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The for-profit hospice industry grew by 128% between 2001 and 2008, while nonprofits expanded only 1% and government-sponsored hospices jumped 25%, according to research published in the summer issue of the Journal of Law, Medicine and Ethics. Not surprisingly, for-profit hospices generate higher revenue than their nonprofit competitors. Investigators say they do this by selectively recruiting long-term patients who don't have cancer, thus gaming the Medicare payment system. The study co-author, Robert Stone, M.D., says that other studies have shown that when for-profit hospices select longer-term patients, this results in overpayment, which, in turn, drains funds from the hospice program.
"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,” Stone said.
Stone and his co-author, Joshua Perry, J.D., M.T.S., contend that these practices put non-profit hospices' financial survival at risk. The study also highlights questionable marketing practices used by for-profit hospices. One tactic involves sending representatives into nursing homes and giving residents branded gifts. Another is paying nursing home employees for future hospice referrals.