Companies in this industry provide long-term skilled nursing care, other types of care, and social services in residential facilities. Major US companies include Brookdale Senior Living, Golden Living (owned by GGNSC Holdings), HCR Manor Care, and Kindred Healthcare (all based in the US), along with Bupa (UK), ExtendiCare (Canada), Korian (France), and Orpea (France).
Internationally, demand for nursing homes and assisted living services is growing along with the number of elderly people. While the number of nursing facilities varies by region, a growing number of countries -- particularly those with some form of national health insurance -- are experiencing an increase in demand for long-term care options for their aging and infirm citizens.
The US nursing homes and long-term care facilities industry includes about 85,000 establishments (single-location companies and branches of multi-location companies) with combined annual revenue of about $225 billion.
Demand for nursing care is linked to the demographics of the US population. The profitability of individual nursing facilities depends on efficient operations, as revenue per patient is largely controlled by the big government insurance programs (Medicare and Medicaid). Large companies have some economies of scale in administration and purchasing, but small operators can compete effectively by offering better service. The US industry is fragmented: the 50 largest companies account for about 20% of revenue.
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The industry includes skilled nursing facilities for recovery from acute or chronic medical conditions (about 55% of US revenue),...