Maggie recently wrote about a MedPAC decision aimed at stopping for-profit hospices from purposefully keeping patients under their care for extended periods of time in order bill Medicare for more days of service. Medicare’s concern that the hospices might be bilking the system raises a larger question: should we be worried that so many of today’s hospices are for-profit?
The short answer is “yes,” and at the very least, we should be giving them—and hospices in general—more attention. Hospices play a bigger role in our health care system than ever before. In 2005, hospices cared for 1.2 million patients, and one-third of Americans who passed away that year did so under hospice care. According to the National Hospice and Palliative Care Organization (NHPCO), hospice admissions are rising rising at a rate of almost 10 percent a year.
The fastest growing segment of the hospice industry is—you guessed it—for-profit hospices. Between 1994 and 2004, the number of for-profit hospices in the US increased nearly 4-fold, growing more than 6 times faster than nonprofit hospices. According to industry estimates, for-profit hospice programs now care for about 35% of hospice patients, versus a mere 9% in 1990 (today, nonprofit groups care for 56% and the government and other types of organizations care for the remaining 9%). Little wonder, given that there’s so much money to be made in the industry: Medicare reimbursement for hospice care has grown from $68.3 million in 1986 to $8.3 billion in 2005 and is expected to hit a whopping $45.6 billion by 2030.
The bad news is that, in their quest for Medicare dollars, for-profit hospices don’t provide all the care that they should in order to fulfill the hospice mission of maximizing patients’ quality of life. In fact, a 2004 Medical Care study of 2,080 patients enrolled in 422 hospices across the country found that “terminally ill patients who receive end-of-life care from for-profit hospice providers receive a full range of services only half the time compared with patients treated by nonprofit hospice organizations.” That’s because for-profit hospices like to keep costs low by skimping on services, particularly so-called “non-core” services like medications and personal care (How these are classified as “non-core” services I don’t know—they seem pretty important to me—but there you go). For example, families of patients receiving care from a for-profit hospice received counseling services, including bereavement counseling, only [45% as often] as those in a nonprofit hospice. Translation: when researchers controlled for differences across patients, sicknesses, and conditions, those at for-profit hospices were only half as likely to get the same support provided at nonprofit hospices. A 2005 follow-up study confirmed that for-profit patients receive a “narrower range of services” than nonprofit patients.
Given these results, the senior author of both studies, Dr. Elizabeth Bradley of Yale, concludes that “for-profit hospices…might not be as strongly rooted in…[the]…traditional hospice philosophy” of “psychosocial support, spiritual care, the use of volunteers and family, and symptom management” as their nonprofit counterparts.
But it’s not just “non-core” services that for-profit hospices are skimping on: for-profit hospices are only half as likely as nonprofits to provide palliative radiotherapy (RPT), a radiation therapy that has been shown to effectively reduce pain and other symptoms related to tumor growth.
The dearth of for-profit RPT probably has a lot to do with the fact that for-profit hospices take on a smaller share of patients with cancer than do nonprofits—in part because it costs a lot to care for cancer. In addition, it’s much easier to predict how soon cancer patients will die; they rarely stay in a hospice for more than six months. By contrast, when a patient is suffering from Alzheimer’s combined with congestive heart failure, it is much more difficult to guess how much time they have left; they could wind up staying in the hospice for a year or more. Indeed, for-profit hospices tend to “cream-skim” patients, both by taking on fewer cancer patients and having a greater share of patients who require a relatively long stay. (In this regard, MedPAC’s fears are warranted). Worse still, according to research from the University of California, Irvine, patients who stay longer at for-profit hospices receive less high-skilled nursing care—such as tracheotomy care, wound care, and suctioning or feeding tubes—because skimping on these services keeps costs down.
In sum, research shows that patients stay longer at for-profit hospices, yet receive less personal care, symptoms management and spiritual support during their stay. This is a pretty good way to make money, and indeed, the largest for-profit hospices are doing very well: a 2005 study in the Journal of Palliative Medicine found that large hospices owned by publicly traded companies generate profit margins nine times higher than those of large nonprofits and three times higher than privately owned for-profit hospices of similar size. In other words the “corporatization” of the hospital movement seems to be a major part of the problem—just as it has been with nursing homes. As one palliative care specialist told Maggie, “these are very cold companies.”
Among them are VITAS, the country’s largest for-profit, publicly-owned hospice, which cares for more than 11,000 patients in 16 states; the publicly-owned Odyssey Healthcare and Vista care and the private Heartland Hospice, which is a division of HCR Manor Care. You might remember Manor Care from our report on nursing homes in June. Back then, we noted that, in 2007, the major private equity firm The Carlyle Group bought up Manor Care for $6.3 billion. A New York Times story covering the privatization of elderly care noted that “large [nursing home] chains owned by an investment company in 2005 earned $1,700 a resident…[and were], on average…41 percent more profitable than the average facility.”
Like for-profit hospices, these nursing homes cut services in order to reduce costs; but as Maggie noted at the time, the health care industry isn’t like other industries. What may count as “efficiencies” in other fields—reduced labor costs, more streamlined services, etc—compromise the quality of health care to such an extent that “patients die.” There’s just no way around it: “health care is labor intensive.”
What’s so frightening about the case of for-profit hospices in particular is that cutting corners undermines the whole mission of hospice care. As Dr. Bradley’s team notes in their 2005 study, for-profit hospices risk losing sight of “the fundamental principles of hospice” because they are not doing all they can to support and comfort patients and families during the final stages of life. There’s really no way to do a half-way job with hospice care: you’re either doing everything you can to make dying people and their families feel better, or you’re not. This is not a calculus that comes down to dollars.
Such is the sentiment of “Hospice Guy,” a long-time hospice worker and blogger who writes “Hospice Blog.” In 2005, Hospice Guy wrote a post that really sums up how cold business logic and hospice care are ultimately incompatible. Hospice Guy notes that “one of the large corporate hospices refuses to provide pull-up diapers for its patients who need diapers.” Why? Because pull-up diapers, which patients can put on themselves, cost 23 cents more per pair than standard adult diapers, which must be put on a patient by someone else. Twenty-three cents. Meanwhile, this is “a huge dignity issue,” Hospice Guy points out, correctly. “If you are incontinent but can still pull up your pants, then you are going to want to keep your dignity.” Instead, this particular hospice forces terminally ill patients “to ask [their] spouse or children to change [their] diaper” in order to maximize savings. In the name of cost-cutting, a hospice “has made it…policy” that patients must be treated like infants. Can anyone really claim that this is maximizing a terminally ill patient’s quality of life? No. But can the decision be justified on the grounds of costs and the bottom-line? Yes. And that’s what’s so troubling.
The story of for-profit hospices is one that we’ve seen many times in our health care system, and we’ll see it again: profit risks compromising the quality of care patients receive. The rub here is that, whereas the worry in most health care field is over-treatment—doing too much in order to rack up revenues—the problem with for-profit hospices is that they don’t do enough to support patients. When someone is dying, you don’t have to spend a lot of money on high tech efforts to save them, but what you do have to spend on is labor intensive: meaningful attention, counseling and consultation, pain-mitigation, skilled nursing, etc. As palliative care specialists Diane Meier points out, “just sitting with a dying patient can be a comfort. It’s hard to do, but for the patient, it can mean a lot.”
More and more, it looks like the business plan of for-profit hospices is to provide relatively minimal care to people who will take a long time to die. If ever there were a strategy antithetical to the principles of hospice, this is it.
I think that at least one cause of the problem is that there is a disconnect between the person writing the check and the person under the business’ care. Since the patients (or their families) are not paying (directly) for the care they get what they get with little recourse. I think these sorts of problems arise whenever the free market is distorted like this. For-profit would not, I think, be a problem if there was the usual feedback (with sufficient competition, of course). The same argument applies to for-profit prisons, but without a clear free-market solution as the societal standing of prisoners is fundamentally different from that of hospice patients.
So, as with all such matters, we can choose to take the truly free market path, or the socialized, centrally controlled path. I realize that there of issues of affordability with the free-market approach, but I would suggest that such concerns are as much, or even more, pressing in the long term with the socialized approach.
The only difference between a for-profit and not-for-profit hospice is the way it pays taxes. I’ve seen not-for-profit hospices reap significant rewards from keeping patients on longer – and, coincidentally, denying “core services” such as personal care aides, which a for-profit in the same town provided across the board for all patients, regardless of payer source. The problem does not lie within the classification of “for-profit” or “not-for-profit” but in the leadership of the company. Not-for-profits can still make a sigificant profit on their services, and most do.
Angela is right. Same goes for NFP vs. for-profit hospitals. The large non-profit hospital chains have actually been MORE profitable than most for-profit chains over the past several years. NFP status is a gov’t subsidy for a portion of providers and often does little else.
Tom, if we were ever to have free market health care the one thing it would be is “affordable”. If patients were responsible for paying for their own care and the gov’t stopped fixing prices and setting arbitrary regulations like certificate-of-need then costs (the amount of health care supplied) would by definition be aligned with demand.
It would by definition be “affordable”, but of course all patients would not have access to all tiers of care.
Some people can “afford” the Mercedes & some people can only afford to ride the bus, but they’re all able to afford some kind of transportation. In a free market health care system some people would be able to afford a health plan that enables them to see every specialist under the sun as often as they want and get access to the latest multi-billion dollar technology that shows only marginal benefit, but others would only be able to afford basic care from a clinic.
Some people believe that everyone should have guaranteed access to a “moderate” level of care regardless of their own contribution to society (a socialized system), where the people who can afford the best care are made to subsidize the people who can’t. Most of us would probably come down somewhere in the middle, but of course we’ve seen how this is probably the worst of both worlds since you have the problem of out of control costs AND lower access to health care than otherwise would have been demanded.
It’s interesting how all of these comments ignore the evidence from peer-reviewed medical journals and other sources indicating that quality of care just isn’t as good at for-profit hospices.
This tends to be a problem with free marketeers– they have a point of view, but no evidence to back it up. See the book The Conservatives Have No Clothes, by Greg Anrig, for an excellent discussion of this problem.
“This tends to be a problem with free marketeers– they have a point of view, but no evidence to back it up.”
That’s a really weak response. It’s fairly crass to inject politics into the discussion so I’ll refrain from responding to that.
I don’t think anyone is ignoring any evidence… quality may well be better at NFP hospices…but I think the part where you’re wrong is when you take that piece of data and imply that the for-profit status is the root problem (and for the record, no I have no affiliation with any for-profit entities).
Hospice has a Medicare mix of over 90%. The largest hospice companies have net margins of low single digits and shrinking rapidly. So let’s not pretend that they’re somehow reaping massive rewards by cutting corners. Overall quality in hospice care (or any care) is a direct reflection of what you’re willing to spend. And Medicare spends very little relative to what quality hospice care really costs. The for-profit guys have lower operating costs than the NFPs, yet they’re still not making a return that will attract real new investment into the hospice arena. You can’t expect a system to work where in order to provide a desired level of quality providers must spend more than they are reimbursed, where patient quality depends on the goodness of donors’ hearts. Doesn’t matter if the system is dominated by NFP or for-profit, it simply doesn’t work.
And a NFP running large losses to keep up high levels of quality care is admirable and nice to have in the short run, but is not sustainable and doesn’t help the larger problems of exploding costs in the long run.
Costs & Quality are inherently inversely related, and until people are willing to accept that fact of life we’ll have no real progress on health reform.
Death is both scientific and sacred.
Hospices should combine the qualties of bio-medicine with places of worship.
Hospices need $ to operate but like religious institutions should be non-profit
Dr. Rick Lippin
Southampton,Pa
Hospices are both scientific and sacred spaces.
While they need $ to operate they need to be non-profit institutions.
Dr. Rick Lippin
Southampton,Pa
PT–
Actually, no. In the health care market we have reams of evidence that lower spending and higher quality go hand in hand.
The best health care providers get the diagnosis right the first time, commit fewer errors,
and don’t try to pad their bills.
Dr. Lippin,
the question I think that needs to be answered then is how do you get enough people to give ‘enough’ resources to operate enough hospice facilities at a high enough quality of care. And who is going to determine what “enough” is? It sounds great to have only hospices who have only a higher moral calling, but how exactly can we make that happen?
Do you prohibit for-profit hospices from providing care? If so, what mechanism do we use to ensure that there enough hospice resources to care for all the people who need it?
Do you forbid patients from receiving end of life care from any entity that is owned by private citizens?
Or do you just put doctors & nurses on the government payroll and have them provide free hospice care to anyone who needs it? If so, then which government bureaucrat do you trust to determine what the appropriate level of “quality” means, to manage the number of staff available form year to year to ensure there is always enough care to go around, and exactly how much care we are entitled to?
How do you prevent lobbyists from having undue influence over the politicians making the decisions once the program is in place?
Maggie,
I agree that higher quality and lower cost are not mutually exclusive in all individual cases. Certainly medical errors & inefficiencies exist and we’ve both seen glaring examples I’m sure.
But this is simply a red herring. The actual dollar amount is immaterial relative to the total health care dollar. To imply that there is large amount of dollars to be saved that could somehow support higher levels of care is way off base.
The recent CBO budget options report (which I think most would agree is as close as we’re going to get to an honest assessment of the cost & benefits of various options) I think depicts this reality fairly clearly. They conclude that, even if we have widespread adoption of HC IT to cut down on errors & greater use of preventative care, we “could improve people’s health but would probably generate either modest reductions in the overall costs of health care or increases in such spending” over the next 10 years.
So while I agree that there is waste in the system, to suggest that we could have meaningfully higher levels of overall care while spending less actually runs counter to actual evidence.
Cutting waste, while a worthwhile goal, is a straw man when it comes to real health policy reform. It’s an incredibly minor issue relative to the rest of our problems.
PT
Your questions are good ones. I am in no position (yet:)) to “forbid or prohibit” much.
I posit that the entire profesion of medicine and the US culture could mature around the death and dying issue.
I do not have all the practical answers you pose and “the devil is in the details” and “the political weeds”.
But we also need a vision?
No?
Dr. Rick Lippin
Southampton,Pa
Dr. Lippin,
I agree that we do need a vision, but not any old vision will do. We need to be honest about the costs & benefits of different models of care. There are no easy choices to be made and there is no choice that will provide us with “more” without giving up something else.
We need to be prepared to sacrifice something if we want something else. I’m afraid that making impossible promises of higher quality care at no additional costs will lead to a lot of hype followed by a lot of disappointment, which will then kill any small window for meaningful reform we may now have.
And in the meantime I’m not going to hold my breath for the US culture to mature 🙂
PT
“optimism is a moral imperative”-ral
Rick Lippin
For-profit status IS the root problem. Overall quality in health care is a direct reflection of what is willing to be spent.
The recent new wave of owners and investors that have been purchasing nursing home chains with hospice services have brought a priority of maximization of profits, rather than providing the staffing and resources necessary to ensure top quality care for our loved ones.
These types of private for-profits have acquired these facilities, cut expenses and staff, sometimes below minimum legal requirements, increased profits, and quickly resold facilities for “significant” gains. But by regulatory benchmarks, residents of those facilities are worse off then they were under their previous public for-profit or even non-profit owners.
For-profits cut services in order to reduce costs, but the health care industry isn’t like other industries. What may count as efficiencies in other fields, reduced labor costs, more streamlined services, skimp on medications and personal care, compromise the quality of health care to such an extent that people die!
There is just no way around it, health care is labor intensive. Cutting corners undermines the whole mission of health care. Private initiative is a good thing, but it should not lead to a cold society, lacking
any compassion for citizens, in pursuit of financial gain.
Gregory,
who do you want to step in then and run these things for free? Where exactly are you getting the money from?
Nothing is preventing any NFP from coming in and doing a better job than any for profit company. In fact, the playing field is already tilted in their favor through gov’t subsidy. If NFPs were so
much better why do for-profits even survive?
If NFPs were doing such a bang up job at providing better care they’d drive the for-profits right out of business for lack of patients. I can imagine the ad campaign now.
Likewise, if a hospice in a local market was reaping massive profits due to “cutting corners” others would come in drive them right out of the market by delivering higher quality care. You think doctors aren’t acutely aware of the quality of hospices in their local markets? Fact is for-profit hospice companies are barely getting by.
You were right on the money when you said “Overall quality in health care is a direct reflection of what is willing to be spent”.
And hospice quality IS exactly what we (Medicare) pay for!!! Any lack of spending on the part of hospices is a direct function of inadequate reimbursement.
Your arguments are firmly rooted in ideology and outside of reality. Sure, in the ideal world we’d have some benevolent entity willing to give us all the care we want with at no costs to anyone, but we live in the real world and need solutions that work in the real world.
You’re trying to talk to me about ideology PT? You’re the one outside of reality with that crap. The private initiative via private for-profits have a wider range of behaviors than public for-profits. A private equity group can be more ruthless about profit than a public company.
These types of private for-profits have acquired nursing home with hospice services, cut expenses and staff, when residents are dying from lack of proper care.
Neglect is the silent killer in our nation’s nursing facilities. By some estimates, malnutrition, dehydration, bedsores and infection – caused by neglect – account for half of nursing home deaths and injuries.
There would be a much higher level of care given to residents if adequate staffing were provided. But even for-profit nursing homes, the desire for profit margins translates into less staffing, less training for the staff that they do have, less food (or a lower quality of food) for the residents, and less management and oversight.
A conflict arises between saving dollars and providing good care. Administrators benefit from the amount of profit generated by the facility they manage, usually paid annual bonuses based on bed-count. They must choose between increasing the profit margins of their individual facilities or supplying more support staff for the care of residents.
Even nursing home abuse may occur because of the desire for profit. Caregivers are often stretched beyond their ability. They try to do the best job that they can, but the lack of additional support restricts what they can do to help residents.
Don’t try to give me any euphemisms about ideology or reality. Step inside one of these facilities; better yet, live in one.
I’m not offering “euphamisms”, I’m just pointing out the glaring lapses of logic in your arguments.
Your entire argument is that we have inadequate staffing in nursing homes. I haven’t said one thing about this not being true. It probably is.
You say “there would be a much higher level of care given to residents if adequate staffing were provided”. Well no kidding. You’re a genius.
But not one thing you have said supports your statement that the root of the problem is profit status of the provider. If you don’t want corners cut, it costs more. Again, the for-profit hospices are barely breaking even…where exactly is all this money you say they’re saving by cutting corners?
Both NFP & for-profit have the same restrictions on the care they can provide. If providers have access to more resources, they can spend more resources. You admit yourself that this is highly labor intensive (read variable cost)business. You can’t expect a hospice to provide $110 worth of labor for $100 worth of reimbursement, which is what your argument essentially boils down to. Entities can’t be sustained in that scenario, regardless of their corporate structure.
The root cause of that funding problem is that Medicare is not paying enough to cover your desired staffing levels. The root cause of a lack of funding is that the Medicare program has a serious deficiency in its ability to correctly determine adequate prices for service for the millions and millions of different services provided. You wind up with gross overfunding & underfunding in various industries b/c it’s just impossible for Medicare to sit there every year and dictate what the “correct” price is for every individual episode of care. (This is especially the case in hospice with virtually all patients on Medicare. There’s no commercial insurers to subsidize the lower paying medicare business).
Your statements like “A conflict arises between saving dollars and providing good care” have nothing to do with profit status. This conflict is inhernet in every industry since the beginning of time…the good old cost vs. quality tradeoff. It makes no difference if the center is NFP or a publicly traded company…they all deal with limited resources.
Can you answer me one question? If for-profit providers are barely breaking even in this country, and NFPs & for-profits are paid the exact same rates, how exactly are NFPs paying for all this extra care you claim they are giving? Where is the money coming from? And if this is the case, what exactly is preventing more NFPs from entering the industry and doing the exact same thing?
These are some very basic questions that you need to consider.
Your argument is based around a fallacy of more care without any more cost. Which is why i say you aren’t dealing in reality.
Overall quality in health care is a direct reflection of what is WILLING TO BE SPENT. However, it’s WHAT they’re willing to spend those dollars ON that matters most!
You said, “Overall quality in health care is a direct reflection of what is WILLING TO BE SPENT. However, it’s WHAT they’re willing to spend those dollars ON that matters most!”
And who’s providing the funding? Answer: Medicare. There are only as many dollars in the hospice system as Medicare is willing to pay. Are you now trying to make the argument that hospice operators ARE reimbursed enough money, but they just don’t know what they’re doing so they spend the money on the ‘wrong stuff’? That really doesn’t make any sense and I’m not even sure what you’re getting at.
On a side, note, did anyone happen to see the large hospital chain that was charged by the MN Atty Gen just today with charging patients excessive rates on unpaid bills? Wanna guess the corporate structure of the chain? Hint: it rhymes with Don Soffit. Abuses are a problem in the industry irrespective of corporate structure. Stop trying to demonize the thousands of great people who provide excellent care to very sick patients in centers around the country.
In regards to nursing homes that supply hospice services, there are more than sixty bonus programs that exist to help them do what they are legally required to do, such as pay the minimum wage or install fire sprinklers for resident safety. They are eligible for hundreds of millions of dollars in taxpayer-funded bonuses despite past violations of basic health and safety standards.
Accoding to the Register in Des Moines, Iowa (where Senator Chuck Grassley is from), a review of 81 bonus payment programs in 26 states, shows that some of the worst homes in the nation are collecting quality-of-care bonuses approved by the same federal agency that considers them to be below-average caregivers (CMS). The total cost to taxpayers is unknown, and CMS approves and helps fund each of the bonus-payment programs but does not track any of those payments.
Toby Edelman, nonprofit Center for Medicaid Advocacy, thinks the governement seems to be saying, yes, we’re going to impose fines for poor care, but at the same time we’re going to be giving you bonuses. It just doesn’t make any sense.
This kind of system was devised for the industry, by the industry, with the incestuous blessings of totally-corrupted, oversightless agencies and tolerated by powerful politicians with no spine or ethics.
I don’t buy the term “underfunded” or that Medicare/Medicaid payments are so low. Louisiana nursing homes received one of the lowest Medicaid rates in the country. Although state-by-state profit amounts are unavailable, a study commissioned by the Louisiana Department of Health and Hospitals found that the average Louisiana nursing home had a 15% profit margin in the 2001-02 budget year. How does one get a 15% margin while Medicaid is reimbursing one of the lowest rates in the country?
Yes, like all nursing home chains, most of their revenues come from public programs, Medicare and Medicaid. How should our public health care dollars be spent? On one nursing home chain’s windfall or certified nurse assistants and registered nurses in nursing home? What about the issue of financial accountability for those public funds. The nursing facilities have the ability, under current law, to spend their Medicare reimbursement, once they get it, as they choose, not necessarily as Congress intended. Spend that money as Congress intended, and we wouldn’t be having this discussion.
PT:
Your comments on Jan. 22nd have been sticking in my mind for a couple of days.
Can someone address what profit status has to do with the services, if both profits and non-profits are reimbursed similarly?
By the way, one of the reasons for the difference in tax status, is that the organizations should be operated differently, and they offer different products or services?
If there are no tangible differences between the 2 organizations, then non-profits should lose their tax advantage.
Don Levit
Unfortunately, many times profits take a higher priority than resident care when it comes to nursing homes that are being run for a profit. Many nursing homes are run by large corporations that own multiple facilities across the United States. The individual home ends up being run from the board room rather than from a resident focus.
In addition, many of these for-profit nursing homes are budget or census driven. The administrators want to come in under budget to make more profits for the corporation. The desire for profit margins translates into less staffing at nursing homes, less training for the staff that they do have, less food (or a lower quality of food) for the residents, and less management and oversight. A conflict arises between saving dollars and providing good care.
There would be a much higher level of care given to patients if adequate staffing were provided. However, Administrators benefit from the amount of profit generated by the nursing home they manage, usually paid annual bonuses based on bed-count. They must choose between increasing the profit margins of their individual facilities or supplying more support staff for the care of residents.
Another way residents don’t receive the care they need because of profit concerns, ranges from which ambulance service the nursing home calls, to whether or not a patient even goes to the hospital after a fall or other calamity. Nursing homes may contract with an ambulance service that is further away from the home because they got a better deal on rates.
Even nursing home abuse may occur because of the desire for profit. Caregivers who work in nursing homes are often stretched beyond their ability. They try to do the best job that they can, but the lack of additional support restricts what they can do to help patients.
Federal and state laws require nursing homes receiving federal funds to develop a plan of care and employ a sufficient staff to provide all of the care within the plan. Due to understaffing, many nursing homes, however, cannot provide all of the care listed on the plan.
PT, Don and Gregory–
Thanks for your comments.
PT & Don–
Gregory has actually studied nursing homes in depth, so I refer you to his most recent comments (Jan 23, 5:47 and Jan 25) for the best answers to your questions.
PT–On this blog we try to avoid suggesting that other people are lying, not in touch with reality, etc.
Gregory,
I’m sorry to jump into this a bit late. I wonder if you could provide a definition, consensus or otherwise, as to just what adequate staffing means in a nursing home context. Or, is this something that varies by state regulation like, say, hospital nurse staffing ratios?
Nursing homes are extremely labor intensive as you well know while the work is often difficult and doesn’t pay especially well. While I agree that, at the margin, there is more temptation to skimp on care at a for profit home, especially one owned by a large corporate chain like Manor Care, the not for profits also probably have plenty of the same motivations.
When my father was in a nursing home in NJ for the last year of his life (he died in 2001), we were paying privately for his care at the rate of $163 per day. At the time, the NJ Medicaid rate was $119. That home also had a section that focused on rehabilitation for seniors who just had heart surgery, hip replacements, etc. and received much higher daily rates from Medicare for those patients. My father started out in that category following hip replacement. I remember that physical therapy was billed at $39 per 15 minute unit or $156 per hour. There have been plenty of cases where inappropriate PT was provided to patients across the industry merely to drive revenue for the nursing home even though, in many cases, the patient was unlikely to benefit from it. These abuses could have been well controlled if primary care doctors who supervise each patient’s care were paid adequately to provide proper oversight but they generally are not. That’s a failing of Medicaid and Medicare, in my opinion.
Whether a given nursing home provides hospice services or not, the quality of care it is able to provide is often driven more by its patient mix – private pay, Medicaid, Medicare than by whether it is for profit or not for profit.
Barry
I’ve experienced the very same case where inappropriate PT was provided to residents across the industry merely to drive revenue for the nursing home even though the resident was unlikely to benefit from it.
My mother went to the hospital for a urinary tract infection for four days (where it requalifies you to be back on Medicare-only) and is readmitted to the nursing home, where she is still on Medicare-only status for up to 80 days, at a much higher rate of reimbursement.
The only Plan of Care that is recognized is a decreased functional mobility secondary to recent urinary tract infection and hospital stay. The goal is for the resident to abulate, transfer and perform bed mobility. The only intervention is for skilled PT five times a week.
But there are no other interventions to prevent urinary tract infections. So, near the end of the 80 day period or when the resident has reached their plateu of physical stamina, the resident is taken off of Medicare-only and placed back on Medicaid/Social Security.
When another urinary tract infection occurred, but she used up the allotted time period to meet the phsyical therapy plateu standards, she cannot stay on Medicare-only even though the urinary tract indications are not resolved.
Any ancillary services provided due to the hospitalization would be more renumerative to the nursing home if those services are owned by, or are shell companies belonging to the company (even when they do not pertain to the medical indication).
Whether those ancillary services are independent of the company or not, they are an additional cost on residents and/or government programs.
Here’s a link to a summary of each state’s requirements, or lack thereof (remember that administrative time is INCLUDED in the staffing levels each facility claims):
http://www.ltcombudsman.org/uploads/HarringtonStatestaffingtableRevisedJan2008.pdf
Here’s Charlene Harrington’s (UCSF) report on recommendations for MINIMUM staffing:
http://www.iom.edu/Object.File/Master/43/900/Harrington%20.pdf
Excerpt: “Federal and state standards should specify 4.1 hprd as a minimum and be adjusted for resident casemix”
It’s way past time that non-profit status be taken away from all healthcare organizations. The arguements on this issue are based on emotion at best and are spurious at worst. All healthcare organizations receive the same amount of reimbursement – period. The only difference (the tax exemption is only valuable for organizations that own property) in the two is that the not-for-profit can raise money and use it for whatever they please. The not-for-profit hospice in my area has an office building that would rival an investment banker’s, they do extensive marketing campains, and the CEO is one of the top earners in the area. The for-profit hospice has a charitable foundation that donations are made to and they can only give their money to patient needs, and often pay for a patient’s utility bill, grocery gift cards, etc.
It’s time to take the notion that either of these two systems is better or worse, even the playing field, and judge the tree by the fruit is produces.
I AM THE OWNER OF A SMALL FOR PROFIT HOSPICE. I WORK IN A VERY RURAL AREA OF MISSISSIPPI. OUR COMPANY IS A NON-PROFIT NOT TO MAKE MORE MONEY, BUT BECAUSE WITH OUR LOW CENSUS AND LIMITED AREA IT WAS RECOMMENDED BY OUR ACCOUNTANT. MY BIGGEST COMPETITORS ARE ALL NON-PROFIT THAT I WORKED FOR AT ONE TIME. THIER TAX STATUS OF NON-PROFIT IS JUST THAT, A TAX STATUS, BECAUSE THEY ARE MAKING PLENTY OF PROFITS AND DISTRIBUTING THEM TO THIER CEOS. I HAVE READ ALL OF THE POSTS ON THIS PAGE AND THE ONE I HAVE THE BIGGEST PROBLEM WITH IS THAT FOR PROFITS DO NOT GIVE THE SAME QUALITY OF SERVICE. I READ THIS AFTER I HAD JUST OK’ED MY AGENCY TO PAY FOR LAUNDRY FOR A PATIENT,SOMETHING MY NON-PROFIT FORMER EMPLOYERS WOULD HAVE NEVER DONE.I HAVE COLLECTED CLOTHES FOR ANOTHER PATIENTS FAMILY, ARRANGED WEDDINGS FOR TWO PATIENTS AND PAID FOR MEDICINE THAT WERE NOT PART OF THE PATIENTS PALLIATIVE TREATMENT BECAUSE THEY DID NOT HAVE MONEY. I HAVE MYSELF WORKED OUT IN THE FIELD TO SEE PATIENTS IN THE MIDDLE OF THE NIGHT FOR PAIN CRISISES AND TO HOLD SOMEONE’S HAND AFTER THIER LOVED ONE HAD DIED. I GIVE HOMEMAKER SERVICES SOMETIMES SEVEN DAYS A WEEK WHEN I HAVE BEEN TOLD BY MY NON-PROFIT EMPLOYERS THAT THREE TIMES A WEEK IS ENOUGH. THAT IS PART OF THE REASON WHY I CHOSE TO START MY OWN COMPANY. WITH THE STATE OF THE CAP ISSUE AND MEDICARE CUTS, I COULD HAVE EASILY KEPT MY JOB AS AN R.N. WITHOUT THE ANGUISH AND FINACIAL HEADACHE. SO BEFORE YOU LUMP EVERYONE INTO ONE CATEGORY, MS MAHR YOU SHOULD LOOK AT YOUR NON PROFITS AND SEE IF THEY ARE REALLY NON PORFIT IN DEEDS OR JUST IN WORDS AND TAX STATUS.
CORRECTION IN FIRST SENTENCE WE ARE A FOR PROFIT:) TYPING TOO FAST:)
There has been an ongoing cycle with nursing home chains that privatized over the last several years. It begins as a public company; they save up, sell out as private company (obscenely enriching the top dogs in the process); they suck all the assets dry; then they put it back into the public market.
The owners of these nursing home chains, Blackstone, KKR and The Carlyle Group, move well beyond their usual interests, involving itself in the operation of nursing homes it has no experience in. But they make the argument they needed public currency to better expand their asset management platform beyond private equity (hedge funds, etc.). And forward the crazy notion that patient care should rank at least somewhere in the priority range of how many Mercedes your average Carlyler can pack into their 18-car garage.
These types of private for-profits have acquired nursing homes, cut expenses and staff, sometimes below minimum legal requirements, increased profits, and quickly resell facilities for significant gains. But by regulatory benchmarks, residents at those nursing homes are worse off then they would be under their previous public for-profit (or non-profit) owners.
Greatings, Ugh, I liked! So clear and positively.
Nadine
I have worked as a hospice nurse for a non-profit hospice, and 2 for-profit hospices over the past 10 years. I agree with the poster who said we should judge a hospice by its fruits.
Profits are generated by increasing census, and in my market, hospices are competing for patients by offering more frequent visits, covering more supplies, equipment and medications, and providing more services (like home visits from the medical director, massage therapy, etc.)
All hospices are trying to make money, but when we compete for patients, we are driven to provide better care. Tax status has nothing to do with it. In fact, many non-profits suffer from inefficiency, top-heavy administration, and resistance to new ideas. Thank God for the for-profits in my state who have shaken things up and improved access and quality care!
sg
Can you answer me one question? If for-profit providers are barely breaking even in this country, and NFPs & for-profits are paid the exact same rates, how exactly are NFPs paying for all this extra care you claim they are giving? Where is the money coming from? And if this is the case, what exactly is preventing more NFPs from entering the industry and doing the exact same thing?
I enjoyed your post and linked to it in my post through the Chicago Bridge
http://www.thechicagobridge.org/hospice-the-business-of-dying/
I’ve seen not-for-profit hospices reap significant rewards from keeping patients on longer – and, coincidentally, denying “core services” such as personal care aides, which a for-profit in the same town provided across the board for all patients, regardless of payer source.
So, as with all such matters, we can choose to take the truly free market path, or the socialized, centrally controlled path. I realize that there of issues of affordability with the free-market approach, but I would suggest that such concerns are as much, or even more, pressing in the long term with the socialized approach.
Non profit Hospice’s actually have the ability to produce a larger profit than for profit hospice’s.
For profit or Non profit staus does not make a hospice good or bad. Its the staff working at each induvidual hospice that makes it good or bad.
Non profit hospices use their non profit status as a marketing tool. Some of these non profit organizations have very large pay roll’s and bounus plans. Both for and non profit hospices bill for services. Non profit has accsses to funding that does not exist for their for profit counterparts.
VERY GOOD!!!
This is an amazing story. She did just that? I would love to track more updates on this one since this one took my attention.
stretch mark removal
http://reduce-stretch-marks.com/
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This is alarming. Certain hospital institution have their patients confined even if they are free to go. This is rampant in most countries especially the third world ones. They confine their patients as if they are somewhat a prisoner since they can’t pay in full. With this policy the more the patient stays the higher the bills are.
Great site. This could probably have the refactoring tag added t it.
We aren’t reimbursed for providing one on one or group grief counseling for teh patients and families who’ve lost someone on hospice with us and we definitely aren’t reimbursed for the camp we put on over the summer that addresses the needs of children who’ve recently lost a loved one, often their own parent. Not one of these services are profit-driven. Therefore, they’re of little to no interest to for-profit hospices, unless they are required to keep their doors open.
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I’ve just read all the posts on this subject and one thing seems blaringly missing in the discussion. NFP hospices can solicit and receive millions of dollars in donations, and do so. With that money they build beautiful buildings, pay handsome bonuses and salaries to their exectutives, spend more on marketing and even donate some back to the community to inflate their reputation. But….there is no study that I am aware of that shows these NFPs spend more on patient care. Does anyone have any stats on this? Full disclosure: I work for a FP hospice that is eating up the NFP competition in my area because the community has learned that we provide service to our patients that is of a much higher quality.
Blogging is now becoming one of the new phenomenal ways to make money online. It is no surprise because you can work on your own hours, if you call it working that is. How to make money is no longer a mystery.
It would by definition be “affordable”, but of course all patients would not have access to all tiers of care.
It would by definition be “affordable”, but of course all patients would not have access to all tiers of care.
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Thank you for link!!!
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They really have to be clear if they are for profit or no profit. This can be clearified quite easily. But we have to remember that it is not really easy to care for those people. This is not the only area companies over-charging on health system.