Calif. Hospices Could Be Next in Health Care Consolidation Trend
Hospice organizations in California and other states could be next in a growing trend of consolidation among health care industry players, MedCity News reports.
The hospice industry is facing a 2% cut to Medicare reimbursements and a 2% cut as part of sequestration.
Most hospices -- both private and not-for-profit -- obtain a significant majority of their revenue from Medicare reimbursements.
Jon Radulovic, vice president of communications for the National Hospice and Palliative Care Organization, said hospices may turn to mergers and acquisitions to increase their financial stabilities.
Radulovic said that a "lot of organizations are looking to see what benefits there are for consolidation or merging," adding that the moves are not taking place "on an epidemic proportion, but we probably figure you will see more."
Hospice Consolidation in California
California’s hospice industry already is seeing some consolidation. For example, San Diego Hospice last year filed for bankruptcy and was purchased by Scripps Health.
Meanwhile, at least one hospice group in California is considering an affiliation.
San Francisco-based Hospice by the Bay -- the second oldest hospice provider in the U.S. -- is contemplating an affiliation with Sutter Health, according to MedCity News.
Officials at Hospice by the Bay say the provider is financially stable, but they want to take steps to avoid a situation like what occurred at San Diego Hospice. CEO Kitty Whitaker noted, "Things can change very quickly."
According to Hospice by the Bay's 2012-2013 annual report, the not-for-profit group generated $36.9 million in revenue on about $31.5 million in expenses. About 89% of its revenue came from Medicare reimbursements (Verel, MedCity News, 8/14).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.