Patient Characteristics, Sites of Care Change with PE, PTC Hospice Acquisitions

Hospice agencies experienced an increase in Medicare patients with dementia and patients receiving hospice care at home after acquisition by private equity (PE) firms and publicly traded companies (PTC), according to a study published online in JAMA Network Open.

“This cohort study suggests that hospices owned by PE firms and PTCs may target Medicare patients likely to be more profitable, specifically those in sites of care and/or with certain clinical conditions, such as dementia, that are associated with lower complexity of care,” wrote corresponding author Robert Tyler Braun, PhD, of Weill Cornell Medical College, New York, New York, and coauthors.

Researchers looked at changes in Medicare patient characteristics and sites of care at hospice agencies acquired by PE or PTCs compared with changes in nonacquired for-profit hospice agencies. The study included 158 agencies acquired by PEs, 250 acquired by PTCs, and 1559 other for-profit hospice agencies.

Prior to the acquisition, hospice agencies that PE or PTC would later acquire tended to serve more patients in nursing homes compared with for-profit hospice agencies that were never acquired, according to the study.

After the acquisition, the proportion of patients with dementia increased 5.98% at hospices owned by PE firms and 13.49% at hospices owned by PTCs compared with for-profit unacquired hospices. The proportion of patients receiving hospice services at home increased 3.37% at PE-owned hospices and 5.26% at PTC-owned hospices after acquisition, researchers reported. Meanwhile, Hierarchical Condition Category risk scores decreased 1.37% at PTC-owned hospices after acquisition.

“Some caution should be exercised in interpreting these findings, especially as they might relate to quality of care,” researchers wrote. “It is essential to investigate these transactions further to understand whether they are associated with patient outcomes or possibly driven by other factors.”

Reference

Braun RT, Unruh MA, Stevenson DG, et al. Changes in diagnoses and site of care for patients receiving hospice care from agencies acquired by private equity firms and publicly traded companies. JAMA Netw Open. 2023;6(9):e2334582. doi:10.1001/jamanetworkopen.2023.34582