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A 3G Healthcare Real Estate analysis found that nursing homes where agencies supplied at least 15% of nursing hours had a Medicare ownership change within two years 11.8% of the time, compared with 7.5% at buildings below 2%. The report describes agency use as a screening signal for operational pressure, not a prediction that a facility will be sold. The analysis does not establish that agency staffing causes ownership changes.
Nursing homes relying heavily on agency staff were more likely to have a Medicare change of ownership within two years, according to a report from 3G Healthcare Real Estate. The analysis found a change in 11.8% of buildings that obtained at least 15% of nursing hours from agencies, compared with 7.5% of buildings below 2%—a relationship the report calls a screening signal, not a forecast of a sale.
The figures are based on 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, can mean a change in who holds a facility’s license; it does not necessarily mean the real estate was sold.
Klos said facilities with heavy agency use also had more citations and higher staff turnover, even when their occupancy levels were similar. He characterized the pressure as a labor and cost problem rather than a census problem. The report does not establish that agency staffing causes a later ownership change.
The association varied by market. 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. He cautioned that high agency use is not a reliable prediction for an individual facility and can reflect different conditions, including vacancies, staff reliability or planned flexible staffing.
Staffing Costs Can Shape a Sale
Agency labor can affect a nursing home’s operating costs and cash flow, making it relevant to prospective buyers and lenders weighing whether a facility can remain financially viable after a transition. Thomas Miller, chief executive of staffing company Meda Health, said buyers may view high agency costs as a chance to reduce expenses after closing. He cited data showing some high-use buildings dropping from 28% agency hours to 17% in the first year after a sale, but the source does not specify how many buildings that figure covers.
Miller said a headline staffing ratio does not explain why agency workers are needed. A buyer’s review should distinguish persistent vacancies from reliability problems or deliberate use of flexible labor. Cutting agency staff before replacement workers are ready can lead operators to hire agency workers again at crisis rates, he said. Agency reliance in leadership roles, including the director of nursing, is a particular concern for lenders, according to Miller.
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Agency Use After the Pandemic
The report places its findings against a national rise and subsequent decline in agency staffing. Klos said agency hours grew from 3% in early 2019 to 10.52% in late 2022, then fell to 5.31% in the latest financial quarter covered by his analysis. He said that level remained above the pre-pandemic figure.
Miller attributed the decline to more workers returning to the field, employers improving wages and benefits, and more disciplined staffing by operators. He also said the removal of federal staffing minimums ended one source of demand for agency labor. Separately, he cited a travel-nurse industry survey showing gross agency margins falling from 25% before the pandemic to just under 20% in 2025. These figures describe broader industry conditions; they do not show what caused the ownership changes in the report.
““[High agency use] is a screening signal, not a forecast, and it changes a lot by market.””
— Stan Klos III, founder of 3G Healthcare Real Estate
What the Link Cannot Establish
The report describes an association between agency hours and ownership changes, but the supplied findings do not establish cause and effect. The figures also do not explain why individual facilities used agency staff or changed ownership. A CHOW can involve a license-holder change without a property sale, so the reported rate should not be read as a sale rate.
The analysis does not provide the total number of buildings studied, confidence intervals or a breakdown of all state-level results. It is also unclear from the published material how the findings account for differences among facilities beyond the comparisons cited. Klos said states have not used building-level agency figures in licensing or ownership approvals, though states publish agency data and some regulate staffing agencies through registration rules or rate caps.
Watch Labor Plans in Transactions
The report points buyers and lenders toward facility-level staffing records and a credible plan for retaining workers after a transaction. Miller said workforce reliability can affect survey results, occupancy and operating margins, and that a building can still rely on agency staff every weekend despite appearing staffed on paper.
Agency hours may remain a useful indicator to monitor as post-acute care demand and workforce supply change, Miller said. The source material does not identify a scheduled policy decision, additional report or next publication date. Whether the association holds across more markets and over time remains to be seen.
Key Questions
What does a nursing home change of ownership mean?
A change of ownership (CHOW) is a change in who holds the facility’s license. It does not always involve a sale of the building’s real estate.
How did agency use relate to ownership changes?
According to the 3G Healthcare Real Estate report, buildings where agencies provided at least 15% of nursing hours had a Medicare ownership change within two years 11.8% of the time. The rate was 7.5% at buildings below 2% agency hours.
Does heavy agency staffing mean a home will be sold?
No. Klos described agency use as a screening signal, not a forecast. The report found an association and does not show that high agency use causes a sale or ownership change.
Why might buyers examine agency staffing?
Agency costs can affect operating cash flow, and buyers may need to understand whether reliance reflects vacancies, staff reliability or planned flexible coverage. Miller said a transition plan should account for the reason agency workers are being used.
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