Private Equity and Corporate Ownership Are Transforming End-of-Life Care

January 11, 2025
4:21 pm

The transformation of hospice care in America represents one of the most profound shifts in our healthcare system – from a community-based, mission-driven service to an increasingly profit-oriented enterprise. This evolution raises urgent questions about the quality of care for those facing life’s final chapter.

The Changing Landscape of Hospice Care

In just two decades, the hospice industry has undergone a dramatic transformation. Today, more than 70% of hospice providers operate as for-profit entities, with private equity firms and publicly traded companies rapidly expanding their presence in the field. This shift represents a stark departure from hospice’s origins as a volunteer-driven, nonprofit movement dedicated to providing dignified end-of-life care.

The financial incentives are clear: hospice care offers some of the highest profit margins in healthcare, with for-profit providers reporting Medicare margins three times higher than their nonprofit counterparts. These attractive returns have sparked a gold rush of investment, particularly from private equity firms seeking quick profits through short-term ownership.

Impact on Patient Care

Recent research paints a troubling picture of how profit motives affect care quality. A comprehensive study published in JAMA found that for-profit hospices consistently deliver poorer care experiences across multiple measures.

Lower Staff Levels: For-profit facilities typically employ fewer registered nurses and rely more heavily on licensed practical nurses and nursing aides. The JAMA study revealed that nonprofit hospices maintain significantly higher staffing ratios, particularly for registered nurses who provide the most skilled care.

Reduced Visit Frequency: Patients in for-profit hospices receive significantly fewer visits from doctors and nurse practitioners – about one-third the number compared to nonprofit facilities. This reduction in professional care visits directly impacts the quality of pain management and symptom control.

Higher Discharge Rates: For-profit hospices show higher rates of live discharges, often transferring costly patients to hospitals rather than providing needed care themselves. This practice, while financially beneficial for the hospice, creates tremendous stress for patients and families while increasing overall healthcare costs.

The Human Cost

Behind these statistics lie real human experiences. Families report significantly worse care experiences in for-profit hospices, with concerns ranging from inadequate pain management to delayed response times. The RAND Corporation’s analysis found that family caregivers were nearly 5 percentage points less likely to recommend for-profit hospices to others.

The emotional toll on healthcare workers cannot be ignored. Many experienced hospice nurses and care providers report feeling pressured to reduce visit times and carry larger caseloads, compromising their ability to provide the kind of compassionate, thorough care that drew them to hospice work.

The Role of Medicare

Medicare’s payment structure inadvertently enables this profit-driven approach. The system pays a set daily rate regardless of services provided, creating incentives to minimize care while maximizing enrollment length. This has led to troubling practices:

Aggressive recruitment of patients who may not qualify for hospice care
Preference for longer-stay patients with conditions like dementia over cancer patients who typically require more intensive care
Cost-cutting measures that reduce direct patient care time

A Path Forward

The situation demands immediate attention from policymakers and healthcare leaders. Several reforms could help restore hospice’s original mission:

Enhanced Oversight: Implementing stricter monitoring of ownership changes and quality metrics, with particular attention to patient outcomes and family satisfaction.

Payment Reform: Developing new reimbursement models that better align financial incentives with quality care and patient needs.

Transparency Requirements: Mandating clear disclosure of ownership structures and profit margins to help families make informed choices.

Worker Protections: Establishing minimum staffing ratios and protecting healthcare workers who report quality concerns.

The Stakes

The commercialization of hospice care represents more than just another market transformation – it strikes at fundamental questions about how we care for the vulnerable and honor human dignity at life’s end. As one hospice veteran noted, “The main way of making the bottom line look good is decreasing visits”. This stark assessment highlights the fundamental tension between profit maximization and the intensive, personalized care that dying patients deserve.

We must ask ourselves: Can we reconcile the profit motive with the sacred trust of caring for the dying? The evidence suggests this experiment in market-driven end-of-life care is failing those who need it most. The time has come for meaningful reform that puts patient care and dignity back at the center of hospice services.

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