Residential hospice facilities meet special needs, but at what price?
Leading providers share experiences, tips
For the past decade, residential hospice facilities have provided a lifeline for terminally ill patients who could not be cared for at home or did not have homes or families to care for them yet did not need or qualify for inpatient or acute-level care. Because those hospice residences often didn’t have to meet the institutional requirements of hospitals or nursing homes, some achieved spectacularly tranquil, home-like environments.
Residences also provide a dramatic, visible focus for the hospice’s fundraising and for elevating its profile in the community. However, while routine hospice home care services are covered for patients residing in these facilities, in most cases, the costs of operating the facility such as building management, meals, and linens are not covered. Providers, therefore, face the dilemma of how to fund ongoing expenses for a service that is wanted and needed but can cost up to $100 per patient per day. Yet new hospice residences continue to spring up around the country, often with splashy grand openings. What has been learned in the past decade about the role and the long-term viability of this model?
Unlike leased units or contractual relationships with hospitals or nursing homes, a freestanding hospice residence allows the agency to create the atmosphere and the type of care it wishes. When the community gets behind the project with charitable dollars, the result can be a beautiful or even resort-quality structure in an elegantly landscaped setting that seems to embody hospice’s philosophy of a peaceful death. A residence also enables the hospice to extend access for many patients who otherwise might never qualify for its care.
"I have managed two residential hospices, one in the Northeast (Hospice at Mission Hill in Boston) and now here in the South," says Patricia Gibbons, BSN, CRNH. Gibbons is the manager of Beacon Place, a 12-bed residence and inpatient facility operated by Hospice of Greensboro, NC. "For whatever reason, we seem to be doing OK here, and we are truly serving an underserved population whose care needs are so great they can’t be at home." Recent examples include a 39-year-old woman with amyotrophic lateral sclerosis, two young children, and no husband and a woman with liver cancer and schizophrenia who was living in a shelter. "As hospice looks within itself to truly honor its mission, these are populations that often have been overlooked," Gibbons says.
"We now have 99 residential beds, including 21 efficiency apartments," out of a total daily census of 1,300 patients, adds Mary Labyak, MSW, LCSW, president of Hospice of the Florida Suncoast in Largo. "We see clearly that these are people who couldn’t otherwise be cared for, because they’re homeless or because of their living situations. And there are families we can keep together who were falling apart because of the stress and who are now able to have a positive experience with their dying loved one."
Because of the dearth of open space in its community, the Largo hospice has chosen to convert existing structures, rather than build from scratch. "We don’t have waterfalls, but we don’t have a debt to service," Labyak says. The converted facilities "give us a position in the community that says, We do things because it’s the right thing to do.’ We see this commitment as tangible visible evidence that we care." The drawback: a deficit on operating costs for these residences that totalled $400,000 in the first five months of this year.
"Room and board is the big piece. People in need of residential care aren’t necessarily able to afford the room and board," says Gibbons, who believes hospice insurance benefits should be revised to include a provision for these essential living expenses. "Or you might have an elderly couple where the wife can no longer care for her husband, but she still has to pay the rent or mortgage while he’s in the hospice residence. Even with an extended payment plan or sliding scale, it still comes down to relying on community donations."
Although the Medicare hospice benefit does not include it, a small but growing number of private insurance and managed care plans are covering residential room and board on top of the customary hospice rate for professional services, but this is usually negotiated by case managers case by case. Most hospice residences have instituted a room-and-board charge, but with income-based sliding scales they typically collect less than half this fee.
Residential care is a risky endeavor
"It’s a very risky thing," says Patrice Moore, RN, MSN, CEO of Hospice of North Central Florida in Gainesville. Six months ago her agency opened a $4-million, 34,000-square-foot care center with administrative offices and 18 residential beds. "We’re finding that if you do strictly residential care, as we do, it is very difficult because the level of care is much greater than what you see at home. What’s disheartening is that it feels like such the right thing to do. It’s a way of caregiving that just has to have value. And yet you don’t want to lose sight of your main mission which is to provide care in the home. We’re struggling trying to figure it out every week," Moore says.
Follow these tips to make residential care viable:
1. Be clear on the need.
"I would ask you to think about what is the problem you’re trying to solve," Dale Lupu, MPH, PhD, a hospice consultant from Silver Spring, MD, told participants at a workshop on facility-based care at the recent National Hospice Organization management meeting in Washington, DC. "Is the problem that somebody wants to give you lots of money and needs something visible? Is it patients without caregivers? Are there other ways to solve that problem? I think buildings should happen as a last resort after you have thought through every other way of solving the problem," he added. Then do a thorough, community-based needs assessment to quantify the need.
2. Mix levels of care.
Increasingly, new freestanding hospice units seek to combine custodial-level, long-term residential care with acute-level, short-term inpatient care, since the higher daily rate for the latter can help cover operating costs for the entire facility. Depending on the size of the facility, the skilled nursing services required for acute care and the custodial level care for residential patients can be combined efficiently under one roof.
Medicare’s requirement for inpatient respite care might also be addressed in a residential/inpatient facility. However, Gretchen Brown, MSW, president and CEO of Hospice of the Bluegrass in Lexington, KY, warns that her agency’s respite patients almost always end up converted to inpatient-level care, because they are so ill by the time the family is willing to ask for respite.
"Mixing inpatient and residential care gives you tremendous flexibility, but if you become totally dependent on inpatient-level reimbursement, you could get in trouble," Gibbons observes. "We have six inpatient beds and six residential beds, and the residential patients need as much care as the acute patients their needs are so great."
Hospice of Martin & St. Lucie in Stuart, FL, opened its second eight-bed residence last May while also obtaining a certificate of need from the state to operate up to eight of its 16 beds as inpatient care. "We have a registered nurse on duty for both [adjacent] residences, and we’re keeping our heads above water financially," after losing $100,000 or more per year with residential care only, reports Mary Knox, RN, ARNP, CEO of Martin & St. Lucie.
Because of cost hemorrhages, Moore recently decided to dedicate a portion of her agency’s 18-bed facility to full-pay clients, at the current rate of $100 per day, while reserving the remainder to residents who can only pay some or none of the room-and-board charges. "I really wrestled with this decision, but I don’t think it’s particularly unfair in today’s health care environment. We’re committed to providing hospice care regardless of ability to pay, but we are not committed to providing food and a place to live."
3. Track expenses.
"One of our problems is we haven’t had enough good data to make the important decisions" about staffing and operating the residence, Moore adds. "We’re getting a whole new software program to help us find the needle in the haystack," she reports. "I’d recommend to any hospice: Make sure you have your costs in line as much as possible, and you can track expenses before you start admitting patients. But be realistic. It will take more staffing than you expect," with higher operating costs, while the amount that can be collected in payment from residents may be less than budgeted.
4. Consider the trade-offs.
"I have never tabulated the numbers, but there’s no question that we reduce inpatient stays [by using the residences]. Very seldom does one of our residents go to the hospital," Labyak reports. Given that residential hospice patients likely would have been high utilizers of services if cared for at home, the residence may have an impact on the bottom line in other areas as well. "We spend a lot on caregivers in the home and sometimes can’t even find enough personnel. My experience leads me to believe that there’s something there," in terms of the residence’s contribution to the agency’s overall bottom line, which might justify subsidizing it out of the general operating budget, Labyak suggests.
"We have also found that our after-hours calls are down," Moore adds. A night nurse at the residence is able to do phone triage for patients living at home. "With the facility and office all in one [building], sometimes staff from upstairs can go down to provide coverage in the facility."
5. Explore other creative approaches.
Hospice Home, a 40-bed residence that opened in June in Farmington Hills by Hospice of Michigan, is the recipient of a $20,000 "wish list" donation of household goods from Kmart Corp., including towels, sheets, blankets, plates, cups, silverware, and appliances even a gas barbecue grill and patio furniture. Other hospice managers suggest approaching suppliers, designers, contractors, and other vendors to see what they can contribute, either directly or from their other clients.
"It’s a challenge to figure out how to manage this part of our business," Moore concludes. "We need to look harder and look closer to see if there is any other way to do things."
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