Venture capital has gone full-speed ahead: they bought the Styx, the river that the shades of the dead pass through. And with that purchase, they now control Charon, the ferryman — or, in this case, the millions of Charons who ferry the near-dead to their designation.
Who knew that dying could be so profitable?
The nation’s venture capitalists knew.
They have invested in hospices — an unlikely mother lode of cash.
Long ago, hospices — initially non-profit — were dedicated to helping the moribund, and their families, weather the final transition. Cicely Saunders, in Britain, launched the first hospice devoted to palliative care in 1967. She had trained as a nurse, later qualified as a physician, and established a facility that broke with the prevailing mores. She recognized that medicine could not cure all patients; and she discarded the practice of lying to patients about their prognosis. She recognized that constant pain needs constant control, discarding the notion that people must wait until pain becomes excruciating for relief. She recognized that doctors needed to be at the center of a corps of caregivers, focused on alleviating the anxiety of the patient, as well as the family. And she would have found the idea of charging patients inexplicable. In 1970, the NHS contributed two-thirds of the operating costs. Volunteers raised the rest of the money.
Florence Wald, Dean of the Yale School of Nursing, took Cicely Saunders’ vision to the United States. In 1974 she, with two pediatricians and a chaplain, founded a Connecticut hospice.
American hospices needed financing. Senators Frank Moss and Frank Church introduced a bill to steer federal funds to hospices. The bill failed. Several task forces and conferences later, a Department of Heath, Education and Welfare report blessed the movement, in hopes that it would reduce costs. In 1979 the Health Care Financing Administration financed demonstrations at 26 hospices to gauge the savings. In 1982 Medicare introduced a hospice benefit. The wisdom: patients who eschewed costly life-saving treatments for less-costly hospice care would save Medicare money.
The goal of helping patients and saving money does not neatly dovetail. Medicare established ground rules for hospice: no treatment for the underlying disease (unless to alleviate pain), a six-month prognosis, a process for “recertification” if the patient lived beyond the prognosis. Sometimes patients would improve - and then lose the hospice benefit. Initially all hospices in the Untied States that contracted with Medicare for non-profit.
But the lure of savings lured the for-profit hospices. Medicare pays a per diem rate, regardless of the patient. Today more than three-quarters of the 5,500 hospices, serving 1.6 million Americans annually, are for-profit. Between 2000 and 2007, the number of for-profit agencies doubled while the number of nonprofits stayed the same. In 2017, 100% of new hospice providers were for-profit. And most patients received in-home hospice care. If a hospice can spend less than the Medicare payment, the hospice will profit. Understandably, researchers have suggested that for-profit hospices focus on patients who need less complicated care (though now that most hospices are for-profit, that distinction will fade.)
Enter into this lucrative business: venture capital. Private equity now gobbles up three of every five new acquisitions. The zeal to spur marketing (with bonuses) to admit more patients, to cut services, to renege on equipment, to cut staff, to reach for patients who don’t need costly care mounts with the zeal to show a profit. Yet a for-profit hospice generally has an identifiable owner, some entity where families can lodge a complaint, or request a service.
Venture capital is more obtuse. Consider Transitions Health, owned by Dorilton Capital, which operates in 18 states. The owner of Dorilton remains a mystery. Recently Dorilton bought Williams Racing, a British Formula One team. Presumably a forensic searcher could pinpoint “the” entity for a patient to query, but the query is not easy.
We have traveled light years from Cicely Saunders to Dorilton Capital, which promises to buy more hospices in a field of competing firms. The Styx is now a prime real estate investment, and all the Charons who ferry the moribund have morphed into low-wage workers.
Stay tuned to the evolution of hospice. Will venture capital swallow the industry? Will scientists vanquish those debilitating disease that lead us to hospice? If not, will venture capital abandon this mother lode for a more profitable one?
Tiresias, the fabled blind prophet of Apollo in ancient Thebes, might predict the outcome of this ultra-capitalization of death. I can’t.
Joan Retsinas is a sociologist who writes about health care in Providence, R.I. Email retsinas@verizon.net.
From The Progressive Populist, September 15, 2022
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