Vertical integration: Must hospice rely on partnerships for survival?
September 1, 1997 6 minutes read
Vertical integration: Must hospice rely on partnerships for survival?
Challenge is to re-engineer end-of-life care systemwide
So much current coverage of the health care industry, in the trade press and the mass media, focuses on merger mania who acquired whom, who owns whom, and what’s the latest deal? In such a feeding frenzy, it’s easy to forget that at one time, managed care theorists were more interested in functionally integrated, highly coordinated health care systems that could quickly respond with the most appropriate, least expensive service for the changing health care needs of each patient in a covered population.
For policymakers, payers, providers and users it’s less important who owns whom than how health care services are functionally integrated into a holographic organization in which each piece embodies the culture of the system as a whole, much as a fragment of a hologram contains its entire image.1
For America’s hospices, which have operated largely as carve-outs or niche providers of end-of-life care, vertical integration with larger systems that are integrating along the continuum of care may be essential to their long-term survival. But does such integration require a direct ownership relationship? Must hospice usually the smaller partner in any proposed relationship be acquired by the larger entity as the price of partnering? What do such acquisitions mean to the hospice’s ability to advocate for the needs of its patients and to its larger mission of transforming care of the dying in America?
These questions take on greater urgency with the growing attention to end-of-life care shown by groups ranging from the American Medical Association in Chicago and Princeton, NJ-based Robert Wood Johnson Foundation to the Center to Improve Care of the Dying in Washington, DC, and the Project on Death in America in New York City.
The battlefield has been defined by recent, widely publicized research demonstrating that the health care system fails many dying patients and by continuing clamor for physician-assisted suicide as a solution to the suffering of dying patients.
Despite two decades of growth, America’s hospices serve only one in six dying Americans, while the rest remain in hospitals and nursing homes, often overtreated, inappropriately treated, in pain, and without the benefit of hospice’s saner, gentler approach, say many hospice administrators.
New approaches are needed
New models, new approaches, and new programs clearly are needed in these other settings. What will be the role of today’s hospice providers in filling those needs? As integrated health delivery systems recognize the need to re-engineer and better coordinate their continuums of services for patients with life-threatening illnesses, how can hospice contribute its expertise to the new end-of-life care pathways? And what will the emergence of these new models of care mean for hospice’s current niche, and for the patients it now serves?
"Hospice has to get out of its shell and tell its story," says Tim Rice, executive vice president of health services for the Moses Cone Health Care System in Greensboro, NC, which has a long-standing relationship and partial ownership interest in Hospice at Greensboro. "You can’t be afraid to talk to the hospital CEO and do medical staff presentations. Hospice has a powerful story to tell. You are the only ones not afraid to talk about dying," Rice adds. "Our physician community they think they understand hospice. They don’t understand it."
"When we talk about vertical integration, the independent specialty niche player like hospice is at the bottom of the food chain," observes John Carney, MEd, CEO of community-based Hospice Inc. in Wichita, KS. "We hope to stay independent, but we feel we need to make alliances with the larger system. For us it’s not a size issue but a positioning issue. Ideally, hospice would not just sit off by itself but get involved throughout the continuum," Carney says. "What I see is a vast lack of understanding by hospices of what’s going on with integrated health systems and how to work with them."
"What happens is that hospice becomes part of the larger system, then the real work begins," says Paul Brenner, MDiv, coordinator of Jacob Perlow Hospice, a program of Beth Israel Medical Center in New York City. "I’ve been surprised in my own institution that doors and windows sometimes open if people are there to go through them. Whoever is in charge of monitoring end-of-life care in this institution apparently has decreed that this is the moment to address the issue," Brenner explains.
"It’s not about hospice knocking on the hospital’s door and saying, Throw us your bodies.’ It requires thinking through the issues of a more complex environment and how hospice can get involved in different ways to help the system and enable people to access appropriate end-of-life care in greater numbers. Some strong community-based programs may be savvy enough to reach into acute care settings and say, Look, we can do more to add quality to the lives of your patients and families, even while they’re in here.’ To be seen as a partner, rather than a bagel for a hospital CEO’s breakfast, depends on the leadership of the hospice. The era of there being one way to go, one answer, one solution that’s gone," Brenner says.
"I can’t see how most independent hospice programs can go it alone to have the resources, financial or otherwise, to do what needs to be done," says Patricia Murphy, RN, hospice coordinator for VNA and Hospice of Northern California in Emeryville, part of the Sutter health care group.
Just a blip on the budget’
On the other hand, says Anne Thal, LCSW, DCSW, president and CEO of community-based Hospice of Hillsborough in Tampa, FL, "I think hospital-based hospices have a harder row to hoe. They’re just a blip on the budget. I believe community-based programs have an opportunity to play a larger role as things evolve, through partnerships and alliances. It’s not easy; you have to knock on the door 15 times. But to me, vertical integration means something very different than it does to Columbia/HCA stockholders. It means we aggressively partner to be part of what’s going on."
"Hospice can get lost in the larger system, absorbed, watered down," adds Samira Beckwith, ACSW, LCSW, CEO of community-based Hope Hospice and Palliative Care in Ft. Myers, FL. "The system can only get transformed if somebody at the top of the system is committed. It’s also possible to achieve functional integration without being owned by the system," she adds. "Are people going down these [merger] paths without demanding assurances that they will be involved in functional transformation of the larger system? People who question whether the independent hospice can survive, I wonder if they’re afraid to find ways to truly functionally integrate, which means that each side will change the other."
Gretchen Brown, MSW, president and CEO of Hospice of the Bluegrass in Lexington, KY, says being acquired by larger systems probably is inevitable for most hospices unfortunately. "I think it’s going to happen. I just think we’ll probably all end up in that position except for a few in very unique situations, with certificate of need protections and special relationships to their community and to other providers," she says.
"It’s good to reframe the issue as seeing how hospice can transform the larger system. Certainly an articulate person within the system, previously outside of the system, might be listened to. But institutional people spend a lot of time serving institutional needs. And hospice types may not stay with those systems very long after a merger. Then a new manager comes in without the hospice commitment, and the hospice ends up serving the institution," Brown says.
"I have chosen to pursue a career of community-based care. I think community-based programs can better meet the needs of the community they have to. I fear that our community will be less well-served, but will probably end up with several smaller hospices owned by large systems," Brown says. "I don’t need proof that community-based is best. All of the top dues-paying members of the National Hospice Organization are community-based. They just get the job done in their communities."
Reference
1. Shortell SM, et al. The holographic organization. Health Forum Journal March/April 1993.
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