We have grown numb to headlines about inadequate care and the challenges in our health care system. Patients and communities are forced to suffer the consequences as one health care system after another becomes distressed. At the same time, we have also witnessed how private investors have profited.
New England is finally moving on from the bankruptcy of the for-profit hospital system Steward Health Care, but the role of profit in health care continues to be a concerning issue in hospice, an important part of end-of-life care in the health care continuum. A new study in Health Affairs found a surge in private equity ownership of hospice centers in recent years, with acquisitions rising from a handful in 2015 to almost three dozen in 2021.
Why is this happening? According to a report by The New Yorker, private equity firms have bought up local, independent and nonprofit hospice providers because they see them as an investment opportunity. To make good on that investment, they then load these organizations with debt, strip them of their assets and then strive to max out the revenue.
Versions of this scenario are playing out across health care, from hospitals and nursing homes to home care services. Not all are as blatantly exploitive, but even in the best-case scenario, private equity firms can’t help but face competing priorities: Do they prioritize the best possible patient care, or the best possible profit margin?
All too often, we see them choose profit over patient care.
A 2023 study published in the Journal of American Medicine found that after a hospital facility had been bought by a private equity firm, hospital-acquired complications increased by 25%, falls increased by 27% and central-line infections increased by 38%. Researchers from other organizations note that for-profit hospices generally use less-skilled clinical staff than nonprofits, and across the board, family caregivers report “substantially worse” experiences.
In contrast, the American Journal of Hospice & Palliative Medicine published a 2024 study ranking the quality of the 50 largest hospices in the United States, and I do not believe it is a coincidence that 23 of the top 30 are nonprofit providers. This includes HopeHealth, which ranked second.
To be clear, I am not opposed to an organization making money. I am opposed to extreme profitmaking. In my view, when a health care provider is more loyal to its investors than to its patients, it becomes an ethical issue. It violates a sacred promise to the patient.
Fortunately, many of us experience the other side of the coin. I am privileged to lead a nonprofit provider of hospice and palliative care. That distinction – “nonprofit” – is important. While for-profits exist to make profits, nonprofit organizations exist to put others first. In fact, to even qualify as a nonprofit, we must serve the public good in some way. We do not distribute profits to anyone or anything other than the mission itself.
We define success as providing excellent care to the community. We lead crucial community programs simply because it is the right thing to do, even if those programs do not provide any return on investment. While a private equity firm may not hesitate to leave a community behind when it is no longer profitable, the nonprofit health systems will do everything in their power to be there for their community.
That is because we do not answer to investors. We answer to our patients and families.
Diana Franchitto is CEO and president of HopeHealth, a nonprofit hospice and palliative care organization based in Providence, and vice chair of the National Partnership for Healthcare and Hospice Innovation.
Massachusetts is shelling out $700 million to begin to re-establish a long-term, stable foundation for just a few of its community hospitals. It is hardly moving on. The repercussions will be with Massachusetts for many years to come.