Business Plan: St. Francis Hospice LLC
University of San Francisco
Management of Financial Resources
November 28, 2013
The economic outlook for a limited liability hospice company in the current healthcare environment is generally favorable. The Affordable Care Act regards effective hospice care as an essential component in healthcare reform because it has the potential to provide better quality of life for patients and reduce healthcare cost. The public is becoming more aware of hospice services and enrolment rates in the Medicare sponsored program has seen significant growth in recent years and is projected to continue well into the next decade. In this paper an executive summary is presented to indicate a favorable market environment. SWOT analysis is conducted to further identify extraneous variables. A start-up cost analysis is presented and project goals and major miles stones are documented.
Business Plan: St. Francis Hospice LLC
The Medicare hospice benefit covers palliative and support services for beneficiaries with a life expectancy of six months or less who choose to enroll in the benefit. In 2009, nearly 1.1 million Medicare beneficiaries received hospice services from nearly 3,500 providers, and Medicare expenditures totaled $12 billion. The hospice payment system, based on fixed daily rates, has not changed since the benefit was established in 1983. However, the Medicare Payment Advisory Commission (MedPAC), an independent Congressional agency established by the Balanced Budget Act of 1997 to advise the U.S. Congress on issues affecting the Medicare program, has recommended an examination of the services hospices currently provide to assure that payments accurately account for efficient provider costs. With improved data on the services hospices provide, this evaluation could examine payment refinements related to case mix, length of hospice enrollment, care settings, geographic variation, as well as hospice eligibility ("MedPAC," 2011). For 2011, the National Hospice and Palliative Care Organization (NHPCO) estimated that approximately 44.6% of all deaths in the United States were under the care of a hospice program ("Facts and figures," 2011). Centers for Medicare and Medicaid Services (CMS) data show continued acceleration in use of the hospice benefit and associated spending increases. From 1998 to 2002, the percentage of beneficiaries using hospice before they died grew from 16 percent to 25 percent in fee-for-service and from 25 percent to 34 percent in managed care. While 60 percent of beneficiaries who died of cancer used hospice, growth has been substantial among patients with non-cancer diagnoses and among patients in nursing homes (“MedPAC,” 2011). In addition to these growth trends, a provision in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 is likely to increase hospice use even further. This provision allows hospice physicians to bill Medicare for hospice consultation sessions, which may be used to evaluate a beneficiary’s eligibility and need for hospice services. The number of Medicare-certified hospice agencies increased by 8 percent between 2001 and 2003 and the increase has continued. Not-for profit programs remain the largest share of the industry (56 percent), but for-profit facilities have seen the most rapid growth. In particular, for-profit hospices grew in number by 25 percent, significantly more than facilities with other types of ownership. The number of freestanding agencies grew 29 percent—considerably more than their provider-based counterparts, which all experienced single-digit change between 2001 and 2003. According to CMS, similar trends have continued to emerge in the last few years. The strong growth in the number of for-profit hospices may suggest that the financial environment for providing hospice care may be attractive for some providers. Hospice volume within...
References: Emanuel, E. J. (1996). Cost savings at the end-of-life: What do the data show? Journal of American Medical Association, 275, 1907-14.
Emanuel, E. J., Ash, A., & Yu, W. (2002). Managed care, hospice use, site of death and medical expenditure in last year of life. Achieves of Internal Medicine, 162, 1722-8.
Facts on Hospice and Palliative Care. (2013). Retrieved from http://www.nhpco.org/sites/default/files/public/Statistics_Research/2013_Facts_Figures.pdf
Hospice. (2011). Retrieved from http://www.medpac.gov/chapters/mar11_ch11.pdf
Hospice care in America. (2011). Retrieved from http://www.nhpco.org/sites/default/files/public/Statistics_Research/2012_Facts_Figures.pdf
Hoyer, T. (2007, November). The future of hospice. Caring, 26(11), 6-8.
Modifications to payment methodology may be warranted. (GAO 05-42). Washington, DC: Government Printing Office.
Taylor, D. H., Ostermann, J., & Houtven, V. (2007). What length of hospice use maximizes reduction in medical expenditures near death in the US Medicare program? Social Science Medicine, 65, 1466-78.
The Medicare Payment Advisory Commission [MedPAC] (2011). Hospice. Retrieved from http://www.medpac.gov/chapters/mar11_ch11.pdf
Please join StudyMode to read the full document