Research Letter
November 18, 2024
Caregiver-Reported Quality in Hospices Owned by Private Equity Firms and Publicly Traded Companies
Alexander E. Soltoff, Mark Aaron Unruh, David G. Stevenson, et al
JAMA. Published online November 18, 2024. doi:10.1001/jama.2024.20546
The US hospice industry has shifted from not-for-profit to for-profit ownership models,1,2producing concerns about care quality. For-profit hospices may have higher rates of live discharges3 and hospitalizations4 and worse caregiver-reported experiences.1 Recently, hospices have been acquired by private equity firms (PEFs) and publicly traded companies (PTCs).5 Although all for-profit ownership models are oriented toward profit maximization, PEF and PTC ownership structures are distinct in being incentivized to generate short-term and above-market returns for investors,5 raising questions about the potential influence of financial objectives on quality. We compared differences in caregiver-reported hospice quality across categories of ownership.
Methods
This cross-sectional study used Consumer Assessment of Healthcare Providers and Systems (CAHPS) data collected from January 2021 through December 2022. CAHPS surveys of caregivers of hospice decedents are conducted by telephone or mail. The response rate is approximately 30%. To address nonresponse bias and ensure fair comparisons between hospices, the Centers for Medicare & Medicaid Services (CMS) applies case-mix and survey mode adjustments to individual responses prior to aggregating and reporting an agency’s CAHPS data (eAppendix 1 in Supplement 1).6 Because CAHPS exempts small or newly certified hospices, approximately half (51%) of active hospice agencies are included. These hospices provided care to 87% of all Medicare hospice users over the study period.
We examined 3 ownership categories: PEF/PTC-owned (for-profit) hospices, non-PEF/PTC–owned for-profit hospices, and not-for-profit–owned hospices. Hospices owned by government or others were excluded. We identified hospices acquired by PEFs and PTCs between 2007 and 2021 using established methods5 with the Irving Levin Associates Healthcare M&A and S&P Capital IQ databases, which report acquisition announcement dates, names of acquired hospices, and the platform hospice that acquired the agency or the PEF/PTC that owned it, followed by web-based searches. The Weill Cornell Medical College institutional review board approved this study.
We used linear regression models to estimate differences in top-box scores between ownership categories for the 8 individual measures comprising the CAHPS Hospice Survey (communication, timely care, treating family member with respect, emotional and religious support, help for symptoms, hospice care training, hospice rating, and willingness to recommend), as well as a summary measure averaging the individual measures (eAppendix 1 in Supplement 1).1 Measures are scored from 0 to 100, with higher scores indicating better performance. Each regression model used ownership as the primary explanatory variable and adjusted for key community and hospice characteristics. Consistent with past literature,1performance differences between groups were considered as none to small (<1 point), small to medium (1-2.99 points), or medium to large (3-5 points). Analyses were performed using Stata version 17 (StataCorp LLC). Two-sided t tests of regression coefficients, analysis of variance, and χ2 tests were conducted using an α level of .05. A 95% CI not crossing 0 defined statistical significance.
Results
Among 2993 hospices in the sample, 2676 were included in the study: 705 (23.5%) PEF/PTC-owned, 1203 (40.1%) non-PEF/PTC for-profit, and 768 not-for-profit (25.7%) hospices. Most agency and community characteristics differed by ownership category (Table). Across all CAHPS measures, PEF/PTC-owned hospices demonstrated the lowest performance and not-for-profit hospices the highest performance (Figure). Relative to PEF/PTC ownership, we found medium to large differences in favor of not-for-profit hospices on 4 individual measures, with small to medium differences across remaining measures. We identified small to medium differences in favor of non-PEF/PTC for-profit ownership relative to PEF/PTC ownership on all but 1 measure. On the CAHPS summary measure, agency scores ranged from 56.6 to 96.6 percentage points. PEF/PTC-owned hospices scored a mean (SD) of 79.8 (5.2) points; non-PEF/PTC for-profit hospices, 81.2 (5.4) points; and not-for-profit hospices, 83.1 (4.3) points. Regression adjustments revealed PEF/PTC-owned hospices performed, on average, 2.86 points worse (95% CI, −3.38 to −2.34) than not-for-profit hospices and 1.68 points worse (95% CI, −2.32 to −1.24) than non-PEF/PTC for-profit–owned agencies, indicating a small to medium difference.


Discussion
Hospices owned by PEFs or PTCs performed significantly worse across CAHPS measures relative to not-for-profit and non-PEF/PTC for-profit agencies. Although prior research has highlighted poorer user experiences in for-profit vs not-for-profit hospices,1 this study found that PEF/PTC ownership was an especially problematic category of for-profit hospice. Study limitations include the cross-sectional design and low survey response rate.1 These findings raise questions as to how patients are affected when PEFs and PTCs own hospices and suggest the need for greater transparency and accountability of hospice ownership.