Need good care? Buyer beware!

Need good care? Buyer beware!

By: Craig Dresang, CEO, YoloCares

 

Admittedly, I can sound like a broken record on the issue of nonprofit versus for-profit hospice care.  But my needle is stuck in this groove for good reason.  Mostly because State lawmakers have let down their founding hospice providers . . .  the ones that grew out of the Civil Rights Movement, gave birth to end-of-life care in the Golden State, and remain California’s safety-net.

 

My senior leadership team and I just returned from the National Partnership for Healthcare & Hospice Innovation’s annual conference where we learned that the number of hospice providers in California has now swelled to 1,700 . . . nearly all are set up as profit-seeking enterprises.  It is also predicted that a large number of them may disappear in another three to seven years.

 

Compare California’s roster of seventeen hundred hospice providers to a state like Florida where there are only 48.  The Sunshine State boasts a population of 5 million seniors (21 percent of the population), while the Golden State has 6 million seniors (15 percent of the population). The proliferation of providers has been more pronounced in states that do not have Certificate of Need (CON) laws. States with CON programs, like Florida, regulate the number of hospices allowed in an area.  Without such laws consumers are often preyed upon at their time of greatest need by bad actors.

 

In California, the for-profit hospice industry is explosive. While some would argue that growth and the resulting competition is healthy, the average consumer is usually not aware of the quality divide that may separate one hospice from another.  Simply put, California lawmakers have botched the end-of-life care industry, but more importantly, they have failed the patients, families, and communities who need really good care and in-place safety nets for their most vulnerable residents.

 

Granted, a few years ago the California governor placed a temporary moratorium on the issuing of new hospice licenses to slow down the explosive growth.  But it was too little too late.  Many smart and ambitious venture capital investors bought up scores of licenses before the moratorium and they have continued the cycle of open, sell, repeat.  It is ironic that a highly regulated state like California where it is illegal to whistle for a lost canary before 7 a.m. (in Berkeley), it is perfectly legal for modern-day snake oil salesmen to open a hospice and keep it running with no reported quality scores.  Lawmakers need to stop majoring in the minors and start majoring in what matters most to people who need care.

 

Nearly 50 years ago, when grass-roots physicians and clinicians formed YoloCares, they never imagined a future where nearly 2,000 other hospice companies would enter the California market.  From privately owned mom-and-pop shops to multi-billion dollar publicly traded corporations, many hospices simply seek to profit from patients during the most vulnerable time of their lives . . .  usually at the expense of quality-of-care.

 

Some entrepreneurs enter the hospice industry to build a nest egg for early retirement.  Others wish to line the pockets of shareholders, owners, and investors.  In fact, a former nonprofit nurse was recently wooed into a business deal, perhaps by the same guy who has already opened, then sold or closed hospices, under a variety of names, in Sacramento.  Although the owner’s standing for delivering sustainable high-quality care is sketchy, he may have a solid reputation for building wealth.

 

This same nurse told our chief clinical officer, “I have been approached by someone who wants me to become an owner of a new hospice company.  My primary role will be to build a census of 40-45 patients and then we’ll sell it.  I’m told I will make millions of dollars.”  She also revealed that she was recruited because of her relationships with other care facilities . . .  nursing homes, and retirement/assisted-living communities.  This person, who had less than a year of hospice experience, and is not a certified hospice and palliative nurse, has branded herself as a hospice guru on social media. Her agency does not state accreditation.  Nor does it show any publicly reported quality scores.

 

The for-profit formula is simple.  High caseloads for clinicians + High pressure + Barebones patient/family support = 20 percent profit margins for owners and investors.  Unfortunately, there are many new market players that lack integrity and employ a business model where they only meet the minimum threshold of hospice requirements.

 

A recent LA Times investigation reported a correlation between the rapid growth of hospice companies and a wave of fraud and, in some cases, inadequate care for those in their final days of life.  The report described a one-mile stretch of Victory Boulevard in the San Fernando Valley where there are more than two dozen hospices in one office complex alone.  Some of those hospice operators were cited for sending recruiters to places like senior centers to recruit patients by offering them free medical equipment, housecleaning services, or other things of value.  The piece highlighted a “cottage industry” of kickbacks and deceptive practices.

 

At its core, the most fundamental reason for our nation’s embrace of the hospice model was to foster a more humane world and to clear the way for a gentler, less tumultuous crossing for the sickest among us. Madalon Amenta, co-founder of the Hospice & Palliative Nurses Association and co-author of Nursing Care of the Terminally Ill, has said, “Hospice care evolved from a basic moral instinct of caring for your neighbor who is suffering. Throughout history it has always been a simple human response to a real human need.”  Until her recent passing, Amenta was also a board member for YoloCares.

The spiritual principles that have been the bedrock of hospice can be at odds with contemporary transactional culture. Amenta, reflecting on her role in getting the Medicare Hospice Benefit passed in Congress, says, “American venture capitalists quickly figured out how to monetize a model of care that was previously designed to be benevolent and charitable at its core.”  Patients can receive exceptional high-quality care in either commercial or community-grounded programs; they can also receive poor care in either type of organization. While there should be no moral judgment about a hospice provider’s tax status, it is important to understand the tensions that exist within the industry and the wide range of differences related to practice and philosophy of care.

In recent years, Health News Florida reported that, “According to the Medicare Payment Advisory Commission, for-profit hospices had Medicare profit margins of 19 percent compared with 0-6 percent for nonprofit hospices.”   There are real and perceived fears that if profitability becomes a focus, then quality can take a back seat.  According to a 2022 article in Fortune, “The ability to turn a quick profit in caring for people in their last days of life is attracting a new breed of hospice owners: private equity firms.  That rapid growth has many hospice veterans worried that the original hospice vision may be fading, as those capital investment companies’ demand for return on investment, and the debt load they force hospices to bear, are hurting patients and their families.”

 

In the same article, Dr. Joan Teno, an adjunct professor at Brown University School of Public Health, said, “Many of these transactions are driven by the motive of a quick profit.  I’m very concerned that you’re harming not only the dying patient, but the family whose memory will be of a loved one suffering because they didn’t get adequate care.”

 

California does not need greater scrutiny of its legacy nonprofit safety-net providers.  The state needs to put newcomers under a magnifying glass and consider revoking hundreds of hospice licenses, especially for providers that are not accredited and do not post quality scores.

 

And each of us, as citizens of our state and as human beings, deserve compassionate and high-quality care when we or someone we love is dying.  Our families deserve better care.  Our lawmakers and policy shapers must do better to ensure this kind of care is available to all of us, and that bad actors, more concerned about their wealth and retirement funds, don’t have a way to prey on any of us when we find ourselves in a life and death crisis.