Opinion Page: For-Profit or Nonprofit, Hospice Is Not a ‘Hustle’

From Hospice News, December 2, 2022

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The profit conundrum

Ensuring the permanent sustainability of nonprofit hospices is crucial. These providers pioneered the care model, blazed the trail that led to the Medicare Hospice Benefit, and remain vital to the communities they serve. To paraphrase a quote from Isaac Newton, nonprofit hospices have giants standing on their shoulders.

But for-profit providers also have a part to play, and their tax status does not automatically impugn their integrity. Providing quality care and turning a profit are not mutually exclusive.

Many stakeholders have voiced concerns about the growing incursion of private equity into hospice and the larger health care space.

While any significant changes in an environment that affects the lives of millions of people should be closely examined, I am uncomfortable with statements that praise or castigate an entire population or sector in generalized terms.

Reality is rarely so cut and dry, and almost every action has both positive and negative effects. The ideal for any system is to develop a set of practices and oversight that encourages the positive and holds bad actors accountable (which is admittedly easier said than done).

Some investors may have indeed made or encouraged decisions that prioritized profits over patients, but one can’t assume that such allegations are universally applicable or that the influence of PE has been entirely negative.

PE capitalization has allowed a contingent of providers to build scale and expand to new markets, including some inroads to underserved communities. This has given many patients access to care that they otherwise may not have been able to receive.

Investor dollars have also allowed hospices to obtain tools and technology that can improve efficiency and in some instances have a positive impact on quality.

“This is a complex issue, and it can’t be solved just by someone saying that equity funds shouldn’t be in health care, or that we’re going to regulate equity funds more. At the end of the day, equity funds are an economic driver,” Randal Schultz, a certified public accountant and health care lawyer with Lathrop GPM, told Hospice News earlier this year. “The clients of mine that get involved with equity funds for the most part are doing it because they’re getting some money out of it, but also because they’re getting new technologies that they need. By getting new technologies, they’re able to provide a broader base of care and better and faster care for their patients.”

darryll jones