15 Big Cities' Nursing Home Vacancy Rates

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(Related: 15 Worst Cities for Nursing Home Quality)

Long-term care planners, and insurers, often talk about the terrible shortage of nursing home beds facing the United States. There’s one problem with that story: Many nursing home managers are having a hard time filling beds.

The overall national nursing home bed occupancy rate fell to 85.9% in the third quarter, from 88.7% a year earlier, according to the National Investment Center for Seniors Housing and Care (NIC). The NIC nursing home bed occupancy figure is at the lowest level since mid-2011.

Financial professionals can get market-by-market nursing home bed vacancy data from the Centers for Medicare and Medicaid Services (CMS), the agency that runs Medicare and Medicaid.

We used CMS data to find the 15 U.S. cities with the most Medicare and Medicaid nursing home beds. We then used bed number and bed occupancy data to come up with bed vacancy rates. We ranked those big nursing home cities by bed vacancy rate.

For the 15 biggest nursing home cities, the average bed vacancy rate ranges from 7% to 28%.

To see the average vacancy rate for each of the 15 cities, along with the overall national average, see the data cards in the slideshow above.

What are the numbers like for all U.S. cities and towns?

In all U.S. communities with more than 500 certified beds, the average vacancy rates range from about 0%, in Merced, California, up to 56%, in Costa Mesa, California. The median is about 17%, in Wallingford, Connecticut.

What might this matter to financial professionals?

Bed vacancy rates could end up affecting all kinds of LTC planning, whether that planning is done with life insurance, annuities, long-term care insurance, or gold bars hidden under a mattress. High vacancy rates now could hold future nursing home bed costs down in some places, and cause failure rates, and prices, to climb in others.

Why should you take these vacancy rate numbers with a grain of salt?

Nursing home bed vacancy rates reflect many factors. Here are five.

1. Need for Care

Some people need long-term care from the time they are born. The odds that people will need care are much higher when people reach age 65. But elderly people are far more likely to need full-time care after they turn 85.

Members of the huge baby boom generation won’t start turning 85 until 2031.

Today, most occupants of nursing homes are members of the relatively small Greatest Generation and Silent Generation cohorts. Nursing homes that have expanded to serve the boomers will have to wait 13 years till the wave comes in.

2. Bed Supply

Real estate developers and nursing home companies are building new facilities all the time. Sometimes, filling all of the new beds takes time.

3. Compliance Problems

Federal, state or local regulatory actions may keep certain facilities from taking new patients.

4. Disease

Outbreaks of flu and other contagious diseases can keep facilities in large areas from taking new patients. During bad flu years, operators of large, publicly traded senior housing companies talk about flu-related freezes during their quarterly calls with securities analysts.

5. Consumer Preferences

Many people who need long-term care would prefer to get it in their own homes, or in their own homes and in adult daycare facilities. The new emphasis on home-based and community-based care has forced nursing homes to compete harder for patients.

— Read Medicare Pays Well for Nursing Home Care: Senior Housing Group, on ThinkAdvisor.

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