Hospice Today

Growing Market

NHPCO’s Facts and Figures

Today’s hospice marketplace remains strong with an increasing population need and a growing demand for hospice services nationally.

Over the past several years, the number of patients served by hospice care has continued to increase. According to the National Hospice and Palliative Care Organization’s October 2014 “NHPCO’s Facts and Figures” report, over 1.5 million patients were served by hospice care in 2013. To understand this growth it is important to see the upward trend line and consider that as many as 10,000 baby boomers are turning 65 each day.

Hospice care is generally associated with an aging population. As older patients progress in their disease condition to a terminal state, they seek comfort and pain-relief through the palliative philosophy of hospice care. Over the years, hospice care has expanded from cancer predominance to a much broader disease based spectrum. According to the most recent NHPCO report, non-cancer related diagnosis accounted for over 60% of the patients in 2013. These diverse patient disease states require different levels of patient care, each with varying cost consequences.   

With this growth in hospice patient care, has come the increased prevalence of hospice agencies across the country. This hospice market, with 4,800 agencies in 2008, has expanded to over 5,600 agencies in 2013, including over 3,500 Medicare Certified Hospice Agencies.

A market that originated with a not-for profit charter, has seen the entry of new for-profit hospice organizations as shown in the graph below. Today, not-for-profit hospice agencies are under new market pressures as a result of the growth of these for-profit agencies, and increased cost of patients related to the complexity of their disease state. Consequently, in order to maintain a strong, viable program, not-for-profit hospice agencies must now balance superior patient care with strong business acumen.

 

Medicare Certified Hospice Providers

Reimbursement Pressures

Hospice organizations, like other healthcare providers, are under reimbursement pressures. Prospective payment structures with fixed per diem Medicare payments have constrained hospice cash flows, requiring more effective management of service-related costs. 

CMS has proposed Medicare reimbursement cuts, or minimal increases, over the past several years. Since Medicare payments may represent as much as 85% of the total payer mix, these proposed cuts or minimal increases year over year greatly impact hospice revenues. This problem is compounded by increased hospice drug expenses. A Medicaid report identified that drug expenses as a percent of total payments were 13.3% for 2002 and increased to 14.4% in 2003. These increases are expected to continue long-term, consistent with drug industry trends; while hospice per diem reimbursement increases are not expected to offset these costs.

With increasing drug costs and decreasing reimbursements, hospices are required to search for cost-containment strategies to remain profitable. Third party drug management companies provide access to discounted drugs through pharmacy networks, but they retain a substantial amount of the savings and often fail to provide sufficient clinical support. They do not generate maximum savings for the hospice. That’s where the AmerisourceBergen Pharmacy to Hospice Administration program begins.


Read about the Pharmacy Today

Learn about the Pharmacy to Hospice Administrator program

See the Facts & Figures

*Graphs and statistics provided by the National Hospice and Palliative Care Organization’s “NHPCO’s Facts and Figures,” 2014 Edition.