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Are for-profit hospices cherry-picking patients?

By Lynne Peeples

NEW YORK (Reuters Health) - By choosing cheaper patients -- those likely to stay longer and rely on less skilled care -- for-profit hospices may be leaving nonprofit hospices overburdened with patients who cost more to take care of, according to a new study.

Researchers note that the findings -- which suggest that for-profit hospices choose a patient mix that allows them to make more money from their Medicare reimbursements -- could help inform the current debate surrounding Medicare payment reform.

"The number of for-profit hospices has rapidly increased over the past decade, raising questions about potential financial incentives in hospice reimbursement," lead researcher Dr. Melissa Wachterman of the Beth Israel Deaconess Medical Center, in Boston, told Reuters Health by e-mail.

Hospices typically provide care for patients who have been given 6 months or less to live. Nearly 1.5 million Americans use these services every year. Hospices are paid a flat rate -- $143 a day in 2010 -- by Medicare to take care of a patient regardless of how much care that patient requires.

Based on information from 4,705 patients included in the 2007 National Home and Hospice Care Survey, the researchers found that for-profit hospices had more patients with non-cancer diagnoses, nearly half, than did nonprofit hospices: 48 percent versus 34 percent.

This included twice as many patients with dementia, a group that generally requires fewer visits from hospice nurses and social workers.

Further, a typical patient in the for-profit programs spent 4 days longer in hospice care. Half spent more than 20 days in hospice, whereas half of patients in nonprofit hospices stayed 16 days or less, report the researchers in the Journal of the American Medical Association.

"Hospices are most resource-intensive right at beginning, when a lot of activity and assessment is going on with a patient, and then a little more intensive again at the end of peoples' lives," Andrea Gruneir of the Women's College Research Institute, in Toronto, who was not involved in the current study, told Reuters Health.

In other words, hospices were making larger profits off patients that stuck around longer.

"Of course, these differences only speak to the kinds of patients hospices are caring for, and not the quality of care they're providing," added Gruneir.

The researchers note that their study was in fact limited by a lack of information concerning both access to, and quality of, hospice care.

That troubled Jon Radulovic, a spokesperson for the National Hospice and Palliative Care Organization, which represents both for-profit and nonprofit hospices.

"We don't necessarily feel that this research shows that there's cherry-picking. You'd need to take a more extensive look than they have done," he told Reuters Health, adding that his organization "forbids" such selective admitting of patients.

Sean Michael O'Neill, who is completing a Ph.D. in policy analysis at the Pardee RAND Graduate School in Santa Monica, Calif., said the study "does a great service in highlighting the financial incentives that may be influencing hospice representatives." But O'Neill, who was not involved in the current study but whose own research has identified similar patterns, emphasized the need for further research to fill in the gaps.

Wachterman offered some recommendations for the debate over Medicare payment reform.

"Policymakers should consider paying hospices a higher daily rate for cancer patients who we found received more visits from skilled providers," she said. "They could also pay more for the days when patients first enroll in hospice and around the time they die when they need more care, a policy that Medicare is already considering."

For now, noted Wachterman, families can still be reassured that "Grandma will receive similar nursing care regardless of whether she is in a for-profit or nonprofit hospice."

SOURCE: http://bit.ly/eqKgPT Journal of the American Medical Association, online February 1, 2011.