Three California-based hospices — the Elizabeth Hospice in San Diego, Mission Hospice & Home Care in San Mateo and Hospice of Santa Cruz County — have formed a strategic partnership called the California Hospice Network to support the growth of community-based hospice care throughout their state.
Though each network member will remain a distinct, independent organization, the partnership enables the hospices to collaborate on best practices and improve efficiency through cost sharing. No leadership or board changes will occur.
To better compete with large for-profit hospice companies, nonprofit hospices in several states have formed similar coalitions. Three hospices in 2013 established Ohio’s Hospice. That partnership has since expanded to nine members in addition to joint venture activities.
Earlier this year, four hospices in Oregon formed the Oregon Nonprofit Hospice Alliance.
“Nonprofit hospices are facing increasing costs and decreasing revenues amidst a rapidly changing health care landscape,” said Jan Jones, chief executive officer of The Elizabeth Hospice, who will also serve as chief executive officer of California Hospice Network. “More hospices are looking for opportunities to work together, whether it is in a structured collaboration or through mergers and acquisitions. We are all looking to improve efficiency while also improving the experience that our patients and families receive.”
The network will allow its members to share back-office costs and boost their negotiating power with health plans and payers. To help facilitate this the member organizations will transition to using the same electronic medical record systems.
One early goal for the network is to consolidate their employee health insurance plans to reduce costs.
“We will gain not only new employees but also gain more patients, so we will have more negotiating power on our costs,” Jones told Hospice News. “Each of us now has our own back-office functions, and that’s expensive. There is a really strong business case for being able to consolidate a lot of the back-office costs so we can reinvest those savings in our programs.”
Looking ahead, the member hospices expect that joining forces would give them more leverage in negotiations with Medicare Advantage plans in the event of a hospice carve-in, Jones said.
“Our goal is have the entire footprint of California participate, so nonprofit organizations throughout the state can work together to negotiate with payers,” she told Hospice News.