Podcast Title: Leading Organizations That Matter
Episode: 48. Diana Franchito: The Rise of the For-Profit Hospice
Host: Rey Spadoni
Release Date: December 17, 2024

Introduction

In Episode 48 of Leading Organizations That Matter, host Rey Spadoni engages in a profound conversation with Diana Franchito, President and CEO of Hope Health. The discussion delves into the evolving landscape of the hospice industry, particularly the significant shift from nonprofit to for-profit models. This episode provides critical insights into how this transformation impacts patient care, organizational integrity, and the broader mission of hospice services.

Background of Hope Health and Diana Franchito

Diana Franchito introduces Hope Health as the second oldest hospice in the United States, tracing its roots back to the early days of the hospice movement initiated by Dame Cicely Saunders in London. Hope Health, headquartered in Providence, Rhode Island, serves over 1,500 hospice and palliative care patients and employs more than 600 staff members. As the leading teaching affiliate for hospice and palliative care at Brown University's Warren Alpert Medical School, Hope Health plays a pivotal role in training medical professionals in end-of-life care.

Quote:
“Hope Health is the major teaching affiliate for hospice and palliative medicine of the Warren Alpert Medical School of Brown University. And that means we have the training responsibilities for all Brown learners in palliative and end-of-life care.”
— Diana Franchito [03:04]

Shift in Hospice Industry: From Nonprofit to For-Profit

A central theme of the episode is the alarming trend of increasing for-profit entities within the hospice sector. Historically, approximately 30% of hospices operated on a for-profit basis. However, this number has surged to nearly 80%, driven by the allure of high profit margins and an efficient reimbursement model.

Franchito explains that the Medicare Hospice benefit, established in 1982, initially aimed to support patients receiving hospice care at home. However, Medicare's decision in the 1990s to extend hospice services to nursing home residents catalyzed the growth of for-profit hospices. Operating within nursing homes allows for greater efficiency and reduced operational costs, making the for-profit model highly attractive to entrepreneurs.

Quote:
“The switch from majority nonprofit to the majority for-profit is the lure of profiteering and excessive profiteering. And by that I mean over 30% profit margins.”
— Diana Franchito [06:44]

Quality of Care: For-Profit vs. Nonprofit

Franchito strongly differentiates between for-profit and nonprofit hospices, emphasizing that tax status does not inherently determine the quality of care. Instead, the underlying motives differ significantly. For-profit hospices prioritize profit maximization, often at the expense of patient care, while nonprofit hospices reinvest profits back into the community and services.

She cites recent studies illustrating disparities in care quality. Publications in the Journal of the American Medical Association and the American Journal of Hospice and Palliative Medicine reveal that for-profit hospices underperform in quality metrics and that employees report better experiences in nonprofit settings.

Quote:
“Hospices demonstrated the lowest performance and nonprofit hospices the highest performance in terms of quality.”
— Diana Franchito [12:14]

Abuses and Ethical Concerns in For-Profit Hospice

The conversation takes a serious turn as Franchito addresses unethical practices rampant among for-profit hospices. Highlighting a segment by John Oliver, she underscores real instances of exploitation, such as aggressive patient solicitation and fraudulent activities aimed at maximizing reimbursements.

Franchito references a 2022 ProPublica article titled "How Hospice Became a For-Profit Hustle," detailing manipulative tactics like using church bulletins and Meals on Wheels lists to identify and enroll patients. She also points out shocking statistics, such as the existence of multiple for-profit hospices operating fraudulently from single addresses like auto body shops and restaurants.

Quote:
“Some hospices have a 100% live discharge rate, meaning those patients will be discharged from hospice alive. This leads to higher rates of hospitalizations just in time before a regulatory review comes on.”
— Diana Franchito [15:14]

Advice for Leaders and Board Members

Franchito offers strategic advice to leaders and board members of nonprofit hospices. She emphasizes the importance of communicating the nonprofit status clearly, highlighting a mission-driven approach that prioritizes community well-being over profits. Nonprofit leaders should educate stakeholders about the ethical benefits of their model and the superior quality of care they provide.

Quote:
“It's about taking care of the community that they serve in a way that's deep and meaningful.”
— Diana Franchito [24:17]

Guidance for Families Choosing a Hospice

The episode provides invaluable guidance for families navigating the complex decision of selecting a hospice. Franchito references a Consumer Reports guide, advocating for choosing hospices based on nonprofit status, certifications, availability of palliative care consultations, inpatient units, and comprehensive care settings.

She advises utilizing resources like Medicare’s Care Compare website, word-of-mouth recommendations, and online reviews to assess hospice quality and ownership. Emphasizing due diligence, Franchito encourages families to research and select hospices that align with their values and care expectations.

Quote:
“Make sure your hospice is Medicare certified because there are certainly rules of the road that a hospice has to follow along with a very robust grief counseling and grief support team.”
— Diana Franchito [27:38]

Future of the Hospice Industry

Looking ahead, Franchito predicts continued growth in the hospice sector, driven by the aging baby boomer population and increasing societal acceptance of hospice care. She anticipates that the distinction between for-profit and nonprofit hospices will become more pronounced, urging vigilance to ensure that the focus remains on patient-centered care rather than profit.

Quote:
“It’s really hard just to serve. You know, as the old saying goes, two masters and it’s either the pocketbook or the patient.”
— Diana Franchito [30:02]

Conclusion

Rey Spadoni wraps up the episode by emphasizing the critical nature of understanding the differences between for-profit and nonprofit hospices. He underscores the importance of making informed choices to ensure compassionate and ethical care during vulnerable times.

Quote:
“That's enough to make you pause and to take notice of the distinctions and to take the time to do a bit of research and to understand this better.”
— Ray Spadoni [33:06]

Franchito directs interested listeners to Hope Health’s website and the National Partnership for Hospice and Healthcare Innovation for further information, reinforcing the episode's commitment to empowering leaders and supporting mission-driven organizations.

Additional Resources

• Hope Health Website: hopehealthcove.org
• National Partnership for Hospice and Healthcare Innovation: NPHI.org
• John Oliver’s Segment on Hospice Industry: Available in show notes

This comprehensive discussion in Episode 48 serves as a crucial resource for leaders, board members, and families navigating the complex and ethically charged landscape of hospice care. By highlighting the stark contrasts between for-profit and nonprofit models, Diana Franchito provides actionable insights to safeguard the quality and integrity of end-of-life care.