Does Rising Use of Hospice Care Reflect Need or Business Opportunity?

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October 29, 2011; Orlando Sentinel | According to this article from the Orlando Sentinel, hospice costs have risen quite a bit in the past few years—more, perhaps, than might be accounted for by a growing population of elders. In fact, Medicaid funding for hospice care has increased by $1 billion/year since 1998 to $12.1 billion in 2009, the last year for which statistics are available.

Some appear to believe that this growth has more to do with for-profits getting into the business of hospice care than with an increase of the population actually in need of these specialized services. NPQ reported previously on this concern in February in a newswire reporting on a study in the Journal of the American Medical Association showing that for-profit hospice care providers generally serve patients who will stay longer and need less care than nonprofits in the same field.

This article in the Sentinel states that the population of those on Medicaid opting for hospice care only doubled between 1997 and 2007; yet it appears that the rate of Medicaid reimbursement has increased more than tenfold. Hospice care was originally conceived as a way to lower “end of life” costs while providing a compassionate and humane setting. Some believe that the rapid expansion of the use of hospice care reflects a cynical move by for-profit nursing homes to declare longer and longer terms of end of life care—for instance in the case of Alzheimer’s treatment. In July, the federal office of the Inspector General issued a report that expressed concern about the increasing use of hospice funds for longer stays in nursing homes. The audit noted that nursing-home hospice patients tended to require less medical care and have longer stays, resulting in bigger profit margins.

For-profit hospices have a greater percentage of their patients in nursing homes, and are reimbursed an average of 29 percent more per patient.—Ruth McCambridge      

  • Peter Hudson

    This one issue is generalizable to the total health care system; namely that the for profit motive in health care is dangerous.It is certainly instructive to the citizens of the USA where much of health care is both privately financed and privately delivered, while at the same time an important public component (i.e. Medicare and Medicaide) faces enormous inflationary pressures, largely because it is delivered through for-profit corporations as in this case of hospice care. In Canada, contrary to the allegations of those who opposed the Obama reforms, problems associated with the health care system do not result from an over-reliance on publicly funded and publicly delivered care, but rather an over-reliance on for-profit care. About 30% of the system is privately delivered and funded. There is no national pharmacare program, for example, and provincial, tax-supported plans provide only partial coverage. Delivery is of course in the hands of the drug companies. This is the fastest rising cost within the health care system. Laboratory services are covered by pubic plans, but they too are largely delivered by a handful of for-profit corporations. The cost of these services has also risen dramatically in the past 30 years.

  • Alan Cato MD

    After my retirement, in 2010, I authored a book intended on saving na