Study finds the hospice industry has experienced turbulence
An analysis of hospices active in Medicare between 1999 and 2009 published in the June issue of Health Affairs is an attempt to shed some light on the degree of the changes transforming the industry and to point the industry in the direction it should be focusing on.
The study, supported by a grant from the National Cancer Institute, found the hospice industry in the United States has gone through substantial change.
[See also: Concerns raised about increase in for-profit hospice care.]
Among the most marked changes found in the study is the shift from nonprofit dominance in the industry to for-profit. Of the 2,225 hospices in 1999 participating in Medicare, 1,381 (62 percent) were nonprofits. A decade later, 52 percent (1,741) of the 3,342 hospices active in Medicare in 2009 were for-profit while 35 percent (1,161) were nonprofit. Of the hospices that began participating in Medicare between 2000 and 2009, 80 percent (1,371) were for-profit.
The study also noted that
• staffs in hospices were larger in 2009 than in 1999 with the number of hospices with 100 or more full-time employees doubling;
• the number of freestanding hospices increased by nearly 250 percent between 1999 and 2009;
• one-fifth of hospices active in 1999 had closed or terminated their Medicare participation by 2009; and
• of those hospices that remained active between 1999 and 2009, 44 percent had changed ownership type – generally moving from nonprofit status to for-profit.
"Questions that always arise are: Why would the for-profits come into this sector? What is it about it that is attractive to a for-profit industry and then what's the impact of that?" said Elizabeth Bradley, PhD, one of the authors of the study and a professor of public health at Yale University.
While the study's scope doesn't answer those questions, Bradley said, she thinks for-profits are interested in the hospice industry because they see an opportunity to gain market share and make profits as the demand for hospice services increases with the aging population.
Don Schumacher, president and CEO of the National Hospice and Palliative Care Organization (NHPCO), a nonprofit member group, agrees, and doesn't see the turbulence noted in the study as necessarily a negative.
"It's a part of what happens in all sectors of healthcare and that is when there is an opportunity, I guess, for there to be growth and change and an opportunity for healthcare dollars to be expended and made, the industry goes through transition," he said.
The thing the industry needs to be concerned about and aware of is whether in that transition the stakeholders are being responsible and are willing to be held accountable, Schumacher said.
The industry is largely unregulated and that is cause for concern, he said, and not necessarily because of tax-status. "It's because (of) the turbulence in the field and the number of new providers that are coming in," he said.
While most industries want less government oversight, the hospice industry is pushing Congress for more in the area of surveillance, he noted. Legislation was introduced last year that would require hospices to be surveyed by Medicare every three years.
"If new providers are coming in and they don't have the history and they're not being surveyed (by Medicare)," Schumacher said, "my goodness, there's all kinds of potential for things to go wrong."
