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.
United States skilled nursing facility (SNF) market Overview:
A Skilled Nursing Facility (SNF) provides comprehensive medical and rehabilitative services for patients who require daily assistance and supervision. These facilities typically offer 24-hour nursing care, physical and occupational therapy, and other post-acute care services for individuals recovering from surgeries, injuries, or managing long-term conditions.
The U.S. SNF industry continues to benefit from demographic tailwinds, with an expanding elderly population and increasing incidences of age-related diseases fueling the demand for professional long-term care. Moreover, improvements in Medicaid reimbursement rates in several states and the adoption of advanced medical technologies are strengthening the operational and financial viability of facilities nationwide.
United States skilled nursing facility (SNF) market Dynamics and Value Insights:
The continued growth of Medicare Advantage (MA) is a crucial driver of SNF utilization across the U.S. The number of MA beneficiaries reached nearly 30 million in 2023, significantly contributing to post-acute care referrals. MA plans often emphasize cost efficiency and rehabilitation-based care management strategies, ensuring higher SNF occupancy rates.
Additionally, Medicaid rate enhancements have modestly improved operating margins, which reached 0.6% in 2023, signaling gradual financial stabilization. Variations in MA adoption across states influence reimbursement structures, with some states reporting up to 3% higher reimbursement rates compared to traditional Medicare, providing strong incentives for SNFs to align services with MA policies.
United States skilled nursing facility (SNF) market Key Trends and Technological Advancements:
Federal Staffing Mandate Debate: The proposed CMS staffing mandates are among the most debated developments in the SNF market. The mandate, which requires additional 16,000 registered nurses and 75,000 nurse aides nationwide, could cost facilities between USD 4.2 billion to USD 7.1 billion annually.While the goal is to enhance care quality, the policy faces resistance from advocacy groups and facility operators due to ongoing workforce shortages and rising labor costs. Smaller and rural facilities are particularly vulnerable to compliance costs, potentially leading to closures and reduced care access.Despite the challenges, the mandate is driving innovation in workforce retention, training programs, and automation technologies, improving the long-term efficiency and competitiveness of SNFs.
AI Integration Transforming Facility Operations: Artificial Intelligence (AI) adoption is revolutionizing SNF operations by improving administrative efficiency and patient outcomes. AI-powered solutions in medication management, admissions processing, and predictive analytics are reducing operational burdens and enhancing care quality.
In 2023, AI tools began assisting with fall risk assessments, ulcer prevention, and resource optimization, allowing nursing staff to focus more on patient interaction. Going forward, robotic process automation (RPA) and natural language processing (NLP) are expected to further enhance workflow efficiency, positioning AI as a defining factor of SNF competitiveness by 2030.
Strengthening Partnerships with Hospitals and Health Systems: Collaborations between SNFs and hospitals are emerging as a key growth strategy. These partnerships streamline post-acute transitions, reduce hospital readmissions, and ensure continuity of care.
By integrating patient data and coordinating rehabilitation programs, such as physical therapy and stroke recovery, SNFs can secure steady referral streams, boost occupancy rates, and build a reputation for high-quality outcomes. These alliances are also fostering more sustainable, value-based care models across the healthcare system.
United States skilled nursing facility (SNF) market Challenges Impacting Growth:
Despite positive momentum, several structural challenges constrain market growth:
- Workforce Shortages: Persistent nurse and aide shortages are the most critical bottlenecks, affecting care quality and operational capacity.
- Reimbursement Constraints: Heavy dependence on Medicaid and government funding limits financial flexibility, as reimbursement rates often lag behind inflation and rising care costs.
- Facility Closures: More than 450 SNFs have closed since 2020, reflecting financial strain, particularly in rural regions.
- Operational Costs: Inflation and labor costs have increased post-pandemic, reducing profit margins and slowing recovery despite growing demand.
United States skilled nursing facility (SNF) market Historical vs Forecast Outlook (2020–2035):
Between 2020 and 2024, the U.S. SNF industry grew at a CAGR of 3.1%, increasing from USD 171.9 billion to USD 194.2 billion. The COVID-19 pandemic caused a temporary setback due to occupancy declines and staffing shortages, but the market has gradually stabilized post-2022.
Looking ahead, sustained recovery will depend on enhanced Medicaid funding, AI-driven productivity, and workforce resilience programs. While short-term challenges persist, the long-term outlook remains stable with increasing demand from the senior population.
United States skilled nursing facility (SNF) market Competitive Landscape and Concentration:
The U.S. SNF market is moderately concentrated, with the top-tier companies accounting for around 23.9% of total market share. These firms focus on strategic mergers, technological integration, and expansion of specialized care units.
Tier 1 Companies (Leaders, 23.9% share):Brookdale Senior Living Solutions, Genesis Healthcare, Lincare Inc., The Ensign Group Inc.
These players have extensive networks and invest heavily in clinical innovations and quality assurance programs.
Tier 2 Companies (Mid-sized, 16.1% share):Extendicare, Sunrise Senior Living LLC, Life Care Services, LifeCare Centers of America.
They emphasize partnerships with hospitals and employ adaptive strategies for regional markets.
Tier 3 Companies (Niche players):Golden Living Centers, Peninsula Behavioral Health, Sava Senior Care Administrative Services LLC.
These focus on specialized segments like behavioral health and memory care.
This layered market structure ensures diversity, innovation, and competition across service models and regions.
United States skilled nursing facility (SNF) market Category and Segment Insights:
By Type: Freestanding SNFs dominate with a 77.1% share (2025).
These facilities offer cost-efficient, specialized services such as rehabilitation, post-surgical recovery, and long-term care, making them more flexible than hospital-based SNFs.
By Ownership: For-Profit SNFs lead with a 74.3% share (2025).
They exhibit higher financial agility, investment in infrastructure, and efficiency-driven management, attracting private-pay residents and ensuring stronger revenue flows.
United States skilled nursing facility (SNF) market Regional Insights:
The U.S. SNF market shows strong regional variation:
- Northeast & Midwest: Mature markets with high elderly populations and dense SNF networks.
- Southeast: Rapidly expanding due to demographic shifts and lower operational costs.
- Southwest & West: Emerging centers for AI-driven and tech-integrated SNFs, particularly in states like California and Arizona.
Regional disparities in Medicaid reimbursement rates, MA penetration, and labor availability continue to shape investment and expansion strategies.
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United States skilled nursing facility (SNF) market Recent Developments:
August 2024: Genesis Healthcare, Inc. received the Gold Excellence in Quality Award from AHCA/NCAL, highlighting leadership in care quality and innovation.
August 2022: Sunrise Senior Living launched its second luxury senior lifestyle community, The Apsley, in New York City, expanding its footprint in the premium care segment.
United States skilled nursing facility (SNF) market Future Outlook:
The U.S. skilled nursing facility market stands at a pivotal juncture. While workforce shortages, regulatory mandates, and financial pressures pose immediate challenges, long-term growth will be driven by AI integration, strategic hospital partnerships, and expanded Medicaid funding. With demand for elderly care expected to surge through 2035, SNFs that embrace innovation, enhance workforce sustainability, and maintain high care standards will lead the next phase of industry transformation.
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