2024 was a year of transformation for the care services industry. From significant debates around CMS mandates to the rapid adoption of AI and mounting pressures from the capital market, operators in both acute and post-acute care faced an environment of constant change. These challenges underscored one undeniable truth: Adaptability isn’t just a strategy; it’s a necessity.
Looking ahead to 2025, the stakes are even higher. New policy shifts, workforce dynamics and growing demands tied to the aging population will force operators to rethink how they deliver care and manage resources. At the same time, there are many opportunities for those ready to embrace technology thoughtfully, strengthen their financial foundations and prepare for the unexpected — whether it’s a natural disaster, a cybersecurity breach or an evolving regulatory landscape.
Drawing on my experience in the care industry, I’ve learned that turning challenges into opportunities requires a forward-looking mindset and practical strategies. Here are insights into the key trends shaping our industry, from navigating policy changes and maximizing the potential of AI to building resilience for the future. My goal is to empower operators to lead confidently into 2025 and beyond.
Policy shifts post-2024 election
The results of the 2024 election signal potential policy changes with the new administration that could significantly impact the entire industry. Chief among these is the CMS staffing mandate. Though designed to ensure consistent workforce levels in nursing facilities, many in the industry felt the mandated levels would be challenging to attain, and it may be scaled back or even scrapped under the Trump administration. While that would be a welcomed relief for most, the original underlying intent of the policy remains an issue to tackle.
Other potential shifts include changes to Medicaid funding or reimbursement models, which could influence how facilities manage financial planning.
Operators must prepare for these changes before the new administration takes office. Staying connected with industry associations will be crucial for understanding evolving regulatory priorities. Diversifying workforce strategies, including leveraging PRN models and technology solutions, and bolstering efforts to attract and retain talent are steps operators can take now to mitigate potential disruptions. This proactive approach ensures that facilities remain agile and ready to navigate an evolving policy landscape.
Capital market constraints
The capital market continues to tighten, creating significant challenges for care facilities. Rising operational costs and declining reimbursement rates are putting pressure on budgets. From 2019 to 2022, hospital expenses rose by 17.5%, driven by inflation, workforce shortages, and supply chain disruptions (AHA). This financial strain is particularly severe in post-acute care, where providers often operate with narrow margins. As traditional funding sources become less accessible, facilities must find creative ways to maintain operations and invest in growth.
One strategy gaining traction is public-private partnerships. By collaborating with governmental or private entities, operators can access funds for infrastructure projects or service expansion without the need to shoulder the full financial burden alone. Similarly, facilities are exploring alternative financing mechanisms such as long-term leasing agreements or tapping into grants specifically designed for aging-infrastructure improvements. These approaches allow operators to bridge funding gaps while meeting the needs of their communities.
Efficiency has become a critical lever for financial sustainability. Facilities are increasingly adopting energy-efficient technologies and systems that reduce operational costs over time. For example, upgrading HVAC systems or implementing sustainable energy sources can significantly cut utility bills while appealing to environmentally conscious stakeholders. By combining strategic investments with operational cost-saving measures, facilities can navigate today’s challenging capital market while positioning themselves for a more stable financial future.
Silver Tsunami
The “Silver Tsunami” is no longer a future trend—it’s a present-day reality reshaping the healthcare landscape. By 2034, the U.S. population aged 65 and older is projected to outnumber those under 18 (U.S. Census Bureau), a demographic milestone that brings both opportunities and challenges. This aging population has already begun to strain resources, particularly in long-term care and skilled nursing facilities, where bed availability is often outpaced by demand. The need for care is further compounded by a projected requirement for 3.5 million additional long-term care workers by 2030 (AHCA).
For facilities, adapting to this demographic shift means prioritizing both capacity and innovation. Expanding bed capacity is critical, but so is rethinking service models to cater to older adults’ needs. Aging-in-place infrastructure, such as home health programs and telehealth services, has become increasingly popular, allowing seniors to receive care in their homes without overburdening traditional facility-based settings. Specialized programs for memory care, chronic disease management and rehabilitative therapies also address the unique requirements of this growing population segment.
The Silver Tsunami also presents a significant opportunity for operators willing to innovate. By positioning their facilities as leaders in elder care, operators can build trust with patients and families while securing long-term growth. This requires strategic investments in technology and workforce training, as well as partnerships with community organizations to create integrated care networks. Proactive planning will enable facilities to navigate these demographic changes effectively while meeting the needs of an aging population.
Value-based care reimbursements
The healthcare industry is experiencing a significant shift toward value-based care (VBC) models, moving away from traditional fee-for-service structures. This transition emphasizes patient outcomes and quality of care, rewarding providers for managing populations effectively rather than for the volume of services rendered. In 2022, nearly 70% of Medicare Advantage enrollees opted for VBC providers (Holland & Knight), signaling the growing patient interest in these models.
For facility operators, adapting to these new reimbursement structures requires a strategic approach. Implementing data analytics to monitor patient outcomes and identify areas for improvement is essential. Collaborating with payers to develop mutually beneficial value-based contracts can also facilitate smoother transitions. Additionally, investing in training to align care delivery with VBC principles ensures that the entire organization is prepared for this paradigm shift.
The benefits of embracing VBC are multifaceted. Facilities that successfully implement these models often see improved patient satisfaction, better health outcomes and more efficient use of resources. As payers increasingly favor VBC arrangements, facilities positioned to deliver high-quality, cost-effective care are likely to experience financial advantages. By proactively engaging with VBC models, operators can enhance care delivery while securing their financial future.
Strengthening preparedness for pandemics and extreme weather events
The COVID-19 pandemic and recent extreme weather events have underscored the critical need for healthcare facilities to bolster their preparedness strategies. Building resilience in medical supply chains and facility operations is paramount to ensuring continuity of care during crises. The global trend of rising temperatures made 2023 the warmest year since systematic measurements began in 1850 (NCEI), posing significant health risks and imposing substantial economic burdens.
To enhance preparedness, facilities should develop comprehensive emergency response plans that address various scenarios, including pandemics and natural disasters. Establishing relationships with multiple suppliers can mitigate risks associated with supply chain disruptions. Investing in infrastructure improvements, such as backup power systems and flood defenses, can also protect operations during extreme weather events.
Providing training in emergency protocols and conducting regular drills are essential components of a robust preparedness strategy. Engaging with local and state emergency management agencies can provide additional support and resources. By taking these proactive steps, healthcare facilities can better navigate future health crises and environmental challenges, ensuring the safety and well-being of both patients and the workforce.
2025 is not without its hurdles, but it is also a year brimming with opportunity
In part two, we'll explore additional strategies for succeeding in the year ahead.
About Brandon Tappan
Brandon Tappan, ShiftKey's CRO, has deep industry knowledge and experience in post-acute care that gives him a unique perspective as one of ShiftKey's senior executives. Prior to joining, he led growth and operations for multi-facility/multi-state organizations in the post-acute space. Brandon is a licensed nursing facility administrator and is a sought after expert on workforce strategies. He served on the Texas Health Care Association Board for five years and often advises on innovative strategies for issues impacting care facilities.
