How hospice became a for profit hustle

https://www.newyorker.com/magazine/2022/12/05/how-hospice-became-a-for-profit-hustle

by cocacola1 • 4 years ago

190 86 4 years ago

PaulHoule3• 4 years ago

Anything that involves a government benefit that is out of scale with what people can pay out of their own pocket will become a nexus of corruption and distort the economy. That's practically an axiom of political economics, but politicians might wake up to it in 300 years or so.

badcppdev• 4 years ago

Does it need to involve the government?

How about any aspect of human behaviour that involves people with a difference in economic, health, or educational levels will lead to an exploitative marketplace?

(Edit: ^ that looks like a slippery slope to Marxism which isn't intentional so please be gentle with your feedback)

feet• 4 years ago

Marxism is not necessarily a bad thing

pclmulqdq5• 4 years ago

Yes, it does. The government is the only entity here that has effectively an unlimited wallet. Every time the government is involved in these markets (without taking them over completely), prices explode because the government purse completely crushes the demand curve. Education and healthcare are prime examples.

If you want a counterexample to the idea that healthcare prices are high solely because the demand for healthcare is inelastic, look at dental care. There isn't a lot of government funding for dental care, although it is very much necessary for your overall health. As a result, dental care is comparatively cheap - a full routine cleaning plus a check-up from your dentist (handled by private insurance) costs about the same as a single lab test (handled by medicare/medicaid and private insurance). Serious interventions, like wisdom tooth removal, crowns, or braces, cost only thousands of dollars. By contrast, routine surgeries are often in the tens of thousands.

Similarly, in education, private trade schools tend to cost $10,000/year or so, while private colleges are $50,000-70,000. The economic benefits of a private trade school are actually similar to the benefits of several majors.

PaulHoule3• 4 years ago

Try watching the evening news on broadcast TV sometimes. You occasionally see an ad for something buy out of their own pocket (particularly DTC startups) but it is almost all benefits you can get from medicare, prescription drugs, lawsuits you can join because your CPAP is trying to kill you, and personal injury lawyers that specialize in car crash victims. (I guess somebody has to advertise cars because if people didn't buy cars you couldn't get hit by a car and call William Matar but you don't see car ads until 8pm when prime time starts)

What's scary is that these people vote... And they want to get the government out of their medicare.

quacked2• 4 years ago

I was just explaining to some friends recently that the only way to become a large non-entertainment tech company these days is to find a captive market (education, healthcare, power, logistics, emergency response, etc.), insert yourself as a cheap solution to a complicated and expensive problem, and then infect the entire sphere until your terrible software is load-bearing and senior managers can't be convinced to replace it. I'm not surprised that this practice also works well in non-software areas like hospice, elder care, transportation, etc.

ecshafer• 4 years ago

Several large "Tech" companies basically are that already I think. Companies like EPIC or SAP or many other large enterprise companies, we might not normally think of as tech companies despite their main source of revenue is selling software and perform that very function. IBM is another though I do think we usually consider it a tech company.

matthewdgreen2• 4 years ago

The reason politicians don't wake up to it is because they have no easy alternatives. The fixes in this situation are much more complicated than the dunks.

rqtwteye2• 4 years ago

They are not really that complicated but politicians have to be willing to step on the feet of their donors.

LastTrain• 4 years ago

Yes, having the private sector fraudulently gobbling up those dollars is pretty sickening. Only working solution is to have government run healthcare top to bottom.

danso• 4 years ago

You can skip the New Yorker paywall with incognito mode, but it's also co-published on ProPublica's site: https://www.propublica.org/article/hospice-healthcare-aserac...

chrisbrandow• 4 years ago

Based on our experience, this is at the very least, not wrong.

My stepmother required, hospice, and and the worker was definitely helpful, but also very clinical, and somewhat hurried. There was not very much explanation or opportunity to ask questions. Fortunately, for us a relative, who was a nurse, from a separate side of our family, came for a few days, and was profound source of comfort for my stepmother and all of us.

I haven’t thought about this for a little while, but what I’m struck by is that this is a problem that may never “scale” successfully from either a government or entrepreneurial standpoint. What a family needs are a couple of humans that have been through this before to just sit with them and answer questions and reassure them that everything‘s OK. We’ll never be able to make that cost effective. In the best cases, this was a role historically filled by others in the community, though I imagine throughout a lot of history, it is just been a very difficult experience.

AlbertCory2• 4 years ago

"Scale" would mean to place ads for a low-paid, depressing job, and then hire people who last, on average, four months; use lots of software; get slick marketers; and raise venture capital to address this large, untapped market.

So no, I don't want a scalable solution to hospice care, thanks.

couchand• 4 years ago

Scale, here, could also mean decommodifying our time so that we feel more free to spend it with those we love.

pj_mukh• 4 years ago

Controversial Opinion: Elder Care/Hospice + Childcare + A lot teaching is "infrastructure" and should probably be done on Debt spending.

It should be marginally cost optimized in that it should not give in to consultant + contractor + admin bloat driven cost diseases, but worrying about cost "effectiveness" here seems to be defeating the point, as you laid out in your example.

yamtaddle• 4 years ago

Given we seem to be all-in on "our economic system rewards you greatly for being highly mobile, and punishes you—potentially greatly—for sticking around somewhere with family roots" I'm inclined to agree. We should either modify our economy so that's not (at least, to such a high degree) the case, or treat elder care and child care as the costs—to society, not individuals—of doing business that way.

pirate787• 4 years ago

Much of the federal spending on these categories is deficit spending.

nivenkos• 4 years ago

Ongoing costs should never be met with debt spending.

Just raise taxes to compensate - wealth tax, land value tax, capital gains tax, property tax, sin taxes, etc. - all of which help to push money into useful parts of the economy too.

PuppyTailWags2• 4 years ago

There's a sociology (yeah yeah I know the criticisms) podcast recently that pointed out this was actually a decision made through following economic frameworks of efficiency. Before this framework was in place, social good programs were actually run by social workers and similar people who had personal careers in the thing they were running. A lot of our golden age of government regulation and robust social programs and the like were when agencies were run by actual folks in that career, social programs run by social workers, environmental programs run by scientists...

An example they used was the EPA during the ozone crisis. The EPA tried to set something like "we should set maximum allowable ozone to a level where 95% of americans wouldn't be affected" vs the economists at the time arguing they should look at the marginal cost of saving american lives and go for the efficient tradeoff between lives and economic production of more ozone.

obblekk• 4 years ago

"He better not make it tomorrow. Or I will blame u" to encourage a nurse to overdose a patient to hit 6mo life expectancy quotas (from the article). This is disgusting.

Is there any fundamental reason the industry is so sketchy? Or just that it's a bit obscure (for young people who might start a business) and highly regulated, so little competition?

Seems like "ripe for disruption" might actually be a good thing here.

This kind of business really should be operated at a reasonable margin (20%?) by ethical, professional, competent operators. Not sure how to get that outcome quickly, but hope it can be solved before my family gets there.

downrightmike• 4 years ago

'Distruption' usually skirts and outright ignores laws. A lot of this requires RN to do the work and Doctors to oversee everything, So it'll cost a lot period. You'll not find anyone to risk their medical license for you. There is a shit ton of paper work and if things aren't documented correctly, everyone can get in trouble. A lot of the issue is the consolidation of the industry, which is usually the issue.

A4ET8a8uTh0• 4 years ago

I think the emotions and incentives involved make for such a breeding ground. The article seems to focus on the latter. And I think, at its core, this is the problem. The incentives are too strong and regulation too lax ( and people being people, optimize for those ). I want to offer a similar example from a seemingly regulated field and yet badly incentivized[1], where ambulance workers and doctors were involved in a scheme that involved getting money for funneling bodies to friendly funeral houses.

I think you are right about the margin size. It attracts the type of person who will optimize for it at any cost.

[1]https://www.cbsnews.com/news/polands-cash-for-corpses-scanda...

HillRat4• 4 years ago

I was deeply involved in hospice software, and specifically developing hospice revenue cycle solutions, about 15 years ago, and I can certainly confirm that the Medicare/Medicaid reimbursement formulas -- while in most areas arguably about as well-designed as you're going to get with such a program -- incentivize fraud because of the odd combination of up-front incentives and retrospective clawbacks. For well-run hospices, these aren't major issues (clawbacks aren't uncommon, but aren't financially controlling), but for hospice systems built to drain public cash out of dying patients, it's every bit as bad as the article says. (I did find that, using public Medicare hospice data, it was very easy to find providers that -- comparing my model to DOJ prosecutions -- were engaged in patient-stuffing and fraud by looking at their patient population data. Unsurprisingly, there was a significant correlation between questionable patient censuses and financial performance.)

Generally, hospice is a hard case -- I'd never put a loved one (and I didn't) through one of the major providers, while smaller hospices have their own issues even if they're well-run, because Medicare/Medicaid reimbursement isn't really sufficient at the small scale (many are non-profit for this reason). I'd like to see more money directed towards hospice while restricting hospice size (such as putting caps on total patient census) to try and reduce the incentives for fraud and gaming the system, but to be honest I don't think there's a good way to fix the problems inherent in the model.

(Also, the government should be a lot more aggressive, and licensing bodies more strict, on penalties against these companies. Yank the medical licenses from medical directors, slam some FTC decrees on named individuals, and put some execs in prison -- rather than, say, letting them go on to get elected to the Senate -- and the risks to medical fraud will start to outweigh the value for a lot of people.)

joshstrange• 4 years ago

(Also, the government should be a lot more aggressive, and licensing bodies more strict, on penalties against these companies. Yank the medical licenses from medical directors, slam some FTC decrees on named individuals, and put some execs in prison -- rather than, say, letting them go on to get elected to the Senate -- and the risks to medical fraud will start to outweigh the value for a lot of people.)

It's so incredibly depressing how the people at the "top" (the ones running the companies) always manage to skirt any consequences at all for their actions (and no, a fine that is a tiny % of the profit they made is not a consequence). I agree, we need to start sending CEO's and other C-level people to prison, pull their licenses, and not allow them to run companies in the future (or at least for a period of time) to disincentivize this disgusting behavior. And before I hear about how screwed up our prison system is: I know. We need major prison reform but keeping the rich/powerful out of prison does nothing to help that. In fact I'd argue it hurts it, the people who have means to fight against it never have to experience it themselves. Reform is needed but until then it'd sure be nice if we applied the law a little more evenly/equally. I'm not sure how some kid selling weed on a corner can end in prison but an exec that defrauds the government/public for millions/billions can walk away scot-free.

HillRat4• 4 years ago

Interestingly, both HHS and IRS have law enforcement arms that are extremely effective and could be used more extensively in these cases, but they're overburdened dealing with things like opioid prescription crimes (which are worthy of prosecution, but could also be handled entirely within the DOJ). Folks I've known in those agencies are often frustrated by the fact that they're not spending their time going after complex white-collar frauds that they're specifically equipped to handle. Like you say, it's like Anatole France's old line about the "majestic equality of the law" forbidding rich and poor alike from sleeping under bridges.

spoonjim• 4 years ago

One of the few things I like about the Chinese government is that they execute serious white collar criminals.

bombcar• 4 years ago

There is an eternal cycle in these things - large corrupt institutions get shit down by the government, new “better” ones start up, one or more horror stories happens, and new regulations are added to “prevent it” and very soon only the large corrupt organization are able to keep up with the paper work.

treeman792• 4 years ago

Was involved in medical billing software. Any individual bill is generally fine on its own. Actual fraud was taken seriously.

But the system is absolutely designed to milk the government for every dollar possible. Basically, how much can we bill for without it crossing the line into fraud.

Perhaps much worse. Is there is zero incentive to reduce cost for treating people.

HillRat4• 4 years ago

Ironically, one of the more effective ways to reduce billing waste was when health systems (or their PE owners) decided to slash costs by laying off their coders (for everyone else who didn't live revenue cycle, a "coder" in this case is someone trained to translate medical procedures to billable CPT codes) and having nurses do billing. Suddenly there was zero incentive to optimize for reimbursement, since nurses are understandably nervous about getting sent up for inadvertent Medicare fraud.

moneywoes• 4 years ago

Any ideas for finding some of these names? Is there room for innovation in the market

rdmirza• 4 years ago

I'm intrigued about your research and would love to hear more. I'm a physician interested the effect of for-profit care on health care and outcomes.

As an example, we showed that for-profit dialysis facilities in the US have about a 7% higher mortality rate. We did a meta-analysis and every study barring one found higher mortality in for-profit dialysis facilities. Other studies suggest one reason is lower referral rates for kidney transplantation. Higher mortality has also been shown in for profit hospitals.

HillRat4• 4 years ago

It was a long time ago, so I'm operating off questionable memory here, but IIRC the major tell was looking at patient longevity (questionable hospices had longer patient tenure, presumably because of more aggressive recruitment of non-EOL pts) and distribution of inpatient care days (which have the highest reimbursement rate, so questionable hospices tended to max out inpatient days). There was definitely a correlation between size of hospice and those variables, and hospices involved in DOJ/HHS prosecutions were correlated with longer pt tenure and high utilization of inpatient care.

Your work sounds interesting and enlightening -- I'm not familiar with dialysis facilities clinically or from a business PoV, but I'm curious if they suffer from some of the same incentives issues as hospices, given the significant Medicare/Medicaid spend in that area, and the number of ESRD policy carve-outs.

aczerepinski• 4 years ago

I worked for AseraCare for five years and another hospice for three. Although it was a large company, most of the branches were small and (I assume) unprofitable. Hospice is a very tough business until economies of scale take hold above 100 or 200 concurrent patients.

I never saw any fraud and have tremendous respect for the clinicians. It was a bad work environment though because of unrealistic expectations put on the executive directors to grow grow grow. In five years I worked for five executive directors locally, and five CEOs at the national level.

rqtwteye2• 4 years ago

“ grow grow grow.”

This mindset is just wrong for health care. It should be run as basic infrastructure but not for profit, especially not ever increasing profit.

my_city• 4 years ago

Im tired of the media asking variations of the question: "why this thing that is supposed to be good, ruined by profit seeking?"

The answer starts with "c" and ends with "apitalism". Any other answer is bullshit.

asdff• 4 years ago

I figure its just to fill the bandwidth on the given issue with noise to prevent a wider anticapitalist agenda from becoming popular or even having these ideas become accessible. Now when you search for "why this thing that is supposed to be good, ruined by profit seeking?" you will probably not find an article condemning capitalism as a system among the top search results, and instead find all of these other articles that distract and deflect from the root issue.

leetcrew• 4 years ago

okay, but this article is specifically about medicare fraud. this could just as easily be the setup for a hot take on how public benefits don't work, but I realize the problem is a little more nuanced than that.

onlyrealcuzzo• 4 years ago

You can commit fraud at a non-profit: https://a2independent.com/2022/10/27/ann-arbor-non-profit-ho...

When you have a system like Medicare - that a few terrible people can abuse to extract hundreds of millions of dollars - it's going to happen, whether you have non-profits or for-profits, whether it's government corruption or private corruption.

The problem is setting up a system that doesn't take fraud & corruption into consideration and have a real way of dealing with them - not Capitalism

onemoresoop• 4 years ago

You can commit fraud at a non-profit

The difference is that the other one for profit is not considered fraud, it's just working as intended to maximize profit

ng12• 4 years ago

This was very sad to read. My grandmother was on hospice and her worker was an absolute saint -- she went to bat for my grandmother several times against her nursing home and social worker that were tired of dealing with her decaying mental state. I still send her a Christmas card every year.

inasio• 4 years ago

Relevant from last week: a (horrific) Ars Technica story about a person that got a foot amputated without their consent (and then died)[0]. The amputation is one of the milder parts of the story, the conditions and neglect that lead to it are just unbelievable.

[0] https://arstechnica.com/science/2022/11/after-renegade-nurse...

JTbane• 4 years ago

It's criminal how much a person can be charged for end of life care: I'd much rather have a single-payer system.

buescher• 4 years ago

Medicare is a single-payer system. The whole article is about waste, fraud, and abuse in a single-payer system.

atlasunshrugged• 4 years ago

Somewhat related, whatever happened to Honor? I remember them making a big splash about reinventing senior services some years ago but feel like I don't hear much about them anymore -- their website (joinhonor.com) is live so I guess it's a going concern but I do wish there was more action in the industry supporting the elderly.

gorjusborg• 4 years ago

https://archive.ph/QvhVa

SoftTalker2• 4 years ago

Based on personal observations before my parents passed, there is a lot of "for profit hustle" in every aspect of elder care. So many people are trying to get their hands into the pockets of sick old people to siphon off their wealth and/or government benefits before they die. Everything from estate planners, to long term care insurance, to assisted living apartment communities, to nursing homes, to hospice -- so many hustlers looking to make a buck.

alistairSH• 4 years ago

Even worse, in the US, more than half the states have filial responsibility laws, requiring us to pay for over-priced elder care. Even if the elderly parents is still alive (and simply moved to Greece).

https://caselaw.findlaw.com/pa-superior-court/1607095.html

rossjudson• 4 years ago

That is the craziest thing I have read in a long time.

lm28469• 4 years ago

There was a huge scandal in France not so long ago, a private hospice group abused their residents, barely taking care of them while asking thousands per months for room

They even got 50m of public funds, which they misused to pay contractors.

Looks like the invisible hand doesn't like old people so much

https://www.francetvinfo.fr/societe/prise-en-charge-des-pers...

csydas• 4 years ago

Unfortunately, I cannot read the article in full because of the paywall, but before I entered into the tech-sphere, I had a brief stint in vulnerable persons hospice.

It was a nightmare fueled by the $15/hour wage in 2011 wages. While the price was right for my needs, ethically I could not sleep at night.

My first night involved:

- Persons unable to cleanse themselves after normal bodily functions

- Several dead persons

- Said dead persons and many others who took the time to edit their living will to reflect me because for the few nights I kept this job, I treated them like human beings needing help

I walked away from this job after a week and lawsuits followed from the bereaved and the business itself because I was named in the living will. From my perspective, these were persons who had no business signing a contract and by any medical definition were not fit to determine a reward in their living will. I am not here to pretend I understand the nuances of law and why such an action was allowed, but after quitting and outright telling my boss I was not up to the mental stress of seeing people die on a nightly basis and waiting for (US) medical services to arrive and literally kick a body around, I ended up with very little faith in the hospice system.

My coworkers openly bragged about the "opportunities" they found for themselves with persons who couldn't even figure out the current date without someone holding their hand and writing the date for them. This was abhorrent to me in ways I don't know how to put into words, but I have images of the nearby dog kennel and such persons taking advantage of the patients.

US hospice is absolutely an under-studied and over-abused factor in US life. To make matters worse, as I understood it from discussions with colleagues, far too many people see the abuses as a necessity or "fair trade" with the alternative being that persons who need hospice rotting in the street.

The irony kills me at a core point that so many people in the training accepted this as a sensible truth instead of being upset that those in need have the choice of total abuse or rotting in the gutter.

I will write that I am sickened by this environment, but sickened doesn't come close to describing the filth and awfulness I felt in such an environment.

peter303• 4 years ago

Several of my acquaintances and relatives benefited from hospice. There was less red tape in obtaining financial approval than curative medical care. Less wrangling with insurance company gatekeepers.

How hospice became a for profit hustle

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