For-profit hospice industry raises worries

May 19, 2011 at 1:23 AM
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BLOOMINGTON, Ind., May 19 (UPI) -- End-of-life hospice care is being dominated by investor-owned chains that cherry-pick patients and cut labor costs to maximize profits, U.S. researchers say.

Dr. Robert Stone, an emergency medicine physician in Bloomington, Ind., and Joshua Perry of Indiana University say end-of-life hospice care was once the province of charitable organizations, but 52 percent of hospices are now part of the for-profit sector.

For-profit hospice industry grew by 128 percent from 2001 to 2008, while the non-profit sector grew by only 1 percent. During the same period, government-sponsored hospices increased by 25 percent.

"Research shows that for-profit hospices, and especially publicly traded chain providers, generate higher revenues than their non-profit counterparts," Stone says in a statement. "They do this in part, studies show, by selectively recruiting longer-term patients, most of whom do not have cancer, thereby gaming the Medicare payment system."

Medicare currently pays hospice providers a fixed per diem payment throughout a patient's stay, regardless of whether services are provided on any given day, Stone says.

"Hospice patients' use of services are greatest on the first day, when services are set up, and in the last few days of life," Stone says. "Hospices that recruit longer-term patients will be overpaid and will drain funds that should be going to patient care. Typically, the for-profit companies also pay lower salaries and benefits to a less-skilled staff, and employ fewer registered nurses. This raises quality concerns."

The study is published in the Journal of Law, Medicine and Ethics.

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