GLOBAL SKILLED NURSING FACILITY MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Market Size and Trends

The global skilled nursing facility market is estimated to be valued at USD 380.11 Bn in 2024 and is expected to reach USD 688.86 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 8.9% from 2024 to 2031.

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The demand in the skilled nursing facility market is expected to grow due to the rising geriatric population worldwide. With the increasing lifespan and declining birth rates, the number of aging people is steadily growing. As elderly citizens generally struggle with disabilities, chronic conditions, and difficulties in daily living, they tend to seek specialized long-term care that can be offered by skilled nursing facilities. These facilities cater to such needs through trained medical professionals and therapy services. Thus, as the elderly population expands in size, there will be a growing need for nursing homes and skilled care centers to accommodate this demographics’ needs, driving the overall market growth in the coming years.

Rising geriatric population

The growing senior population is a key driver for the skilled nursing facility market. As life expectancy continues to rise across the world, the number of elderly citizens requiring long-term care is increasing substantially. According to the World Population Prospects 2022, The population above the age of 65 is expanding faster than the population under that age. This means that the proportion of the global population aged 65 and more is predicted to climb from 10% in 2022 to 16% by 2050. It is anticipated that by 2050, the global population of people aged 65 and more will be double that of children under the age of five, and nearly equal to that of children under the age of 12. This rise in the elderly cohort will translate to greater demand for nursing home and assisted living services. As people grow older, they often suffer from chronic illnesses or mobility issues that make it difficult for them to live independently. Many may require full-time assistance or supervision with daily activities like bathing, dressing, taking medication, and preparing meals. Skilled nursing facilities can provide the important healthcare and personal care services needed by seniors who can no longer manage on their own at home. This need will only intensify as the population ages rapidly over the coming decades.

Market Concentration and Competitive Landscape

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Another key factor influencing the skilled nursing facility market is the continuous rise in healthcare costs. Medical inflation has been outpacing general consumer price inflation in most countries for many years now. This trend is putting immense financial pressure not only on governments and private payers but also on individuals and families. The costs of home healthcare services can be quite substantial with round-the-clock private caregivers or periodic visits from nurses and physical therapists. For those lacking adequate family support or financial means, nursing homes have become a more affordable long-term care option. These facilities allow for professional medical supervision and administration of treatment at a fixed monthly rate that is significantly less than paying for home health services. This has made them an attractive solution especially for people needing post-hospital convalescence or palliative care towards the end of their lives. With healthcare expenditures projected to grow substantially in the coming years, nursing facilities will play an important role in providing cost-effective long-term care solutions for the growing senior population. Their ability to offer comprehensive services at an inclusive monthly fee makes them a financially viable option for both patients and their families dealing with rising medical costs.

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The skilled nursing facility market faces several challenges. With an aging population, the demand for long-term care is rising just as Medicaid reimbursement rates have declined, squeezing operating margins. Many facilities struggle to attract and retain quality nurses and other staff due to low pay and stressful working conditions. An increased emphasis on home-based and community-based care also poses a threat as some patients choose alternatives to institutional long-term care. Facility operators must find ways to cut costs and operate more efficiently to adapt to stringent reimbursement environments.

Market Opportunities: Growing telehealth and remote patient monitoring

Telehealth and remote patient monitoring presents a major opportunity for the skilled nursing facility market in the coming years. With an aging population and growing rates of chronic conditions like diabetes, Chronic Obstructive Pulmonary Disease, and heart disease, more elderly patients are opting for long-term care in nursing facilities. This is putting pressure on existing infrastructure and medical staff resources. Telehealth can help address this in a cost-effective manner. Remote monitoring technologies allow caregivers to keep a close watch on patients' vital signs and health metrics from any location. Wearable devices can transmit data like heart rate, oxygen levels, weight fluctuations, etc. to the nursing staff continuously.

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Facility type segment is sub-segmented into hospital and freestanding. Freestanding segment is anticipated to hold 86.6 of the market share in 2024. Within the facility type segment of the skilled nursing market, freestanding facilities contribute the largest share due to their convenience and cost-effectiveness. As the population ages, demand is rising for long-term care options that allow seniors to receive medical support and rehabilitation services without having to stay in a hospital. Freestanding skilled nursing facilities fulfill this need by providing nursing, therapy and other services in standalone residential settings equipped for long term or post-acute care. Being off-hospital premises gives freestanding facilities flexibility to tailor their service offerings and amenities to different patient profiles. They can accommodate various levels of care from short recovery stays to long-term living arrangements. This translates to convenience for patients and their families who prefer a home-like environment during recovery or final years as opposed to institutional hospital settings. The residential model also gives freestanding facilities ability to customize their floor plans, decor, activities and operating schedules to promote comfort, normalization and quality of life.

Insights, By Ownership: Rise in the number of for profit facilities

Ownership segment is sub-segmented into government, profit, and non-profit. Profit segment is estimated to contribute the highest share of the skilled nursing facility market and is projected to hold 67.7% of the market share in 2024. The ownership segment of the skilled nursing facility market is dominated by profit facilities due to their profit-focused business models that spur market share growth. As independent businesses, for-profit skilled nursing facilities aim to maximize financial returns for owners and investors. This imperative drives them to optimize operations, capture paying customers and minimize costs more aggressively than their non-profit counterparts. For-profit facilities employ business strategies focused on boosting occupancy rates, such as employing dedicated marketing teams for aggressive outreach. They also invest in amenity upgrades and service expansions based on demand signals to attract more self-paying residents and fast-growing post-acute referral segments. Strategic ties with nearby hospitals and physician groups secure a steady flow of new customers too. To control costs and boost the bottom line, for-profits take advantage of economies of scale through large regional or national chains. Pooled resources support shared services like group purchasing programs that produce savings. Centralized administrative functions also minimize redundant spending at individual facilities. Furthermore, for-profits tend to maintain tight control on staffing levels and wages while still meeting minimum regulatory quality and safety standards.

Insights, By Service Offered: Favorable demand and reimbursement factors drives growth of occupational therapy segment

Service offered segment is sub-segmented into physical therapy, occupational therapy, speech-language pathology services, medical social services, and others. Occupational therapy segment is estimated to contribute the highest share of the skilled nursing facility market and is projected to hold 37.6% of the market share in 2024. This can be attributed to various favorable demand and reimbursement factors that sustain its lead position. Occupational therapy aims to help patients recovering from injuries or illnesses regain independence in daily skills needed at home, work or in the community. As life expectancies lengthen amid an aging population, such independent living services take on rising importance. Additionally, new post-hospitalization care models emphasize occupational therapy as key to avoiding repeat hospitalizations or nursing home stays by assisting faster transitions home. Favorable regulatory changes are also propelling demand growth. For instance, expanded Medicare reimbursements in recent years now cover costlier therapies like occupational therapy rendered in skilled nursing facilities. Heightened coverage incentivizes more patients and referrals towards these services proven effective in improving long-term outcomes. Similarly, private insurers follow Medicare’s lead with their own therapy coverage expansions to control overall healthcare spending through prevention.

Regional Insights

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The North America region has dominated the global skilled nursing facility market in past decade and is expected to hold 44.8% of the market share in 2024. In terms of facility type, the freestanding sub-segment contributes the highest share in the North America skilled nursing facility market. This can be attributed to the growing preference for stand-alone rehabilitation facilities that are not attached to acute care hospitals. Freestanding facilities allow seniors to receive long-term and post-acute care in a home-like environment, closer to their families and local communities. They aim to provide personalized care and accelerated recovery in a less clinical set-up compared to hospital-attached facilities. The convenient locations and patient-centric approach of freestanding buildings have made them the leading sub-segment in the region.

Another region that has seen tremendous growth in recent years is Asia Pacific. Countries like India, China, Singapore, Malaysia, and Thailand have experienced a surge in their aging populations as life expectancy increases and fertility rates decline. Coupled with growing affluence, this has spurred the demand for eldercare services beyond what traditional family support systems can provide. Indonesia in particular stands out with the fastest expanding skilled nursing market in the region. It currently has around 300 facilities but the market is highly fragmented with many small independents. Considering Indonesia’s young population profile and rising chronic diseases, experts forecast senior care to be one of the biggest healthcare opportunities over the coming decades. Both international as well as domestic operators are keen to enter this largely untapped market and establish scale through consolidation. The government is also stepping up efforts to develop regulations and standards to professionalize the industry.

Market Report Scope

Key Developments

• On January 17, 2024, CPSI (now known as TruBridge), a healthcare solutions company, and PointClickCare, a leading healthcare technology platform that enables meaningful collaboration and access to real-time insights, have announced a referral partnership. PointClickCare will exclusively refer TruBridge, a revenue cycle management (RCM) solution, to their skilled nursing clients seeking outsourced RCM solutions.
• In October 2022, Allina Health, a nonprofit health care system, and Flare Capital Partners, a private investment firm, announced the launch of Inbound Health, a new company that allows health systems and health plans to provide hospital-at-home and skilled nursing-at-home services. These creative new care models enable patients who require facility-level acute or post-acute care to get care in the comfort of their own homes, improving patient access, satisfaction, and results while lowering total care costs.
• In March 2022, Antara, part of the USD 5 billion Max Group, announced the opening of a 10-bed Care Home facility in Jasola, India. The launch comes shortly after Antara announced plans to invest more than Rs 300 crore in senior residences, care homes, care at home services, and MedCare products over the next three to four years.
• In March 2022, Rela Hospital, a multi-specialty quaternary care hospital in Chromepet, India, opened a new health care facility in Oragadam to provide healthcare solutions to the Oragadam industrial sector. The new facility contains 32 beds. The three-story structure, which spans 15000 square feet, is intended to deliver world-class quality healthcare to citizens of the Oragadam and Kanchipuram districts at a reasonable cost.

*Definition: The skilled nursing facility market consists of long-term care facilities that provide skilled nursing, rehabilitation, and other related services to patients and residents who need medical care, regular assistance with daily activities, or require supervision. These facilities offer short or long-term care for those recovering from illnesses, injuries, or surgeries, as well as custodial care for people who require medical or nursing assistance but do not need acute hospital care.

Market Segmentation

• Facility Type Insights (Revenue, USD BN, 2019 - 2031)
  • Hospital 
  • Freestanding
•  Ownership Insights (Revenue, USD BN, 2019 - 2031)
  • Government
  • Profit
  • Non-Profit
•  Service Offered Insights (Revenue, USD BN, 2019 - 2031)
  • Physical Therapy 
  • Occupational Therapy
  • Speech-language Pathology Services
  • Medical Social Services
  • Others
• Regional Insights (Revenue, USD BN, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East
    • GCC Countries
    • Israel
    • Rest of Middle East
  • Africa
    • South Africa
    • North Africa
    • Central Africa
• Key Players Insights
  • Consulate Health Care
  • Atria senior living
  • HCR ManorCare
  • The Riverview Care Center
  • Kindred Healthcare, LLC
  • ProMedica Senior Care
  • Erickson Living
  • Ensign Group
  • Fundamental healthcare
  • Signature healthcare
  • Genesis HealthCare
  • Life Care Centers of America
  • Trilogy Health Services LLC
  • Saber Healthcare Group
  • Providence Group
  • Life Care Services