The young lady in the Hospice for Utah shirt was giddy and shameless. She and her fellow employees were in the process of buying the "death with dignity" hospice business from the charismatic and energetic founder, Cathryn "Kit" Jackson, for $10 million. Pretty soon this lucrative operation would be all theirs, and the sky would be the limit, she told me two months ago.

    I was having breakfast with a friend at an Assisted Living facility. The hospice aide was there to bathe and dress a client and escort her to the dining room. This in itself was absurd, since the client was already paying to be bathed and dressed by facility employees. But when hospice moves into your end-of-life drama, they take center stage,  and Medicare pays for it.
     "Where are you getting the funds to buy the company?" I asked the pleasant-faced Hospice girl.
    "That's what's so great," she said. "Every quarter, we get to split up the left-over money. You know: the allotment that Medicare sent us to take care of the clients. We get that, plus our salaries! If we didn't keep the leftovers for ourselves, we'd have to send it all back to the government.  Kit's already rich, and now we've got a shot too." Kit, who is an admirable, enlightened person in many ways, is now content to bake cookies with her grandkids or ski the Alps, her website says.
    Even though I knew from my previous investigations that the vast majority of hospice firms are for-profit, it had never occurred to me that the profit they make consists of money disbursed  for patient care that is not spent for patient care. That should have been obvious, but I still find it shocking. The incentive to spend as little as possible on patient care is built into the system. More stupidity! Can't the government get anything right? 
    This is the story of how a compassionate, progressive concept morphed into one of the most fraudulent  (and painfully disappointing) (and profitable) enterprises in our economy.

 

Kit Jackson with her daughter Maurika, who runs Kit's other hospice in Missoula, Montana. Hospice of Missoula purportedly lives by the mantra: “Doing the right thing is our bottom line.”

     Doing the right thing? I guess you can serve more than one master at a time, but over ad over again I have seen money-lust warp people's values and judgement. That dynamic is certainly evident in the history of hospice in America, as I will document below.
    These kids at Hospice for Utah are positively ecstatic about what the future holds for them, once they really become expansionists with the 25-yer-old company. It's a jungle out there, as the wealth potential of the hospice industry becomes manifest to more opportunists. Hospices are popping up everywhere. Then they get bought up by chains, and then the hedge-fund guys move it, with their eyes squarely on the bottom line. Profit, not compassionate care, become the driving force.

(or reversing it) / art by devianteles

     The largest for-profit hospices are doing particularly well: A 2005 study in the Journal of Palliative Medicine found that large hospices owned by publicly traded companies generate profit margins nine times higher than those of large nonprofits and three times higher than privately owned for-profit hospices of similar size. This discrepancy has gotten even greater in the ensuing years, according to the Washington Post.
    I think the staffers at Hospice for Utah, and at many other hospice operations, are probably very nice people, most of whom are committed to being of service, and of treating their patients well. Those who choose such professions as social work, nursing, and patient aide are a special breed, and I'm sure that's immanent in how they do their jobs. I doubt that they think they're screwing anyone, even though it's obvious to them that their company cuts corners and exploits the rules. They're just "gaming the system," like everyone else.
     ''Once you 've done your time in the trenches, you can just sit back and let the checks roll in," one of them told me in 2009.
    Hospice for Utah dazzled my family when my father was in decline in 2009. An attractive, articulate sales team met with us (after giving each of us a festive, sparkly purple gift packet containing items with their logo on it) described all the services they would be providing "for free," which included companionship tailored to a dementia patient ("reading, listening, reminiscing"), regular nurse visits, medications, specialized activities, restorative therapies, and spiritual/emotional succor. Physical and occupational therapy would enable him to regain the strength to stand, walk, and bathe independently.  He would be enfolded in a world of expert, compassionate care. All equipment -- oxygen, a walker, shower chair, heightened toilet seat, incontinence products, etc -- would be provided FREE. That was the big word that had them beaming and us feeling uneasy. We know that whether we pay or not, it's not "free."
    Still, we signed up and waited for the blissful, Florence Nightingale-ish magic of hospice care to unfold. Weeks passed, and no one showed up, except that an aide arrived each morning to rouse my father at the assisted living facility, shower him, and escort him to breakfast.

     They stressed -- as many hospices have illegally done -- that you "don't really need to be expected to die within six months. That's just a technicality. If he's still alive after six months, we just sign him back up! Some people are on hospice for years!"
    Although Medicare has tried to clamp down on this approach, it has continued, and in some respects gotten worse. Investigations have found that for-profit hospices "cherry pick" patients who are healthiest, ensuring that the revenue stream will be flowing as long as possible. 
 

     It was when we got Daddy's Medicare statement that this travesty became unacceptable to us.

    The CEO of Hospice was furious when I criticized her operation. She said no one had ever complained before. My response was that people aren't likely to complain when they're getting "free stuff," even if it isn't as much free stuff as they'd expected.

A MULTIBILLION-DOLLAR INDUSTRY
    "Dying has become a multibillion-dollar industry," a Huffington Post series on hospice declares. Sounds delicious, doesn't it? Do some hand-holding, murmur words of faith and gratitude into the ear of a dear, pale lady, and before long, poof: You've got a great revenue stream. 

A PASSION TO TURN PALLIATIVE INTO YOUR PAL 
     A 2011 ad for a seminar in Portland provides insights into the Hospice for Utah founder's mindset, and into the mindsets of the thousands of those who chose this "business model":
 

Turning Your Passion Into Financial Freedom:

    Do you want to know what it takes to turn your small business, or your dream for a business, into a lucrative and prosperous enterprise? We are all eager for the freedom that financial success affords, but many entrepreneurs need guidance getting there. Join us as Kit Jackson, founder of Hospice For Utah and Hospice of Missoula, shares what she has learned about building a thriving business and turning a dream into financial freedom.
    In Utah, where her first hospice is, there was originally ONE company doing what she was doing - her company.  Now there are over 150 hospices in the area because they all want what she has.  Competition is fierce and she has to be vigilant to stay on top of current trends and invent her own.

    Yes indeed, they all want what she has: Millions of dollars, courtesy of U.S. taxpayers.
     This is dismaying. So many sensitive, noble, socially progressive institutions and movements in our country have lost sight of their core mission, when the prospect of making millions of dollars has presented itself. Most nonprofits -- including the most respected in the country -- aren't really nonprofit: They just take what a corporation might call profits and pay their executives huge salaries, ensconce them in fabulous office suites, and provide extravagant travel, entertainment and retirement benefits.

Compassionate care, combined with compulsive overeating of Medicare funds.

     Hospice for Utah billed itself as a nonprofit, until I publicly pointed out in 2009 that its website offered "profit-sharing" to vested employees. Kit Jackson lashed out at me, but quickly ceased claiming to be nonprofit. One of her employees, a young woman, told me she was going to be able to quit soon, and live off of the "dividends" her stock in the company would continue to pay her.
    Until 1986, hospice in America was a grassroots, genuinely charitable endeavor, which sought to aid dying patients while enabling them to spend their final days at home, surrounded by loved ones, rather than to be in a cold, sterile, unfamiliar environment, hooked up to all sorts of tubes and machines. 
 

This isn't the dream, but for the vast majority of  Americans it's the reality. Sorry, Daddy.

    At that time, hospice was generally regarded as one of the finest examples anywhere of "people helping people." It was often referred to as "a godsend," as gentle people of good will poured their hearts into bringing some light and peace into the dark process of dying. 
    Hospices exist, purportedly,  to provide comfort to people who doctors determine are at the end of their lives, with six months or less to live. The paramount objective, according to the National Hospice and Palliative Care Organization, a trade association, is to make patients comfortable, with a focus “on enhancing the quality of remaining life.”
    Hospice was intended to provide palliative (comfort) care to terminal patients, emotional support for them and their families, and even help with meals and housekeeping. This volunteer work seemed to have a spiritual aspect to it, even when it wasn't associated with a church.
     And then it rapidly all went to hell.  
 

    The "Medicare Hospice Benefit," passed by Congress in 1986,  immediately transformed the purity of hospice into a lucrative entrepreneurial venture. At that time, the fee schedule was designed to incentivize hospices to pile on the services and bill accordingly. So there were girls popping into people's rooms, spritzing some lavender in the air and billing Medicare for "aromatherapy." There were back rubs by unlicensed "masseuses" and "reminiscence chats" with lovely young ladies, and 10-minute "spiritual uplifts" by area pastors, and "bucket list" dialogues with social workers, although it seemed odd to develop a bucket list if you were on the threshold of death. Oh well, at least the girls got paid. All sorts of people got paid, especially those who owned the hospice businesses.
 

Isn't it fun to make a bucket list when you're in bed, dying? Climb Everest!

     Less than 10 years after hospice was given Medicare-benefit status, hospice providers were specifically targeted in a wider probe of Medicare fraud by the Office of Inspector General (OIG).  They have been charged with fraud over and over again ever since. The majority of them have been found to submit deceptive billing to Medicare, according to published reports.

    When I complained about Hospice for Utah's failings, the owner told me that only one other person had ever expressed dissatisfaction. "People love us," she said. That doesn't surprise me, since everything hospice does is "free" to you. 
 

Who doesn't?

    (International law firm Morgan, Lewis & Bockius has published a 37-page guide for hospices to avoid regulatory scrutiny, and a 47-page guide to "achieving a favorable outcome" if you are investigated for Medicare fraud. They are very savvy.) 
    The sweeping Inspector General probe took place in the good old days, when the hospice industry had not yet become a multibillion-dollar interest group. Hospice fraud is so rampant today, that it isn't hyperbolic to call it "business as usual."
    Eventually, the fee arrangement was changed, so that hospice was paid by the day, rather than for each "service" or "comfort amenity" provided. Per-diem fees range from about $160 to $900 a day, depending upon whether it's occasional or full-time home care, or inpatient care. 

A hospice worker warmly reminisces with a terminally ill patient at his home.

    Hospice gets these fees whether it provides any services on any given day (or week) or not. A federal advisory panel on Medicare spending has cautioned for years that these financial incentives are likely to push companies to enroll patients who aren’t appropriate for hospice. When my father was enrolled, we -- like so many families at that time -- were told, "It doesn't matter if he has 'less than six months to live.' If he stays alive, we can just draft an ongoing agreement." 
    We thought they were being awfully nice. Little did we know that they regarded us one more "accounts receivable" to plump up their profits. I must admit that the young nurse, social worker and the aides seemed to be competent and kind. The poorly paid aides were particularly lovable and cheerful, as poorly paid aides tend to be. I will elaborate later in this post on why we removed my father from hospice.
 

    Many families speak in reverential terms "about the kindness a beloved hospice nurse showed a father, uncle or sibling," according to a Huffington Post series. "But in interviews, many nurses said business managers imposed unrealistic quotas that forced them to rush visits. Hospice doctors, they said, visited at-home patients only on rare occasions. Patients have suffered as a result, they said."
    (Just one of thousands of examples of outright fraud: A Lamar County, Georgia, woman claimed in July of this year that a for-profit hospice company took advantage of her dying husband, pocketing thousands of Medicare dollars without ever showing up to help, and without her ever even signing any papers, according to Fox News Atlanta. "Having no professional help for her husband, the woman took early retirement from her job as a school bus driver, costing her thousands of dollars in future pension money. Then, last fall, she had to go back to work part-time to pay for his meds, not realizing that Medicare was already paying a hospice company for services her husband never got. A fraud investigation indicated that the firm "Kathy Cares" had billed Medicare for five months of home hospice -- collecting $23,749," the Fox investigation stated.)

    But this is small potatoes, as they say in Georgia, compared to what the big-time hospice firms do, raking in tens of millions of dollars for phantom patients and phantom care. I have appended a few more illustrative examples at the end of this post.

    A primary concern of MedPAC is that the per-diem payment method encourages hospices to seek out patients likely to live longer than the six-month criterion. Commercial hospices in particular tend to have longer-staying patients, studies have shown. The average hospice stay has increased dramatically since 2000, regardless of diagnosis, a HuffPost analysis of Medicare data found. This has led to a surge in expenditures: $15 billion in federal dollars in 2013. 
     “The financial incentives do in fact dictate behavior,” Eugene Goldenberg, a research analyst for BB&T Capital Markets, told HuffPost. “It’s a lucrative business." 

Financial incentives can turn people into pigs.

    The profit motive must certainly account for the increasing number of  patients in nursing homes and assisted living who are served by for-profit hospices (this is ironic, since hospice was expressly created to allow people to die at home.) Employees in these institutions already provide considerable routine care — bathing, providing meals, changing linens -- but hospice gets paid just as much as if it were performing these tasks. And hospice staffers don’t have to travel as much as when they visit people in far-flung houses, the New York Times wrote earlier this year. Paradoxically, higher fees are paid for patients in institutions, with the exception of 24-hour at-home care, which is the most expensive.

    So whereas Hospice was formerly motivated to provide every little service it could dream up (manicures! foot massages!), it's now motivated to devote as few staff resources as possible and reap the payments as profit. 

Ah, Medicare -- how I love thee!

    The U.S. hospice industry has quadrupled in size since 2000. Nearly half of all Medicare patients who die now do so as a hospice patient -- twice as many as in 2000, government data indicate.
Since 2006, the U.S. government has accused nearly every major for-profit hospice company of billing fraud, according to the Huffington Post.
    In 1990, only 5 percent of hospices were for-profit operations. By 2013, they dominated the industry, representing 63 percent of hospices. Some 98 percent of hospices launched in the past 15 years have been for-profit.

    Hospice has been exhaustively investigated by several superb reporters over the years. I would not presume to improve upon their work, and there's no point in duplicating it. I particularly recommend two series:
    The Washington Post provided new insights in its August, 2014, article http://www.washingtonpost.com/news/storyline/wp/2014/08/21/as-more-hospices-enroll-patients-who-arent-dying-questions-about-lethal-doses-arise/
    The Post provided greater depth in its December 2013 article, "Hospice Firms Draining Billions from Medicare":  (http://www.washingtonpost.com/business/economy/medicare-rules-create-a-booming-business-in-hospice-care-for-people-who-arent-dying/2013/12/26/4ff75bbe-68c9-11e3-ae56-22de072140a2_story.html.  
 

Billons of taxpayer dollars down the drain. So what else is new?

     Huffington Post reporter Ben Hallman’s  indispensable six-month investigation into the hospice industry has resulted in a disturbing exposé of fraud and abuses. Hallman’s  piece, How Dying Became A Multibillion-Dollar Industry, details these findings, the publication says (http://projects.huffingtonpost.com/hospice-inc):
 

• Hospice companies with illegally-obtained hospital records, insufficient documentation and inadequate training for caretakers
• More than 1,000 hospices haven't been inspected for more than seven years
• Since 2006, the U.S. government accusing nearly every major, for-profit hospice company of billing fraud
• Hospice employees being pressured into wrongfully enrolling patients and adjusting health records in order to obtain more government funding. Every day, hospice marketers descend on doctor’s offices, rehab centers and hospitals. These workers have been known to rifle through patient logs at nursing stations, scramble to sign up what some in the industry call “last gasp” patients — people with just hours left to live — and even scuffle with each other in hospital corridors over the right to sign up dying people, according to current and former hospice employees and allegations made in federal lawsuits.

 

    In a complaint filed the same day in the District Court for the western district of Missouri, the government contends that since 2001 Vitas has defrauded Medicare two ways: It has accepted for hospice care patients not eligible to receive it, billing Medicare for their treatment; and it has charged Medicare for "crisis care" given to patients who didn't need it and/or never got it.