Hospice grows in care, competition in Ocean State

GOOD CARE: Home & Hospice Care of Rhode Island CEO Diana Franchitto, right, speaks with nurses at the facility’s second-floor nurses station. The organization is the second-oldest of its kind in the U.S. / PBN PHOTO/MICHAEL SALERNO
GOOD CARE: Home & Hospice Care of Rhode Island CEO Diana Franchitto, right, speaks with nurses at the facility’s second-floor nurses station. The organization is the second-oldest of its kind in the U.S. / PBN PHOTO/MICHAEL SALERNO

Hospice, the palliative and holistic care of patients diagnosed by a doctor to be in their last six months of life, has come a long way in Rhode Island since its local start in 1976.
The hospice that got things rolling in the state was Home & Hospice Care of Rhode Island, and it is actually the second-oldest hospice organization in the United States. (The first was in nearby Branford, Conn.)
In those days, what was then known as Hospice Care of Rhode Island was an all-volunteer operation paying its bills through staff donations.
Today, hospice in the state is an industry replete with for-profit and nonprofit providers, all of them overwhelmingly funded by Medicare, and HHCRI has come to be the dominant player in the local market.
HHCRI CEO Diana Franchitto said in a recent interview that some people looking at the organization’s gleaming flagship structure, the Philip Hulitar Inpatient Center on North Main Street in Providence, would be surprised to know that the organization’s offices had been housed in a church basement and a carriage house (“a glorified garage,” as she put it) not all that long ago.
At the onset, hospice meant care given in a cancer patient’s home. Part of that was the effort to be compassionate, and part of it was the nonexistent budget that would become HHCRI was dealing with.
In 1983, though, Congress enacted legislation funding Medicare to reimburse hospice services. And in 1984 HHCRI became the first agency in New England recognized by Medicare as a hospice provider. Despite its growth following the Medicare recognition, HHCRI has remained nonprofit.
Over the years, hospice has come to be provided to terminal patients who have chosen it over interventions designed to arrest, or slow, the course of their illness or disease.
In the last decade and a half, hospice has seen explosive growth in the United States, and a number of for-profit providers have set up shop, including Odyssey HealthCare of Rhode Island (owned by Gentiva) and Beacon Hospice (owned by Amedisys), in Rhode Island. For-profit providers such as Odyssey and Beacon tend to specialize in hospice care provided in nursing homes (neither Gentiva nor Beacon has an inpatient hospice center in the state, for example), where the number of days that patients receive the Medicare hospice benefit tends to be longer and the hospice benefit payment from Medicare tends to be greater.
“The reason for-profits get into hospice and proliferate so quickly is because margins have historically been pretty good, and the cost of entry is very low,” said Dr. Vincent Mor, Warren Alpert Medical School of Brown University professor and an HHCRI board member.
Nancy Roberts, president and CEO of the Visiting Nurse Association of Care New England, a nonprofit hospice entity, acknowledges that longer stays are more profitable.
“The highest cost is at the beginning of care and at the end of care,” Roberts said. “So when you have long stays, as you do with nursing home patients, there’s an opportunity to have a larger margin.”
The bulk of HHCRI’s patients are actually treated away from the Hulitar location, which has only 24 beds. According to Franchitto, nursing home patients constitute about 35 percent of HHCRI’s hospice patients, with the majority of patients being treated in their own homes and “a very small percentage” at Hulitar.
HHCRI’s average length of treatment is 47 days. At Beacon, the average is 89 days. A Gentiva spokesman declined to discuss operation.
The Medicare payment schedule pays $162 per day for the category of care most often delivered in nursing homes, which is known in the industry as “routine home care.” (It is a level of care that can also be, and is, delivered in a private home.) Michelle August, administrator for Beacon Hospice in Rhode Island, who started her career in the industry at HHCRI, said that differences between for-profit and nonprofit hospice services are easy to exaggerate.
“I think we’re all trying to reach the same goal,” August said, “and that is quality patient care. Whether you’re profit or nonprofit, you want to make sure the patient gets what they need.”
As the hospice industry has grown, so has the interest on the part of the Centers for Medicare and Medicaid Services in doing careful accounting of what it spends annually on hospice services. (In 2010, the last year for which figures are available, Medicare spent $13 billion on hospice nationally.)
“There is a much tighter focus on hospice care relating to the terminal diagnosis and the comorbidities,” said Beacon’s August. “We need to be more focused in our assessments, really getting our patient histories, determining what’s truly related to their diagnosis, what’s not related to their diagnosis, conferring more with the medical director.”
The local industry is competitive, though many Rhode Islanders looking for those services tend to stay close to home, say providers.
“We do have some competition,” said Melanie McGinn, director of hospice care for the Visiting Nurse Services of Newport and Bristol Counties. “I think the fact, though, that we’re on Aquidneck Island, which has its own culture, compared to other areas in the state, means we hold our own. VNS has been here for a very long time.”
In terms of innovation, there is generally less than there is in other segments of health care, according to Mor.
“There’s no magic robot to do procedures in hospice,” he said. “The Japanese are working on it. There are lots of little gimmicks, but so far no one has replaced the human touch.” •

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