how to choose hospice why ownership

Monday, May 19, 2008

How to Choose a Hospice – Why Ownership Matters – updated

(This post is part of a series of posts. To read from the begining of the series go here.)

As I said in the previous post, the differences between hospice companies are often small and usually hard to find. This post deals with one thing that I feel is a huge difference; Ownership.

Who owns the hospice is a very important question, because it gets to the very core of the reason the company exists. If a company is listed on the stock exchange, then the stockholders are the owners. Do you think they invested in the company because they wanted to own the stock of a company that takes good care of people? Do you think Charles Schwab advises their clients to invest in HCR Manor Care (the owner of the national chain Heartland Hospice) because they treat people right? No, investors buy stock because the company makes money. If the owners of the company are focused on profit, then those that run the company must make money or else. Do you think the CEO of Heartland Hospice or, the largest hospice in the nation, VITAS (owned by Chemed who also owns Roto-Rooter) is more likely to lose his job because of poor patient care or poor earnings? In that situation, patient care can not be the number one priority. Your priority is your loved one; if that isn’t their priority, then there could be problems. Avoid the problem by finding out who the owner is and what their background is. Some of this information can be found on the company’s website if you want to do that research to avoid wasting time with a phone call.

Many hospices are non-profit, so they may say something like, “We are owned by our community”. The community won’t be expecting profits from the company, so your free to move to the next question. I’m not saying that non-profits are always your best choice, but they do avoid the ownership profit-margin issues that can come with some for-profit hospices.

A follow-up question here would be to find out what else the company owns. Two years ago, I would have told you that a hospice that does anything other than hospice is a warning sign that you may not be working with the best. Now, many hospices are diversifying into other areas of healthcare because of instability within the hospice industry. They are branching out to solidify their bottom line just in case the government makes changes to the Medicare Hospice Benefit that negatively effect hospices financially. I guess that means that my advice here is to find out what they did first. If they do home health and hospice, odds are they did home health before they did hospice. This means that hospice isn’t their core business or mission, they branched out to hospice for the same reasons hospices are branching out to other health care businesses today. The problem in this type of situation is that these companies generally will view hospice as the equivalent of home health and treat hospice the same way they treat their home health. You want a hospice that exists to do hospice. It is crucial that your hospice see hospice care as something sacred. They will all tell you that they do, but knowing their ownership background will help you know which ones to believe. A hospice that has branched out into other areas of health care may be just fine, but companies that branched out into hospice may be a red flag.

That’s question number one. I’ll post on question number two in another post.

A special note for those of you choosing a hospice for someone in a nursing home:
Do not use a hospice that is owned by your nursing home. Let me repeat. Do not use a hospice that is owned by your nursing home. Odds are the nursing home has told you that you should consider hospice and in the same breath told you that you should consider a specific hospice. If the hospice they recommend is owned by the nursing home or by the same person/company who owns the nursing home, stay away! I can not stress this enough. The biggest service a hospice provides for nursing home residents is a different set of eyes and ears for the patient. A hospice that is not affiliated with your nursing home will not have any problem reporting a problem if they see one. Their focus is making sure that the patient is cared for, and if they have to point out poor care that is being given by the nursing home, then so be it. If the hospice and nursing home are in bed together, then the hospice employee knows that they are making their boss look bad when talking to families about issues related to the nursing home. Worse than that, many nursing home/hospice combo companies have some crossover employees. If the nursing home nurse changes her nametag during the day and becomes the hospice nurse, do you really think she will do much in the way of assessing the patient? She saw the patient earlier in the day as his/her nursing home nurse, so why pay attention later just because she has a different name tag on? One more time: do not use a hospice that has the same owner as the nursing home. Every nursing home patient needs someone who is willing to rock the boat. Hospice workers are often professional boat rockers; don’t reduce the impact that hospice can have on your loved one by using a hospice that can’t speak freely when there is a problem.

For the sake of clarity here, I am not saying that hospices that are owned by nursing home companies are not good at what they do. Some of them may be excellent, but there is an inherent conflict that comes from them caring for patients in their own facilities.


Oklahoma Hospice Dude

Hospice Guy,
I agree with you how important it is for citizens to ask their hospice provider options as to who owns the hospice. Ownership tells us alot and even though not all details are exposed in ownership, it does start the process. I would also highly recommend citizens to check out the 29 questions to “ask a hospice” that is published by the Hospice Foundation of America. They are great questions to pin a hospice down to show accountability and responses.

The problem is, most patients and their families have to make the hospice choice in the middle of a very difficult situation and are in no emotional state to pursue the 29 questions or ask who owns the hospice.

In the hospice community, our challenge is to educate citizens now, before the difficult situation arises for any one of us.

Thanks for the blog … I also agree with the “conflict of interest” for nursing homes who own hospices and the nursing home only offering their hospice and not other choices. It just does not feel right, sound right or look right. I think there’s an old saying that goes something like, “if it quacks like a duck and walks like a duck, it’s probably a duck.”

I agree, there are probably good hospices owned by nursing homes, but they have certain set themselves up for question and in a difficult situation.

Christian Sinclair, MD

Besides a hospice branching out into home health what other businesses are you seeing them doing?

I would also expound that the other business rule does not apply to natural extensions of hospice which you slightly allude to. For example a hospice starting a pediatric hospice or a palliative care focused home health is not quite the same as a hospice that decides to start doing traditional home health of post op hip fracture repairs.

HG, what would you say about the relationship between hospices and nursing homes that work frequently together? When does efficiency become collusion? That is a hard line to draw. I would not expect families would be able to sort that out before choosing a hospice. I would encourage families to ask for at least two choices when starting from a nursing home and choosing a hospice.

Hospice Guy


Home Health is by far the most common dual business with hospices. There are also hospices moving into Private Duty home care, which is a bit of a better fit than Medicare Home Health. There are also quite a few hospices that own medical equipment companies and pharmacies. These are natural fits since hospices spend a lot of money on DME and drugs.

From there the list gets a bit crazy. I know of hospices who are doing telecare. Others own/run physical therapy agencies, medical employee agencies, or physician practices. I have heard of a hospice that owns a funeral home, but don’t know if that is really true.

On the nursing home/hospice relationship. The line between efficiency and collusion is almost impossible to identify. I agree that real choices should be given. I know many nursing homes have a hospice they will allow you to use if you insist on going against their wishes and using someone other than their preferred hospice. That isn’t offering choices. Allow two or three hospices in your building doesn’t mean that you offer choice. You often see nursing homes that have 95% of their hospice patients with one hospice, but insist that they are offering choice since 5% are with another hospice. We all know that is a farce, but it happens every day.

Griffey and Charlie

I am having to choose a Hospice Agency in Orange County, CA for my father. Your posts have been very informative…thank you.

One question, I have. Do Hospice agencies offer a “finders fee”, so to say, to hospital personnel for bringing in a patient?

I feel like I am being steered to one particular agency.

Thanks again – also , if you happen to have a recommendation for Orange County, I’d be very interested.

Goss Boss

Simply because a Hospice is profit oriented does not in anyway mean that it provides inferior care. THe best way to ensure high profits is to efficiently and effectively deliver excellent service. Furthermore corporate guidlines and quality care assurances often ensure that publicly traded deliver excellent services. Please do not over generalize, and I beg readers not to be so naive to think a for profit company cares not about patient care


Having been involved in Hospice care (for almost 20 years now) provided by not for profit, for profit privately owned and corporate publicly traded. I have not found corporate interests to be compatable with quality care at the end of life. I fear the profit motive generates a 'quick buck' mentality that is frequently at odds with care. There are exceptions I'm sure. There are huge problems related to hospices admitting inapproriate patients who remain on service for several years despite all the Quality Assurance markers which should theoretically prevent such a practice. 'Costs' (not including administrative staff) are cut to the absolute bone regardless of the impact on care. When patients are admitted to a hospice they have no idea what to expect (ie how to determine good care) unless they have known someone taken care of by the same hospice. So by the time problems arise its almost too late. More times than enough I have heard of patients ask to transfer from one hospice to another to be told Medicare would stop the benefit….a flasehood but it happens. These hospices continue to operate, get referrals and profit. So by all means let's not generalise but let's not assume that good care and profits necessarily go hand in hand. I will never be associated with a publicy traded hospice corp again and will think very hard before I work with or for a private for profit. Our patients deserve the absolute best we can provide and by so doing we will maintain a healthy bottom line. Very best wishes. B


For almost 4 years I have worked for a non-profit hospice in California, for 2 years volunteering, and then as a part-time paid employee without benefits. Recently I did what I should have done 4 years ago: review the agency's IRS Form 990, the IRS form that hospices that qualify as non-profit 501(c) 3 organizations must file and make publicly available. I was devastated! The husband and wife owners/key employees are raking in almost $600K, which is about 6.8% of program expenses. According to, the percentage of program expenses that key employees ear is a very important matter to consider when determining whether to donate to a charity. I've looked at other hospices and other charities, and the key employees are compensated much less. So the matter of whether a hospice is technically profit or non-profit is a bit more complex. Some "non-profits" are that in name only. The owners of the non-profit hospice I work for are making huge profits.