Change is coming, and while some people will be prepared for it, others will struggle.
With a record turnout at last week’s NIC Conference, we wanted to see what the mood was, and whether there was any primary theme. The mood was decent, perhaps not as upbeat as in years past, but it really depended on whom you asked. The old-timers are a bit nervous, the newcomers more bullish. On the skilled nursing side, going from fee for service payments to bundled payments and ACOs is going to be more painful than many believe it will be, and could result in many small providers hanging it up and selling. It will not cause the value disruption that came after the PPS change to Medicare in the late 1990s, but it will be difficult for many.
On the seniors housing side, the sentiment seemed to be that lending was tightening up slightly, especially with terms. One constant theme, however, is that the wait for 2026, when the boomers first start hitting 80 years old, will not have the impact that many are hoping for. The growth rate of the 85+ population consistently declines from 2017 to 2021, which does not bode well for all the developments opening in the next five years. That is when many of the currently sidelined buyers will be ready to pounce.