What a difference a year makes.
At last year’s NIC Fall Conference, the mood wasn’t exactly bleak. But it seemed to linger somewhere between tense and somber.
Operators and investors were in a funk, weighed down by financial uncertainty, rising operating costs, and relentless staffing challenges.
This year? The sentiment was far more upbeat.
This shift is good news for the larger skilled care universe, as it signals that investors are once again open for business. NIC President Ray Braun captured the essence of this renewed confidence when he said, ”Market fundamentals are sound.” When was the last time you heard that kind of optimism?
Of course, it hardly hurt that the Federal Open Market Committee just chose to lower its key overnight borrowing rate by a half percentage point. You’d be hard-pressed to find a clearer signal that inflation is moderating and the labor market is weakening.
This newfound optimism has been a long time coming — some might argue too long.
In recent years, skilled care operators have faced a perfect storm of challenges. The pandemic triggered a staffing crisis, making it difficult to retain enough workers to maintain even basic levels of care. At the same time, occupancy rates plunged. Rising costs, fueled by inflation and supply chain disruptions, further squeezed already tight margins. If it wasn’t one thing, it was several others.
Yet nursing home operators are a resilient bunch, and that resilience is finally paying off. While staffing shortages remain a concern, efforts to improve recruitment and retention are slowly making headway. Occupancy rates, though still below pre-pandemic levels, have stabilized. And as inflation eases, operators are starting to feel some relief from rising costs.
After a long stretch of uncertainty, the signs of recovery are hard to miss. That should give both skilled care and senior living operators reason for optimism.
Of course, the future holds no guarantees for anyone or any industry. But it finally feels safe to say that the worst is behind us.
John O’Connor is editorial director for McKnight’s.
Opinions expressed in McKnight’s Long-Term Care News columns are not necessarily those of McKnight’s.
