After years of underutilization, occupancy rates climbed steadily through 2025, approaching or returning to pre-pandemic levels in many markets. SNFs saw higher hospital referrals and admission volumes as post-acute care pathways normalized, even while overall bed inventory declined in some regions. 

This shift reflects broader demographic trends — including an aging population and increased prevalence of chronic conditions — that are expanding demand for skilled care across the continuum.

No trend defined 2025 more than the workforce challenge. Skilled nursing facilities continued to struggle with recruiting and retaining nurses and frontline caregivers, with turnover rates remaining alarmingly high and staffing shortages pervasive. 

These shortages touched every aspect of operations — from quality of care and regulatory compliance to financial sustainability — and underscore the need for systemic solutions that support pipeline growth, competitive compensation, and professional development pathways.

On the financial front, 2025 brought modest rate increases for Medicare Part A reimbursements under the new SNF prospective payment rules, providing operators some breathing room amid rising labor and supply costs.

Yet as payment reforms lag behind inflation and workforce expenses, many providers still find themselves balancing margin pressures with mission-critical care delivery — a dynamic expected to shape policy discussions well into 2026.

Regulatory pressure remained a defining force in 2025, with CMS continuing to refine quality, staffing, and reimbursement measures for skilled nursing facilities. Updated quality reporting requirements, ongoing evolution of value-based purchasing, and heightened scrutiny around staffing and survey outcomes pushed providers to strengthen compliance while maintaining operational flexibility.

At the same time, proposed staffing mandates and measurement changes sparked industry debate, highlighting the tension between regulatory intent and on-the-ground realities. Together, CMS policy signals reinforced a clear direction for the sector: accountability and quality remain non-negotiable, and data-driven performance is increasingly central to sustainability.

Across the business landscape, mergers, acquisitions, and disciplined consolidation were prominent. Operators sought scale to enhance operational efficiency, access capital, and expand service offerings. 

This period of strategic reshaping reflected broader trends in health-care investment — with well-positioned SNFs gaining value and underperforming facilities exploring creative exits or turnaround paths.

Amid these pressures, the industry accelerated adoption of digital tools and care-enabling technologies. From clinical decision support and EHR-linked workflows to remote monitoring and predictive analytics, technology played an increasing role in driving efficiency, enhancing outcomes, and supporting workforce effectiveness

For many operators, technology investments are no longer optional — they’re foundational to delivering consistent, high-quality care while managing rising costs.