When insurance firms launched social media initiatives, the results were rewarding.
Los Angeles, CA (PRWEB) July 22, 2012
The $110.7-billionNursing Care Facilities industry has benefited from an aging US population that drives demand for healthcare services. During the five years to 2012, revenue is expected to increase 1.8% per year on average. Due to the necessary nature of services provided in nursing care facilities, the industry was able to thrive even while the economy struggled. However, despite favorable demographic trends, operators have had to make adjustments to boost occupancy rates while maintaining profitability, including progressive acquisition strategies and cost mitigation techniques. Furthermore, says IBISWorld industry analyst Anna Son, “revenue growth was hindered as private health insurance coverage and per capita disposable income fell during the recession, decreasing nursing care affordability for many people.” Additionally, reduced Medicare and Medicaid reimbursements are expected to hamper industry growth in 2012, with an estimated revenue decline of 0.2%.
In response to changing consumer preferences, unfavorable government policies, uncertain reimbursement rates and a down economy, many operators have exited the industry or closed underperforming locations. This trend has caused the number of companies to decline in the five years to 2012. As consolidation continues, the number of operators is forecast to decline further during the five years to 2017. Additionally, operators in the Nursing Care Facilities industry are changing their business models and offering supplementary services to reduce costs, attract residents and help offset lower Medicare reimbursements. “Labor, supply and malpractice expenses have stabilized recently,” says Son, “which has helped firms maintain profit margins.”
Demand is forecast to pick up slightly starting in 2014 and going forward as the economy recovers and the population continues aging. However, recent healthcare legislation will encourage individuals to use at-home nursing care to cut costs. This trend will shift demand away from the industry's facilities and into patients' homes. Furthermore, Medicare and Medicaid reimbursements are expected to decline over the next five years. Both factors will place downward pressure on revenue and profitability and somewhat offset the benefits of an improving economy and an older population. As a result, IBISWorld forecasts that revenue will grow at a slow rate over the five years to 2017. For more information, visit IBISWorld’s Nursing Care Facilities in the US industry report page.
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IBISWorld industry Report Key Topics
This industry provides living quarters, inpatient nursing and rehabilitation services for people with a chronic illness or disability. The care is usually provided for an extended period to individuals who require help with day-to-day activities, but who do not need to be in a hospital.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
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