CLA Releases 39th SNF Cost Comparison and Industry Trends Report

Today, CLA (CliftonLarsonAllen LLP), a top-10 U.S. accounting and professional services firm, announced it has issued its 39th edition of the Skilled Nursing Facility (SNF) Cost Comparison and Industry Trends Report. This year’s report further indicates the need for SNF operators to develop deeper financial and business acumen to navigate staffing, payment, and occupancy pressures.

“The intricacies of running a skilled nursing facility in 2024 and beyond are more complex and dynamic than ever. The top operators recognize patterns and adapt quickly, while staying true to core principles,” said Stephen Taylor, principal at CLA, a health care leader who focuses on the senior living and care industry. “Running a SNF today requires sharper business acumen than ever. The landscape has shifted — rising costs, regulatory changes, and evolving payer dynamics mean operators can’t just rely on old playbooks. Success now demands a deeper understanding of finances, data, and strategy.”

Based on 2023 data, this year’s report offers a comprehensive view of the national benchmarks skilled nursing operators can use to measure performance, understand the evolving industry landscape and better their chances of succeeding in a difficult marketplace.

The skilled nursing sector has continued to experience notable divergence, with the gap between financially stable operators and those facing challenges growing wider. The report points to a combination of rising labor costs, increased reliance on Medicaid reimbursement, and the ongoing growth of Medicare Advantage as key drivers of this divide. As operators contend with workforce shortages and regulatory changes, adapting operational strategies and increasing business acumen has become increasingly critical for survival.

Key trends include:

• Labor and staffing pressures – Direct care nursing expenses reached $49.2 billion in 2023, driven by ongoing labor shortages and continued reliance on contract labor. Contract labor usage surged by 12.2% since 2019 for facilities with operating margins of -4% or lower, further compounding financial strain on SNFs still relying on elevated contract labor use.
• Medicare Advantage expansion – The rapid expansion of Medicare Advantage plans, which now account for over 50% of enrollment in many states, has placed additional pressure on SNF revenues. These plans typically reimburse at lower rates than traditional Medicare, forcing operators to adapt strategies.
• Occupancy gains, disparities linger – SNF national median occupancy rates continued to tick higher, rising to 80.2% in 2023 up from 76.3% in 2022.
• Consolidation of the industry – Since 2020, 774 nursing homes have closed, resulting in the loss of 62,567 beds and displacing 28,421 residents. This consolidation has largely benefited larger, more resilient operators, while smaller facilities face heightened competition and financial strain.

“The industry continues to face complex challenges as it emerges from the pandemic, particularly around labor shortages, shifting payer mix, and rising costs,” Taylor said. “Our findings stress the importance of strategic planning and operational agility for SNF operators navigating these pressures. Facilities investing in workforce management, quality care, and payer partnerships are seeing more stability.”

For more in-depth insights and state-specific data, please refer to the complete 39th SNF Cost Comparison and Industry Trends Report.

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CLA exists to create opportunities for our clients, our people, and our communities through industry-focused wealth advisory, digital, audit, tax, consulting, and outsourcing services. With nearly 9,000 people, more than 130 locations, and a global vision, we promise to know you and help you. CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer. Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC-registered investment advisor.