The Cost Of Dying: Hospice Industry’s Most Profitable Patients Get The Least Help

Hospice care has a new face: Dementia now accounts for more Medicare spending on end-of-life services than any other disease. And a WPLN investigation finds that the patients with the longest stays tend to get the least help.

Multiple times a day, Karrie Velez resorted to trickery. She ground up a handful of medication in a pill crusher and laced her patient’s meals.

“Because if you don’t, she will just spit them out,” Velez explained as Jean McCasland sat at her breakfast table in Goodlettsville, unaware despite being in earshot.

Velez stirred the pill powder into some peach yogurt and offered a bite to Jean, who responded by asking what yogurt is. Her dementia, at that point in late July, had made even the most basic conversation impossible.

Velez worked with Jean six days a week, six hours a day. And most of that time, they just sat, holding hands listening to music and trying to recall the lyrics. That’s primarily what she needed for most of her time on hospice — a sophisticated sitter.

But Velez doesn’t work for a hospice agency. The McCaslands, like many patients who elect hospice care, still had to hire a private caregiver like Velez, even while the hospice agency has been getting paid nearly $200 a day.

Blake Farmer WPLN

While there are still more cancer patients using hospice, dementia patients stay on hospice more than twice as long, according to Medicare’s latest data.

Modernizing Hospice

The problem is that hospice wasn’t designed for dementia patients, even though they now represent the largest cost to Medicare. And according to the Medicare Payment Advisory Commission, the only reason the average length of hospice stay increases each year is because patients with diseases like dementia are choosing to start hospice even earlier.

But the government benefit was established in 1983 with cancer patients in mind and primarily focuses on relieving pain. So hospice agencies don’t have to provide the kind of caregiving that people with dementia really need.

“Certainly, there is some disconnect,” says Pedro Gozalo at Brown University. He’s studied hospice since it was a niche part of health care. Now it’s a $19 billion industry dominated by for-profit companies who tend to have a much larger percentage of dementia patients.

Hospice was originally pitched as a way to save Medicare money. The comfort-first mindset would avoid costly treatment that wouldn’t do much good.

Gozalo’s research shows that in many cases, especially patients in nursing homes, it’s not meeting that money-saving objective anymore.

The original thinking was that some patients would require more attention than others, but policy makers agreed on a flat daily rate. Gozalo says dementia and other terminal illnesses with variable and often lengthy timelines have exposed flaws in that formula.

“That simplicity sometimes is exploited,” he says.

Key hospice providers have also noted in recent weeks that the Medicare benefit needs to be revisited. They’ve seen how even with hospice it can be hard to keep a dementia patient at home. The National Hospice and Palliative Care Organization also sees the six-month life expectancy as arbitrary given how difficult it is to predict when a dementia patient will die.

The Caregiver Gap

It’s uncertain just how many families have to hire private help. The Centers for Medicare and Medicaid Services doesn’t keep track of that datapoint.

But the cost to many families is clear. The McCaslands had to drain their retirement accounts to pay their private caregiver.

Meanwhile, a hospice company was charging Medicare for its suite of services. The McCaslands paid nothing out-of-pocket for hospice, but its role is much lighter, since Jean didn’t need much special attention or medical equipment.

“I don’t know, I guess I’ve just accepted what’s available and not really thought beyond what could be, because this is what they say they do,” said John, Jean’s husband of nearly 50 years.

John said he’s been quite happy with the help he’s received — the peace of mind a nurse being on-call 24 hours a day, a regular supply of adult diapers, a bath for Jean once a week.

But the McCaslands, like most families, have never considered whether they were getting what Medicare is paying for. John has kept a three-ring binder that holds his monthly statements but only realized what the hospice agency has been charging the government when asked to review them.

“That’s $200 a day,” John said with surprise.

That per diem is charged every day, even if on most days no one from the hospice agency visits.

The daily rate drops closer to $150 after two months — a recent payment reform meant to discourage gaming the system — but after some quick math, John realized the payments total nearly $60,000 over the course of a year on hospice.

“That’s in the neighborhood of what a facility charges,” he said.

He reassessed his expectations of hospice on the spot. His hospice agency has been making twice as much a week as what he’s paid his fulltime caregiver.

“I guess when you consider the amount of money that’s involved, that perhaps they would provide somebody round-the-clock,” John said.

courtesy NHPCO

This analysis from NHPCO finds that dementia is now the largest expense for the Medicare hospice benefit.

The McCaslands’ hospice agency, a small for-profit based in Madison called Adoration, says it can’t provide more than the Medicare benefit allows, though administrator Sue Riggle says she understands how much dementia patients need the help.

“I think everybody wishes we could provide the sitter service part of it,” she says. “But it’s not something that is covered by hospices.”

There are some hospice services the McCasland’s haven’t tapped into, like respite care. For up to five days a month, Medicare does pay for the patient to stay in a nursing home to give the caregiver a break. But very few hospice patients ever use it. John said it would be more trouble than it’s worth for him.

“Part of it is, I don’t know what it would do to her to be away and then to come home,” he said.

The core tenants of hospice, prioritizing comfort over any kind of cure, have made sense for Jean, long before she could qualify. But the benefit isn’t nearly enough. Even with the support hospice provides, John had to hire even more help as his wife inched closer to death.

“I mean, it’s a 24-7 thing if you’re going to keep them at home,” John said. “And I have said from the beginning that that was my intention, that she would be at home through the duration, as long as I was able to care for her.”

John fulfilled that hope.

Jean died Oct. 26, 2019, after 13 months on hospice. Her long-time caregiver, Karrie Velez, was also by her side as she drew her final breath.

A hospice nurse arrived later and made the official death pronouncement.

Blake Farmer’s reporting on end-of-life care is part of a reporting fellowship on health care performance, sponsored by the Association of Health Care Journalists and supported by the Commonwealth Fund.