Choosing For-Profit or Non-Profit Hospice Care

Choosing a for-profit or non-profit hospice care provider is probably a question you never thought you would consider. Most people don’t even realize that there are different types of certified hospice care providers available; a non-profit version and one that operates as a for-profit business.

For-Profit or Non-Profit Hospice Care – Is there a Difference?

Not all hospice services are alike, with some providing aftercare services such as bereavement support and monthly group support groups while others may offer nothing more than immediate hospice medical service needs.

Above & Beyond Hospice Care is a for-profit hospice care business. This means that we pay taxes and can utilize our profits to continue to provide services and programs beyond basic hospice care.

7 Facts Regarding For-Profit or Non-Profit Hospice Care

Let’s take an unbiased look at the basics of choosing for-profit or non-profit hospice care:

1. “I’ll Only Use Non-Profit Hospice” – You may hear this comment from people who feel that the words “non-profit” means that the company’s main purpose is to serve without making any money for their services. The truth is that hospice care providers all follow the same rules and regulations without regard to a person’s financial position.
2. Medicare Based Care – All Medicare based hospice care is highly regulated with every provider having to follow the same conditions of participation. Basically, Medicare pays the bill and they won’t authorize you as a provider unless you meet their stringent regulations and maintain your Medicare authorization.
3. 90% of Hospice Patients Are Medicare Patients^[1] – Because the majority of hospice patients are Medicare patients which means that all are treated equally with the same set rules under Medicare laws. Whether for-profit or non-profit, the same rules apply (including how much Medicare pays).
4. How Hospice Agencies Pay/Get Paid – Many are wrong in thinking that “not for profit” means that an organization runs on grants, donations, and volunteers. This is not true and every agency gets the same amount of money “per diem” by Medicare no matter what their profit status is. As a matter of fact we have a hospice foundation to help those who may not be insured or need help with financial parts of hospice and some amazing community volunteers that are a vital part of our business in helping with hospice care and after care for the families.
5. Taxes – A common part of non-profit hospice organizations is that they pay no taxes. As a for-profit business, taxes are paid just like any other business and supply the community with both the benefit of tax money and hospice care provided.
6. Types of Hospice – According to the below referenced booklet from the NHPCO, the majority of hospice care is provided by free-standing agencies (that is, not by a nursing home, hospital, or associated hospice care but a provider who provides hospice care as their business or part of their caregiving business). This allows the majority of patients (nearly 60%) to pass peacefully in their place of residence.
7. Putting the “Family” in Hospice – We view hospice care as care that encompasses the entire family unit. The rules and regulations of Medicare hospice care oversees the treatment and care of the Medicare hospice patient alone; there are no rules and regulations regarding providing care and support for family and friends of the patient (both during the hospice care and after). Both business models have the ability to extend their services beyond the immediate care of the hospice patient; however, this can sometimes be affected by financial position of the provider itself.

Summarization of the Two Styles of Hospice Providers

• Both Operate Under the Same Regulations – Once all is said and done, both for-profit and non-profit hospice care providers are bound by the same set of rules and regulations.
• Taxes – One of the main differences between the 2 styles of businesses involve the very basic action of paying taxes as a business. Non-profits do not pay taxes that typically are used to help localities/cities and states pay for everyday costs associated with running a state/city. For-profit hospice care providers pay the same taxes as every other business in the area; providing financial benefit through taxation to the communities in which operate.
• What Happens to Money Made – It is safe to assume that both types of hospice providers will “make money” at the end of their fiscal year. So, what happens to the money/profit on the books at the end of the year?
  • As a non-profit, that money must be used, showing a zero balance on the books. This can be done as they see fit (donations, incentives to employees, bonuses, using the funds to pay for updates, materials, and/or programs, etc.). The only acceptable result is that at the end of their fiscal year they show no profit or funds on the books.
  • As a for-profit, any/all money can stay on the books and shown as taxable income or can be used as they see fit to invest the money back into the company for upgrades & new programs, provide incentives/bonuses to employees, place into foundations designed to build interest to use as needed for helping others, etc.). They do not have to use the money and can simply keep it on the books for use as they see fit in the future.
• Profitable Businesses Can Also Have Non-Profit Foundations – As explained with our link to our Hospice Foundation page here; profitable hospice care providers can and often will include a Foundation which can be non-profit. The reason for this is to allow for accepting tax-qualified gifts and other income with the intention of the money being used specifically for helping others who need financial help for hospice care.

Does It Matter If You Choose Profit or Non-profit Hospice Care?

√ Your decision for choosing hospice care providers should truly not be based upon whether the providers are for for-profit or non-profit businesses.

√Your choice should be made based on the quality of care provided, personal referrals by others (friends and/or family), and personal fit between the provider and your family & loved one.

√Consider both the medical hospice care and whether the provider offers to continue helping your family with aftercare, such as a grief support group and more.

√Moving from one provider another can cause undue stress; while being able to continue support with the same business and care providers throughout the end of life process will be much less stressful.

√Make your choice regarding hospice care for your loved one based on facts and your gut feeling for the hospice care providers you feel most comfortable with.

√Remember, all hospice care providers operate under the same rules and regulations. This means that no matter what, all hospice care will have the same set of rules to follow.

The information we’ve provided will hopefully make having to choose between a profit or non-profit hospice care business a little less stressful for you and your family.

[1] NHPCO Booklet “NHPCO’s Facts & Figures Hospice Care in America 2015 Edition”

Photo Public Domain by George Hodan