NPHI Policy Team publishes “The Effect of Private Equity on Hospice” in latest Public Policy & Aging Report

WASHINGTON, May 30, 2023 – The Spring issue of the Gerontological Society of America’s (GSA’s) Public Policy & Aging Report, contains an article on “The Effect of Private Equity on Hospice,” co-authored by NPHI’s Chief Policy Officer, Larry Atkins, NPHI Policy Director, Ethan McChesney, and Dr. Joan M. Teno, Adjunct Professor of Health Services, Policy, and Practice at Brown University.

The article assesses the impact and potential risks for beneficiaries and their families of a recent trend toward private equity investment in hospice organizations. It points to the fact that almost all new hospice providers in the last two decades are for-profit companies, with a growing share of these backed by private equity investors.

Private equity is attracted to hospice by a Medicare payment methodology that provides stable and predictable revenues with the opportunity for high profit margins. A 2019 Milliman Study comparing low- and high-profit margin hospices found that high-profit-margin hospices were associated with high percentages of patients living in assisted living facilities or nursing homes, on hospice care for more than a year, receiving fewer therapy visits, and more likely to be discharged alive.

There is strong evidence showing that hospice care can be profitable for a provider that selects patients with terminal diagnoses, like dementia, that are likely to have low costs of care over a long length of stay. “Profiteering” in hospice is becoming a challenge for existing non-profit hospice providers, particularly in eight urban counties in the southwest that have seen a recent influx of large numbers of potentially fraudulent for-profit hospices.

These major shifts in hospice ownership are likely to have a significant impact on the quality and experience of care for beneficiaries and their families. The Milliman Study points to a difference in the level of care associated with ownership status. The study shows that “not-for-profit hospice providers offered 10% more nursing visits, 35% more social worker visits, and three times as many therapy visits as for-profit hospices.”

The authors conclude that “private equity is increasingly attracted to hospice by the opportunities for substantial profits on predictable government revenues with relatively little capital investment. They state that a more aggressive enforcement effort aimed at known patterns of fraud and abuse, along with a major change in payment to reduce the incentives and profit potential, is required to continue to earn the trust that beneficiaries and families have placed in hospice providers.

To explore the full recommendations and learn more about the effects of private equity on hospice, read the full article here.

The National Partnership for Healthcare and Hospice Innovation (NPHI) is a membership organization comprising 100+ not-for-profit, community-integrated hospice and palliative care providers dedicated to ensuring patients and their families have access to care that reflects their individual goals, values, and preferences. Representing providers from 37 states and the District of Columbia, NPHI and its members help design more innovative and effective models of care, advocate for comprehensive and community-integrated care customized to meet each person’s unique needs, and build collaboration between national thought leaders, decision-makers, and other healthcare stakeholders to improve hospice care. Learn more about NPHI at