TL;DR
Turn quiet afternoons into listening time
- Thousands of audiobooks, podcasts and originals
- Listen on your phone, tablet or Echo — also offline
- Cancel anytime
A study of 191 hospices acquired by private equity firms from 2018 to 2022 found Medicare spending per stay rose 5.9% compared with similar for-profit hospices. The increase was associated mainly with stays averaging 6.3 days longer and a shift in the patients admitted, while researchers found no increase in care visits.
A study of 191 for-profit hospices acquired by private equity firms found that Medicare spending rose 5.9% per hospice stay compared with similar hospices that were not acquired. The increase was mainly associated with longer stays and changes in the patients admitted, not an increase in recorded care visits, according to the research published in the November issue of Health Affairs.
Researchers compared the acquired hospices with 1,305 matched for-profit hospices that remained outside private equity ownership. Using Medicare fee-for-service claims, they examined outcomes in the two years before and after each acquisition and compared those changes with the control group. The study covered acquisitions made between 2018 and 2022.
After acquisition, the average hospice stay was 6.3 days longer. Patients were less likely to have stays of under a week, more likely to remain in hospice for over six months, and more likely to be discharged alive. The share of patients with dementia rose from 22.6% to 23.8% at acquired hospices, while the study reported no change in that share at control hospices.
The researchers found no significant increase in total visits or time spent on visits per week, including physician, nurse and home health visits. Social work visits fell. The authors said the findings point to longer stays and a shift toward patients who may require less ongoing care as factors associated with higher spending. The study does not establish that private equity ownership alone caused every observed change.
How Longer Stays Affect Medicare Costs
The results matter because Medicare pays hospices a set daily rate rather than a fee that varies with the amount of care a patient receives. A longer stay can raise total spending per patient, while the hospice’s costs depend in part on the services required. The study says the patient mix shifted toward a larger share of people with dementia, whose care needs may differ from those of patients needing frequent visits or complex pain management.
Hospice serves a substantial share of people near the end of life: the source report says nearly half of U.S. deaths involve Medicare beneficiaries using hospice, and up to a quarter of Medicare spending occurs in the last year of life. If ownership changes are associated with longer stays and different admission patterns, the findings may inform debate about how to pay for hospice while maintaining access to appropriate, person-centered care.
The study documents spending and care patterns, not whether individual patients received better or worse care. Its findings also do not show that every private equity-owned hospice changed in the same way. Those distinctions matter when considering policy responses or drawing conclusions about patients’ experiences.
Products Worth Considering
Blueair Blue Pure 511i Max Smart Air Purifier
Hyperice Normatec Elite Wireless Compression Boots, Standard Size
Oral-B iO Series 3 Rechargeable Electric Toothbrush for Adults, Black
As an affiliate, we earn on qualifying purchases.
Study Compared Acquired and Unacquired Hospices
The research focused on hospices that were already for-profit before acquisition, rather than comparing all nonprofit providers with all for-profit providers. The authors framed the comparison around whether private equity ownership was associated with further changes among businesses operating under the same broad payment system and serving the same population.
The source report describes a longer-term change in the sector: hospice ownership has shifted over two decades from mostly nonprofit to nearly three-quarters for-profit, while private equity has become a fast-growing owner. In a typical private equity deal, firms use investor funds and borrowing to purchase a company; debt may be assigned to the acquired business. That is background about the ownership model, not a finding that this study measured the debt or financial decisions of the hospices it examined.
The study’s results add to prior work by senior author Zirui Song on private equity in health care, which the report says has linked ownership to changes in hospitals and physician practices. Those earlier findings concern other health care settings and should not be treated as direct evidence about the hospice patients in this study.
“The goal of hospice is to provide respectful, person-centered care that helps terminally ill people approach end of life with dignity, while minimizing pain and suffering.”
— Zirui Song, senior author and associate professor of health care policy at Harvard Medical School
What the Claims Data Cannot Establish
The findings show an association between acquisition and changes in spending, length of stay and patient mix. The report does not establish why individual patients were admitted or discharged, whether particular clinical decisions were appropriate, or how patients and families experienced care. Claims data record billed services and diagnoses but cannot answer every question about quality or clinical judgment.
It is also unclear from the report how much the patterns varied among the 191 acquired hospices, whether changes persisted beyond the two-year post-acquisition period, or what happened to hospice finances and staffing. The reported rise in the dementia share is a change in the study population, not proof that any specific patient was selected because of lower care needs.
The researchers found fewer social work visits but no significant change in total visit volume or time per week. The source does not provide enough detail to determine how those service patterns affected patients’ pain, family support, outcomes or satisfaction.
Payment Policy Questions Ahead
The researchers said changes to Medicare’s hospice payment system may warrant consideration. One option raised in the report is to adjust the daily rate according to a patient’s clinical needs, potentially using diagnoses in a way similar to hospital payment. Such an approach could reduce incentives to favor patients with lower expected care needs, but it could also create incentives to code diagnoses to obtain higher payments, the report notes.
The study does not announce a policy change or set a timetable for one. The next steps are for policymakers and researchers to weigh payment options against the study’s limitations and assess whether different payment designs can support appropriate hospice care without encouraging selection or inaccurate coding. Further evidence would be needed to establish how any proposed change affects access, service delivery, patient outcomes and Medicare spending.
Key Questions
How much did Medicare spending rise after the acquisitions?
The study found 5.9% higher Medicare spending per hospice stay at acquired hospices compared with similar for-profit hospices that were not acquired. This is the study’s per-stay comparison, not a figure for all Medicare hospice spending.
What was associated with the spending increase?
The increase was mainly associated with stays averaging 6.3 days longer and changes in the patient mix. Researchers did not find a significant increase in total visits or time spent on visits per week.
Did the study show that patients received more care?
No. The researchers reported no significant increase in total visits or weekly visit time, and said patients received fewer social work visits. The study does not determine whether individual patients received appropriate care or how they experienced it.
Did private equity ownership cause the changes?
The study found differences associated with acquisition by comparing changes at acquired hospices with changes at matched controls. Those results do not, on their own, prove that ownership caused every change or establish what happened at every hospice.
What payment change did the researchers raise?
They said Medicare could consider adjusting hospice payments based on patients’ clinical needs. The report also cautions that risk adjustment could encourage coding practices aimed at increasing payment; no policy change or timetable was announced.
Source: medicalxpress.com
