Health systems expansion in palliative care could disrupt the competitive playing field

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As health and hospital systems show increasing interest in home care, the competitive landscape for hospices could change, both in terms of market share and staff recruitment.

According to YoloCares CEO Craig Dresang, one of the main concerns is that hospices will see declines in their referral flows, admissions, and ultimately their bottom line.

“In most markets, hospitals will refer patients to an independent hospice and compete for patients with a local palliative care provider,” Dresang told Hospice News. “As they refer and compete with each other, we need to find ways to partner and simultaneously compete for patients in a friendly and collaborative way.”

Some palliative care providers believe this represents a conflict of interest for health systems, Dresang said. This is largely due to the potential for revenue gains on both sides of the refund coin.

The California-based hospice provider is among those who have seen health system and hospital mergers and acquisitions activity increase. For example, earlier this year, Adventist Health expanded its footprint to Mendocino County.

Last year, Hoag Memorial Hospital Presbyterian established a home care and hospice business in California, renamed Hoag at Home.

California isn’t the only market seeing a swell of this activity.

In 2021, Wisconsin-based Aspirus Health System expanded with hospice and palliative care programs in Michigan’s Upper Peninsula. That same year, Eden Health, a subsidiary of EmpRes Healthcare, began offering hospice and hospice care in Idaho Falls.

Executives at some hospices and other vendors expect disruption in the M&A space.

Some hospices are concerned that increased competition from healthcare and hospital systems could have negative financial and operational impacts, according to Stan Massey, partner and chief strategy officer of Transcend Strategy Group. However, strengthening collaborations and partnerships with hospices could improve patient access and alleviate pressures on the workforce somewhat, he added.

“Some hospices are feeling this perceived threat of competing healthcare systems,” Massey told Hospice News. “But he’s looking for ways to partner with them and provide quality end-of-life care. Some hospices have been successful in being a partner in research, education and filling gaps in care. The bottom line is that helping to provide the right care also includes providing excellent education and support for caregivers, because ultimately this staffing shortage will affect all healthcare.

Several factors are pushing residential healthcare organizations to consider home care, including a growing preference for aging in place among seniors. More and more hospitals and health systems are investing in palliative care in response to the growing demand and current pressure on acute care services. Health systems are looking to expand into palliative and community-based palliative care to complement existing offerings while creating new channels of care delivery.

According to St. David’s HealthCare President and CEO David Huffstutler, more health systems intervening in palliative care can have positive effects when it comes to patient access and the ability to quickly process referrals.

“When other health systems invest in services like palliative care, everyone benefits,” Huffstutler told Hospice News in an email. “It allows us to release patients when they are ready and allows patients to choose the setting they feel most comfortable in, whether that is in an assisted living facility or in their own home.”

Texas-based St. David’s HealthCare was created through a partnership between hospital operator HCA Healthcare (NYSE: HCA) and two nonprofit organizations: the St. David’s Foundation and the Georgetown Health Foundation. The recent services expansion has its roots in HCA’s $400 million acquisition of an 80% stake in Brookdale Senior Living’s home health and palliative care segment last year.

The health system recently launched a home care and palliative care business, branded as St. David’s HealthCare at Home and St. David’s Hospice & Family Care.

“Adding home care and palliative care services to our health care network allows us to expand access to care and improves our ability to meet the needs of our patients,” said Huffstutler. “Home health and palliative care are essential to the continuum of care. Patients will benefit from better coordination of care and integration of palliative care services when they leave our hospitals.

One of the biggest motivators for hospitals is to expand their continuum of care, according to Stan Massey, partner and chief strategy officer of Transcend Strategy Group. Part of that motivation is driven by capacity constraints as hospitals see the growing demand for inpatient care, he said.

“Some of our health system customers have really turned to palliative care and home care primarily as a pressure relief valve to keep hospital beds. They don’t have enough to meet the demand,” Massey told Hospice News. “Even though we are no longer in a hospital capacity crisis due to COVID, there are many hospitals that still often have capacity issues. Health systems have yet to understand the mix of patients they receive from their own hospital systems, which are often very acute and really have very little life left.

The impact on patient choice, quality and understanding of end-of-life care services is a primary concern for palliative care providers, according to Dresang.

Hospital-based hospices have made the market more competitive and confusing for healthcare consumers, he said.

“On the one hand, it looks like increased competition. But it actually limits competition, because a healthcare system will intentionally or unintentionally limit a patient’s choice of hospice,” Dresang said. “It didn’t turn out to be a good thing for the patients. This has diluted public understanding of end-of-life care and challenged independent organizations that have a long history of integrating into their communities and serving as a safety net.

But there is ample room for health and hospital systems to co-exist alongside hospices, according to Massey.

Health and hospital systems need the expertise that palliative care providers bring when it comes to providing critical illness and end-of-life care outside of their walls in home and home settings. community, he added.

“Palliative home care is a different ball game,” Massey said. “They just can’t wave a magic wand and be an expert in delivering it without some experience, or hire workers who have experience. It’s part of the call. For the hospices that have been serving their communities, mostly based on home-based services for 30 to 40 years, they really are experts, and I think they’re going to have an advantage over the expertise of hospital systems for quite some time. .”

But questions linger in the minds of palliative care providers about whether the hospital and health systems will work with or against them in terms of stretching limited staff resources more broadly.

A number of hospice leaders have previously told Hospice News that the poaching of staff from larger health systems and other providers is becoming a greater source of tension in the ground war of recruitment and retention. industry. This is often accompanied by promises of higher salaries, more extensive benefits or signing bonuses.

Health systems tend to be better placed financially than hospices to offer staff higher remuneration.

That means hospices are fighting harder to recruit and retain enough staff to provide end-of-life care amid widespread labor shortages, according to Dresang.

“Most hospices will never be able to pay nurses at the same rate as a unionized hospital,” Dresang told Hospice News in an email. “However, we win candidates with organizational culture, benefits and work-life balance.”

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