What is the trend?

Industry stakeholders are responding to the desire for older adults to age in place, reduce overall cost of care, and improve patient control over care decisions. As a result, stakeholders are capitalizing on home-based care solutions for primary care all the way to end-of-life. A more comprehensive suite of home care services, rather than a point solution, can help avoid fragmentation in the care continuum and ‘slippages through the cracks’ that patients experience in post-acute and acute settings.

What are the potential impacts on stakeholders?

• Hospice providers will need to prepare for the increased demand for more in-home hospice services, and the challenges associated to scaling those services, despite the majority of hospice already takes place in the home.
• MA plans are already interested in home-based solutions and will be trying to figure out how hospice and palliative care fit into the equation. Home-based, non-hospice palliative care is still in its infancy, but it’s gaining a lot of momentum. We are seeing a lot of investment from payers in this space since CMS has allowed MA plans to offer palliative care as supplemental benefit under the Value-Based Insurance Design (VBID) model.
• Home-care vendors will be able to extend their current suite of home-based offerings, such as telehealth platforms and wearable sensors with real-time data feeds, to palliative and hospice models.

Why does this matter?

• Integrating home care, home health, and hospice improves the seamlessness of referrals and ensures patients get the appropriate care in the appropriate care setting. This integration can also capture greater share of the labor market. The vertical integration of labor will change the way stakeholders compete for both paid and unpaid labor.
• Stakeholders cannot overlook the challenges of extending more end-of-life care to the home if they want to be a successful player in this space.

Challenges of extending more end-of-life care to the home

1. There’s a tight labor pool for these services, especially in rural areas. Creating a viable financial model for affordable in-home hospice can be challenging.

2. The burden on caregivers providing end of life care is significant. It’s important for them to have the ability to deal with potential complications. Hospice does not provide 24-hour care in the home except in short crisis situations, so symptom flare-ups like a spike in pain or difficulty breathing may be challenging to manage at home for caregivers.

3. Stakeholders must understand that end-of-life care in the home isn’t suitable for everyone — the home is not a one-size-fits-all destination for dying. Certain physically and emotionally burdensome end-of-life needs are difficult to manage with intermittent home hospice visits.

What is the trend?

Historically, MA beneficiaries who wanted to enroll in hospice would have to switch to traditional Medicare. However, in 2021, CMS created the Medicare Advantage Value-Based Insurance Design Model (VBID), which includes a hospice benefit component. Participating MA organizations must offer advanced care planning, palliative care services, and transitional concurrent care for a period of one month for all seriously ill patients. The VBID Medicare carve-in is in its third year. Many expect that this will become permanent. In the case that it does, stakeholders — especially payers — will have to be prepared for how this will impact payment and interdisciplinary team structures since there will be a lot of debate around who should ‘own’ end-of-life payment decisions. More importantly, stakeholders will have to be prepared for how this will impact the quality of care for patients.

What are the potential impacts on other stakeholders?

• MA Plans are now incentivized to partner with hospice agencies to expand their hospice networks. MA plans will focus on delivering strong patient outcomes in hospice care, at the appropriate time, without owning hospice outright. However, plans will need to clearly communicate to their members that their push to get their members into hospice earlier is for quality of life, not financial reasons. In general, plans are more likely to have strategic interest in hospice and invest in home-based solutions as part of their goal to address the full continuum of care.
• Hospice providers may experience an increased administrative burden under the MA carve-in, due to additional compliance and quality reporting. Also, providers will likely receive less payment under the MA-carve in than they have under traditional Medicare, which could hurt their bottom line.

Key compliance areas

Reporting on utilization, eligibility, and length of stay will help providers know and understand what their patterns are, and what utilization is like in their communities.

Why does this matter?

• The push for a) more care to the home and b) the MA carve-in for hospice are parallel trends. Progressive organizations will capitalize on creative synergies between these trends. This could include bringing together complimentary services like home health, home care, and home hospice services for a more seamless patient healthcare journey. Organizations that can leverage the synergies between these two trends will better meet their patients’ needs and gain a long-term, structural advantage in the senior care market.
• More in-home, end-of-life services and the hospice carve-in under MA can improve plans and providers’ value proposition. However, to succeed, they will have to address the challenges around integrating another service into their existing constellation of senior-focused services. Palliative and hospice care are currently under-utilized services, due in part to their association with death and dying for patients and their physicians. Incorporating both services into a more holistic — and value-based — set of at-home services for seniors could dampen those cultural barriers for both patients and providers.
• MA plans that offer hospice will ‘own’ the financial decisions around death and dying, as well as the care provided in third-party hospice centers in its network. They will need to be mindful about how to communicate with their members on these sensitive topics.

What is the trend?

There’s been a shift in the ownership structure of hospice. Historically, hospice operated as predominately not-for-profit. However, more than two-thirds of hospices nationwide are now operating as for-profit entities. Private equity firms have been particularly attracted to this market because it can be lucrative:

• The population of older adults in the United States is rapidly growing
• There are generous Medicare payments to hospice; Medicare pays hospice providers the same rate per day per patient visit, no matter how complicated or expensive that person’s medical needs, and no matter where they’re located
• There are few regulations on quality control in the hospice industry

Overall, PE differentiates itself from other for-profit operating structures by have a shorter-term investment focus. One of their main goals is to help struggling businesses improve their profits.

What are the potential impacts on stakeholders?

• Hospice providers may benefit from PE investment rather than a partnership with a plan or health system if they are looking for PE’s expertise in backend business operations and the capital needed for growth. However, hospice operators will have to be mindful of supporting their workforce in business changes to avoid worker dissatisfaction and burnout. Non-profit hospice providers may look to compete against for-profit and private equity-backed organizations. In this case, they may be interested in collaborating, aligning, or merging with other hospices or home health agencies to share resources.
• MA Plans should understand the changing non-profit versus for-profit industry dynamic as they evaluate potential network partners. It’s unlikely that payers will see PE as much of a competitor since their investment goals are quite different.
• Health systems may potentially see PE as disruptors to their current hospice models or hospice partnerships. Ultimately, it many cases, they act only as only a source for capital.
• PE groups shouldn’t hide the ball and should make sure they are clear about their goals and what they bring to the table. Although this is an attractive market, PE must also think carefully when evaluating hospice investments. For example, understanding the compliance for getting paid is a major barrier to success.

Why does this matter?

• The competitive landscape for hospice is changing. PE is a new partner providing a way to access capital and operational expertise for struggling hospice organizations. This will result in even more consolidation in the hospice space.
• PE groups have faced increased scrutiny in their hospice enterprises. However, all stakeholders should understand that private equity is not a monolith—no two PE firms are the same. Therefore, the focus should not be if PE investment in hospice is good or bad, but rather on accurate quality reporting and organizational accountability for poor patient outcomes.
• There has been public criticism of quality oversight in hospice care. This will be an added and evolving challenge as more folks receive hospice at home.