Tuesday, December 30, 2014

Hospice Care: Non profit or for profit?

An interesting recent article in the Washington Post discusses the differences between for-profit and non-profit hospice care. The article says that although “[i]n some cases, for-profit hospices provide service at levels comparable to nonprofits, . . the data analysis, based on hundreds of thousands of Medicare patient and hospice records from 2013, shows that the gap between the for-profits as a whole and nonprofits is striking and consistent, regardless of hospice size." The Post authors identify profit-motive as a reason for the inferior performance of for-profits, stating that: “Hospice operators have an economic incentive to provide less care because they get paid a flat daily fee from Medicare for each of their patients. That means that the fewer services they provide, the wider their profit margin.” 

The key findings are that:

"Nonprofit hospices typically spent about $36 a day per patient on nursing visits; for-profit hospices spent $30 per day, or 17 percent less. The gap between for-profits and nonprofits remains whether the hospices are old or new.

Nonprofit hospices are much more likely to provide the more intense services — continuous nursing and inpatient care — required by patients whose symptoms are difficult to control. Nonprofits offered about 10 times as much of this per patient-day as did for-profits.

While hospices of both kinds usually dispatch a nurse to see a patient at some point during the last two days of life, for-profit hospices are more likely to fail in this regard, according to the analysis. A typical patient at a for-profit hospice is 22 percent less likely to have been visited by a nurse during this window than a patient at a nonprofit hospice, the numbers show, a sign that for-profit hospices may be less responsive during this critical time.

Patients at for-profit hospices are much more likely to drop out of hospice care than patients at nonprofit hospices."

One problem, according to the Post, is that “regulatory scrutiny of hospices has lagged behind those of other health-care institutions, though Congress has recently called for more frequent inspections. And without as much oversight, hospice operators can operate in ways that benefit shareholders more than patients." 

One conclusion that could be drawn is that the nonprofit form, in the absence of other direct regulation, is an indicator to consumers of better service, at least in this context. By comparison, in the broader hospital context, the line between non profit and for profit hospitals is not as stark.

Roger Colinvaux


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