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For Profit vs Non-Profit Hospice - Does it Really Matter?

By February 2, 2009

A recent blog by Niko Karvounis on Health Beat deals with the sticky subject of for profit and non-profit hospices. Karvounis has done some respectable research looking at studies of for profit vs non-profit hospices and it's well worth reading. The gist of the blog is that we need to be wary of the huge growth of for profit hospices and the care they provide:
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.

This is an issue I have strong personal feelings about, having worked for a very large for profit hospice and a medium sized community non-profit hospice. I'm always hesitant to say that for profit hospices don't provide good care; I know there are many that do. I also know there are many non-profit agencies that provide sub-standard care. In my own experience, however, the non-profit hospice I now work for provides many more services than the for profit I used to work for. We have a large number of volunteers that provide massage and reiki therapy in addition to standard volunteer services. We have a volunteer run Transitions program for people who aren't quite ready for hospice or don't yet qualify for it. We provide more supplies, such as pull-up diapers and food supplements, than the for profit did.

Full Disclosure: This is only a comparison of two hospices that I have personally worked for and not reflective of the entire hospice industry

The entire atmosphere is different as well. At the for profit I worked for, the focus seemed to be to bring in as many patients as possible - unless they were going to die in the next 24 hours or needed expensive care such as tracheotomy care and feeding tubes. Patient care decisions seemed to center around cost management. At the non-profit I work for now, patients are brought in because they need hospice care. Period. Patient care decisions are centered around what is best for the patient.

This isn't to say that the hospice I work for now isn't concerned with the bottom dollar. Every hospice has to budget carefully, especially in this time of impending cuts to the Medicare reimbursement plan. It is, however, admirable to run a hospice agency with financial finesse and excellent patient care - whether your for profit or non-profit.

I've recently written an article about choosing a hospice provider with a focus on who own the hospice.

Choosing a Hospice Provider: Hospice Ownership

I'm sure there are some strong opinions on this topic and I'd love to hear what you have to say. Leave your comments below!

February 2, 2009 at 8:22 pm
(1) Jenn Heisler says:

I truly believe not for profit is better for patients, when the not for profit is NOT paying insane wages to executives.

I’ve seen for profit hospices that excluded entire categories of drugs (primarily chemo) that can be effective for pain control in palliative care in order to put more money to the bottom line.

For profits also shy away from those patients in the most dire need, the late referrals where the patient is an imminent death, where there will be no chance of breaking even, let alone profit.

February 2, 2009 at 9:29 pm
(2) Charisse says:

I have to disagree with the comments on profit vs nonprofit. I have worked for both. The non profit I worked for could not provide all the services that the patients and families needed. The could not provide any supplies. The for profit hospice I am working for is amazing. They provide all the supplies, medications,nursing, cnas, social work services, bereavement services, Grief and loss support groups. I live in rural Illinois. By rural I am not talking about the suburbs of Chicago, I am talking about the largest town in the area has about 20000 people and the smallest is 500. The towns are at least 2 hours away from each other. The not for profits out here do not have the financial backing to provide the services that the patients and families need. They are short staffed and do not the ability to provide the needed services out here. Maybe it just depends on the area as far as profit vs not for profit. I don’t think it is good to catagorize hospices on one or two hospices. It just depends I feel on the management. I don’t know about the hospices where you are, but the hospice I work for are not ” highly paid executives.” But there is also something to be said for profit hospice executives and that is, they don’t have to worry about loosing their job for lack of funding and are at risk more for not doing the job they were hired for. All the hospices in our area are good hospices. Some just can provide more services and supports than others. That is why I am a proponent of community integration where we can work together for the benefit of the patients and their families. It really isn’t about profit ve not for profit it is about patient and family care. It about doing the best they can with what they have. There is good and bad in everything. It is why patients and families should have choices of doctors and hospices that help them at the very tough time in life. It is about educating people on those choices, allowing them to make the best choice for their family.

February 3, 2009 at 11:12 am
(3) Kristin Hayes says:

I have noticed a big difference between working for non-profit hospitals versus for profit hospitals. The difference is all in the quality of patient care. Because not-for-profit hospitals put all of their proceeds back into the organization they seem to spend more money updating facilities and equipment, they seem to spend more money training their staff, and overall seem more concerned about providing the best patient care. I have taken a pay cut to leave for profit hospitals to work for a non-profit organization that has much better working conditions.

February 9, 2009 at 7:41 pm
(4) Charisse says:

You are right it is about the quality of care. It is also about choices. Patients and their families have the right to investigate and pick which hospice is best for them be it profit or not for profit. I have worked for both and the way I see it, the quality of care is the bottom line. We really need to look at what is best for the family and the patient. It isn’t about which is better, and there should not be a competion about it. There is good and bad to both, but working together we can give patients and their families the best of both.

February 9, 2009 at 9:17 pm
(5) dying says:

I agree Charisse. It all comes down to quality of care and there are more important factors to consider when choosing a hospice provider than it’s profit status. The location of on-call staff and response time in an emergency is key, the relationship the hospice has with a pharmacy is also important, as well as the type of staff and services the hospice provides.

February 13, 2009 at 4:09 pm
(6) Nick says:

When my wife was dying from ALS, we had visits from a for profit and a non-profit hospice. The difference between the two was overwhelming. The for profit’s focus was 90% on “qualifying” my wife for care. Forty-five minutes later I was so angry I almost threw them out. The non profit (Namaste) on the other hand was focused in exactly the opposite direction. 90% of their time, especially in the beginning, was toward understanding what my wife wanted and the remaining spend on the qualifying process. What a difference!

This looks like something I ought to invite people to comment on in my website http://www.livinginlightofdying.com, something I created to honor my wife and provide a place for discussion about how we live when faced with an illness diagnosed as terminal.

February 14, 2009 at 6:44 am
(7) Melody says:

I have worked for both a small company for profit is able to give more quality care i feel pullups/high low beds meds/same RN same aids and etc/non profit have to have approval from managment for supplys like pullups meds and etc large hospices may give massage and oils but they are very tight

March 20, 2009 at 10:53 am
(8) Andrew J. Forester says:

I am a for-profit company owner who specifically helps seniors. I also began my hospice carreer as a volunteer before I accepted a position with a non-profit hospice.

I appreciate your candor regarding this matter. However, I am sensing even you are becoming more cautious in discussing your true feelings in order to remain “balanced” and safe within the industry.

Medicare never intended for hospice to be a for-profit business. Every dime was meant to be spent on patients and their care givers whether it be at home, a nursing home or hospital. My current boss worked for for years in an extremely large for-profit hospice. They expected a 30% return. This means that 30% came off the top and the rest was spent on the required activities.

All hospices are to provide the SAME services. However, HOW those services are provided differs greatly. As a very large non-profit DO NOT have to please share holders so in real dollars, we are able to have our clinical staff stay with patients longer. We are able to invest in staff and technology to attract and keep the best employees.

Here in Michigan, three hospices already went under due to the lowering of the reimbursement rate. We know this because they contacted us and transfered their patients to us. Spread the word, there is no money in hospice care. If they are making money, then something critical is being cut back.
We actually go in the hole each year providing care. We use our non-profit status to acquire donations to assure all care and treatments can be granted.

Shouldn’t there be one time in our life where we can feel free from wondering if some one is making a buck off of us? That time should be when we lay down to die.

May 18, 2009 at 3:28 pm
(9) Leighlou says:

One important note to consider is that all hospice organizations are reimbursed at the exact same rate from Medicare- whether they are for profit or not for profit. So if they money is exactly the same coming in, why do not for profits need to do additional fundraising?
The care is equal- have you ever met someone who works for hospice who does not put the patient first?

May 18, 2009 at 6:11 pm
(10) dying says:

Leighlou, I think Andrew summed it up really well. The reimbursement rate is the same for a non-profit and for-profit but how they use the money varies greatly. And, unfortunately, I have worked for a hospice that did not put the patient first but focused on profits instead. No business is corruption proof.

Andrew, I am trying to maintain a good balance. I have seen large for-profit hospice agencies do excellent work with a focus on what’s best for the patient. That said, do I think hospice should ever be a “for-profit” business? Hmmmmm…..

June 13, 2009 at 12:56 am
(11) Georgia says:

For-profit vs Non-profit I disagree that this is the issue that makes a difference. I believe that is whether the organization is a large corporation (Some not all) or a small community owned and operated. It also is the integrity of the company providing care.

Large corporations with offices all over the United States are looking for numbers and most cost effective care, which at times means low quality of care. The ones who are in charge loose sight of what is most important “THE PATIENT”. Does not mean that they do not care but they a board and share holders to answer to about what is coming in for profit.

I own a for-profit in my local community because several large corporations have moved in and I wanted things to be different. I live with my patients in the same community.

I also do not understand the concept that because of the low reimbursement several have had to close or the new Cop’s are causing undue cost on hospice. While on some patients we loose money, there are those who have minimum medication requirements or equipments requirements that we make a little money on. Do not get me wrong I am here to take care of my family and employees but that can be done and give GOOD QUILTY CARE!

Also what was written in prior comments is true Medicare, State Funding such as Medicaid, Private Insurance all pay the same rate to non profit and for profit. The non or the for does not make a difference for insurance payment. One big difference is the fund raising dollars for non profits.

Families always have choices, they should ask questions and more questions.

September 12, 2009 at 1:08 pm
(12) Dewayne says:

Angela is correct to point out the temptation for profit, and the tendency to ration or even deny care to those who may have greater end-of-life issues and needs. Remove the profit; remove the temptation. This idea stikes at the heart of those who are perhaps a little more interested in profits than patients, i.e. corporations and shareholders.
This point also carries over into the entire healthcare debate currently raging in our nation, and until the motives for profit and “free market” policies are confronted and revealed for what they are: greed and elitism, our system will continue to provide less and less for more and more.

October 2, 2009 at 8:04 pm
(13) chandra says:

I like to say that hospice is needed. I have been a hospice nurse for years and currently work for a for profit. I have noticed that my employer has becpme increasingly slack with providing the basic things such as pullups, lotion, wipes. I and my co- workers are upset about this and have bought supplies with our own wages. This includes paying for meds. My employer is getting richer while my patients go without. I stay for two reasons . I do not want to leave my patients and I am starting the process of opening up my own not for profit hospice. In my city, the face of hospice has looked ugly. I am ashamed to say. I want to do something better and improve the care patients who are dying should receive. It is really hard to provide good care to my patients when I do not have the supplies to work with. I hate when I have to go to a local hospital and borrow blood collection tubes just to do my patients labs. I hate the fact that at my employers inpatient unit there is no T.V. in the patients rooms while my employer lives in a mansion. This is something I am not proud of, but I continue to stay because the patients I do have need me. Needless to say , there are many hospices out there who sucking the life out of medicare and medicaid to fill their own pockets. There is nothing wrong with paying bills but living in a mansion while the sick and dying are lying in your facility with out a T.V. IS OUTRAGES!!!!

July 21, 2010 at 10:55 am
(14) Jen says:

Do you know why your non-profit volunteer program was able to provide such an amazing aray of services???? Let me tell you.

Non-profit hospices are allowed to utilize most volunteer clearing houses and 3rd party volunteer recruitment organizations (ie: The United Way, RSVP etc…). Usually due to those organizations’ rules and by-laws, for-profits are not permitted. So, all of the volunteer recruiting, training and retention is done by just one Volunteer Services Manager, not by a whole team of, or multiple teams of people, like non-profits have access to.

As an MVS of 2+ years for a for-profit hospice organization that has a service area of 8 counties, roughly 400 square miles, I can say that it is a VERY difficult job to recruit MANY volunteers of different areas of expertise all by yourself.

So please, before you assume that the reason for lack of special service availability is because for-profit hospices are trying to bilk every last cent out of our dying patients by not providing those services, do your research.

I am DEEPLY offended by this article.

July 29, 2010 at 9:09 am
(15) adult family home in washington says:

I like this article. Not just this article, but many articles on this website. Programmers

are human too.

But some questions remain: what if the good job has a bad salary and vice-versa? This is a

frequent dilemma for many people.

August 5, 2010 at 2:00 am
(16) Stephanie says:

I must say.. I too was deeply offended by this article. Not much research was done on the for-profit side. I have been a hospice nurse for 7 years and recently have one year in top management in a for-profit. I have worked on field and now learned the dynamics of running a company. For comparison – we have only one non profit hospice in our city with 7 other for profits. By far, the for-profit hospices that I have worked for (and that has now been 2), do a better job with pt care. This is only reflected by what I have seen and heard in the community. Currently, the company I work for has demonstrated great care for the dying patients. As management, it is my job to make sure the patients needs are first and my employees are deliverying great care. I believe it all comes down to the company you are talking about. We have CHPN nurses and our owners believe in hiring the best staff. Budget is important. . . a profit margirin is important… This allows us to have better equipment, better training and more options for our patients. I also thought at one time that management just wanted “numbers”. Now that I am on “the dark side” I have developed more of an understanding in what you need to make your company successful and continue providing the care needed to the patients and community. The bottom line is not weither the company is for profit or non profit- it is how management runs the company. I do know some “high paying executives” in the non-profit hospice, so to me that is the same. The community seems to be made to believe that we are after their money to get rich of the dying and that is not true. This has been expressed by the non profit hospice in trying to grow their census with use of expensive commercials and ads in the paper. So how is that fundraising money really being used? I guess there are two sides to every arguement. I am for the hospice that provides the best care and currently that is a FOR PROFIT AGENCY in town.

August 22, 2010 at 8:53 am
(17) NJ Computer Nurse says:

For profits are in the business for profit. I have personal experience with a hospice in Delaware for my uncle. As a RN for a hospice/homecare agency not for profit which did not service his area, I was APPALLED at the lack of responsiveness and LACK OF SERVICES provided to him despite phone calls. Their objective is to get the hospice revenue with as little output as necessary.
I am now faced with assisting a family friend in his choice, and the nurse from the FOR PROFIT hospice came in to chat with him. I point blank asked if her agency was for profit and she told me yes. When I asked about not for profits, she told me most had switched over, this after I told her I am a RN ( and an informatics RN). I found 2 others in our area that are not for profit and I’ve counseled my friend to put an immediate hold on that other referrral and consider one of the not for profits.

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