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

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