Hospices Acquired by PE Firms, Publicly Traded Companies See Increases in Dementia Patients

Hospices tend to see an increase in dementia patient admissions as well as home-based utilization following an acquisition by a private equity firm or a publicly traded company.

Among hospices purchased by PE firms, the number of dementia patients served rose by 6% compared to for-profit providers that were not acquired, a new study in JAMA Research Open found. Care in the home, as opposed to a nursing facility or other setting, also rose an average 3.4%.

Meanwhile, similar trends exist among providers acquired by publicly traded organizations, who see an average 13.5% rise in dementia patients and a 5.3% increase in home-based care delivery.


“Prior to acquisition, private equity firms and publicly traded companies targeted hospices with more patients in nursing homes; after acquisition, both agencies of private equity firms and publicly traded companies saw a rise in Medicare patients with dementia and patients who received hospice services at home, and hospices acquired by publicly traded companies were associated with lower patient Hierarchical Condition Category [HCC] score after acquisition,” the study authors wrote.

After an acquisition by a public company, hospices saw a 1.4% drop in HCC scores among their patient populations, according to the research.

HCC scores are designed to predict the costs associated with a patient’s care. Patients with lower HCC scores often need hospice care for longer periods of time, though their care needs may be less intensive or complex.


Researchers analyzed data on hospice acquisitions between 2013 and 2020 to compare changes in sites of care or patient population compared to other for-profits that did not undergo a transaction.

The study included 158 hospices that had been acquired by PE firms, 250 purchased by publicly traded companies, as well as 1,559 other for-profits.

“These findings suggest that [private equity] and [publicly traded companies] select patients and sites of care to maximize profits,” the study indicated.

Dementia-related illnesses are the fastest growing primary terminal diagnosis among hospice patients.

A little more than 20% of hospice decedents in 2020 suffered from dementia, up from 18.5% in 2019, according to the National Hospice and Palliative Care Organization (NHPCO). Comparatively, circulatory and heart diseases, the next highest, represented 10.2% of terminal diagnoses in 2020, while cancer accounted for 7.2%.

Dementia patients also tend to have the longest average lengths of stay in hospice — 181 days in 2020, compared to an average 97 days among all patients.

“Proponents claim that these [PE and publicly traded] institutional investments create economies of scale through clinical standardization, quality improvement and integrated systems, thereby enhancing care and profitability while reducing clinicians’ administrative burdens,” the study authors wrote. “Critics argue that PE and PTCs could prioritize short-term, above-market returns, which may lead to agencies selectively enrolling and targeting patients who require less complex care and longer hospice stays, such as those with dementia and nursing home residents.”

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