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How the Hospice Movement Became a For-Profit Hustle
In my medical career, I watched with dismay as all of the non profit home hospice programs, run by the VNA etc, were run out of business by for profit ( frequently private equity funded) companies like Vitas.
They targeted the hospital discharge planners who made most of the referrals. Most of the docs didn't see anything wrong with making referrals to Roto Rooter
Vitas is run by the same people who run Roto-Rooter
Roto-Rooter is one of the two subsidiary divisions of publicly traded Chemed Corporation, of which the other one is hospice care provider VITAS Healthcare
KKR owns many of the Ambulances in America, having bought AMR
For profit is to be expected in this country. The bottom line is the bottom line. Sadly,,,, why should hospice be any different than the hospitals and medical groups the folks see first? Some of the non profit medical systems don’t seem any different that those that are blatantly for profit. Here in nor cal one predatory non profit stands out.
I do not necessarily disagree that non profit hospitals can be just as predatory but they tend to be more responsive to consumers when their abuses are publicized.
In CT, Yale and Hartford Hospital Health Care own over 2/3s of the hospitals and doctors with two other big non profits owning three each. There are only 6 independent hospitals left several in rural areas.
This degree of market concentration drives up prices and eliminates professional independence, as there is nowhere else for physicians to practice, if they object to one system's policies or procedures.
One of the first thing the new hospital owners do is "encourage" MDs to not refer to specialists outside the network. While they cannot usually make it punitive, they have "incentives " to ensure docs use the "right" radiologists, specialists, labs etc.
What is the oncologist in network is incompetent? You will never know
Non-profit is a legal structure and many nonprofits do in fact exist. Whether you cynically peel back the onion or not, they are held to a different standard than for-profit companies, which require that shareholders always be put first even when human lives are at stake. That said, there are many poorly run corrupt nonprofits. But in general they don’t have the pressure to hit a quarterly revenue or earnings target like for-profit companies do. That sort of short-term profit orientation leads to many of the abuses the hospice article described such as trying to enroll as many people in hospice as possible even if they don’t belong there and then skimping on necessary but costly medical services for people who do belong there.
Ave Maria Mutual Funds are owned by theocrat and pizza mogul Tom Monaghan. The Catholic Values he promotes are pro-life, anti- contraception, anti-premarital sex, laissez-faire capitalism. Predatory capitalism is never a problem for these Catholics !
@staycalm Structurally, there are significant differences between non-profit and profit. Yes, there can be corruption and overpaid executives at both, but the fundamental goals are different. For-profit C-Corps have a fiduciary duty to put shareholder profits above everything else. Non-profits are supposed to live up to their mission statements. Those are very different things. Yes, there is also corruption in non-profits, only of a different sort. Within the range of non-profits one could say there is Doctors without Borders on one end of the spectrum and shady televangelists and weird underground churches on the other. While there can be all sorts of shenanigans going on inside a non-profit, it is not the same as a company that has outside shareholders it is beholden to. Companies can have all sorts of shenanigans going on inside them as well plus having that profit-at-all-costs mentality.
Non-profits are supposed to follow their mission statements--not the same at all. That said, there are ones in the middle--major "non-profit" hospitals and universities come to mind--that rake in the cash and would be highly profitable were they businesses. Still, the top-ranked ones at least adhere to their missions and tend to think long-term instead of trying to churn out a quick profit every quarter. And what they have left over after paying their bills either goes into expanding the institution or to their endowments, not to shareholders.
All of this said, I would rather have a non-profit hospice with a mission to care for the dying in a dignified and attentive manner than a company that sees the dying as a business with the goal of extracting as much profit from them as possible. It is very possible the non-profit could fail at its mission but at least the idea behind it is ostensibly sound. It lacks the conflict of interest that the profit motive creates in this particular situation when people are at their most vulnerable and need help.
I doubt that most universities would be profitable. Private universities rely on about 5% draw from their endowment funds; tuition may cover about 50%. Public universities have state subsidies that may range from 10-80% (depends on their types); tuition may cover about 30%. They do have separate taxable and very profitable for-profit operations - bookstores, sports, possibly other auxiliaries, etc; some college/university coaches make more than their university presidents.
More than half of the country's roughly 5,000 hospitals are classified as nonprofits. These nonprofits gain lucrative tax exemptions in exchange for providing services that benefit their communities. Certain hospital systems have shirked their responsibilities and have also deployed very aggressive billing tactics to extract the maximum amount of money from their patients (some of whom qualified for free care). The Providence hospital system profiled in the NY Times article linked below is headquartered in my county. Until recently, I had no idea that Providence operated this way. I'll never utilize their services unless it's a life/death situation and there are no viable alternatives. Link
Edit: Providence will refund payments made by low-income patients who were wrongly charged for medical care. Coincidently (or maybe not!), Providence ran full-page ads in the Oregonian and The Seattle Times promoting its charity-care on the same day the NY Times published its investigation. As Louis Brandeis stated over a century ago, "sunlight is said to be the best of disinfectants." Link
I agree with Observant1 about the problems with many "nonprofit" hospitals failing to deliver on their missions for poorer patients. But it is a mistake to think for-profit hospitals are somehow better in this case: https://cnn.com/2021/05/17/us/hospital-lawsuits-pandemic-invs
It's shameful how some hospital systems, profit and nonprofit alike, treat their patients. Their ruthless debt collection strategies can wreak havoc - especially for those of limited means. I'm very disappointed with the overall "healthcare system" in the U.S. We're one of the richest countries on the planet, yet many residents don't have health insurance and our healthcare costs per capita are higher than any other developed nation. Reading articles likes the ones in this thread which detail unethical and sometimes criminal behavior by these institutions make me wanna holler.
For sure. Capitalism at it's finest. But the sad fact is that even the US government can't do a decent job in health care- the VA "system" is, in it's own way, just as bad. Except, of course, for the President.
This is exactly why latinate western European countries snort derisively at Anglo-Saxon capitalism. We are sunk in in a system that puts profit above all, and I mean all, else.
+1 observant1 When countries like Uruguay and Portugal provide health insurance to all their citizens, you have to ask: Why can't the U.S. provide the same !!
Years ago the biggest issue with non-profit hospitals was the insider dealing on the boards, esp the smaller ones. CEO puts buddy lawyer on board. He gets all the legal work and votes to increase CEO pay and benefits year after year after year. Same thing with local construction guy and accountant. Nobody cared that hospital lost money year after year after year. This is what drove the two non profit hospitals I worked at to near bankruptcy, forcing sale to Hedge Fund.
A legitimate state government would have stepped in, but the Democrats were bought off by the employee unions to look the other way, until it was too late. Even then the Unions successfully got the Governor to block two proposed mergers to much better partners than the hedge fund that finally bought the hospital. Governor was quoted as saying to the CEO of Tenant Hospital Corporation at their only meeting "I don't like to talk to people like you, but they tell me I have to".
Now almost all "Non-profits" are owned by massive chains that are in fact really profit companies. They just spend all the excess cash at the end of the year on something (CEO salaries first, of course) so they end up with only the minimal surplus allowed legally.
I worked at the VA for ten years. It was far far worse with no incentive to spend money on better care at all until disasters were too obvious to overlook any more. Horrible post op infection rates because there were pigeon nests in the air intake of the OR. Wouldn't pay for new drugs because they were too expensive, etc etc.
I don't know much a bout track record of European or Canadian systems, but the UK is a disaster.
Recent data shows their target for beginning cancer therapy is 90 % within TWO MONTHS!
They are currently at 60%. So almost half of newly diagnosed caner patients wait over two months to start treatment.
UK per capita health care expenses are LT 50% of the US, which of course is the highest in the world.
I haven’t a clue about how to post a link but Dec 1 Salon.com has a timely article about private equity buying up all manner of health care practices with predictable results.
Health care at the level of society is an interplay of incentives, cost, breadth and depth.
Many countries have selected the greater good approach -- universal healthcare covering basic services for everybody but "rationing" access to the more complex stuff like cancer. This system is supported by a rational tax base. Breadth over depth -- ensuring that all have good healthcare for the majority of life.
Meanwhile here in good ole USA, we have taken an altogether different path because despite all metrics to the contrary we believe that we are smarter than everybody. Insurance firms acting as an expensive intermediary, lax regulation, low taxes, the finest on demand healthcare available for any ailment but at the cost of shutting out 30% of the population from any healthcare at all (Obamacare made a notable dent in coverage but costs are way too high) and in general allowing various players (drug firms, medical associations, insurance cos, unions, universities, hospitals, etc..) throughout the system to buy up the fine and honorable folks in DC.
People gripe over outlier cases in the British and Canadian systems but at the level of society these systems produce far superior outcomes at a lower cost to society than the American way.
Single payer is the solution, this isn't even an experiment or a question, it is known to work but for a variety of reasons it benefits many players to obfuscate this.
Our healthcare system (if one can even call it that) needs an overhaul with a focus equivalent to the Marshall Plan or the Manhattan Project. We need an entity the equivalent of Federal Reserve to manage.
Absent that, it is all lip service and more of the same cow dung. We have lost the script -- somehow we can defend all of Europe and rebuild Europe from the ashes of WW2 but can't rebuild the severely broken "healthcare system" in our own country.
I wasn't generalizing about health care unions, just reporting the fact that much of the opposition to the much needed merger of the two hospitals in a very small town ( big enough for only one, really) came from the nurse and hospital unions at the non Catholic hospital, as the prospective buyer did not plan on retaining union personnel.
I know many examples of Unionized nurses standing up for patient safety and fighting for better staffing etc, but in this case the union did little to object in the past to years of mismanagement by the non profit administration, which is why a merger or sale was the only alternative to bankruptcy
Equally at fault was the Catholic Bishop, who refused to allow the merger of the Catholic Hospital and the non-profit even after significant work arounds were developed to allow tubal ligations after caesarian sections to continue ( there were about 25 a year). This has been worked out in a variety of ways nationwide in other Catholic hospitals, but he canceled the deal because the sheets of the patients would have been intermingled with those of the "Faithful", as he put it.
Consequently, both hospitals remained separate and desperate. Their bonds were selling for 50 cents on the dollar. One was driven into the arms of the hedge fund and the other taken over by a large Catholic hospital chain. Neither is doing well, as they continue to compete with each other for patients and reimbursements from commercial insurance companies who can play one off against the other on price alone.
This reminds me of the off color joke of a young Catholic woman of modest means living the simple life in a rural town who goes to the big city and visits her folks in a few months wearing fancy bling. When the mother asks the daughter the source of the new riches the daughter whispers into her mother's ear and the mother promptly faints. After the mother regains consciousness the daughter whispers again into her ear, the mother breathes a huge sigh of relief and goes on to proclaim "Thank heavens, I thought you said Protestant"
Comments
Our local hospital was bought by Prospect Medical, a hedge fund, with dismal consequences
https://www.propublica.org/article/investors-extracted-400-million-from-a-hospital-chain-that-sometimes-couldnt-pay-for-medical-supplies-or-gas-for-ambulances
In my medical career, I watched with dismay as all of the non profit home hospice programs, run by the VNA etc, were run out of business by for profit ( frequently private equity funded) companies like Vitas.
They targeted the hospital discharge planners who made most of the referrals. Most of the docs didn't see anything wrong with making referrals to Roto Rooter
Vitas is run by the same people who run Roto-Rooter
Roto-Rooter is one of the two subsidiary divisions of publicly traded Chemed Corporation, of which the other one is hospice care provider VITAS Healthcare
KKR owns many of the Ambulances in America, having bought AMR
https://morningstar.com/stocks/xnas/amed/ownership
Chemed Corp, which owns the also mentioned Vitas Healthcare and Roto Rooter—funds that own it: https://morningstar.com/stocks/xnys/che/ownership
Perhaps the saddest and most ironic owner is Ave Maria Rising Dividend, a Catholic values fund that has a 4% position in Chemed:
https://morningstar.com/funds/xnas/avedx/portfolio
I do not necessarily disagree that non profit hospitals can be just as predatory but they tend to be more responsive to consumers when their abuses are publicized.
In CT, Yale and Hartford Hospital Health Care own over 2/3s of the hospitals and doctors with two other big non profits owning three each. There are only 6 independent hospitals left several in rural areas.
This degree of market concentration drives up prices and eliminates professional independence, as there is nowhere else for physicians to practice, if they object to one system's policies or procedures.
One of the first thing the new hospital owners do is "encourage" MDs to not refer to specialists outside the network. While they cannot usually make it punitive, they have "incentives " to ensure docs use the "right" radiologists, specialists, labs etc.
What is the oncologist in network is incompetent? You will never know
If the cost structure of a "non-profit" org is high and non optimal that is the equivalent or worse than a for profit operation.
Non-profits are supposed to follow their mission statements--not the same at all. That said, there are ones in the middle--major "non-profit" hospitals and universities come to mind--that rake in the cash and would be highly profitable were they businesses. Still, the top-ranked ones at least adhere to their missions and tend to think long-term instead of trying to churn out a quick profit every quarter. And what they have left over after paying their bills either goes into expanding the institution or to their endowments, not to shareholders.
All of this said, I would rather have a non-profit hospice with a mission to care for the dying in a dignified and attentive manner than a company that sees the dying as a business with the goal of extracting as much profit from them as possible. It is very possible the non-profit could fail at its mission but at least the idea behind it is ostensibly sound. It lacks the conflict of interest that the profit motive creates in this particular situation when people are at their most vulnerable and need help.
MFO is indeed 501(c)(3) nonprofit.
https://www.mutualfundobserver.com/support-us/501c3/
These nonprofits gain lucrative tax exemptions in exchange for providing services that benefit their communities.
Certain hospital systems have shirked their responsibilities and have also deployed very aggressive billing tactics to extract the maximum amount of money from their patients (some of whom qualified for free care).
The Providence hospital system profiled in the NY Times article linked below is headquartered in my county.
Until recently, I had no idea that Providence operated this way.
I'll never utilize their services unless it's a life/death situation and there are no viable alternatives.
Link
Edit: Providence will refund payments made by low-income patients who were wrongly charged for medical care.
Coincidently (or maybe not!), Providence ran full-page ads in the Oregonian and The Seattle Times promoting its charity-care on the same day the NY Times published its investigation.
As Louis Brandeis stated over a century ago, "sunlight is said to be the best of disinfectants."
Link
Their ruthless debt collection strategies can wreak havoc - especially for those of limited means.
I'm very disappointed with the overall "healthcare system" in the U.S.
We're one of the richest countries on the planet, yet many residents don't have health insurance
and our healthcare costs per capita are higher than any other developed nation.
Reading articles likes the ones in this thread which detail unethical and
sometimes criminal behavior by these institutions make me wanna holler.
A legitimate state government would have stepped in, but the Democrats were bought off by the employee unions to look the other way, until it was too late. Even then the Unions successfully got the Governor to block two proposed mergers to much better partners than the hedge fund that finally bought the hospital. Governor was quoted as saying to the CEO of Tenant Hospital Corporation at their only meeting "I don't like to talk to people like you, but they tell me I have to".
Now almost all "Non-profits" are owned by massive chains that are in fact really profit companies. They just spend all the excess cash at the end of the year on something (CEO salaries first, of course) so they end up with only the minimal surplus allowed legally.
I worked at the VA for ten years. It was far far worse with no incentive to spend money on better care at all until disasters were too obvious to overlook any more. Horrible post op infection rates because there were pigeon nests in the air intake of the OR. Wouldn't pay for new drugs because they were too expensive, etc etc.
I don't know much a bout track record of European or Canadian systems, but the UK is a disaster.
Recent data shows their target for beginning cancer therapy is 90 % within TWO MONTHS!
They are currently at 60%. So almost half of newly diagnosed caner patients wait over two months to start treatment.
UK per capita health care expenses are LT 50% of the US, which of course is the highest in the world.
and:
https://hcavsamerica.org/wp-content/uploads/2022/02/SEIU_Investigative_Report_FINAL-1.pdf
Moreover, it's hard to argue that unionized labor such as nurses and orderlies are behind the problems at non-profit or for-profit hospitals. Nurses until the pandemic didn't have adequate wages for the amount of work they did. Now they are getting paid better because of a significant shortage. Orderlies were far worse, and remain severly underpaid for doing the worst bed-pan work.
Nurses and orderlies in my experience do most of the labor in hospitals, with doctors visiting their patients for a few minutes each day during their rounds. During the pandemic, nurses experienced the brunt of some of the exposures to the disease and caring for these patients, some of whom were hostile to even the notion that the pandemic existed: https://npr.org/sections/health-shots/2021/01/11/955128562/for-health-care-workers-the-pandemic-is-fueling-renewed-interest-in-unions
Yet I agree with you about the comparison between the U.S. healthcare system and Britain's. Ours is broken. Britain's still works, despite the Tories best efforts to break it and turn it into ours: https://theguardian.com/commentisfree/2022/oct/11/tories-fear-loathe-nhs-workers-strike
Many countries have selected the greater good approach -- universal healthcare covering basic services for everybody but "rationing" access to the more complex stuff like cancer. This system is supported by a rational tax base. Breadth over depth -- ensuring that all have good healthcare for the majority of life.
Meanwhile here in good ole USA, we have taken an altogether different path because despite all metrics to the contrary we believe that we are smarter than everybody. Insurance firms acting as an expensive intermediary, lax regulation, low taxes, the finest on demand healthcare available for any ailment but at the cost of shutting out 30% of the population from any healthcare at all (Obamacare made a notable dent in coverage but costs are way too high) and in general allowing various players (drug firms, medical associations, insurance cos, unions, universities, hospitals, etc..) throughout the system to buy up the fine and honorable folks in DC.
People gripe over outlier cases in the British and Canadian systems but at the level of society these systems produce far superior outcomes at a lower cost to society than the American way.
Single payer is the solution, this isn't even an experiment or a question, it is known to work but for a variety of reasons it benefits many players to obfuscate this.
Absent that, it is all lip service and more of the same cow dung. We have lost the script -- somehow we can defend all of Europe and rebuild Europe from the ashes of WW2 but can't rebuild the severely broken "healthcare system" in our own country.
I wasn't generalizing about health care unions, just reporting the fact that much of the opposition to the much needed merger of the two hospitals in a very small town ( big enough for only one, really) came from the nurse and hospital unions at the non Catholic hospital, as the prospective buyer did not plan on retaining union personnel.
I know many examples of Unionized nurses standing up for patient safety and fighting for better staffing etc, but in this case the union did little to object in the past to years of mismanagement by the non profit administration, which is why a merger or sale was the only alternative to bankruptcy
Equally at fault was the Catholic Bishop, who refused to allow the merger of the Catholic Hospital and the non-profit even after significant work arounds were developed to allow tubal ligations after caesarian sections to continue ( there were about 25 a year). This has been worked out in a variety of ways nationwide in other Catholic hospitals, but he canceled the deal because the sheets of the patients would have been intermingled with those of the "Faithful", as he put it.
Consequently, both hospitals remained separate and desperate. Their bonds were selling for 50 cents on the dollar. One was driven into the arms of the hedge fund and the other taken over by a large Catholic hospital chain. Neither is doing well, as they continue to compete with each other for patients and reimbursements from commercial insurance companies who can play one off against the other on price alone.