Changes in Care for Patients Receiving Hospice Care From Agencies Acquired by Private Equity Firms and Publicly Traded Companies

Over the past three decades, hospice ownership by publicly traded companies (PTC) and private equity (PE) firms has steadily increased. As of 2019, 16% of Medicare hospice patients receive care from PE- or PTC-owned agencies. While proponents of acquisition claim these investments could lead to quality improvement and integrated systems, their actual impact on patient care still needs to be studied.  

In a JAMA Network Open study led by Dr. Robert Tyler Braun, assistant professor of population health sciences, researchers evaluate whether the acquisition of hospice agencies by PE firms and PTCs is associated with the change in site of care and clinical diagnoses for Medicare beneficiaries.  

Dr. Braun and colleagues determined the number of acquisitions of freestanding hospice agencies by PE firms or PTCs from 2010 to 2021. They then matched this data with available patient and hospice characteristics data from 2013 to 2020. The study used a difference-in-differences approach to examine whether acquisitions were associated with changes in patient diagnoses and sites of care. The difference-in-differences method uses longitudinal data from treatment and control groups to estimate a causal effect.  

Findings suggest that hospices owned by PE firms and PTCs may target Medicare patients likely to be more profitable because of certain clinical conditions, such as dementia, and who are associated with lower complexity of care. Additionally, hospice care provided in the home increased following PE and PTC acquisition, while the percentage of patients in assisted living decreased. These changes can maximize profitability following acquisitions. Researchers highlight a greater need for transparency in reporting acquisitions and oversight measures to ensure that patient care quality and accessibility are maintained in the hospice market.  

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