As health and hospital systems show a growing interest in home-based care, the competitive landscape for hospices could change — both in terms of market share and staff recruitment.
A leading concern is that hospices will see dips in their referral streams, admissions and ultimately their bottom lines, according to YoloCares CEO Craig Dresang.
“In most markets, hospitals will both refer patients to an independent hospice and compete for patients with a local hospice provider,” Dresang told Hospice News. “Since they both refer and compete, we must find ways to simultaneously partner and vie for patients in a friendly and collaborative way.”
Some hospice providers feel that this represents a conflict of interest for health systems, Dresang said. This is largely due to the potential to see revenue gains from both sides of the reimbursement coin.
The California-based hospice provider is among those that have seen health system and hospital M&A activity rise. For example, earlier this year Adventist Health expanded it footprint to Mendocino County.
Last year Hoag Memorial Hospital Presbyterian formed a home care and hospice venture in the California — rebranded as Hoag at Home.
California isn’t the only market seeing a swell of this activity.
In 2021, Wisconsin-based Aspirus Health System expanded with hospice and palliative care programs in Michigan’s Upper Peninsula. That same year EmpRes Healthcare subsidiary Eden Health began offering hospice and palliative care in Idaho Falls.
Leaders in some hospices and other providers expect disruption in the M&A space.
Some hospices fear that more competition from health and hospital systems may have adverse financial and operational impacts, according to Stan Massey, partner and chief strategy officer for Transcend Strategy Group. However, strengthening a hospices collaborations and partnerships with them could be improve patient access and somewhat ease workforce pressures, he added.
“Some hospices are feeling this perceived threat of competition from health systems,” Massey told Hospice News. “But it’s looking for ways to partner with them and provide true quality end-of-life care. Some hospices have been successful in being a partner in research, education and filling in gaps of care. The bottom line is that by helping provide the right care, it also really does include providing great education and support for family caregivers because ultimately, this staffing shortage is going to affect all of health care.”
Several factors are driving facility-based health care organizations to eye home-based care, including a growing preference to age in place among seniors. More hospitals and health systems are investing in hospice in a response to growing demand and the current strain on acute care services. Health systems are looking to expand into community-based hospice and palliative care to complement existing offerings while creating new care delivery channels.
More health systems stepping into hospice can have positive effects when it comes to patient access and the ability to quickly process referrals, according to St. David’s HealthCare President and CEO David Huffstutler.
“When other health care systems invest in services like hospice care, everyone benefits,” Huffstutler told Hospice News in an email. “It allows us to discharge patients when they are ready, and enables patients to choose a setting in which they are most comfortable – whether that’s in an assisted living facility or their own home.”
Texas-based St. David’s HealthCare was formed through a partnership between hospital operator HCA Healthcare (NYSE: HCA) and two nonprofit organizations — St. David’s Foundation and Georgetown Health Foundation. The recent expansion of services has its roots in HCA’s $400 million acquisition of an 80% stake in Brookdale Senior Living’s home health and hospice segment last year.
The health system recently launched a home health and hospices business, branded as St. David’s HealthCare at Home and St. David’s Hospice & Family Care.
“The addition of home health and hospice services to our health care network allows us to expand access to care and improves our ability to meet the needs of our patients,” said Huffstutler. “Home health and hospice are critical to the continuum of care. Patients will have improved care coordination and integration of hospice services when they are discharged from our hospitals.”
One of the biggest motivators for hospitals is to expand their continuum of care, according to Massey. Part of this motivation is driven by capacity constraints as hospitals see rising demand for inpatient care, he said.
“Some of our health-based system clients have really turned to hospice and home health mainly as a pressure relief valve to keep hospital beds. They don’t have enough to meet demand,” Massey told Hospice News. “Even though we’re not in a hospital capacity crisis because of COVID any longer, there are a lot of hospitals that still are often at capacity issues. Health systems haven’t figured out the mix of patients yet that they are getting from their own hospital systems who are often high acuity and really don’t have that much life left.”
The impact on patient choice, quality and understanding of end-of-life care services is at the root of hospice providers’ concern, according to Dresang.
Hospital-based hospices have made the market more competitive and more confusing for health care consumers, he said.
“On one hand, it looks like increased competition. But it is actually limiting competition, because a health system will either intentionally or unintentionally limit a patient’s choice regarding hospice,” Dresang said. “It has not turned out to be a good thing for patients. It has diluted the public’s understanding of end-of-life care, and challenged the independent organizations that have long histories of being integrated into their communities and that serve as a safety net.”
But there’s enough room for health and hospital systems to coexist alongside hospices, according to Massey.
Health and hospital systems need the expertise that hospice providers bring when it comes to delivering serious illness and end-of-life care outside their walls in home- and community-based settings, he added.
“Home-based hospice care is a different ballgame,” said Massey. “They just can’t wave a magic wand and be an expert at providing it without some experience, or hiring workers that have the experience. That is part of the appeal. For those hospices that have been serving their communities, primarily based on home-based services for 30–40 years, they truly are experts. I think they are going to have an edge on the expertise over hospital-based systems for quite some time.”
But questions linger in the minds of hospice providers around whether hospital and health systems will work with or against them in terms of stretching the limited pools of staffing resources wider.
A number of hospice leaders previously told Hospice News that staff poaching from bigger health systems and other providers is becoming a greater source of tension in the industry’s recruitment and retention ground war. This often comes with promises of higher wages, more extensive benefit packages, or sign-on bonuses.
Health systems tend to be better-positioned financially than hospices to offer staff higher compensation.
This means hospices are fighting harder to recruit and retain enough staff to provide end-of-life care amid widespread workforce shortages, according to Dresang.
“Most hospices will never be able to pay nurses at the same rate a unionized hospital does,” Dresang told Hospice News. “However, we win over candidates with organizational culture, benefits, and work-life balance.”
Companies featured in this article:
Adventist Health, Aspirus Health System, Brookdale Senior Living, Eden Health, EmPres Healthcare, Georgetown Health Foundation, HCA Healthcare, Hoag Memorial Hospital Presbyterian, St. David's Foundation, St. David's HealthCare, St. David's HealthCare at Home, St. David's Hospice & Family Care, Transcend Strategy Group, YoloCares