The Business of DyingThe Corporatization of Hospice

Rob Stone MD FAAHPM All Souls Day, 2013

Woody Allen

“More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness.

The other, to total extinction. Let us pray we have the wisdom to choose correctly.”

Questions to Consider

• How are hospice services reimbursed, and therefore, how to game the system?

• How have for-profit entities changed the “hospice industry”?

• Are non-profit hospices any better?

In the Business of Dying: Questioning the Commercialization

of HospiceJoshua E. Perry and Robert C. Stone

“ In our society, some aspects of life are off-limits to commerce. We prohibit the selling of children and the buying of wives, juries, and kidneys. Tainted blood is an inevitable consequence of paying blood donors; even sophisticated laboratory tests cannot supplant the gift-giving relationship as a safeguard of the purity of blood. Like blood, health care is too precious, intimate, and corruptible to entrust to the market.”- Woolhandler and Himmelstein NEJM 1999journal of law, medicine & ethics cost and end-of-life care • summer 2011

Hospice Basics

• Reimbursed by Medicare and all others• 6 month life expectancy• Forgo life-prolonging treatments• Focus on comfort care and family support

Basics II

• Began in US in 70’s – volunteer/charity/community based

• Medicare benefit 1982• Transformation to for-profit in the 90’s (just

like the health insurance industry)• Over 50% of hospices now for-profit*• Medicare hospice spending $13 billion*

*MedPAC 2010

Hospice: Capitation Lives

• Hospice assumes (almost) the total cost of care of the dying patient

• Reimbursed on per diem• Costs are high at admission and death, low

in between

Hospice: Capitalism Lives

• Recruiting patients who live long pays well (for-profit LOS 45% > than non-profit*)

• High patient/staff ratios are profitable• Nursing home patients fit both criteria• Pizza and pens give way to:“House brand” hospice – , part of SNF chain

*MedPAC 2008

Office of Public Affairs FOR IMMEDIATE RELEASETuesday, January 3, 2012

US Files Complaint Against National Chain of Hospice Providers Alleging False Claims on the Medicare Program“For-profit hospice companies like AseraCare are entitled to receive Medicare dollars only for Medicare recipients who are terminally ill.”

Hospice is a Profit Center

#2, Market Cap 366M market share 4.6%Includes VistaCare and Odyssey Hospice

= VITAS #1, 4.9% market share

HealthCare Partners = = Healthcare Partners Community Hospice

Purchase price > $400 million. Gentiva becomes the “preferred hospice provider” for 49 Texas nursing homes.

AAHPM Board of Directors

AAHPM Board of Directors

VITAS

GentivaGentiva

VistaCareHCP/Davita

?

Peter Brunnick, CEO, Hospice & Palliative Care Charlotte Region

Charlotte Business Journal 9/30/13How will the ACA affect your business model?

“The Affordable Care Act has clearly shifted the focus of a hospice and palliative care provider towards the alignment and coordination of care throughout the community’s continuum of care. Historically, hospice providers were often siloed from other health-care providers, but health-care reform has clearly broadened our outlook and has identified that having a seat at the table is now an imperative. We remain clearly focused on the patient, but understanding our role in managing the health of an entire population has heightened our awareness and has identified the importance of reaching out from our traditional domain to dialogue and understand the roles and requirements of other providers.”

You can’t make this stuff up. From a non-profit CEO