Study: For-profit hospice facilities reportedly provide worse care than not-for-profits

An estimated $23 billion of Medicare dollars are spent each year on hospice care.

A new study published on November 18 in JAMA Network found that care quality can be linked to care center ownership, with not-for-profit hospice outperforming for-profit services.

And for-profit facilities in the space are growing. In 2010, 53% of hospice facilities were for-profit, growing from 2,300 to 3,500 over a 10-year span, according to the Medicare Payment Advisory Commission. By 2020, that share jumped to 70% of 5,200 facilities analyzed, per the CDC.

Private equity (PE) ownership has also been on the rise at hospice facilities. Between 2015 and 2022, 47 PE firms bought 124 hospices, a report out of the Icahn School of Medicine at Mount Sinai found.

The details. Of the 2,676 US-based hospice facilities reviewed for the study, 705 (23.5%) were PE-funded or publicly traded; 1,203 (40.1%) were for-profit, but not publicly traded or PE-backed; and 768 (25.7%) were not-for-profit.

The facilities included in the study comprise 87% of Medicare beneficiaries who received hospice care in that time period, according to the study. About 80% of the patients in the survey were on Medicare, study author and Emory University doctoral candidate Alex Soltoff said in an email, and some patients had private insurance or other plans.

Researchers from Emory University School of Medicine, Weill Cornell Medical College, Vanderbilt University Medical Center, and the Veterans Affairs Medical Center collaborated on the study to review data between January 2021 and December 2022 from the Consumer Assessment of Healthcare Providers and Systems, a government agency that surveys hospice patient families or caregivers via phone calls and mail.

Respondents rated the centers based on eight metrics, such as timeliness of care, communication quality, and if the patient in hospice was treated respectfully.

Questions arise. Not-for-profit hospices ranked first across all eight metrics, receiving a score of 83.1 out of 100. For-profit—but not PE-backed or publicly traded hospices—got a score of 81.2, while PE-backed and publicly traded hospices came in with 79.8 points.

These estimates place not-for-profit hospices in the 56th percentile for all hospice facilities and for-profits in the 47th percentile. PE/publicly traded facilities fall “substantially below” the national mean at the 34th percentile, Soltoff said.

“These findings raise questions as to how patients are affected when [private equity] and [publicly traded companies] own hospices and suggest the need for greater transparency and accountability of hospice ownership,” the study’s authors wrote.