How For-Profit Hospices Compare to Nonprofit Hospices

Hospice care is for people with a terminal illness and a life expectancy of six months or less. When choosing a hospice agency, an important aspect may be whether the agency is:

  • Nonprofit
  • For-profit

The differences may affect the services you get.

You may not have much choice when it comes to hospice care—a lot depends on what's available where you live, your insurance, and what hospice your healthcare provider recommends. Even so, knowing the difference between for-profit and nonprofit agencies can tell you what to expect.

This article compares for-profit and nonprofit hospice agencies, how they're paid, who they serve, their various services and staff, and what to expect while receiving hospice care.

What Is Hospice?

Hospice is medical care for the end of life. Its goals are to help people with terminal illness live as well as possible and die peacefully. Hospice provides physical, psychological, social, and spiritual support to the dying person and their family.

African American nurse holding patient's hand
Terry Vine / Getty Images

Regulations

No matter the type of hospice, it has to meet certain federal requirements. To get paid by Medicare, which most are, they have to be approved and certified by that agency.

States also have licensing requirements, some of which are more stringent than the federal regulations. These rules may deal with:

  • Eligibility requirements
  • Length of coverage
  • How doctors certify terminal illness and life expectancy
  • Medicaid claims requirements
  • How much care is available in a given day
  • Where hospice recipients can and can't live (e.g., some don't allow hospice for people who are hospitalized.)

The legal requirements set the minimum standards for hospice care. Some agencies may go above and beyond, while others may only provide what's required.

Services Provided

Basic hospice services involve help for both the ill person and their loved ones. That includes:

  • Providing patient care, including pain and symptom management
  • Coordinating care with the family or nursing home
  • Sometimes, ordering medications
  • Grief counseling for the patient and loved ones
  • Support for caregivers
  • Education to family members so they can provide care, give medications properly, and understand the dying process
  • Religious care through a chaplain or community resources
  • Assistance with funeral and burial arrangements

While everyone is held to the same minimum standards, for-profit hospices tend to offer fewer additional services. Studies show for-profit agencies:

  • Offer less comprehensive bereavement services
  • Employ fewer skilled nursing providers
  • Have fewer staff members per patient

When choosing a hospice agency, you may want to consider these factors.

End-of-Life Care Training

Nonprofit hospice agencies have historically trained medical personnel in end-of-life care. For-profit agencies are less likely to. The U.S. has a critical and growing shortage of people trained to do this work, so training opportunities are important.

Number of Agencies

The hospice industry used to be made up almost entirely of nonprofits. That's no longer the case.

Between 2000 and 2007, the number of for-profit agencies doubled while the number of nonprofits stayed the same. By 2016, for-profits accounted for 67% of all Medicare-certified hospices. In 2017, 100% of new hospice providers were for-profit.

It's promising that the overall number of hospice agencies has increased. Even so, if you live in a rural area, you may still have few options.

Concerns About For-Profits

The sharp rise in for-profit hospices has led to some concerns. Critics have questioned:

  • The type of patients they seek
  • The range and quality of services they provide
  • Lower amounts of training for staff

For-profit agencies tend to bring in significantly more money than nonprofits. Some critics charge that they take advantage of a Medicare policy in order to benefit their shareholders.

Where Care Is Offered

Most hospice care is given in private homes. It's also common in skilled nursing facilities (nursing homes), assisted living, and hospice facilities. Some states allow hospice services in the hospital while others don't.

For-profits often favor people in nursing homes and other medical facilities. Because much of the client's care is provided by the facility, they need fewer hospice services. That makes them less expensive for the agency.

Someone dying at home generally requires a lot more hospice visits and more varied services.

How They're Paid

Medicare benefits cover hospice care from any certified agency, regardless of whether they're for-profit or nonprofit. Most people in hospice are eligible for Medicare.

No matter the diagnosis, Medicare reimburses hospice agencies at a per-diem (per day) rate. That means the agencies get the same amount regardless of the care and services needed by you or your loved one.

You can get similar coverage from Medicaid in most states, as well. Private insurance often offers a hospice benefit, but it varies significantly.

Medicare has a yearly limit on how much it will pay for hospice. For-profit agencies have been shown to be three times more likely than nonprofits to exceed this maximum benefit.

That means more financial burden on the family of the dying person if they stay in hospice after the benefit runs out.

If you exhaust your hospice benefit or don't have one, you may be able to get charity care. Many hospice agencies offer free or low-cost services to people who can't afford them. Nonprofit agencies are more likely to offer charity care than their for-profit counterparts.

Leaving Hospice Before Death

For-profit hospice agencies have a higher rate of people leaving hospice before death. That may be due, at least in part, to families' inability to pay for hospice once the Medicare benefit ends.

Who They Accept

While the Medicare per-diem is the same for everyone, end-of-life needs vary greatly by diagnosis. For example, people with cancer have a fairly predictable life expectancy and course of treatment.

By the time they enter hospice, most cancer patients are end-stage, meaning they've exhausted treatment options and are close to death. They tend to need expensive care with intensive pain and symptom management.

On the other hand, those with less-predictable diagnoses, like dementia patients, tend to live longer than cancer patients and need less-costly care. Studies show that non-cancer hospice patients get fewer visits from hospice nurses and social workers.

Cancer Patients
  • Short-term care

  • Predictable prognosis

  • Intensive symptom management

  • Fewer days of per diem pay

  • More expenses for the agency

  • Nonprofit care more likely

Dementia Patients
  • Long-term care

  • Unpredictable prognosis

  • Less intensive symptom management

  • More days of per diem pay

  • Lower expenses for the agency

  • For-profit care more likely

Hospices caring for non-cancer patients can therefore get the per diem rate for longer and with lower out-of-pocket expenses. That adds up to more profits.

Studies have shown that for-profit hospices tend to favor non-cancer patients. They also have longer than average enrollments and significantly more dementia patients than nonprofits.

Some research into hospice trends has called for changes in the Medicare Hospice Benefit. With how the fixed per diem appears to be shaping for-profit care, there's a concern that the people most in need of hospice may not be able to access it.

They're also calling for more research into the services and quality of care provided by different types of hospice.

Outreach to Disadvantaged Groups

Research shows for-profit hospices are better at outreach to ethnic minorities and people living below the federal poverty level. These groups have been less likely to use hospice, so for-profits may be helping to lessen the disparities.

Staffing

Hospice agencies employ people with a variety of training and specialties. The medical personnel on a typical hospice team includes:

  • Medical directors: Coordinate care between your personal doctor and the hospice team
  • Nurse practitioners: Highly trained, specialized nurses who often are your primary hospice contact
  • Palliative care nurses: Nurses who specialize in making you or your loved one comfortable by managing pain and other symptoms, educating caregivers, and helping the family
  • Several types of therapists: Physical, occupational, nutritional, or speech therapists may help maintain comfort and quality of life for the dying person

Other members of the team may be:

  • Medical social workers: Act as a counselor to the dying person and family, help with financial, legal, and insurance issues, arrange support services in the community
  • Spiritual counselors: Provide spiritual and emotional support to the dying person and family, if desired
  • Home health aides: Help with personal care (washing, dressing, eating) and provide breaks for caregivers
  • Volunteers: Trained to provide companionship to patients and help caregivers with chores, such as grocery shopping
  • Bereavement counselors: Help the family cope with the loss of a loved one

Studies show for-profits hospice agencies have less highly trained staff and fewer staff members per patient than nonprofits. However, they make about the same number of visits to the patient.

Choosing a Hospice Agency

Selecting the right hospice for you can be daunting, as you have many factors to consider, including:

  • Local availability
  • Range of services
  • Quality of staff
  • Cost, insurance, and Medicare benefits
  • Personal/family needs

You may want to make sure the hospice you choose is accredited. To do so, check with the Joint Commission or the Community Health Accreditation Program. Accreditation isn't required. However, it means the agency meets or exceeds industry standards, according to a third party.

You can also compare agencies and check whether they're nonprofit or for-profit through the Medicare website's comparison tool.

Summary

Hospice agencies provide end-of-life services to people who are terminally ill and their families. Most hospices used to be nonprofit agencies but now a majority are for-profit. All hospices have to follow federal and state regulations. Medicare pays them a per-diem rate, regardless of diagnosis.

For-profit hospices have been criticized for choosing longer-term and lower-needs patients, offering fewer services, and having less-trained staff than nonprofits.

A hospice team is made up of several types of medical and non-medical professionals and volunteers. Accreditation means a third party has verified care meets industry standards.

A Word From Verywell

Hospice provides valuable care and the decision of which agency to hire is an important one. Nonprofit and for-profit hospices have some key differences.

But that status may take a backseat to considerations such as local availability, cost, and your gut feeling about what's best for you and your family. In the end, it's most important for you to be satisfied with the care you receive.

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4 Sources
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Hospice Foundation of America. What is hospice?

  2. Wachterman MW, Marcantonio ER, Davis RB, McCarthy EP. Association of hospice agency profit status with patient diagnosis, location of care, and length of stayJAMA. 2011;305(5):472–479. doi:10.1001/jama.2011.70​

  3. Hospice News. Nonprofit hospices fight to compete with for-profit chains.

  4. Washington State Hospice & Palliative Care Organization. Hospice team.

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