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Balancing Skilled Nursing and Life Plan Communities

What ratios of independent living units to skilled nursing beds work?

Making senior housing work means getting beyond what is considered strictly healthcare, some investors are saying. Part of the mix means looking at the needs of those who need skilled nursing facility (SNF) beds as well as people who are better off with independent living (IL) units.

Finding the proper balance between the two segments is a challenge as skilled nursing beds can have a negative impact on life plan communities (LPCs) operating performance, according to a new report from Fitch Ratings. LPCs with a lower SNF-to-IL ratio performed better. The higher the ratio, the more SNF expenses — understandably significantly higher than IL facilities — spilled over into the independent living business lines.

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Erik Sherman

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