Hospice Is Now a $17 Billion Business

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The majority of hospices are now owned by for-profit companies.

Hospice has provided end-of-life care in the U.S. since 1974. While volunteers were paramount in the early days of hospice, it has now evolved into a $17 billion industry, dominated by for-profit corporations.

Fran Smith, author of “Changing the Way We Die,” a book about hospice care, discussed the rapid growth in hospice and the cultural changes the program has experienced with Marketplace.org. Smith said:

[Hospice] started off 40 years ago in this country … as a grass-roots cause, all nonprofit. And increasingly it’s a for-profit venture. More than half of Hospice programs are run by for-profit companies, more and more big, publicly traded chains.

Statistics from the National Hospice and Palliative Care Organization confirm Smith’s assertion.

The number of for-profit Medicare-certified hospice providers has been steadily increasing over the past several years. In contrast, the number of Medicare-certified not-for-profit or government providers has begun to decline over the same period.

Smith describes hospice as the most successful segment of the health care industry. About 44 percent of the 2.5 million people who die in the U.S. each year do so in hospice care.

So big bucks are up for grabs, which is likely why so many for-profit businesses are getting in on the action. One such company is Chemed Corp., which owns Roto-Rooter and Vitas – the largest hospice chain in the country.

Smith said hospice is a business venture that’s paying off.

They’re making a lot of money. And there’s a lot of concern about the way for-profits are making money. There’s pretty good research evidence that shows that for-profits tend to cherry-pick the most profitable patients, which tend to be patients with dementia, Alzheimer’s, patients who will stay on hospice care a long time.

The Medicare Payment Advisory Commission or MedPAC said patients at for-profit hospices do in fact experience longer stays – an average of 102 days, compared with 69 days at nonprofit hospices.

Moneymaking aside, hospice allows patients to die in comfort at home or another familiar location. It’s that comfort that keeps hospice a popular choice for end-of-life care, Smith said:

People don’t want to die in hospitals, don’t want to die in intensive care units. And for people who want to die at home in comfort, hospice is the best way to go.

Were you surprised to learn that many hospices are owned by for-profit corporations?

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