Although payroll is rising at continuing care retirement / life plan communities, it is declining slightly at assisted living communities. That’s according to Fitch Ratings’ Life Plan Communities Labor Dashboard for December, released Tuesday.
According to the research, life plan communities saw payroll growth of 0.71% in October. Meanwhile, skilled nursing facility payrolls grew by 0.20% in November. Assisted living community payrolls, however, declined by 0.50% in October, according to preliminary data released by the US Bureau of Labor Statistics. Despite the fluctuations, life plan community, assisted living community and skilled nursing facility payrolls remain 11.15%, 1.43% and 13.59%, respectively, below February 2020 levels.
Hourly earning increases
Although there has been a difference in payroll rises among the different sectors, average hourly earnings increased across the board. Hourly earnings rose at life plan communities, assisted living communities and skilled nursing facilities, from $22.83 to $22.91, from $21.07 to $21.13, and from $24.76 to $24.84, respectively, from September to October. Attributing the increases to ongoing labor challenges, Fitch noted wage growth of 20.90%, 19.51% and 21.94% at life plan communities, assisted living communities and skilled nursing facilities, respectively, from February 2020 to October 2022.
Worth noting is that most of Fitch’s rated life plan communities have been able to pass increased payroll costs onto members through rate and fee increases. Rate increases this year have well above the typical 3% to 5% increase. Some of Fitch’s rated life plan communities enacted double-digit rate and fee increases.
“[Life plan communities] with a significant skilled nursing component, which tend to be lower rated, may experience additional pressure given their exposure to governmental payors limits their ability to raise rates,” Fitch Ratings Director Richard Park said in a statement. “Most of Fitch’s rated [life plan communities] have been able to pass on these higher costs through rate and fee increases, which have been well above the typical 3% to 5% increase in 2022 and 2023.
Job opening decrease in healthcare
The job openings rate has declined in recent months, Fitch also noted. According to the Bureau of Labor Statistics, job openings in healthcare and social assistance decreased by 86,000, resulting in a decline of the job openings rate to 8.7% in October from 9.1% in September.
“This level of job openings still remains very high compared to the 4.2% average job openings rate from 2010 to 2019. Staff shortages at nursing facilities continue to improve,” according to Fitch. “As of Nov. 20, 18.1% of nursing homes reported a shortage of nurses and 18.7% reported a shortage of aides. These figures are well below the peak in January 2022, when 28.3% and 29.9% reported shortages of nurses and aides, respectively.”
