Nursing Homes & Long-Term Care Facilities Industry Profile

The US nursing homes and long-term care facilities industry includes about 75,000 establishments (single-location companies and branches of multi-location companies) with combined annual revenue of nearly $200 billion. Major companies include Manor Care, Sunrise Senior Living, Kindred Healthcare, Golden Horizons (owned by GGNSC Holdings), and SunBridge Healthcare (subsidiary of Sun Healthcare Group). The industry is fragmented: the 50 largest companies account for about 20 percent of revenue.

Internationally, demand for nursing homes and assisted living services is growing along with the aging population. While the number of nursing facilities varies by country, a growing number of countries - particularly those with some form of national health insurance - are experiencing an increase in demand for long-term care options for their aging and infirm citizens.

COMPETITIVE LANDSCAPE

Demand for nursing care is linked to the demographics of the US population. The profitability of individual nursing facilities depends on efficient operations, as revenue per patient is largely controlled by the big government insurance programs, Medicare, and Medicaid. Large companies have some economies of scale in administration and purchasing, but small operators can compete effectively by offering better service. The industry is labor-intensive: annual revenue per worker is about $58,000.

PRODUCTS, OPERATIONS & TECHNOLOGY

The industry includes skilled nursing facilities for recovery from acute or chronic medical conditions (more than 60 percent of revenues), mental health and substance abuse facilities (about 9 percent of revenues), and various types of independent living, ...