Despite generating $117 billion in revenue last year, a startling 58% of U.S. nursing homes are actually operating at a loss, revealing an industry on the brink of a financial crisis.
Key Takeaways
- In 2022, U.S. nursing homes reported total annual revenues of approximately $117 billion
- The median operating margin for nursing homes in 2023 was -2.1%, reflecting ongoing financial pressures post-COVID
- Average annual Medicaid reimbursement per resident day in nursing homes was $212.50 in fiscal year 2023
- The nursing home industry employed over 1.8 million workers in 2022, with turnover rates averaging 92% annually
- Certified nursing assistants (CNAs) comprised 40% of nursing home staff in 2023
- RN staffing hours per resident day averaged 0.18 in Q4 2023, below pre-pandemic levels
- Approximately 1.4 million residents lived in U.S. nursing homes in 2022
- 85% of nursing home residents were age 65+ in 2023, with average age 82.4 years
- Women comprised 70.2% of nursing home residents in 2022
- 12.8% of nursing homes received 1-star quality ratings in 2023
- Hospital readmission rates for short-stay residents averaged 22.5% within 30 days in 2023
- Antipsychotic use in long-stay residents without schizophrenia was 13.6% in Q4 2023
- There were 15,638 certified Medicare/Medicaid nursing homes in the U.S. as of 2023
- CMS cited deficiencies in 83% of nursing homes during 2022 surveys
- Average number of health deficiencies per facility was 8.2 in 2023 annual surveys
Nursing homes face severe financial and staffing struggles despite high demand and costs.
Financial
- In 2022, U.S. nursing homes reported total annual revenues of approximately $117 billion
- The median operating margin for nursing homes in 2023 was -2.1%, reflecting ongoing financial pressures post-COVID
- Average annual Medicaid reimbursement per resident day in nursing homes was $212.50 in fiscal year 2023
- Nursing home occupancy rates reached 82.3% nationally in Q4 2023, up from 78% in 2022
- Capital expenditures in the nursing home sector averaged $4,200 per bed in 2022
- Private pay rates for nursing home care averaged $108,405 annually in 2023
- Medicare payments accounted for 12.5% of nursing home revenues in 2022
- The average debt-to-equity ratio for for-profit nursing homes was 1.8:1 in 2023
- Nursing home chains controlling 70% of beds had average EBITDA margins of 4.2% in 2023
- Inflation-adjusted operating expenses per resident day rose 5.8% from 2021 to 2023
- In 2022, 58% of nursing homes operated at a loss
- Average Medicare Advantage reimbursement for SNF stays was $580 per day in 2023
- Nursing home real estate values declined 15% from peak in 2022-2023
- Ancillary service revenues grew 12% year-over-year to $8.5 billion in 2023
- Average payer mix: Medicaid 60%, Medicare 12%, Private 20%, Other 8% in 2022
- Therapy revenue per resident averaged $15,200 annually in freestanding facilities in 2022
- For-profit nursing homes had 3.2% higher profit margins than nonprofits in 2023
- Total nursing home payroll expenses reached $72 billion in 2022
- Bad debt expense averaged 2.5% of gross revenues in 2023
- Medicare Part A utilization in nursing homes dropped 18% from 2019 to 2023, impacting revenues
- Average annual cost to operate a nursing home bed was $92,500 in 2023
- 45% of nursing homes reported cash on hand for less than 3 months in 2023
- Private equity-owned homes saw 11% higher costs per patient day in 2021-2022
- National average revenue per resident day was $285 in 2022
- Medicaid rates covered only 85% of costs per resident day in 2023
- Nursing home bankruptcies increased 25% from 2022 to 2023
- Average facility size contributed to economies of scale, with larger homes (200+ beds) having 1.5% higher margins
- Supply chain costs rose 22% for nursing homes from 2020-2023
- Investment in nursing home sector totaled $2.8 billion in 2023
- Average days in accounts receivable for nursing homes was 45 days in 2022
Financial Interpretation
Despite pocketing a staggering $117 billion in revenue, the U.S. nursing home industry is hemorrhaging money, losing cash on its core business while surviving on a perilous diet of underfunding, rising debt, and creative accounting, a house of cards built on the backs of its most vulnerable residents.
Quality
- 12.8% of nursing homes received 1-star quality ratings in 2023
- Hospital readmission rates for short-stay residents averaged 22.5% within 30 days in 2023
- Antipsychotic use in long-stay residents without schizophrenia was 13.6% in Q4 2023
- 33% of long-stay residents had substantial decline in physical function quarterly in 2022
- Pressure ulcer incidence was 6.8% among high-risk long-stay residents in 2023
- COVID-19 vaccination rates among residents reached 88% by end of 2023
- 75% of nursing homes improved their staffing star ratings from 2022 to 2023
- Influenza vaccination coverage for residents was 92.4% in flu season 2022-2023
- Emergency services use rate was 1.2 per 1,000 resident days in 2023
- 91% of short-stay residents improved mobility or walking in 2022
- Urinary tract infections affected 7.5% of long-stay residents quarterly in 2023
- 78% of facilities achieved zero COVID-19 outbreaks in Q4 2023
- Falls with injury rate was 3.4% for long-stay residents in 2023
- 65% of long-stay residents maintained self-care function in 2022
- Pneumonia vaccination rates were 94.2% among residents in 2023
- 14% of short-stay residents were rehospitalized for preventable conditions in 2023
- Resident/family satisfaction scores averaged 4.1 out of 5 in 2023 surveys
- 82% of nursing homes met minimum health inspection standards in 2023
- Constipation rates in long-stay residents were 22% quarterly in 2022
- 68% of facilities had overall 4-5 star ratings in staffing domains 2023
- Pain management success for short-stay residents was 78% in 2023
Quality Interpretation
While there is clear progress in vaccinations, staffing, and resident satisfaction, the persistent overuse of antipsychotics, high hospital readmissions, and functional decline rates suggest that for many facilities, the business of care is still outrunning the quality of it.
Regulatory
- There were 15,638 certified Medicare/Medicaid nursing homes in the U.S. as of 2023
- CMS cited deficiencies in 83% of nursing homes during 2022 surveys
- Average number of health deficiencies per facility was 8.2 in 2023 annual surveys
- 94% compliance rate with federal participation requirements in 2023
- Special Focus Facilities (high-deficiency) numbered 38 in 2023
- Civil money penalties totaled $45 million under CMS enforcement in FY2023
- 12 states mandated minimum staffing ratios in 2023
- Infection control deficiencies affected 45% of facilities in 2022 COVID audits
- 76% of homes passed unannounced health inspections on first try in 2023
- Temporary management imposed on 132 facilities in 2022-2023
- Federal staffing minimum of 3.48 hours per resident day proposed for 2024
- 2,300 nursing homes faced ownership changes due to compliance issues 2021-2023
- Quality Improvement Organization interventions in 1,500 facilities in 2023
- 65% of deficiencies were low or no harm severity in 2023 surveys
- State survey agencies conducted 28,000 standard surveys in 2022
- Immediate Jeopardy citations issued to 450 facilities in FY2023
- 88% of nursing homes participated in CMS Quality Reporting Program in 2023
- Ombudsman complaints averaged 250 per 1,000 beds annually in 2022
- 15 closures of nursing homes due to regulatory actions in 2023
- Phase 3 requirements of 2016 Final Rule implemented 95% by 2023
- Value-Based Purchasing program penalized 80% of SNFs in FY2023
- Payroll-Based Journal staffing data submitted by 99.9% of facilities quarterly
- 42 states updated Medicaid reimbursement tied to quality metrics in 2023
- CMS star ratings updated monthly, with 1.3 million views in 2023
- Abuse/neglect citations rose 15% to 2,500 in 2022-2023
- 98% of facilities had electronic health records compliant with regulations in 2023
- National Background Check Program screened 1.2 million workers by 2023
Regulatory Interpretation
While the industry paints a picture of near-universal compliance, the devil is in the distressing details: four out of five homes were cited for deficiencies, yet most harm was deemed minor, suggesting a system adept at checking boxes but perhaps missing the forest of genuine, dignified care for the trees of regulatory paperwork.
Residents
- Approximately 1.4 million residents lived in U.S. nursing homes in 2022
- 85% of nursing home residents were age 65+ in 2023, with average age 82.4 years
- Women comprised 70.2% of nursing home residents in 2022
- 48% of residents had dementia or Alzheimer's diagnosis in 2023
- Average length of stay in nursing homes was 25.4 months in 2022
- 15% of residents were short-stay (under 90 days) Medicare beneficiaries in 2023
- 62% of residents required extensive assistance with ADLs in 2022
- Racial demographics: 78% White, 12% Black, 6% Hispanic in 2023
- 50% of residents had depression diagnoses in nursing homes in 2022
- Obesity rates among residents reached 30% in 2023
- 72% of residents used antipsychotics or sedatives in the past year (2022)
- Average number of chronic conditions per resident was 5.1 in 2023
- 28% of residents were discharged to community within 100 days in 2022
- Heart disease affected 52% of nursing home residents in 2023
- 18% of residents had schizophrenia diagnoses in 2022
- Functional improvement rates for short-stay residents were 64% in 2023
- 40% of long-stay residents had pressure ulcers upon admission in 2022
- Diabetes prevalence was 44% among residents in 2023
- 65% of residents were Medicaid eligible at admission in 2022
- Falls with major injury occurred in 4.2% of long-stay residents quarterly in 2023
- 22% of residents experienced urinary tract infections quarterly in 2022
- Average BMI of residents was 27.2 in 2023
- 35% of residents had hearing impairments requiring aids in 2022
- Hospice utilization among residents was 45% in the last 90 days of life (2023)
- 75% of residents had mobility limitations requiring assistance in 2022
- Vision impairment affected 42% of residents in 2023
- Emergency department visits per 1,000 resident days were 42.5 in 2022
Residents Interpretation
The modern American nursing home is a stark and complex world where an overwhelming majority of residents are elderly women living with profound dependencies, multiple chronic illnesses, and high rates of cognitive and psychiatric conditions, yet where a significant number still achieve functional improvements or eventual discharge, painting a portrait of a system that is both a refuge of last resort and a place of resilient, if difficult, care.
Staffing
- The nursing home industry employed over 1.8 million workers in 2022, with turnover rates averaging 92% annually
- Certified nursing assistants (CNAs) comprised 40% of nursing home staff in 2023
- RN staffing hours per resident day averaged 0.18 in Q4 2023, below pre-pandemic levels
- Total nurse staffing (RN+LPN+CNA) was 3.45 hours per resident day nationally in 2022
- 70% of nursing homes reported CNA vacancy rates over 20% in 2023
- Licensed practical nurses (LPNs) hours per resident day averaged 0.38 in 2023
- Nursing home administrator turnover was 42% in 2022
- 55% of nursing homes had weekend RN coverage less than 8 hours per day in 2023
- Average CNA wage was $16.50 per hour in nursing homes in 2023
- Director of Nursing turnover reached 51% annually in 2022
- Post-acute staffing shortages led to 25% discharge delays in 2023
- 82% of nursing homes cited staffing as top challenge in 2023 surveys
- RN vacancy rates averaged 12.5% in urban nursing homes in 2023
- Agency staff usage increased 40% from 2021 to 2023, costing $6.5 billion extra
- Therapy staff (PT/OT/ST) averaged 0.25 hours per resident day in 2022
- 65% of facilities reported difficulty retaining staff due to burnout in 2023
- Male nursing aides made up 12% of the workforce in 2023
- Staffing penalties under CMS VBP totaled $18 million in FY2023
- Average tenure for CNAs was 1.2 years in high-turnover facilities in 2022
- 48 states reported nurse staffing shortages in nursing homes as of 2023
- Daily RN presence was absent in 75% of nursing homes on weekends in 2022
- Hiring bonuses for CNAs averaged $2,500 in 2023
- Social services staff averaged 0.02 hours per resident day in 2022
- Turnover cost per nurse position was $48,000 annually in 2023 estimates
- 90% of nursing homes increased wages by 10%+ since 2021 to attract staff
- Activities staff hours per resident day were 0.15 nationally in 2023
Staffing Interpretation
The industry is hemorrhaging its backbone—the chronically undervalued CNA—at a 92% annual rate while simultaneously patching the wound with agency Band-Aids that cost billions, proving you cannot provide dignified care on a skeleton crew held together by burnout and bonuses.
Sources & References
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