Growth of for-profit hospices ripe for coverage

Joanne Kenen

About Joanne Kenen

Joanne Kenen, (@JoanneKenen) the health editor at Politico, is AHCJ’s topic leader on health reform and curates related material at healthjournalism.org. She welcomes questions and suggestions on health reform resources and tip sheets at joanne@healthjournalism.org.

Given the recent spate – some good, some pretty muddy, and one I think pretty eye-opening – of articles about the growth of for-profit hospices, it’s probably worth taking a look at the issue, particularly for those of you who live in communities (such as the south and west) where the for-profits are most dominant. I think it’s also important to note some of the context that some of these articles omitted. And, yes, there’s a health reform angle. Several, in fact.

MedPAC started looking into the for-profits several years ago, as the sector started growing very rapidly. It became clear that the Medicare hospice “caps” and penalties meant to discourage too many long stays weren’t working.  MedPAC  has made a number of payment recommendations, including one that would revamp how all hospices are paid (which would make long stays less profitable) and another focusing more narrowly on creating a separate payment scale for hospice care in nursing homes.

MedPAC advises Congress but doesn’t set policy. And Congress has not acted on the recommendations to date – except that it did include in the 2010 health reform law a requirement that HHS review (and gives it a pathway to revamp) the hospice payment system in 2013. In addition, hospice faces about $7 billion of Medicare payment reductions over a decade under the Affordable Care Act. On top of that is the 2 percent Medicare provider cuts that will be “triggered” next year now that the supercommittee failed to agree on an alternative deficit-reduction steps.

All that being said, the recent Bloomberg piece by Peter Waldman on sales and marketing tactics by the for-profit chains was a hefty piece of reporting. It documents things like “Summer Sizzle” promotions, “Christmas Cash Blitz” and “Fall Frenzy” admission drives. The focus was pretty squarely on the business and sales practices. That is an important issue (and I haven’t seen it as well reported elsewhere ). But for those of you who may want to write about hospice, it’s not the only issue.

If you write about the growth of for-profit hospices – and some communities are now dominated by them – a few things to keep in mind.

  • Don’t conflate quality and quantity. A flawed government payment system, and overly aggressive/inappropriate sales tactics (or even outright fraud) by some players isn’t always the same thing as a quality-of-care problem. A nursing home resident who ends up getting hospice care longer than he or she really should isn’t necessarily getting bad care – although they may well be getting care that Medicare shouldn’t be paying for.
  • There’s a difference between large publicly-traded, investor-owned hospice chains and smaller, local for-profit hospices, which can be quite mission-driven (and low margin.) A hospice’s tax status doesn’t automatically define whether it provides good or bad patient care. (Remember the ongoing debate about which nonprofit hospitals are really “non” profit).
  • Prognosis is really, really hard – particularly for the frail elderly nursing home population. It is hard to know whether a dementia patient is going to die within six months – even when there are some tell-tale danger signs of decline and deterioration. CMS did add some recertification and quality rules two or three years ago that are supposed refine the eligibility criteria – but they still aren’t a crystal ball.
  • Long hospice stays may be a poor use of taxpayer/Medicare money but potentially so are very short stays. If people are only in hospice a couple of days, that often means that they got very aggressive care – which usually means very costly care  until close to the end. That’s one thing if such care was what the patient/family chose. It’s another if the doctors never explained to the patient/family the likely prognosis, the likely outcome, the relative burdens and benefits of such care (and by “burdens” I don’t mean purely financial burdens). If Medicare paid for all that and then there is a mad dash for hospice to try to get pain and symptoms (physical and emotional) under control in the last few days, it’s neither good for Medicare’s bottom line nor does it give hospice the optimal circumstances for providing really good end-of-life care. Those last few days of life can be intensive for the hospice and a hospice with only very short-stay patients would be hard pressed to survive financially.
  • How would small community and rural hospitals survive under some of the new payment models being discussed? Would they close? Get swallowed up by big chains? Both – i.e., first get swallowed up and then be closed because they aren’t as profitable?
  • There have been several studies suggesting that patients who receive hospice care may live longer than similar terminally ill patients who do not. There was a whole spate of articles on this phenomenon back when Art Buchwald was dying – or rather when he was not dying. Most of the research I’m familiar with was on hospice care for specific cancers and heart diseases, not necessarily dementia, and not necessarily in the context of for profit hospice care for nursing home patients. But seriously ill people who get expert, interdisciplinary end-of-life care may bounce back, temporarily, and no longer fall in that six-month life expectancy category. If they really rebound, they should leave hospice care, as Buchwald did, with the right to resume it when the time comes.
  • When asking whether there’s “too much” hospice care in nursing homes – don’t forget to ask what happens when there is not enough. This is the one area where I thought the Bloomberg story was incomplete – or even slightly misleading – by quoting a physician in Kansas as saying there should “never” be hospice in nursing homes. There is a lot of data – in peer-reviewed journals and medical conferences produced by academics and palliative care experts and nonprofits, not by the “industry” – that pain is poorly controlled in nursing homes, that there is overtreatment (feeding tubes being a prime example) of late-stage dementia patients in nursing homes, and that nursing home patients who could benefit from hospice/palliative care are instead sent repeatedly – often via costly ambulance-to the hospital. I met one doctor who called this care model “Our Lady of Perpetual Hospitalization.” This is a piece of the readmission issue that the health care reform law aims to address. There’s no room here to go into the convoluted mismatched incentives regarding nursing home care, but suffice it to say the revolving door won’t stop without quality end-of-life care in nursing homes – and nursing homes are often surprisingly ill-equipped to provide quality end of life care. Accountable Care Organizations, advanced medical homes, home and community based alternatives to institutional care, all part of health reform, may play a role here in coming years but it’s not going to be an overnight change.
  • Hospice was not designed to be a substitute for, or side door to, Medicare-financed long-term care and it’s not the right way to pay for long-term care. Unfortunately, we don’t have a good way of paying for long-term care, nor for helping family caregivers.
  • I’ve heard some rumblings – and it’s not a story I’m in a position to chase right now but may be worth looking into locally – that some groups or individuals are starting small nonprofits, specifically to flip them fast in sales to the big chains and make a lot of money. The Bloomberg piece reported on the recent uptick in acquisition of nonprofits.
  • Joanne KenenJoanne Kenen (@JoanneKenen) is AHCJ’s health reform topic leader. If you have questions or suggestions for future resources, please send them to joanne@healthjournalism.org.

Finally, for now at least, remember that most hospice care takes place at home, with family members as caregivers. But not all terminally ill people have family members alive, or living nearby, or hale and hearty enough themselves to provide that care at home. For them, at least for some of them, the nursing home IS “home,” and that’s where they will access hospice.

Update: Just after I finished writing this blog post, Bloomberg and Kaiser Health News wrote about a big fraud case against a hospice chain based in Arkansas, and updated the status of other investigations.

One thought on “Growth of for-profit hospices ripe for coverage

  1. Dawn

    I am very glad to see that you covered both sides of these issues. I have worked for a very large for-profit hospice “chain” (over 100 offices), a small non-profit, and currently manage a small hospice (one of 10 offices). To me, my current position is the best of both worlds. The non-profit was able to get grants, have fund-raisers etc, therefore seemed to be more financially stable. They had more staff but most of it was within the office. The number of patient visits and care was not any better than the for-profit I work with currently. Regardless of these facts, the community seems to feel that they will get better care from a non-profit organization.

    Unfortunately length of stay will always be an issue. No one can predict time of death or know that the patient is definitely within a six month time frame, but it is imperative that physician’s think ahead and try to do so to the best of their ability. Why do they hesitate? Do they realize what hospice can do? Do they know they can still get paid for Care Plan Oversight? Are they afraid to have the hospice talk? Maybe they simply don’t want to give up on “fixing” the patient.

    Timing is so important! It is unusual that a patient is actually appropriate and showing decline if they are on service for 2 years, but it does happen. On the other hand, many patients are referred only days or hours before they pass away.

    So many people do not understand what hospice can do for these patients. The hospice community can be very beneficial to both the patient and their family in so many ways if given proper time to build a relationship.

    It is difficult to bond with someone you only know for a few days. Patients and/or families often do not trust the staff in such a short period of time. Who wants to share all of their medical issues with a nurse they just met? Who wants to tell their fears about death to a chaplain they don’t really know? Imagine how hard it is to tell a social worker that you only just met that you don’t have enough money for dinner? Or you haven’t spoken to your daughter in 10 years and that you really want to see her before you pass away.

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