Why Dying is Good for Business

HospiceThe profit motive in hospice has become a greater concern as for-profits hospices have expanded.

Hospice care can provide a great benefit to many families and their dying loved ones, and Medicare has been generally praised for its support through reimbursements to providers over the past 28 years. However, according to a recent article by Kaiser Health News and The New York Times, there is growing concern now about misuse of the program by for-profit hospice providers.

 Hospice care is intended to provide dying patients with palliative care in their own homes, or in a hospice facility or nursing home.

As hospice has moved into the mainstream, concerns about excessive costs and misuse have mounted. A primary concern is that Medicare’s flat-fee payment system encourages hospices to seek out patients likely to live much longer than the six month time period for which hospice was originally intended. Medicare pays a flat fee ranging from $147 to $856 a day, depending on the level of care, whether a hospice actually provides services or not.

For-profit hospices in particular tend to have longer-staying patients. "The financial incentives do in fact dictate behavior," said Eugene Goldenberg, a research analyst for BB&T Capital Markets who follows the hospice industry. "It's a lucrative business, at least under the current reimbursement system."

 In response, Medicare has adopted a restriction: It won’t pay for hospice beyond six months unless a physician or nurse practitioner visits the patient and attests that his or her condition is still terminal. This requirement, part of the health care law passed last year, has provoked a backlash from hospice providers who say that sending a doctor or nurse practitioner out to see every patient at the six-month mark is too expensive. Given the financial and political pressures facing Medicare, government officials are concerned that hospice care may be misused. The inspector general of the Department of Health and Human Services looked at one fast-growing segment — hospice patients in nursing homes — and found hospices routinely failed to document that those patients belonged in a hospice or that they were getting the care to which they were entitled.

If you or a loved one is considering hospice care, be sure to thoroughly investigate the care provider before making a commitment. Perhaps the most chilling aspect of these findings is not that people are using a hospice benefit for too long – but that they may be enrolling too soon …perhaps before giving other, more aggressive medical procedures a chance to work. Reference: The Kaiser Health News (June 27, 2011) “Growing Hospice Care Costs Bring Concerns About Misuse”

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