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A report by 3G Healthcare Real Estate found that nursing homes with at least 15% of nursing hours supplied by agencies had a higher rate of Medicare ownership changes within two years than facilities below 2%. The report describes agency use as a screening signal, not a forecast, and says the relationship varies by market.
A report from 3G Healthcare Real Estate found that nursing homes relying more heavily on agency nurses had a higher rate of Medicare ownership changes within two years than facilities with low agency use. The findings point to staffing costs and workforce pressure as possible signals for buyers and lenders, but the report does not say agency use predicts that a facility will be sold.
Facilities that obtained 15% or more of nursing hours from agencies had a Medicare change of ownership within two years in 11.8% of cases, according to the analysis. Among buildings where agencies supplied less than 2% of nursing hours, the corresponding rate was 7.5%. The figures were drawn from building-level payroll filings with the Centers for Medicare and Medicaid Services, said Stan Klos III, founder of 3G Healthcare Real Estate.
A change of ownership, or CHOW, does not necessarily mean a real estate sale. The term can refer to a change in the entity holding a facility’s license. The report compared publicly available federal datasets and found an association between agency staffing and CHOWs; it does not establish that agency use causes an ownership change.
Klos said facilities with heavy agency use also tend to have more citations and higher staff turnover, even when occupancy is similar. The report’s analysis suggests the staffing pattern may reflect labor and cost pressure rather than weak census. However, the supplied report does not provide a full account of the methods or controls used to separate agency use from other factors that may affect ownership changes.
Staffing Costs Matter to Buyers
The findings may help prospective buyers and lenders identify operational risks that occupancy figures alone can miss. Agency labor can raise costs and make staffing less predictable, while a facility may still appear well occupied or perform reasonably on other measures. That combination can matter when a buyer evaluates a facility’s ability to maintain staffing and meet expenses after a transaction.
Thomas Miller, chief executive of staffing company Meda Health, said buyers may view high agency costs as an opportunity to reduce expenses after a purchase. But he also cautioned that cutting agency shifts before replacement workers are in place can create a staffing gap, forcing operators to buy agency labor again at short notice and potentially higher rates. Workforce reliability, including retention and weekend coverage, can shape a facility’s finances and care operations after an ownership change.
The report is not a rule for judging any individual home. Agency use can reflect different circumstances, such as vacancies, staff reliability or the need for flexible coverage. Buyers need to understand why the agency hours are being used, rather than treating one staffing measure as a complete account of a facility’s condition.
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Agency Use Since 2019
Klos said agency use rose from 3% in early 2019 to 10.52% in late 2022, then fell to 5.31% in the latest financial quarter cited in the report. The measure remains above its pre-pandemic level. The source does not specify the exact dates covered by that latest quarter.
Miller attributed the decline to more workers returning to the field, employers narrowing the pay gap between agency and direct employment, and more disciplined staffing practices. He also said the repeal of federal nursing-home staffing minimums removed a potential source of demand for additional agency workers. The report describes a broader sector adjustment: a travel-nurse industry survey cited by Miller put gross agency margins below 20% in 2025, down from 25% before the pandemic.
State health departments publish agency data, Klos said, but he argued staffing star ratings should distinguish temporary agency workers from permanent staff. He said some states have imposed agency registration requirements or rate caps, while he had not found states using a facility’s agency-use figure in licensing or ownership approvals.
“Using more agency labor is the first thing an operator does when the schedule breaks.”
— Stan Klos III, founder of 3G Healthcare Real Estate
What the Association Cannot Show
The reported rates show a relationship between agency use and CHOWs, but they do not show that agency staffing caused a change in ownership or that a specific home is likely to be sold. A CHOW can involve a licensing change without a property sale, and high agency use may arise from several distinct staffing conditions.
The report says the relationship varies by location. In North Carolina and Pennsylvania, Klos said, heavy agency users changed hands at rates two to three times those of operators using agency staff sparingly. The source does not give the underlying state-level counts or time periods for those comparisons. It also does not identify which facilities may change ownership next or establish whether the findings apply uniformly across the country.
It remains unclear whether regulators will use agency staffing data in licensing or ownership reviews. Klos said he had not found a state doing so, while Miller suggested that workforce pressures could make agency hours a more closely watched indicator.
What Buyers Should Examine
For a buyer considering a nursing home, the report points to a need to examine agency hours alongside the reasons behind them: vacancies, retention problems, scheduling gaps or deliberate use of temporary staff for flexibility. Miller said buyers and lenders should assess whether there is a credible labor plan, including how staffing would be maintained after a transaction.
The report does not announce a new regulatory measure or a scheduled follow-up analysis. The next developments to watch are whether agency use continues to fall or levels off, how staffing conditions affect individual ownership changes, and whether states incorporate more detailed distinctions between temporary and permanent staffing in public reporting. Any broader conclusion will depend on further data and the conditions in each market.
Key Questions
What did the report find?
Facilities with 15% or more of nursing hours from agencies had a 11.8% rate of Medicare change of ownership within two years. Facilities below 2% agency hours had a 7.5% rate, according to the 3G Healthcare Real Estate analysis.
Does a change of ownership mean a nursing home was sold?
No. A CHOW can refer to a change in the entity holding a facility’s license and does not always involve a real estate sale.
Does high agency use mean a home will change owners?
No. Klos called agency use a screening signal, not a forecast. The analysis found an association and does not establish that agency staffing causes a change of ownership or predicts what will happen at a particular facility.
Why do buyers look at agency staffing?
Agency hours can affect labor costs and reveal staffing pressures that occupancy figures may not show. Buyers also need to find out why agency workers are being used and whether a workable staffing plan exists after the transaction.
Source: rss
