Physician Offices an Engine for Hospice Referral Growth

New physician relationships are anticipated to be a major opportunity for referral partnership growth in 2021 among hospice providers. Communicating the value of hospice care to physicians will be an important key to developing and sustaining this largely untapped area of referring relationships. 

Demographics, evolving payment models and shifts in patient accessibility during COVID-19 are some of the driving forces that are opening doors to physician office settings for a growing number of hospices.

Among 160 hospice leaders surveyed for Hospice News’ 2021 Hospice Industry Outlook Report, 41% indicated that physician practices represent the largest opportunity for referral growth this year. This number is up from just 27% in 2020.

Hospices have increasingly received more patient referrals from physicians and fewer from facility-based settings during the pandemic as more patients forego institutional care due to fears of contracting the virus.

“Physicians are such a large component of health care systems, managed-care organizations, and also the nursing home community — that’s how we will grow our business,” said Carl Brodarick, chief marketing officer of Seasons Hospice & Palliative Care, based in Illinois. “We want to have good relationships with those folks and health care systems that are primary and acute care in nature, because they will drive a lot of referrals to us.”

Seasons in late 2020 merged with home health and hospice provider AccentCare.

New physicians outranked other referring settings such as hospital systems and assisted living facilities at 24% and 15%, respectively, according to the Hospice News outlook report. Roughly 15% of respondents indicated that reduced referrals during COVID-19 represented one of the greatest pandemic-related challenges to the hospice industry this year.

Reduced access to patients in settings such as nursing homes and assisted living facilities has posed a significant challenge for hospice providers. Disruption in the larger health care and aging services space throughout 2020 adversely impacted VITAS Healthcare, a subsidiary of Chemed Corp. (NYSE: CHE) as well as Amedisys Inc. (NASDAQ: AMED). Both companies took financial hits to their hospice segments, largely due to difficulty accessing patients in these settings, though the rise in physician office referrals offset some of those headwinds.

Demographic tailwinds are driving hospice expansion in 2021. According to a 2018 U.S. Census Bureau report, more than 617 million people were 65 and older in 2015, representing about 9% of the world’s overall population, with projections that this aging population will grow to about 1.6 billion, or 17%, by 2050. Lower fertility rates and increased life expectancy have led to the rapid growth of the older populations across the world and in the United States, with the U.S. senior population anticipated to boom “for many decades to come,” according to the Census Bureau.

“When we look at referral volume growth, we analyze what’s the best way to go and look at what physicians or health care systems have a large senior population, because 85% to 86% of our admissions are for folks over 65. Those are obviously where we’re going to gear our resources at,” Brodarick told Hospice News. “We’re looking at managed-care companies and we’re looking at delegated risk providers, which are these physicians and advance practice nurses who take on Medicare Advantage patients. That’s a huge growth area.”

Of all Medicare decedents in 2018, “50.7% received one day or more of hospice care and were enrolled in hospice at the time of death,” according to data from the National Hospice and Palliative Care Organization (NHPCO). A rising number of individuals enrolled in Medicare Advantage plans that year utilized the hospice benefit.

Value-based programs could create opportunities for hospices to expand their reach and grow through physician-based referrals. Yet, misconceptions about hospice care proliferate the health care system at large, with many misconceptions limiting referrals.

“I am perplexed at the lack of knowledge of hospice care, even among physicians. Increasing industry awareness and depending on your relationship with physicians will continue to be challenges of hospice in 2021,” Sharon Branham, president and CEO of Kentucky-based Appalachian Hospice Care, told Hospice News.

Some hospices have begun building relationships through hospice education and training programs in collaboration with other health care providers such as primary care physicians. Spreading awareness and understanding through educational efforts is one of the strategies towards building referral connections and communicating the value of hospice in terms of cost-savings opportunities.

“We’re trying to provide education to our referral sources that can assist them with not only their education and their certifications, but also with things as they relate to hospice and the end of life,” Brodarick told Hospice News. “Because hospice done right is the best thing for the patient, and it’s also good for our systems.”