Hospice Leaders: Rising Demand, Staffing Critical to 2022 Outlook

Hospice News spoke with a group of industry leaders about the most pressing market forces and trends that will shape the space during 2022. Their comments carried some common threads, including rising demand for care in the home, continued labor pressures and industry consolidation, the involvement of hospice in Medicare Advantage and intensifying regulatory scrutiny.

CEOs and other hospice executives also recognized the need for a dedicated community-based palliative care benefit within Medicare, and expect to see further disruption to patient census and length of stay associated with the pandemic.

Rising Demand for Home-Based Care, Census Pressures

We are expecting to see continued growth in demand for good end-of-life care, especially exiting a period where there has been so much death that may not have been managed or supported.

— Steve Rodgers, CEO, AccentCare

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The changes in service delivery and consumer expectations caused by COVID will continue and some may become permanent. This includes the preference by patients and families to have care delivered in their homes versus in a hospice unit; a higher portion of patients accessing hospice later in their illnesses; and lower occupancy in skilled nursing facilities, where many hospices have focused their business model.

— Susan Ponder Stansel, CEO, Alivia Care

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There isn’t great news in any way from the pandemic, but individuals’ awareness of the [hospice] benefit and the fact that they can receive care at home has really elevated.

With the most recent wave [of the pandemic] and some of the access restrictions that are going back into place with certain health care facilities across the country, I think we’re going to continue to see the ongoing impact inside of hospice that we’ve seen really starting in 2021, as it relates to continued pressure in average daily census — which is not due to the total number of patients we’re bringing on, but the contraction of how long those patients are on service with us. It’ll still cause some disruption inside of every hospice providers’ census throughout 2022.

— Nick Westfall, CEO, VITAS Healthcare, a subsidiary of Chemed (NYSE: CHEM)

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Persistent Labor Shortages

Workforce shortages and rising salaries will challenge hospice providers and may limit their ability to expand geographically or in the lines of service they offer. These shortages will bring into sharper focus work redesign, efficiencies, and use of technology to extend staff resources, since shortages will continue to persist.

— Ponder Stansel

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When you think about the key factors that will shape the hospice space inside of the next calendar year the first one is staffing availability and the ongoing pressure that that’s going to continue to create not only for hospice, but for all health care providers. Staffing availability inside of the space will drive the outcome of all key predictions in 2022, for all providers.

— Westfall

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Widespread Industry Consolidation

There has been a lot of hospice M&A over the course of last year to 24 months. I think it’s going to slow down a little bit, due to some of the pressure that the public companies have faced. I think this is going to kind of create a little bit of a pause in the M&A marketplace and a reduction in their multiples. There will be assets that are still selling out there thinking that they’re going to get big multiples, but the buyers aren’t going to be there anymore.

— Todd Stern, Executive Vice Chair, CEO of Hospice, AccentCare

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Mergers and acquisitions will continue and growth in the number of hospice providers will continue as well. Interest in hospice as a key to effectively addressing the needs of high cost/high need patients with advanced illness will continue.

— Ponder Stansel  

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I think absent further expansion of sequestration relief across the health care continuum, we’re going to see the continuation of smaller or single-site agencies struggle. Everyone has had the headwind pressure affiliated with COVID, but because of those restrictions, if they see huge disruption in their single site, or one of their two sites, it creates more of a burden from a continuity perspective. We’ll see some of those going out of business, and what that means is ongoing consolidation — that hopefully does not lead to any restriction of access in communities.

— Westfall 

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Growing Influence of Medicare Advantage (For Better or Worse)

Hospice has successfully demonstrated its value during the almost 40 years of its existence as a Medicare benefit. While the carve-in will be expanding slightly in 2022, we have yet to see any data indicating the demonstration’s success in these objectives, and in fact, we’ve seen data showing the contrary.

Our primary concern with the carve-in is that individuals facing the end of life could have fewer hospice providers to choose from, and in some rural communities, no providers at all. Secondly, there are concerns that the benefit could be diluted, and that the psychosocial, spiritual, and volunteer components will be diminished or eliminated. Finally, we are concerned that reimbursement will be lowered, therefore reducing the scope and frequency of services providers will be able to offer.  

— Joshua Proffitt, President and COO, LHC Group (NASDAQ: LHCG)

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Continued Medicare Advantage growth and adoption of bundled and risk-based payment by other providers upstream of hospice: Health Plans and providers who are taking risk will seek to build, buy or partner with hospices to help manage their high need/high costs patients to improve financial and clinical outcomes.

Health Plans will have a tendency to want to own this part of the care continuum, even as they continue to work with independent hospice programs. Scale and the ability to cover geographic areas will also play a role in preferred provider decisions and will favor national chains or hospices that have affiliated or established networks. Hospices will continue to develop palliative care or similar upstream serious illness management programs both as a way to protect their referral pipeline and to expand their value in at-risk payment models. The expansion of the VBID Medicare Hospice Carve-In Demonstration will challenge hospice providers to prepare for a future that contemplates the Carve-In becoming a regular part of Medicare Advantage.

— Ponder Stansel

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Intensifying Regulatory Scrutiny

Growth of the benefit, as well as the still-to-be-seen after effect of COVID-19, will lead to increased regulatory requirements and oversight, requiring more knowledge and investment by hospice providers to be compliant with the heightened regulation. We support a balanced and reasonable increased focus on oversight to ensure the highest quality of care is provided for the most vulnerable populations.

— Proffitt

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Quality scores and resources such as care-focused programs and the ability to provide all four levels of hospice care will become increasingly important as [payer] networks narrow and preferred providers will emerge.

— Ponder Stansel

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Calls for a Community-Based Palliative Care Benefit

The pandemic has underscored the many gaps and inequities in our current health care system for the seriously ill. As many Americans realized these shortcomings, and the vulnerabilities they exposed, hospice and palliative medicine further crystallized as important specialties. If we’re talking about the future of the hospice benefit, we must also talk about an upstream extension of the benefit.

There is a desperate need for a benefit that provides the full continuum of care for the last phase of life, not just the last six months. This benefit could be structured with levels of care stratified based off patient prognosis, need, and access to resources, and would continue to grow and evolve with the patient. Care transitions should not be hand-offs, but rather, a seamless progression from the patient perspective. Reimbursement should mirror this patient stratification and evolution. To bring this benefit to all who need it, its terminology should reflect its expansive potential, focusing on palliative language to expand rather than confine its potential.

— Proffitt

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Efforts to establish a home delivered palliative care benefit under Medicare will continue, but will include the opportunity for other types of providers, not solely hospices, to offer this service. Access to palliative care and its effectiveness at improving financial and clinical outcomes is receiving increasing attention, and if a palliative care benefit with payment is available, the number and types of providers offering this service will expand rapidly.

This may encourage more providers to get into the hospice business or may offer the opportunity for hospices to partner so that transitions in care will be coordinated and seamless for the patient.

— Ponder Stansel

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I’m optimistic that we see some progress and potential closure on the formalization of a community-based palliative care demo. As a country, we really need to get formalization around what palliative care is going to mean in a community-based setting, the services, and who is going to provide those services because if done right, it will be very complementary to patients enrolling and electing the hospice benefit.

This will mean earlier access in the hospice benefit, reduction of total cost of care, better coordination with patients and families earlier in their disease trajectory. Frankly, we’ll be better as a country, the sooner we get that in place. Let’s just forget about demoing it. Let’s just do it. 

— Westfall