Hospice News spoke with a group of industry leaders about the most pressing market forces and trends that will shape the space during 2025.

Their comments carried some common threads, including rising demand for care in the home, continued labor pressures, industry consolidation and intensifying regulatory scrutiny. They also spoke about the need for greater integration of hospice into the larger health care continuum and the benefits of operators broadening their scope of services.

During these conversations, four key themes rose to the forefront for the coming year.

A drive towards integration

I think we’ll continue to see organizations investing in integration models to continue to better integrate hospice organizations further upstream and taking a broader view for frail elder care.

– Jason Parsons, CEO, Blue Ridge Hospice

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My prediction is that hospice is going to become a part of the continuum. It is not going to be a standalone. We are going to see other programs that continue to try to meet the needs of the non-hospice space. When I say non-hospice, I mean how the regulatory bodies have defined it. There will be larger networks of providers. But I think you will continue to see a niche group of providers that are very driven by the needs of their communities.

– Cheryl Hamilton Fried, CEO, Kirva Hospice

Demand grows despite blustery staffing headwinds

We will begin to see a more significant increase in utilization in 2025 (vs 2024) as education regarding the benefit, increased [long term care] occupancy versus the pandemic era, and a growing senior demographic all converge on the sector. Staffing will continue to be a significant concern as will caregiver satisfaction, and I anticipate that the industry will turn to AI to battle these important issues.

– David Jackson, CEO, Choice Health at Home

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Overall, we would not expect the hospice industry to see substantial change in 2025 relative to recent history from a utilization, compliance or reimbursement perspective. While we predict labor markets will continue to open up, the demand for caregivers will be the most significant headwinds that hospice (and broader healthcare) continue to face.

– Heath Bartness, CEO, St. Croix Hospice

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We’re going to continue to see the expanded acceptance and understanding of the values of the hospice benefit. More people will access the benefit, and hopefully more people are accessing the benefit earlier in their disease trajectory.

First and foremost, the industry is going to continue to find that the number-one influencing factor of any provider’s ability to continue to meet the demand on the marketplaces is their abilities to attract and retain talent. It will just continue to be one of the most critically important things for 2025 and beyond.

–Nick Westfall, chairman and CEO, VITAS Healthcare

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There will be continued growth in the number of providers, including expansions by existing providers and first-time entrants into the market. There is still lots of [private equity] money out there waiting to be invested and the low capital costs associated with becoming a provider make it a very attractive investment target. This continued growth will push on already strained survey and licensure oversight resources in states that have no barrier to entry.

– Susan Ponder-Stansel, CEO, Alivia Care

A drive towards oversight and reform

There will be continued pressure from the trade associations and Congress for [the U.S. Centers for Medicare & Medicaid Services (CMS)] to design and implement effective reforms to address fraud and poor quality providers in the industry.

At the same time, there is a recognition that the hospice benefit needs to be updated to allow for expanded access for all types of patients and assure that hospice care and the important value it provides remain a strong and relevant part of our health care system.

– Ponder-Stansel, Alivia Care

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I think we can continue to expect further regulatory oversight and investment in compliance and quality programs is vital.

– Parsons, Blue Ridge Hospice

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I see the current environment as more challenging for smaller agencies and have concerns that it may impact rural provision of care. The cost savings of the hospice program and general patient satisfaction is so significant that I believe we must be very cautious as we strive to improve the benefit. I believe general awareness is improving and that it may create an opportunity for the industry to have a greater voice regarding oversight.

The regulatory environment may be challenging but my hope is that it will improve the global compliance of the service and that it will not hinder our efforts to improve health equity for the sector via growth in underserved communities.

– Jackson, Choice Health at Home

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The industry continues to see growing audit activity throughout 2024, and we suspect that to continue to 2025. We don’t anticipate there to be any meaningful new increased regulation or pushes but anticipate the current heightened level of scrutiny to continue.

– Bartness, St. Croix Hospice

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Regulation continues to be the largest variable for next year and beyond. There’s currently too much unnecessary administrative burden due to certain fundamental misunderstandings of the hospice benefit.

Long-standing mission focused providers need to continue to work with CMS to expand ways to define and measure quality inside of hospice that really isn’t reflective of cookie-cutter approaches from other completely unrelated health care industries. There’s certain uniqueness inside of hospice, and so just trying to include those so that it doesn’t have certain unnecessary biases embedded inside.

– Westfall, VITAS Healthcare

A rising tide for M&A with broader range of services

I expect to see significant activity in M&A as organizations determine they can better stay relevant and vital to consumers, especially deals that allow for integration across verticals.

– Parsons, Blue Ridge Hospice

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For providers to stay relevant, they’re going to have to expand services beyond hospice, or they’re going to have to consolidate with other providers.

– Hamilton Fried, Kirva Hospice

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I anticipate an increase over 2024 in general [M&A] activity with valuations ranges similar to the pre-pandemic era.

– Jackson, Choice Health at Home

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We have seen M&A opportunities increase in the second half of this year, and would think that will accelerate in 2025. There are still high hurdles to be cleared, and we don’t expect the heady times of 2020-2021 to return but would anticipate seeing continued increased activity, especially among the small to medium size providers.

– Bartness, St. Croix Hospice

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Whether through merger or acquisition, I believe we see the continuing trend of creating larger hospice organizations. Increasing operational costs, small or no increases in reimbursement, concern about preparing to be more competitive as the potential for narrow contracting networks increases will be behind this trend.

– Ponder-Stansel, Alivia Care

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We’re going to see renewed activity going on, mergers, acquisitions of agencies — those that maybe haven’t had the success at attracting and retaining talent or coming out of the pandemic. There’ll be opportunities for other providers that either operate in the space or are looking to get into the market in which that agency serves to accelerate some consolidation activity inside of the industry.

I do think the outlook overall is positive. The one thing I’ll continue to reinforce is diligence around organizational alignment will be critical.

– Westfall, VITAS Healthcare