Fitch: CCRCs and SNFs Still Staffing Challenged

According to a recent Fitch Ratings report, employment levels at life plan/continuing care retirement communities (CCRCs) and SNFs are still 5.90% lower than before the pandemic. Life Plan Communities Labor Tracker: September 2024 (fitchratings.com)

Per Fitch, the causes are many, but the number one challenge is demand for staff which exceeds supply. Overall, options for staff continue to expand beyond SNFs and CCRCs, including Assisted Living which Fitch notes, has achieved and exceeded, pre-pandemic staffing levels.

Since February 2020, CCRCs have experienced a payroll decrease of roughly 5.90%, Assisted Living Facilities (ALFs) have seen growth of about 7.32%, and Skilled Nursing Facilities (SNFs) have undergone a decline of approximately 7.27%. In contrast, the total private sector has witnessed an increase of around 5.76%. This data suggests that although certain healthcare sectors are on the mend or expanding, SNFs continue to confront substantial workforce challenges relative to the pre-pandemic era.

Some of the overall payroll decline for SNFs can be attributed to facility closures as well as bed reductions – both have been significant since 2020. Since 2020 and through 2022, there are more than 450 fewer SNFs (closures) and more than 37,000 fewer beds (per Clifton Larsen Allen). According to the Bureau of Labor Statistics, the SNF sector has lost nearly 229,000 caregivers (or more than 14 percent of its workforce) since February 2020, the worst job loss among all health care sectors.

Fitch’s analysis indicates a stabilization in wage growth within the sector. The year-over-year average hourly earnings growth for Continuing Care Retirement Communities (CCRCs) was 5.29% in July, a notable decrease from the peak of 12.47% in January 2022. Assisted living communities and Skilled Nursing Facilities (SNFs) have seen similar slowdowns.

According to data from the Bureau of Labor Statistics, RNs make an average of $94,480 annually and have a mean hourly wage of $45.42.

One of the main challenges for SNFs (and other provider sectors) is RN staffing.  Census/occupancy gains are today, principally a function of staff availability.  Revenue gains are the same as patients with higher acuity needs garner an SNF the highest reimbursement yet, if skilled staff is unavailable in sufficient number to provide safe care, facilities are often forced to decline these admissions. The same is true for home health agencies in terms of caseload growth.

The healthcare sector with the highest percentage of RN employment is hospitals – 30.6% of nurses work in general medical and surgical hospitals. Interesting, agencies or staffing firms today, employ nearly 4% of all nurses.  Home health employs a bit more than 11% and as time progresses, will continue to add employment depth. Home health is the fastest growing post-acute sector as measured by spending growth.

In July, the healthcare industry experienced a year-over-year wage increase of 3.5%. Nursing and residential care facilities saw a higher growth rate of 4.1%. Hospitals had a wage growth of 3.6%, while ambulatory health care services, which encompass home health care, saw an increase of 3.4%.

In terms of pay or compensation, Federal, State and Local governments (excluding hospitals and schools) paid an annual mean salary of $114,850 ($55.22 per hour). Staffing agencies came in second at an annual mean of $110,230 or $53 per hour. State by state data and industry sector data in full is available here: Registered Nurses (bls.gov)

The Fitch report follows a similar report from earlier in the year about staffing challenges.  I covered that report when it dropped in this post: https://rhislop3.com/2024/04/18/challenges-persist-in-staffing-for-u-s-life-plan-communities-and-skilled-nursing-facilities/

 

 

 

 

 

 

Leave a Comment