After several years of unpredictable cost swings and pandemic-driven volatility, Maryland’s skilled nursing facilities are entering a period of relative stability — but not without continued financial pressure.
In this article, we’ll take a detailed look at how costs have shifted, what’s driving those changes and where facilities are finding relief.
For the first time since 2020, the cost of caring for residents appears to be leveling out. In 2024, the industry’s total cost per patient day (PPD) rose just 1.08%, from $361.42 to $365.32. This is a modest increase compared to the 3.93% jump in 2023 and well below the national inflation rate of 2.9%.
This moderation signals that facilities are beginning to regain control of their budgets after years of pandemic-related inflation, supply chain disruption and staffing shortages.
Even so, the pre-pandemic trend tells a different story: since 2019, the average total cost per patient day has risen $75.33, a 26% increase. Those higher costs are being driven by many of the same factors facilities have battled for years — personnel, insurance and benefits, and capital improvements, not just the pandemic.
Although pandemic-era expenses like COVID testing and PPE have finally stabilized, other costs are proving stickier.
Among the biggest drivers of 2024’s cost increases:
Inflation’s influence is still being felt, even at lower rates. Compared to the 1.24% average in 2020, 2024’s 2.9% inflation has left a lingering mark on operating budgets.
While costs rose across nearly all regions, Central Maryland continues to be the most expensive area to operate a skilled nursing facility. The region’s total cost per patient day was $372.81 PPD, despite being the only region to report a slight decrease of $3.39 PPD from 2023.
The Baltimore Metro region followed closely at $372.48 PPD, while Western Maryland saw the lowest average cost at $356.95 PPD.
Looking at the five-year trend:
Why are facilities in the Washington Metro region faring better? The data suggests more efficient resource management and possibly stronger economies of scale in that region.
Smaller facilities continue to shoulder higher per-resident costs, largely due to fixed overhead expenses spread across fewer beds.
In 2024:
In reviewing years’ worth of data from Maryland cost reports, we’ve found that the ideal bed size for a skilled nursing facility continues to hover around 120 beds. Facilities within that range tend to balance staffing, efficiency and care quality most effectively.
From 2020 to 2024, the largest facilities (200+ beds) experienced the largest cost increase — up $52.49 PPD — followed by facilities with 45-99 beds ($45.65 PPD). By contrast, facilities with 1-44 beds saw the smallest increase ($17.96 PPD) in costs.
When it comes to overall spending, nonprofit facilities continue to outpace their for-profit peers. In 2024:
This cost disparity reflects nonprofit facilities’ ability to fund enhanced staffing ratios and resident amenities through charitable contributions and endowments. Over the past five years, nonprofits have seen an $88.75 increase in cost per patient day, compared to $74.30 PPD for for-profits.
The data points to a cautiously optimistic outlook. Costs are stabilizing, inflation is cooling and many facilities are regaining operational footing. But the financial burden remains heavy — particularly for smaller and nonprofit providers.
Facilities should continue monitoring their cost structures closely, benchmarking against similar providers and planning strategically for potential shifts in Medicaid and Medicare funding.
For a detailed look at how your facility compares to others across Maryland, request your facility’s scorecard from our Healthcare Group.
Our annual benchmark report for skilled nursing facilities in Maryland includes a breakdown of data in multiple cost areas, broken down by industry, region, facility size and type.
Contact us online or call 800.899.4623.