Medicare spending per hospice stay rose by 5.9% after private equity firms acquired for-profit hospices, relative to similar for-profit providers that were not acquired, according to a study described by Harvard Medical School on Monday, November 2. The increase amounted to $993 per stay from a baseline of $16,922 and accompanied longer stays, without a significant increase in weekly visits or care time.
The Harvard Medical School release said the findings appear in the November issue of Health Affairs. Researchers compared 191 hospices acquired by private equity firms between 2018 and 2022 with 1,305 matched for-profit hospices that were not private-equity-owned, using Medicare fee-for-service claims from the two years before and after each acquisition.
Average length of stay increased by 6.3 days relative to comparison hospices. A smaller share of patients had stays shorter than a week, more stayed longer than six months, and patients were more likely to be discharged alive, the researchers reported.
The analysis is observational. It identifies changes associated with acquisition, not proof that private equity ownership caused them or that an individual provider abused Medicare or harmed patients. Longer hospice stays and live discharges, on their own, do not establish better or worse care.
The researchers found no statistically significant change in total visits or time spent on visits per week. They also reported fewer social work visits and no increase in physician, nursing or home health visits that might otherwise help explain longer stays, according to the release.
The patient mix changed as well. The share of patients with dementia at acquired hospices rose from 22.6% to 23.8%, while the comparison group’s share was unchanged. Senior author Zirui Song said a shift toward patients needing less daily care was a more likely explanation for longer stays and live discharges. That is the researchers’ interpretation of the pattern, rather than proof of a deliberate admissions strategy at every hospice.
The authors pointed to incentives in Medicare’s daily hospice payment system and suggested reviewing how payments reflect patients’ care needs. Possible approaches include adjusting daily payments for clinical need or paying separately for certain services. They cautioned that such changes could create new incentives for diagnostic coding or unnecessary services, requiring oversight.
First author Sneha Kannan of the University of Pittsburgh worked with Julia Driessen, Jeremy M. Kahn, Catherine Mankiw and Song. The research was supported by the National Institute on Aging, the Agency for Healthcare Research and Quality and Arnold Ventures, according to Harvard’s release.
The comparison is specifically between acquired and non-private-equity-owned for-profit hospices. It should not be read as a direct comparison with nonprofit hospice care or as a finding that any one ownership model determines the experience of every patient and family.
JBizNews Desk | New York
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