Skilled Nursing Facility Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Facility Type (Hospital, Freestanding), By Service Type (Intensive Rehabilitation Therapy, Low and Medium Rehabilitation, Medically Complex), By Ownership Type (Non-Profit, For-Profit, Government), By Region and Competition, 2019-2029F

Market Overview

For instance, In October 2022, Allina Health, a nonprofit healthcare system, partnered with Flare Capital Partners, a private investment firm, to launch Inbound Health. This new company empowers health systems and health plans to offer hospital-at-home and skilled nursing-at-home services. By implementing innovative care models, Inbound Health allows patients needing facility-level acute or post-acute care to receive treatment in the comfort of their own homes. This approach not only enhances patient access and satisfaction but also improves health outcomes while reducing overall care costs, representing a significant advancement in patient-centered healthcare delivery.

However, the market faces challenges such as high operational costs, stringent regulatory requirements, and staffing shortages. Key players in the industry are focusing on acquisitions, partnerships, and technological integration to improve patient care and expand their service offerings. The skilled nursing facility market is poised for continued growth, with increasing demand for quality post-acute care services.

Key Market Drivers

Rising Prevalence of Chronic Diseases

For instance, according to National Diabetes Statistics, in the United States, a total of 38.4 million people, which represents 11.6% of the population, have diabetes. Among them, 29.7 million individuals have been diagnosed, including 29.4 million adults. Additionally, there are 8.7 million undiagnosed cases, accounting for 22.8% of adults with diabetes who remain unaware of their condition.

As healthcare systems aim to reduce the burden on hospitals and manage costs, SNFs have become essential in providing post-acute care for chronic disease patients. SNFs also ensure better patient outcomes through rehabilitation programs, contributing to improved quality of life and reduced readmission rates for chronic patients. As the global incidence of chronic diseases continues to rise, the demand for long-term skilled nursing care is expected to grow, reinforcing the importance of SNFs in modern healthcare systems.

Post-Acute Care Demand

The growing demand for post-acute care is a significant driver of the global skilled nursing facility (SNF) market. Post-acute care refers to specialized medical care and rehabilitation services provided after a patient is discharged from a hospital, often following major surgeries, illnesses, or injuries. As healthcare systems increasingly focus on reducing hospital stays and managing costs, skilled nursing facilities have become a vital part of the continuum of care, offering a cost-effective solution for patients who require ongoing medical attention but do not need the intensive resources of a hospital. SNFs play a crucial role in providing post-acute care by offering services such as physical and occupational therapy, wound care, pain management, and medication administration. Patients recovering from surgeries like hip or knee replacements, strokes, or other serious health events benefit from the professional care provided by these facilities, which can help accelerate recovery and reduce the risk of hospital readmission. The aging population and the rising prevalence of chronic diseases are driving demand for post-acute care services. As patients increasingly require extended rehabilitation and recovery periods, skilled nursing facilities are becoming a preferred option for providing high-quality care outside hospital settings, boosting the growth of the global SNF market.

Supportive Government Policies

Supportive government policies are a key factor driving the growth of the global skilled nursing facility (SNF) market. Many governments worldwide recognize the importance of skilled nursing care for elderly and chronically ill populations and have implemented policies to support the development and accessibility of these facilities. In countries like the United States, programs such as Medicare and Medicaid provide substantial financial assistance to cover the costs of skilled nursing services, making these facilities more affordable for patients who require long-term or post-acute care. Reimbursement policies in developed countries are particularly favorable for skilled nursing facilities, encouraging both public and private investments in the sector. These policies ensure that patients have access to essential healthcare services without facing prohibitive costs, while also fostering the expansion of facilities to meet increasing demand. In Europe, government funding and healthcare insurance systems similarly support long-term care services, contributing to the growth of the SNF market.

The regulations aimed at improving the quality of care within skilled nursing facilities have driven technological adoption and enhanced patient care standards. This combination of financial backing and quality regulation encourages further investments in skilled nursing, enabling facilities to expand their capabilities and accommodate the rising demand for specialized care.

Growing Healthcare Infrastructure in Emerging Markets

For instance, In March 2022, Antara, a subsidiary of the USD 5 billion Max Group, opened a 10-bed Care Home facility in Jasola, India. This launch follows Antara's recent announcement to invest over Rs 300 crore in senior residences, care homes, home care services, and MedCare products over the next three to four years. The establishment of the Care Home reflects Antara's commitment to enhancing senior care and addressing the growing demand for quality healthcare services for the elderly population in India, positioning itself as a leader in the senior living sector.

As awareness of elderly care and chronic disease management increases in these emerging economies, skilled nursing facilities are becoming more integral to the healthcare landscape. The rising prevalence of chronic conditions like diabetes, cardiovascular diseases, and respiratory disorders in these regions is further driving the need for long-term care solutions. Skilled nursing facilities offer essential services like rehabilitation, medical supervision, and post-acute care, which are in growing demand due to these health challenges. The improvements in healthcare infrastructure, including the availability of advanced medical technologies and better-trained healthcare professionals, are enhancing the quality of care provided by SNFs. This expansion is positioning emerging markets as key growth areas for the global SNF market, as these countries work to accommodate their aging populations and growing healthcare needs.

Key Market Challenges

High Operational Costs

High operational costs are a significant challenge for the global skilled nursing facility (SNF) market, impacting both profitability and growth. Skilled nursing facilities require substantial investments in infrastructure, medical equipment, staffing, and compliance with strict regulatory standards. These costs can be particularly burdensome for smaller facilities, which often struggle to remain financially sustainable in a competitive market. Labor expenses are one of the largest contributors to operational costs, as SNFs need highly trained professionals, including nurses, therapists, and caregivers, to provide the specialized care required by patients. The global shortage of healthcare workers and rising wage demands further drive up these expenses. The need for continuous training, recruitment, and staff retention adds to operational costs. Beyond staffing, SNFs must invest in advanced medical technologies and equipment to ensure quality care and meet regulatory requirements. Maintaining compliance with health and safety standards, which vary by region, also imposes significant financial burdens. These facilities must allocate resources to ensure proper documentation, audits, and inspections to avoid penalties or closures.

Reimbursement Cuts

Reimbursement cuts pose a significant challenge to the global skilled nursing facility (SNF) market, directly impacting the financial stability of these care providers. Many skilled nursing facilities rely heavily on government funding and reimbursement programs, such as Medicare and Medicaid in the U.S., to cover the cost of care for a large portion of their patients. These programs are crucial for ensuring that elderly and chronically ill patients can afford long-term care. However, periodic budget cuts or changes in reimbursement policies create financial uncertainty for SNFs.

When reimbursement rates are reduced, skilled nursing facilities receive less funding per patient, despite the rising costs of care. This financial strain can make it difficult for facilities to maintain the necessary staffing levels, invest in new technologies, or even meet basic operational expenses like facility maintenance and medical supplies. In turn, lower reimbursement rates can negatively impact the quality of care, leading to reduced patient satisfaction and potential regulatory penalties.

Key Market Trends

Value-Based Care Models

Value-based care models are becoming increasingly significant in the global skilled nursing facility (SNF) market, as they shift the focus from volume-based service delivery to enhancing patient outcomes and quality of care. In traditional fee-for-service models, healthcare providers are compensated based on the number of services rendered, which can inadvertently lead to unnecessary procedures and higher healthcare costs. In contrast, value-based care emphasizes the quality of services provided, with financial incentives tied to patient health outcomes, satisfaction, and overall efficiency.

For skilled nursing facilities, this transition encourages the implementation of best practices and evidence-based protocols to improve care delivery. Facilities are investing in staff training, advanced technologies, and comprehensive care plans that prioritize patient needs. This approach not only enhances patient recovery and satisfaction but also reduces hospital readmission rates, a key metric in value-based care assessments.

Workforce Development and Retention

Workforce development and retention are critical challenges facing the global skilled nursing facility (SNF) market, particularly amid a growing demand for quality long-term care. The healthcare industry is experiencing significant staffing shortages, with many SNFs struggling to attract and retain qualified professionals such as nurses, therapists, and caregivers. This shortage is exacerbated by high turnover rates, driven by factors such as job stress, inadequate compensation, and burnout. To address these issues, skilled nursing facilities are increasingly focusing on workforce development initiatives that aim to enhance employee satisfaction and build a stable, skilled workforce.

Investments in staff training and professional development are crucial components of these initiatives. SNFs are providing ongoing education and certification programs to equip their employees with the latest skills and knowledge in geriatric care, dementia management, and rehabilitation practices. Creating a positive work environment, offering competitive wages, and implementing flexible scheduling can significantly improve employee morale and retention.

The fostering a culture of recognition and appreciation helps enhance job satisfaction, encouraging staff to remain in their positions longer. As SNFs prioritize workforce development and retention strategies, they are not only improving the quality of care for residents but also ensuring the long-term sustainability and success of their facilities in an increasingly competitive market.

Segmental Insights

Facility Type Insights

Based on the facility type, Freestanding skilled nursing facilities (SNFs) are dominating the global market due to their specialized focus on providing long-term and post-acute care without the complexities of being attached to hospitals. This independence allows for tailored services that cater specifically to residents' needs, fostering a homelier environment conducive to rehabilitation and recovery. Freestanding SNFs often have lower overhead costs compared to hospital-affiliated facilities, enabling them to offer competitive pricing and improved financial sustainability. Their ability to enhance personalized care, streamline operations, and adapt quickly to changing healthcare demands makes them a preferred choice for many patients and families seeking skilled nursing services.

Service Type Insights

Based on the service type segment, Intensive rehabilitation therapy is currently the dominant segment within the skilled nursing facility market. This dominance is primarily driven by the increasing prevalence of complex medical conditions that require specialized and intensive rehabilitation services, such as stroke recovery, post-surgical rehabilitation, and Orthopedic injuries. Patients undergoing intensive rehabilitation often need comprehensive care involving physical, occupational, and speech therapy to achieve optimal recovery. The growing emphasis on value-based care, which prioritizes patient outcomes and reduces hospital readmissions, has further accelerated demand for intensive rehabilitation therapy. Consequently, skilled nursing facilities are increasingly investing in advanced rehabilitation programs and trained staff to meet this rising need.

Regional Insights

North America is dominating the global skilled nursing facility (SNF) market due to a combination of factors, including a large aging population, advanced healthcare infrastructure, and supportive government policies. The significant proportion of elderly individuals in the region drives demand for long-term care services, as older adults often require specialized medical care, rehabilitation, and assistance with daily living activities. According to projections, the number of people aged 65 and older is expected to continue rising, further increasing the need for skilled nursing facilities. North America boasts a well-developed healthcare system with sophisticated medical technologies and a wide range of services. Skilled nursing facilities in the region are equipped to provide high-quality care, including specialized rehabilitation therapies, which enhances their attractiveness to patients and families.

Recent Developments

• In April 2024, SSM Health and InboundHealth announced a partnership to provide personalized in-home post-hospitalcare. This collaboration aims to offer patients a viable alternative totraditional skilled nursing facilities (SNFs). By delivering tailored caredirectly to patients' homes, the initiative focuses on enhancing recoveryexperiences while maintaining high-quality healthcare standards. This approachnot only addresses the growing demand for more flexible care options but alsosupports patients in their transition from hospital to home, fostering greatercomfort and convenience during their recovery process.
• In September 2023, A Place for Momlaunched Nursinghomes.com, marking its entry into the nursing home sector. Thisnew platform is designed to serve as a comprehensive resource for familiesseeking information on skilled nursing and long-term care facilities.Nursinghomes.com provides detailed insights to help families evaluate variousoptions, making it easier to compare facilities based on their specific needs.The platform also facilitates direct communication with these care providers,streamlining the process for families navigating the complexities of findingsuitable long-term care for their loved ones. With this initiative, A Place forMom aims to enhance accessibility and support for families in making informeddecisions about nursing home care.

Key Market Players

• Brookdale Senior Living Inc.
• Extendicare
• Genesis HealthCare
• Life Care Centers of America
• Lincare Holdings Inc.(Linde Plc)
•  ProMedica
• SavaSeniorCare Administrative Services LLC
• Sunrise Senior Living (Red Fox Holding Corporation)
• The Ensign Group Inc.
• Signature Healthcare