2023 Marcum Nursing Home Benchmark Study: Fifth Annual Analysis Points to Post-COVID Industry Stress

MARCH 8, 2023 (New York City, NY) – Marcum LLP today released its fifth annual benchmarking analysis of nursing home operations, covering the period 2019-2021.

The 2023 Marcum 3-Year Nursing Home Statistical Review examines an unprecedented and deeply challenging time for the nursing home industry shaped by the COVID pandemic – before, during and after. It is intended to provide a strategic planning road map for the nation’s skilled nursing facilities.

“We believe COVID-19 has changed the delivery of healthcare permanently, and that these changes are just starting to manifest. The ‘great resignation’ has shown not only the operators but also the regulators that there is continued need for qualified people. This year’s analysis illustrates how COVID-19 has dramatically impacted overall spending,” said Matthew Bavolack, a Marcum advisory principal and national leader of the Firm’s Healthcare Services practice.

Key Findings

This year’s report confirms that the skilled nursing facility (SNF) census has slowly begun to rebound, and while COVID-19 caused facility closures throughout the country, demand continues to rise. Persistent nursing staff shortages, however, continue to drive operating costs per patient day (PPD) higher. In combination with historically low occupancy and the expiration of COVID relief funding, gross revenue has not been able to cover total PPD costs, producing net losses for SNFs across the nation and in every region.

Highlights of the report’s key findings include the following:

• Hourly nursing wages trended upward in all three years of the study, increasing by 7.63% from 2019 to 2020, and 9.87% from 2020 to 2021. In 2021, contract nursing costs doubled PPD as compared to pre-pandemic 2019 levels.
• Total operating costs increased 9.27% nationally from 2020 to 2021, almost double the PPD revenue increase of 4.73%.
• Average occupancy declined both nationally and regionally. The Midwest (-5.19%) and Rocky Mountains (-2.43%) registered the highest and lowest changes between 2020 and 2021, while occupancy declined by 4.08% on a national basis.
• The Medicare payor mix percentage increased each year covered by the study and was 1.27% between 2020 and 2021. The new Medicare PDPM (Patient Driven Payment Model) that took effect on October 1, 2019, produced significant increases in average Medicare gross reimbursement per patient day (PPD).

The full report may be downloaded here.

About the Study

The annual Marcum 3-Year Nursing Home Statistical Analysis of long-term care industry trends is a yardstick to help skilled nursing facilities improve both operational and financial performance and to guide strategic planning. The study is based on a meticulous review of the Centers for Medicare and Medicaid Services (CMS) database of Medicare cost reports (Form 2540-10) filed annually by the nation’s nursing homes.

More than 38,000 Medicare cost reports were reviewed for the 2019-2021 analysis. To illustrate trends and identify any local deviations from the norm, data are presented both nationally and regionally. Regions include the Midwest, Northeast, Pacific, Southeast, Rocky Mountains, and Southwest.

Data are analyzed in 15 financial and operational categories. These include:

• Occupancy and payor mix
• Occupancy percentage by state
• Average of total cost PPD by state
• Average length of stay
• Nursing
• Dietary
• Laundry
• Housekeeping
• General service cost per patient day
• Therapy
• Average hourly wage
• Employee benefits to total salary
• Revenue analytics
• Medicare gross revenue per patient day
• Balance sheet analytics

Data reference tables are also provided for each of the three years covered by the study.

About Marcum LLP
Marcum LLP is a top-ranked national accounting and advisory firm dedicated to helping entrepreneurial, middle-market companies and high net worth individuals achieve their goals. Marcum’s industry-focused practices offer deep insight and specialized services to privately held and publicly registered companies, and nonprofit and social sector organizations. The Firm also provides a full complement of technology, wealth management, and executive search and staffing services. Headquartered in New York City, Marcum has offices in major business markets across the U.S. and select international locations. #AskMarcum.