For-profits are taking over Hospices as well as Nursing Homes

gpawelski · January 2009

The for-profits are taking over hospices the same way they have taken over nursing homes. The Kaiser Network noted that hospice care was designed to be delivered mainly by not-for-profit groups with affiliations to religious and community groups, but the June 2008 MedPAC report found that since 2000 mostly for-profit companies and hospices have been providing such care.

Manor Care operates hospice under their for-profit nursing homes as Heartland Hospice Care. On top of receiving an additional $130 a day for hospice service, above the daily payment they receive providing nursing home care, they take donations to their Heartland Hospice Fund.

For-profit hospices, like for-profit nursing homes are run by corporations the are coldly efficient, according to a leading palliative care specialist. If there is a way to play the system to make a higher profit, they will. Nursing home residents are already receiving 24/7 care. The hospice service is an additional $130 a day the home receives.

In their quest for Medicare dollars, for-profit hospices don't provide all the care that they should in order to fulfill the hospice mission of maximizing patients' quality of life.

In fact, a 2004 Medical Care study of 2,080 patients enrolled in 422 hospices across the country found that terminally ill patients who receive end-of-life care from for-profit hospice providers receive a full range of services only half the time compared with patients treated by nonprofit hospice organizations.

That's because for-profit hospices like to keep costs low by skimping on services, particularly so-called "non-core" services like medications and personal care. For example, families of patients receiving care from a for-profit hospice received counseling services, including bereavement counseling, only (45% as often) as those in a nonprofit hospice.

When researchers controlled for differences across patients, sicknesses, and conditions, those at for-profit hospices were only half as likely to get the same support provided at nonprofit hospices. A 2005 follow-up study confirmed that for-profit patients receive a narrower range of services than nonprofit patients.

But it's not just "non-core" services that for-profit hospices are skimping on. For-profit hospices are only half as likely as nonprofits to provide palliative radiotherapy (RPT), a radiation therapy that has been shown to effectively reduce pain and other symptoms related to tumor growth.

The dearth of for-profit RPT probably has a lot to do with the fact that for-profit hospices take on a smaller share of patients with cancer than do nonprofits-in part because it costs a lot to care for cancer. In addition, it's much easier to predict how soon cancer patients will die. They rarely stay in a hospice for more than six months.

Indeed, for-profit hospices tend to "cream-skim" patients, both by taking on fewer cancer patients and having a greater share of patients who require a relatively long stay (In this regard, MedPAC's fears are warranted).

Worse still, according to research from the University of California, Irvine, patients who stay longer at for-profit hospices receive less high-skilled nursing care-such as tracheotomy care, wound care, and suctioning or feeding tubes-because skimping on these services keeps costs down. In sum, research shows that patients stay longer at for-profit hospices, yet receive less personal care, symptoms management and spiritual support during their stay.

This is a pretty good way to make money, and indeed, the largest for-profit hospices are doing very well: a 2005 studyin the Journal of Palliative Medicine found that large hospices owned by publicly traded companies generate profit margins nine times higher than those of large nonprofits and three times higher than privately owned for-profit hospices of similar size. In other words the "corporatization" of nursing homes seems to be a major part of the problem.

Among them are VITAS, the country's largest for-profit, publicly-owned hospice, which cares for more than 11,000 patients in 16 states; the publicly-owned Odyssey Healthcare and Vista care and the private Heartland Hospice, which is a division of HCR Manor Care.

Back in 2007, the major private equity firm The Carlyle Group bought up Manor Care for $6.3 billion. A New York Times story covering the privatization of elderly care noted that large nursing home chains owned by an investment company in 2005 earned $1,700 a resident and were, on average 41% more profitable than the average facility.

Like for-profit hospices, these nursing homes cut services in order to reduce costs, but the health care industry isn't like other industries. What may count as "efficiencies" in other fields - reduced labor costs, more streamlined services, etc - compromise the quality of health care to such an extent that patients die. There's just no way around it, health care is labor intensive.

What's so frightening about the case of for-profit hospices in particular is that cutting corners undermines the whole mission of hospice care. For-profit hospices risk losing sight of the fundamental principles of hospice because they are not doing all they can to support and comfort patients and families during the final stages of life.

There's really no way to do a half-way job with hospice care. You're either doing everything you can to make dying people and their families feel better, or you're not. This is not a calculus that comes down to dollars.

More and more, it looks like the business plan of for-profit hospices is to provide relatively minimal care to people who will take a long time to die. If ever there were a strategy antithetical to the principles of hospice, this is it.

Source: Health Beat

http://community.breastcancer.org/forum/73/topic/724340

anianiau · January 2009

You've put together a good deal of important information. Thanks for your effort. I will look much more carefully at any hospice provider before enrolling myself or a family member when hospice care is the appropriate choice.

gpawelski · January 2009

It has been more than five years since I had to place both my parents into a long-term nursing facility. My father expired before the end of 2003, and my mother still barely survives to this day at one. I say barely survives because our nursing facilities seem not to really care (Administrators) for our elderly and infirmed people, we tend to warehouse them. It's a shame.

We need to convince the new 111th Congress to reintroduce the Nursing Home Transparency and Improvement Act, and make sure that it is as strong and effective as possible, including offering and supporting amendments, like mandatroy staffing levels, to improve the bill.

We haven't had any meaningful nursing home (which includes institutional hospice services) for over twenty years. We owe it to our loved-ones to make sure they receive the care and attention they deserve. Overall quality in health care is a direct reflection of what is willing to be spent, however, it's what they're willing to spend those dollars on that matters most.

sercsw · February 2009

I must point out that the articles mentioned are targeting hospices that operate mostly in nursing homes; I know that different states have different regs that guide hospices and how they function. But ALL hospices must follow federal Medicare regs, which were just updated. These regs are strict, not debatable and highly enforced. Hospices of all revenue streams are highly regulated, audited and fined for infractions. I have been working in hospice in several states over the past 35 years, both not for profit and for profit. Clinically, there is NO difference in care. If the patient or family chooses hospice in a nursing home than that's what you get; if the facility is poorly run, hospice has nothing to do with that. Hospice contracts with the NH's to come and provide hospice care. Hospice on the most part is a type of home care but if you reside in a nursing home the services are essentially the same as home care i.e. one on one aide several hours a day, RN who visits 1-2 times a week to suggest treatments for comfort, a social worker and chaplain for support, etc.. The difference is the patient must pay the room and board portion of the nh and hospice provides "case management" for the palliative care/end of life care. Not all hospices own nursing homes and in fact most don't. The misconception lies in how the hospices are funded. In a not for profit they can do fund raising, take donations and apply for financial grants. For profits cannot do any of those things. If Medicare reimburses hospice $130/day to a NH resident recieving hospice, but hospice supplies the medical supplies, equipment, meds and staff $130/day doesn't nearly cover the costs of care. Hospice is reimbursed $130/day not the NH. Trust me, I know. A not for profit I worked for was part of a very large hosoital system and had a yearly budget over 20 million a year! They had a very large, wealthy donation base and were always in the black. The 2 for profits I worked for struggled to keep their heads above water. But they provided excellent clinical care, including radiation, etc. So, reading about laws, regs, the business of nursing homes etc. doesn't really tell the real story. I love hospice work and am very passionate about it. It's not a rip off and we all work hard (clinically) to care for terminally ill patients and their families. But it is a business non the less whether not for profit or for profit. So please, there is more than one story here; Lets not throw out the baby with the bath water just because the wate is murky. Thanks for listening!!

gpawelski · February 2009

Sercsw. You bring up some very valid points and point out some of the differences between for-profit and not for-profit venues.

Hospice care was originally designed to be delivered mainly by not-for-profit groups, which unquestionably make a superior effort to make hospice care the envy of the health care.

The Medicare Payment Advisory Commission (MedPAC) approved a set of recommendations that would revise the current Medicare payment system for hospice care providers serving terminally ill patients. It was aimed at stopping for-profit hospices from purposefully keeping patients under their care for extended periods of time in order to bill Medicare for more days of service.

While not all hospices own nursing homes, a good deal of private for-profit nursing homes own hospices. As I pointed out above, these private for-profits are taking over hospices the same way they have taken over nursing homes.

Hospices are playing a bigger role in our health care system than ever before, and since 2000, mostly for-profit companies and hospices have been providing such care. The for-profits manage care based on price, not quality. Quality is significantly better, on average, at the not-for-profits.

I've pointed out the case where Manor Care (own by The Carlyle Group) operates hospice under their for-profit nursing homes as Heartland Hospice Group. For-profit hospices, like for-profit nursing homes are run by corporations that are coldly efficient. If there is a way to play the system to make a higher profit, they will.

MedPAC had been concerned that for-profit businesses have been driving growth in Medicare spending by targeting hospice patients who need relatively long periods of care. Their new payment system intends to remove incentives for long hospice stays (remember, we're talking about for-profit incentives here).

Hospices with longer lengths of stay are more profitable. Lengths of stay in a for-profit hospice is about 45% longer than the length of stay in a not-for-profit facility, according to a June 2008 MedPAC report, suggesting that there may in fact be evidence that for-profit hospices are prolonging the deaths of patients in order to rack up higher fees.

And because Medicare does not collect detailed data about the medical treatments a hospice patient receives, there is very little information about what services are actually being provided.

Paying hospices by the day probably may not be the best idea. Perhaps we should go back to the original idea: hospice care should be not-for-profit. The profit motive in for-profit healthcare always creates a conflict of interest. Should the company do what is best for its shareholders (more revenue, more profit), or what is best for the patient?

For-profits are taking over Hospices as well as Nursing Homes

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