Skilled Nursing Facility Market by Type of Facility (Freestanding and Hospitals), Ownership (For-Profit, Non-Profit, and Government), and Region (North America, Europe, Asia-Pacific, and LAMEA): Global Opportunity Analysis and Industry Forecast, 2023-2032

Skilled Nursing Facility Overview

The skilled nursing facility (SNF) market is a part of the broader healthcare industry, giving specialized care and administration to people who require critical help in their lives due to ailment, harm, or inveterate sickness. Nursing homes give residents a variety of medical and recovery administrations, counting round-the-clock care, physical treatment.

Instalments for SNF administrations can be made through government programs, privacy protections, or self-payment. This market is characterized by a mix of commercial and non-commercial providers. However, SNF faces challenges such as staffing, rising work costs, and evolving payment models. Future patterns within the industry include an emphasis on person-centered care, innovation integration, the rise of specialized SNFs, and a move towards home-based and community-based care alternatives.

Global Skilled Nursing Facility Market Analysis

The global skilled nursing facility market size was $326.43 billion in 2022 and is predicted to grow with a CAGR of 7.5%, by generating a revenue of $651.25 billion by 2032.

COVID-19 Impact on Global Skilled Nursing Facility Market

The global skilled nursing facility (SNF) market has been significantly impacted by the COVID-19 pandemic. Demand for SNF services increased as vulnerable populations sought special care during the pandemic, resulting in higher occupancy rates. However, this surge in demand strained resources and staff as SNFs had to implement strict infection control measures. Cramped living quarters and inadequate infection control measures resulted in frequent outbreaks within the SNF, leading to increased mortality among residents. Regulatory changes and inspections were implemented to ensure safety, while increasing costs and declining utilization created financial challenges. The pandemic also accelerated the shift to home care and alternative options. Going forward, more focus on infection control, staffing and technology in SNF will shape the future of the market and the delivery of care to vulnerable populations.

Increasing Geriatric Population to Drive the Market Growth

The skilled nursing facility market is driven by several key factors. A major factor is an ageing population, with an increasing number of older people resulting in an increase in the need for skilled care and long-term care services. The prevalence of chronic illnesses is another factor as these conditions often require special care and treatment by SNF. State reimbursement policies such as Medicare and Medicaid play an important role in providing financial assistance to eligible individuals for SNF services. The availability and accessibility of medical infrastructure and facilities such as hospitals and rehabilitation centers also affect the demand for SNF services. The regulatory environment, adherence to quality standards, and adherence to government regulations are important for SNF to maintain license and reimbursement rights. The SNF market is being transformed by a shift to value-based care that prioritizes improved patient outcomes and care coordination. Technological advances in healthcare, such as EHR and telemedicine, are driving innovation and improving operational efficiency for SNF. Market consolidation, competition among SNFs, and changing consumer preferences and expectations are also impacting the SNF market.

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Regulatory Environment to Restrain the Market Growth

The skilled nursing facility market faces several factors that can restrain its growth and present challenges. One significant restraint is the regulatory environment with strict regulations from government bodies like the CMS that require costly compliance and can change frequently. Reimbursement challenges also hinder the market, as SNFs heavily rely on reimbursement programs like Medicare and Medicaid, which can be subject to rate reductions and increased documentation requirements. Workforce shortages pose another restraint, with a lack of qualified staff, leading to increased workloads, compromised care quality, and difficulty in recruitment and retention. Rising healthcare costs, including staffing and supplies, strain SNFs, particularly if reimbursement rates don't keep pace. The shifting healthcare landscape towards home-based care and alternative options can impact SNF demand. Additionally, demographic changes, such as an aging population, can create strain if demand outpaces facility capacity.

Reimbursements to Drive Excellent Opportunities

As the population ages, there is an increasing demand for long-term care services, including SNF. This demographic change offers SNF an opportunity to meet the growing needs of older people. Healthcare reforms and policies, such as increased coverage and reimbursement changes, are likely to further boost the SNF market by improving access to services and increasing demand. Integrating technologies such as electronic medical records and telemedicine will improve SNF service delivery and operational efficiencies, leading to improved patient outcomes. By working with hospitals, ACOs, and other healthcare providers, SNFs can create referral partnerships. Prioritizing quality improvement efforts and referrals to quality care, SNF has a competitive advantage in attracting patients and building partnerships. The search for home care alternatives may also coincide with a growing preference for community-based services. The SNFs must adapt to changing circumstances, prioritize infection control measures, and remain resilient in the face of challenges, including those arising from the COVID-19 pandemic.

To know more about global skilled nursing facility market opportunities, get in touch with our analysts here.

Global Skilled Nursing Facility Market Share, by Type of Facility, 2022

The freestanding sub-segment accounted for the highest market share in 2022. Freestanding skilled nursing facilities have gained traction in the healthcare market due to their specialization, cost-effectiveness, flexibility, and alignment with the changing healthcare landscape. These independent facilities focus on specific types of care, allowing them to develop tailored programs for specific patient populations. With lower operating costs compared to hospital-based SNFs, they can offer competitive pricing. Their independence grants them flexibility in decision-making and strategic planning, enabling quick adaptation to industry trends and patient demands. Freestanding SNFs also align with the shift towards value-based care and outpatient services, providing a cost-effective and patient-centered transition between hospital and home-based care.

Global Skilled Nursing Facility Market Share, by Ownership, 2022

The for-profit sub-segment accounted for the highest market share in 2022. For-profit companies have dominated the skilled nursing home market through their pursuit of profit, access to capital, aggressive marketing, innovation, reimbursement incentives, and market consolidation. A focus on revenue generation and cost control leads to operational efficiency and financial success. Capital investment in infrastructure and staff training will attract more residents.

Global Skilled Nursing Facility Market Size, by Region, 2022

The North America region generated the highest revenue in 2022. The region benefits from a well-developed medical infrastructure, advanced medical innovation, and highly talented medical experts. The accessibility of private and public funding sources such as private health insurance, government programs such as Medicare and Medicaid, and long-term care insurance support the development of SNFs within the region. North America's regulatory environment, which includes comprehensive standards and guidelines for SNFs, ensures quality care and patient safety, bolstering the reputation and reliability of these facilities. Moreover, market competition and consolidation have allowed large healthcare organizations to invest in SNFs, leading to economies of scale and enhanced services. Technological advancements and a vital research and innovation ecosystem in healthcare have further contributed to North America's dominance in the SNF market.

Competitive Scenario in the Global Skilled Nursing Facility Market

Investment and agreement are common strategies followed by major market players. One of the leading market players in the industry is Sunrise Senior Living, LLC. Sunrise Senior Living, LLC, announced that Health Care REIT, Inc. (NYSE: HCN) has entered into a definitive agreement to recapitalize the Sunrise Senior Living management company. Upon closing the transaction, Health Care REIT, which currently owns an approximately 20% interest in Sunrise, will hold a 24% interest in Sunrise. Revera Inc., one of Canada's leading providers of seniors' accommodations, care, and services, will own the remainder. Health Care REIT and Revera are acquiring their interests in Sunrise from affiliates of Kohlberg Kravis Roberts & Co. L.P. ("KKR"), Beecken Petty O'Keefe & Company, and Coastwood Senior Housing Partners LLC. Sunrise will continue managing its existing communities under the Sunrise brand.

Some of the leading skilled nursing facility market players are Genesis Healthcare, Brookdale Senior Living Solutions, Lincare, Inc., The Ensign Group, Inc, Extendicare, Sunrise Senior Living, LLC, Life Care Services, Golden Living Centers, LifeCare Centers of America Corporate, Peninsula behavioral health, and Sava Senior Care Administrative Services LLC.