance
The U.S. post-acute market is projected to reach $245.3 billion in 2023, an 11% increase from $220.4 billion in 2022. The post-acute market is slowly bouncing back from the COVID-19 pandemic that negatively affected many skilled nursing facilities (SNFs), continuing care retirement communities (CCRCs), assisted living, and inpatient rehabilitation facilities (IRFs).

Post-pandemic, staffing shortages continue to be the largest challenge across the post-acute market with a 13% decrease in nursing home employees between February 2020 and December 2022. Despite the current state of staffing shortages, 43% of surveyed SNF professionals predict that skilled nursing staffing challenges will begin to improve after 2024.

Post-Acute Facilities Experience Increases In Occupancy Levels
CCRC occupancy rates are recovering faster than those of other post-acute facilities. In the fourth quarter of 2022, the average occupancy rates at CCRCs was 87.2% while other post-acute facilities’ occupancy rates were 80.9%. SNF occupancy rates in 2023 have reached the highest level since 2020. Patient volumes in SNFs have increased 11% from 98,862 in January 2021 to 110,271 in January 2023.

Operating Margins In SNFs And Assisted Living Communities Continue To
Struggle Post-Pandemic
SNFs and assisted living communities struggle to endure post-pandemic economic pressures. Skilled nursing facility profit margins are projected to continue to decline until 2027, while 37% of assisted living communities were operating at a loss through 2022. Key factors impacting post-acute operating margins in 2023 include occupancy, inflation, and labor costs.

SNFs Are Prioritizing Advanced Technology Platforms In 2023
Thirty-eight percent of SNF professionals are investing in new technology in 2023. Advanced technology platforms are improving care coordination, clinical work flow, and communication among post-acute providers. In 2024, the top advanced technology platform that SNFs are planning to invest in is information and communication technology (ICT) infrastructure.

Medicare Changes Positively Affect The Post-Acute Market
Medicare spending for SNFs and IRFs have increased in 2023. Compared to 2022, Medicare is now 22.1% of the SNF payer mix, previously 21%. The Centers for Medicare & Medicaid Services (CMS) released the final fiscal year (FY) 2023 payment rule in which Medicare Part A payments to SNFs will increase by 2.7%, or $904 million, compared to FY 2022.