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For-profit vs. not-for-profit: Is one better than the other?
Study criticized for conclusions, negative implications
Cherry picking" was the term used in an Associated Press headline for an article that described the results of a Journal of the American Medical Association article comparing diagnoses, length of stay, and patient care between not-for-profit and for-profit hospices.1 Although the study authors did not use term "cherry picking" in the article, their conclusions that for-profit hospices had a disproportionate number of patients with non-cancer diagnoses and longer lengths of stay implied a for-profit focus on higher revenue-producing patients, according to experts interviewed by Hospice Management Advisor.
Members of the hospice industry are concerned that the study and some of the news coverage of the study portrayed hospice as a forced choice in an industry loaded with organizations that want to select patients based on potential profit, points out J. Donald Schumacher, president and chief executive officer of the National Hospice and Palliative Care Organization in Alexandria, VA. "We are concerned about how hospice is perceived in the community and this study presents problems for both not-for-profit and for-profit hospices," he says.
"I was shocked at some of the conclusions reached by the study authors and it wasn't until I looked at the data that I realized the differences reported were small," says J. Brad Hunter, chief executive officer of Legacy Hospice, a for-profit hospice in Charlottesville, VA. "I understand why HHS [Department of Health and Human Services] would fund a study to compare duration of stay for long length of stay patients, but when the outcome includes such small variation in results, I question why the author would hold these data out as a significant variant between hospices with different tax statuses," he says.
Another issue that Hunter questions is the data sample used for the study. "While the data are likely statistically valid, I note that approximately 50% of the hospices in America have a for-profit status, and 50% of the hospices in America are considered non-profit," he points out. "However, her selection of provider data included 78% non-profit hospice agencies and 22% for-profit hospice agencies," he says. The small variation in data and the small number of for-profit hospices used in the study make Hunter question the results. "I can't get comfortable with her results based on this sample, much less have any support for the conclusions the author drew," he adds.
In addition to looking at length of stay and diagnoses, the study also evaluated the number and type of visits made to patients during their hospice stay. Results show that tax status does not affect the number of skilled visits per patient day. However, the study does point out that for-profit agencies provide a greater number of less skilled visits such as home health aides than do not-for-profit hospices.
The study's use of numbers of visits per day was not meant to be an ideal measurement of quality but with the current Medicare hospice payment model of per diem payments rather than payments based upon specific services provided each day, it was the only measurement available to researchers, says Melissa W. Wachterman, MD, MPH, Beth Israel Deaconess Medical Center in Boston, MA, and lead author of the study. "The 'Holy Grail' of hospice research is to define and measure quality, but we don't have the data at this time," she points out. "As a palliative care physician, I want to know which hospices provide the best pain control, family support, or symptom management, but the type of data available for hospices limits what we know." One result that is important is that from the perspective of individual patient care, the difference in the number of visits per day was not statistically different, she adds.
"With MedPAC [Medicare Payment Advisory Commission] looking closely at the hospice benefit, the study was designed to look at case mix, length of stay, and visits per day, and see if there were differences based upon the hospice's profit status," says Wachterman. MedPAC has recommended that, in 2013, the hospice benefit provide relatively higher payments per day at the beginning of the episode and relatively lower payments per day as the length of the episode increases, with a higher payment for the costs associated with patient death at the end of the episode. One of Wachterman's conclusions was that for-profit have a higher proportion of patients with non-cancer diagnoses, such as dementia, a long length of stay, and nursing home residence, which represents a financially beneficial opportunity for the hospice because the per diem rate is consistent throughout the episode. She adds, "Patient selection of this nature leaves nonprofit hospice agencies disproportionately caring for the most costly patients."
Hospice services fit dementia patients' needs
"I am not happy with the implications that dementia patients in nursing homes require a lower skilled level of hospice care than other patients," says Joan M. Teno, MD, MS, professor of community health and medicine at the Warren Alpert School of Medicine of Brown University and associate medical director for Home and Hospice Care of Rhode Island, a not-for-profit hospice in Providence, RI. "The assumption is that nursing home patients don't require the same level of care from hospice staff, but that is not true," she says. Once a patient is a hospice patient, the nursing home staff may provide daily care, but skilled care to control symptoms such as shortness of breath or pain must be provided by the hospice staff, she points out. "Patients with dementia can be more difficult than other patients because they are impaired longer, each patient's condition progresses differently, and it is difficult to manage pain in long-term patients," she explains.
"The implication is that for-profit hospices focus on nursing home patients because they are more profitable," Teno says. "I live in a state in which almost one-third of deaths occur in nursing homes," she says. Teno points out that she shared that knowledge with hospice management and suggested they look at enhancing services to nursing home patients. (See more on specialized services, pg. 40) "This was not a suggestion made to increase revenue, but to improve end-of-life care for nursing home patients," she adds.
Although the study reports a lower proportion of patients with cancer in for-profit hospices (34.1% vs. 48.4%) and higher proportions of patients with dementia (17.2% vs. 8.4%) and other diagnoses (48.7% vs. 43.2%), Hunter does not believe that hospices with either tax status select patients by diagnosis. "I think all hospices want to provide end-of-life care to as many patients and families that qualify for hospice services as possible," he says. Hospices in the area he serves don't turn away patients because they are living with a specific illness that may have a shorter length of stay than other illnesses, he says. "It just doesn't exist or occur in the real world," he adds, "It's unfortunate that some researchers take small variations in data, overlay tax status of an organization, and then conclude that an issue exists due to tax status."
There is nothing wrong with a business model that develops a specialized focus on certain diagnoses or locations of care, says Schumacher. "I spoke with a former CMS [Centers for Medicare and Medicaid Services] administrator who told me that a hospice can market their program as specializing in care for certain diagnoses as long as they accept all patients who are appropriate for hospice care," he says. The Medicare Conditions of Participation apply equally to all hospices, regardless of tax status, so all hospices are bound by the same rules, he adds.
Hospices are required to accept all patients who are hospice-eligible, but referral sources often influence length of stay with the timing of their referrals, points out Carole Fisher, president and chief executive officer of Nathan Adelson Hospice, a not-for-profit hospice in Las Vegas, NV. "We have two inpatient units that most often care for patients who are moved directly from the hospital setting to the hospice setting," she says. Referrals from hospitals are often late, with just days left in the patients' lives, she points out. Referrals from home health agencies affiliated with hospices or family physicians familiar with hospice tend to come earlier so patients and family members can benefit from palliative care and counseling. "The study did not define how many of the hospices in the study had inpatient units or were affiliated with hospitals or home health agencies," she adds.
Handle publicity carefully
Although the JAMA article and subsequent news coverage caught the attention of the hospice industry, most hospice leaders did not hear much from their constituencies. "I've had a couple of conversations with people, but I pointed out that the study did not paint the full picture," says Fisher. With a total of 26 hospices in Southern Nevada, most of which are for-profit, Fisher points out that using the study to cast a negative impression of the competition is not the way to go. "We face a tough task to educate people about care at the end of life and we are all working toward the same goal of improving access and care," she adds.
The most important thing for hospice leaders to keep in mind is that the study did not measure quality, points out Teno. Although the data included types of visits such as home health aides compared to nurses or social workers, it was not able to describe the visit, she says. "We don't know if the visit was a 10-minute interview with a family member or a full assessment or several hours to help with personal needs," she says. Also, telephone calls were not included in the data as visits, she adds. Many hospices check on patients with telephone calls to follow up on medication changes, symptoms noticed during the visit, or in response to calls from family members, she points out. "Telephone follow up is an important part of care that wasn't addressed," she adds.
Schumacher agrees that the study should not be used by anyone to evaluate quality of care. He is concerned that people looking at this study may overlook the critical importance of quality measures when discussing the provision of hospice care. He points out, "It's important for people to know that quality of care is not based on tax status, it is based upon leadership within the hospice."
1. Wachterman MW, Marcantonio ER, Davis RB, et al. Association of hospice agency profit status with patient diagnosis, location of care, and length of stay. JAMA 2011;305:472-479.
For more information about tax status and hospice, contact:
Joan M Teno, MD, MS, Professor of Community Health and Medicine at Warren Alpert School of Medicine of Brown University and Associate Medical Director of Home and Hospice Care of Rhode Island. Telephone: (401) 863-1606. E-mail: firstname.lastname@example.org.
Carole Fisher, President and Chief Executive Officer, Nathan Adelson Hospice, 4141 Swenson Street, Las Vegas, NV 89119. Telephone: (702) 796-3143. E-mail: Cfisher@nah.org.
J. Brad Hunter, Chief Executive Officer, Legacy Hospice, 675 Peter Jefferson Parkway, Suite 180, Charlottesville, VA 22911. Telephone: (434) 970-7776. Fax: (434) 970-7773. E-mail: email@example.com.
Mark M. Murray, President and Chief Executive Officer, The Center for Hospice Care, 4220 Edison Lakes Parkway, Suite 210, Mishawaka, IN 46545. Telephone: (800) 413-9083 or (574) 243-3100. Fax: (574) 273-2755. E-mail: firstname.lastname@example.org
J. Donald Schumacher, President and Chief Executive Officer, National Hospice and Palliative Care Organization, 1731 King Street, Suite 100, Alexandria, VA 22314. Telephone: (703) 837-1500. Fax: (703) 837-1233.