The USA market for skilled nursing facilities (Skilled Nursing Facilities) is estimated to be worth USD 202.4 billion in 2025 and anticipated to reach a value of USD 279.9 billion by 2035. Spending across skilled nursing facilities are projected to rise at a CAGR of 3.3% over the forecast period between 2025 and 2035. The revenue generated by skilled nursing facilities in USA for year 2024 was USD 194.2 billion.
A Skilled Nursing Facility (SKILLED NURSING FACILITIES) is the facility with complete medical and rehabilitative care for patients that needs daily assistance and supervision. Such services typically include nursing care, physical therapy, and other support for patients recovering from disease, post surgeries, or managing long-term conditions.
Positive trends are realized in skilled nursing facilities across the United States, mainly due to the demand from an aging population for specialized care and rehabilitation services has increased. Some states have improved Medicaid rates, thus enabling facilities to improve their financial viability and meet their operational costs. Advances in medical technology and enhanced care standards further heighten the quality and attractiveness of the services that Skilled Nursing Facilities provide.
USA Skilled Nursing Facility Industry Outlook
| Attributes | Key Insights |
|---|---|
| Historical Size, 2024 | USD 194.2 billion |
| Estimated Size, 2025 | USD 202.4 billion |
| Projected Size, 2035 | USD 279.9 billion |
| Value-based CAGR (2025 to 2035) | 3.3% |
Medicare Advantage (MA) remains the driver in skilled nursing facility sales and occupancy throughout the country. Strong MA enrollment growth, approaching 30 million beneficiaries in 2023, has raised utilization of the SKILLED NURSING FACILITIES, as most plans offer comprehensive post-acute care coverage. Unlike traditional Medicare, many MA plans have cost-efficient care management strategies in place that promote referrals to the SKILLED NURSING FACILITIES level of care for rehabilitation and extended care.
It's also presenting opportunities through the diversification of payment structures and occupancy recovery. Richer Medicaid rates and increasing MA penetration have supported a modest improvement in operating margins, which reached a median level of 0.6% in 2023.
In addition, MA plan adoptions differ by state, and the penetration rates are significantly impacting SKILLED NURSING FACILITIES operations. Some states report reimbursement rates as high as 3% above traditional Medicare, improving revenue streams for facilities. This shift in dynamics further emphasizes the need to align SKILLED NURSING FACILITIES services with MA plans to sustain growth.
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The below table presents the expected CAGR for the USA skilled nursing facility industry analysis over several semi-annual periods spanning from 2025 to 2035. In the first half (H1) of the decade from 2024 to 2034, the business is predicted to surge at a CAGR of 4.3%, followed by a slightly lower growth rate of 3.9% in the second half (H2) of the same decade.
| Attributes | Key Insights |
|---|---|
| H1 | 4.3% (2024 to 2034) |
| H2 | 3.9% (2024 to 2034) |
| H1 | 3.3% (2025 to 2035) |
| H2 | 2.8% (2025 to 2035) |
Moving into the subsequent period, from H1 2025 to H2 2035, the CAGR is projected to decrease slightly to 3.3% in the first half and decrease moderately at 2.8% in the second half. In the first half (H1) the market witnessed a decrease of 100.00 BPS while in the second half (H2), the market witnessed an increase of 110.00 BPS.
Advocacy against Federal Staffing Mandates is driving the Market Growth for Skilled Nursing Facility in USA.
New proposed staffing mandates from CMS aim to push up the minimum staffing in facilities across the nation to tackle these care concerns, with specific new requirements to hike minimum staffing. Facilities are facing an estimated added need of 16,000 registered nurses and more than 75,000 nurse aides at USD 4.2 billion to USD 7.1 billion per year.
But with workforce shortages and financial pressures already at critical levels in the sector, such mandates proved quite a challenge to meet without extra funding or availability of the workforce. This mandate has drawn firm opposition from advocacy groups and industry stakeholders who sent in more than 40,000 comments seeking changes or delays due to possible widespread noncompliance and financial pressure.
It will relate directly to the skilled nursing facility market, especially if these new mandates have wide ramifications for operating cost and profitability. Facilities have continued recruitment and retention, and meeting the staffing requirements of the mandate in a highly competitive labor market remains tough. Among those especially vulnerable could be smaller and rural facilities, and this potentially results in some facilities closing, leading to further declines in care access.
Although compliance and advocacy were challenges for this industry, it indirectly drives market growth by stimulating investments in workforce development, retention programs, and operational efficiencies. As such, to attract talent, facilities are trying with innovative solutions that include higher wages, bonuses, and more comprehensive training programs that will keep them compliant and preserve their market position, boosting market growth.
AI Adoption in Skilled Nursing Facilities Sparks New Market Opportunities
Artificial intelligence is a transformative force in the skilled nursing facility market, emerging as a key tool to optimize operations and the delivery of care. The integration of AI tools in 2023 marked an important turning point, with automation of administrative tasks-such as medication management, admissions processing, and discharge planning-reducing reliance on expensive agency labor. These technologies not only streamlined workflow but liberated so much more of the time for clinical personnel toward direct care in patients.
AI has also enhanced decision-making and improved resident outcomes through advanced predictive analytics. For instance, algorithms can assess fall risks, monitor for potential pressure ulcers, and provide data-driven insights that enable proactive care. These capabilities are especially valuable as Skilled Nursing Facilities navigate staffing shortages, offering a way to maintain high standards of care with limited resources.
This developing trend in the marketplace is revolutionizing the landscape of the skilled nursing facility market, since facilities can better utilize resources and handle the ongoing staffing crisis. In 2024, the adoption of AI is likely to widen even more, as operators test more advanced uses, such as RPA for intake processes and natural language processing for patient interactions.
But AI will not just be an option, because it will continue improving quality, efficiency, and costs. AI will set the new threshold of performance and competitiveness in the skilled nursing facilities sector.
Partnerships with Hospitals and Health Systems Poses a Significant Opportunity for Future Growth
The partnerships of skilled nursing facilities with hospitals and health systems is expected to become one of the valuable collaborations that Skilled Nursing Facilities with hospitals and health systems would have in relation to patients that are post-acute and require rehabilitation care after the discharge from hospital. The general goal is integrating care more effectively to ensure smooth transfer of patients from the hospital for care in the skilled nursing institution. This might even drastically enhance the outcomes for the patients involved.
Such collaborations tend to revolve around coordinated care planning, medical record sharing, and assuring patients' needs through continuity of care. It enables patients to be moved to the required facility depending on their need in a way that helps bridge the gap in care, thereby preventing readmission into the hospital. Further, skilled nursing facilities can work towards designing models that fit rehabilitation-specific needs such as physical therapy, wound care, or stroke rehabilitation.
This integration of care has various positive effects on the skilled nursing facility market. The stable flow of patients released from hospitals raises the occupancy levels of skilled nursing facilities. More patient volumes directly correspond to higher revenue streams. Also, hospitals and health systems like partnering with Skilled Nursing Facilities that can offer good quality care.
This will increase the facility's reputation and gain more referrals. This collaboration ensures that patients receive comprehensive care across the continuum, which in turn leads to a more sustainable business model for Skilled Nursing Facilities. Thus, partnerships contribute to both growths in patient numbers and financial stability in the long term.
Inability of Expansion and Workforce Shortage act as Significant Growth Barrier for this market
There are substantial barriers impeding growth in the United States Skilled Nursing Facility market. Skilled nursing facilities are excessively reliant on sources of government payment, which largely is Medicaid, thus putting Skilled Nursing Facilities in an uncomfortable financial bind. Reimbursement rates from government programs usually fail to match rising care costs and therefore put operating margins at negative levels.
This issue has been further compounded by the persistent staffing issues and operational expenses that increased during the COVID-19 pandemic. While temporary relief in the form of Public Health Emergency (PHE) funding was provided, it was not sufficient to balance the increased financial burdens in 2021 and 2022, leaving facilities exposed.
Workforce shortages and increasing wages have added to these financial challenges. Staff unavailability combined with inflation have meant that operations now cost more than ever. It has led to closure of skilled nursing facilities with over 450 facilities since the pandemic.
Almost half of skilled nursing facilities residents in 2022 are residing in facilities facing possible closure. These are accompanied by slow recovery in occupancy post end of the PHE-related waivers and, hence both facts creating challenging environment for market growth and financial sustainability of skilled nursing facilities.
The USA skilled nursing facilities industry recorded a CAGR of 3.1% during the historical period between 2020 and 2024. The growth of skilled nursing facilities in USA was positive as it reached a value of USD 194.2 billion in 2024 from USD 171.9 billion in 2020.
Skilled Nursing Facilities in the United States have traditionally enjoyed stable occupancy and government reimbursement, largely driven by Medicaid. Facilities were experiencing moderate growth, with staffing being a challenge but able to be supported within current financial structures. Then sudden rise of health pandemic in 2020 due to COVID-19, has severely disrupted the industry, making the sector financially unstable, causing workforce shortages, and declining occupancy that worsened previous issues.
Currently, skilled nursing facilities operate under negative operating margins, considering low Medicaid reimbursement rates, high care costs, and staffing shortages. Temporary funding for the Public Health Emergency provided temporary measures to reduce financial impacts; most of these relief resources are spent, while many facilities run the risk of closure-450+ Skilled Nursing Facilities have closed since the beginning of the pandemic.
The future for Skilled Nursing Facilities may be one of gradual recovery, based on increased occupancy rates and permanent Medicaid rate enhancements. However, the sector will have to work out workforce challenges, financial sustainability, and operational efficiency for long-term viability.
Tier 1 companies comprise market leaders with a significant market share of 23.9% in global market. These companies engage in strategic partnerships and acquisitions to expand their product portfolios and access cutting-edge technologies. Additionally, they emphasize extensive clinical trials to validate the efficacy and safety of their products. Prominent companies in tier 1 include Brookdale Senior Living Solutions, Genesis Healthcare, Lincare, Inc., The Ensign Group, Inc.
Tier 2 companies include mid-size players having presence in specific regions and highly influencing the local market and holds around 16.1% market share. They typically pursue partnerships with multispecialty hospitals and research organizations to leverage emerging technologies and expedite product development. These companies often emphasize agility and adaptability, allowing them to quickly bring new products to market, additionally targeting specific types medical needs.
Additionally, they focus on cost-effective production methods to offer competitive pricing. Prominent companies in tier 2 include Extendicare, Sunrise Senior Living, LLC, Life Care Services and LifeCare Centers of America Corporate.
Finally, Tier 3 companies, such as Golden Living Centers, Peninsula Behavioral Health, Sava Senior Care Administrative Services LLC. They specialize in specific products and cater to niche markets, adding diversity to the industry.
Overall, while Tier 1 companies are the primary drivers of the market, Tier 2 and 3 companies also make significant contributions, ensuring the skilled nursing facilities sales remains dynamic and competitive.
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The section contains information about the leading segments in the industry. By type, the freestanding segment holds the highest market share of 77.1% in 2024.
| By Type | Value Share (2025) |
|---|---|
| Freestanding | 77.1% |
Hospital-based skilled nursing facilities tend to be more expensive to run compared to freestanding Skilled Nursing Facilities. Hospital Skilled Nursing Facilities are larger and encompass services such as emergency care, sophisticated treatments, and specialized medical professionals. A freestanding SKILLED NURSING FACILITIES primarily caters to long-term care and rehabilitation. They can cut their costs since the scope of operation is smaller and more specialized.
Freestanding Skilled Nursing Facilities can easily specialize in service lines such as rehabilitation, memory care, and post-acute care without complicated hospital environments because they can make a more special and focused form of care with it. And thus, attracts residents who do require specialized service that hospitals aren't offering.
| By Ownership | Value Share (2025) |
|---|---|
| For-Profit | 74.3% |
Profit-making Skilled Nursing Facilities are relatively better funded in terms of capital and finance than not-for-profit or government-owned establishments. The availability of financial resources enables them to expand, renovate, and acquire the most up-to-date technology and services that can provide a competitive edge. For-profit skilled nursing facilities are headed with business-oriented experienced managers who have been trained in managing operations and quicker decision-making to ensure that the institution is market responsive.
For-profit Skilled Nursing Facilities are more likely to attract private pay patients who can afford higher levels of care and are less dependent on government reimbursement. This produces more predictable and higher revenue streams, which enables them to sustain their operations even during times of financial constraint.
The market players are using strategies to stay competitive, such as product differentiation through innovative formulations, strategic partnerships with healthcare providers for distribution. Another key strategic focus of these companies is to actively look for strategic partners to bolster their product portfolios and expand their global market presence.
Recent Industry Developments in USA Skilled Nursing Facility
In terms of type, the industry is divided into- freestanding and hospitals.
In terms of ownership, the industry is segregated into- For-Profit, Non - Profit and Goverment.
Key regions of USA includes Northeast United States, Midwest United States, West United States, Southeast United States, Southwest United States have been covered in the report.
The USA skilled nursing facility is projected to witness CAGR of 3.3% between 2025 and 2035.
The USA skilled nursing facility industry stood at USD 194.2 billion in 2024.
The USA market for skilled nursing facility is anticipated to reach USD 279.9 billion by 2035 end.
Southwest United States is set to record the highest CAGR of 5.0% in the assessment period.
| Market CAGR (2023 to 2033) | 8.8% |
|---|---|
| Market Size (2023) | USD 1.96 billion |
| Market Size (2033) | USD 4.55 billion |
| Market Value (2021) | USD 4 billion |
|---|---|
| Market Value (2029) | USD 4.65 billion |
| Market (CAGR) | 1.9% |
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USA Skilled Nursing Facility Market
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