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Concerns raised about increase in for-profit hospice care

In less than a decade, for-profit hospices have proliferated at an astounding rate, and that may be cause for concern, say the authors of "In the Business of Dying: Questioning the Commercialization of Hospice," a study released earlier this month in the Journal of Law, Medicine and Ethics.

[Also: Study sees increase in hospice care, but communication issues remain]

For-profit hospices grew 128 percent from 2001 to 2008, while nonprofits grew by 1 percent and government-owned hospices grew by 25 percent, the authors noted in the study.

[See also: Study sees increase in hospice care, but communication issues remain.]

While no one can explain why for-profits have grown by leaps and bounds, various arguments include aggressive marketing strategies and "cherry picking" patients on the part of for-profits.

"What we do know exists is that the for-profit facilities have figured a way to make healthy profits in this area," said Joshua Perry, one of the study's authors. "I guess that's what was prompting some of the questions that my colleague and I raise in the article. How are they doing this? It turns out that in part they're doing it because they are very selective about the types of patients that they treat. So there's clearly a strategy whereby they're going to target the patients that are least costly to care for."

A study referred to in "In the Business of Dying," which was released by the Journal of the American Medical Association last winter, reported that for-profit hospices seem to have a higher proportion of patients that are cheaper to treat than nonprofits – for example, patients who stay longer in hospice care.

Medicare's payment structure reimburses hospices at the same per-day rate regardless of the patient's illness – which, say the authors of "In the Business of Dying," causes a perverse incentive for hospices to select patients whose illnesses will allow them to remain in hospice longer, such as dementia patients, over those with more acute illnesses, such as cancer patients.

"If you can recruit an Alzheimer's patient, there may not be an awful lot of day-to-day expense, and yet the per diem is the exact same for that care as it would be if you're a hospice taking all comers and you have a cancer patient that requires a lot more palliative care and end-of-life care," Perry said. He noted that there has been no evidence of for-profit hospices denying patients admission based on their terminal illness.

"When they talk about cherry picking – which is a serious issue and that's illegal – no hospice should be able to stay in business if they're performing illegal practices of any sort," said Jon Radulovic, vice president of communications for the National Hospice and Palliative Care Organization, an nonprofit member group representing hospice and palliative care programs and professionals, including both for-profit and nonprofit hospices.

Radulovic said he believes the rise in for-profit hospices has more to do with the roots of hospice, which began as a volunteer-based movement outside mainstream medicine and focused on end-of-life care for cancer patients. Because nonprofits have established decades-long relationships with those in the cancer community, he theorized, for-profits were forced to create a business model seeking non-cancer patients.

He also thinks nonprofits who are dedicated to the original vision of hospice may have a hard time facing the challenges of a maturing hospice marketplace.

"There's competition in markets that never had competition before," he said. "I think it means a lot of providers, regardless of their tax structure, those long-term providers who have been in their communities, have to market in a more aggressive way, and I think for a lot of those the marketing is sort of the 'M' word. It's something that just – it's not dignified. It doesn't honor this sacred journey that we go on."

While Perry said he believes changes to the Medicare reimbursement structure would even out the playing field between for-profits and nonprofits by eliminating the perverse incentives, Radulovic cautions against being hasty on the reimbursement issue.

"There is a need to look at reimbursement, absolutely," he said, "but not until we are sure we have the data (to support that sort of change). Just changing it for change's sake would ultimately end up turning into a barrier to reaching people who are in need of care."

"Our concern is that if there's too much of a focus on just the profit status question," he noted, "you're missing the opportunity to home in on those areas where we really do need to improve."

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