Financial trends at skilled nursing facilities

Skilled nursing facilities (SNFs) provide long- and short-term rehabilitation for patients following a hospital stay either for illness, injury, or surgery.

In this Healthcare Insight, we use data from the Definitive Healthcare LongTermCareView product to review recent financial trends at SNFs including changes in net patient revenue and expense. Data is sourced from the Medicare Cost Report (MCR) and results in this analysis are according to the last five full calendar years of SNF financial performance tracked in our database.

What is the average net patient revenue at SNFs?

Based on data from more than 13,700 SNFs across the country, the average net patient revenue in 2021 was $9.8 million.

Average SNF net patient revenue

Fig. 1 Data is from the Definitive Healthcare LongTermCareView product and aggregated from the last five calendar years tracked in our database. Accessed May 2023.

How does SNF net patient revenue change each year?

SNF net patient revenue increased by 3% from 2017 to 2018 and 2018 to 2019. Since 2019, SNF net patient revenue has decreased each year by about 1.5%. Hospitals experienced similar revenue trends in the same time period, partially due to the COVID-19 pandemic.

What is the average operating expense at a SNF?

In 2021, the average operating expenses for SNFs was $11.1 million.

Average SNF operating expenses

Fig. 2 Data is from the Definitive Healthcare LongTermCareView product and aggregated from the last five calendar years tracked in our database. Accessed May 2023.

How does SNF operating expense change each year?

Between 2017 and 2020, SNF operating expenses increased by about 2% on average each year. Between 2020 and 2021, expenses only increased by 0.1%. In comparison, hospital expenses increase by about 5% each year.

How does SNF financial performance differ by location?

SNFs in the northeastern U.S. have the highest average net patient revenue and operating expenses compared to other regions. SNFs in the west have the second highest. These trends follow similar hospital revenue and expense trends, for example information technology expenses, where hospitals in the northeast and west have some of the highest average values.

Fig. 3 Data is from the Definitive Healthcare LongTermCareView product and aggregated from the last five calendar years tracked in our database. Accessed May 2023.

What is the average salary expense at a SNF?

The average salary expense for a SNF in the U.S. is $4.5 million. This average is based on data for more than 13,700 SNFs for 2021, the most recent full year of data available.

Average SNF salary expenses

Fig. 4 Data is from the Definitive Healthcare LongTermCareView product and aggregated from the last five calendar years tracked in our database. Accessed May 2023.

How does SNF salary expense change each year?

Between 2017 and 2020, salary expenses at SNFs increased by 2.5% on average each year. Between 2020 and 2021, SNF salary expenses decreased by about the same amount. In comparison, hospital salary expenses increase by about 4% on average each year. The differences in salary trends between hospitals and SNFs may reflect the ongoing understaffing and staff shortages experienced by long-term care facilities.

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