Nonprofit Hospices Offer Best Value
One of the most crucial decisions a person makes in life is choosing a hospice agency to support their loved ones for end of life care.
While there are many factors to consider when selecting a hospice, the tax status of the agency is an important one. Research commissioned by the National Partnership for Healthcare and Hospice Innovation and conducted by Milliman, a global actuarial and consulting firm, found significant differences between for-profit and nonprofit hospice agencies. (Link to study here.) We at Community Nursing Services (CNS) understand this well as Utah’s oldest nonprofit home health care agency.
Key differences identified by the Milliman study centered around financial incentives, the level of care required by patients and services offered.
Financial Incentives
The Milliman study found that the profit margin earned between for-profit and nonprofit agencies is significantly different – 19.9% in for-profits compared to 3% in nonprofit agencies. Since for-profit hospice companies have an obligation to generate profit for owners and investors, they are more likely to care for patients with the best insurance coverage. For-profit agencies also report spending 300% more on advertising than nonprofit companies.
Conversely, nonprofit hospice agencies do not have the same level of financial incentives. Like CNS, they are likely to have the mission of serving the needs of the community where they are located. Non-profit hospice agencies are often willing to accept patients with commercial insurance and Medicaid insurance, which reimburse at a lower rate than Medicare. They also might offer care to patients who are without insurance or the ability to pay for care.
Level of Care Need
Since sicker patients require more dollars to meet needs, for-profit hospice agencies may prescreen if patient is ‘high-cost’ or ‘medically complex’ – which refers to a patient who requires a lot of attention and care due to multiple symptoms and medications – and deny admission if care is expensive. ‘High-cost’ patients are often younger in age and suffering from cancer or a severe illness. The bottom line is that ‘high-cost’ patients require more work for the same amount of money as a ‘low-cost’ patient, which is a financial deterrent for profit motivated companies.
Nonprofit agencies are much more likely to accept patients who have expensive care needs, often admitting directly from an inpatient stay in a hospital. These patients are often sicker with greater (and more expensive) care needs but nonprofits have an eye for service to the community instead of financial gain.
Services Provided
One of the most impactful advantages offered by a nonprofit hospice is access to more services. The Milliman study found that non-profit hospices provide 10% more nursing visits, 35% more social worker visits and twice as many therapy visits per day. This translates to much more hands-on care for patients.
In addition, for-profit hospices report spending less than half what nonprofit agencies spend on bereavement services for families after the loss of a loved one. Grief work is challenging and bereavement services help families cope with the profound loss of losing a loved one.
At CNS, matching the plan of care to the patient and family needs is mission critical.
“I truly believe the patient and family is our number one priority,” said Johnson. There are often complicated issues that arise for patients and families at the end of life. We want to work together to find solutions that are best for the patient and family.”
While no one looks forward to having to make the difficult choice of who to trust with end-of-life care, there are many good reasons to choose a non-profit agency like CNS to support you and your family during this important journey.