A major transition in hospice and home health is on the horizon here

Debra L. Glasser, M.D.

Photo by Olympia Wedding Photographer | Loewyn Behold Photography

Last week Providence announced its intent to form a 50/50 Joint Venture (JV) with Compassus, a private-equity company, to provide all of its home health services.

The joint venture proposal, which will affect all of Providence’s locations, remains subject to regulatory approval in Washington. The joint venture will form a new company, Providence at Home with Compassus. Compassus will take over providing home health, hospice, community-based palliative care, and private duty-care giving services. They will run and manage the daily operation, including employing current staff that choose to continue post-transition.

Providence’s press release notes their goal in pursuing this deal is to process hospitalized patients more efficiently. They aim to maximize revenue since weathering heavy financial losses from the pandemic. With greater access to post-acute care (that is, needed support at home), they hope to reduce the length of hospital stays and be able to serve more patients.

What is Compassus?

Compassus is owned by Towerbrook Capital Partners, a private-equity-owned company that in 2019 merged with Ascension Health, then the largest Catholic healthcare system in the US. Compassus is a subsidiary of Ascension Ventures, a private equity branch of the parent company.  According to its website, Ascension Ventures is “the largest multi-system limited partner platform unlocking the full power of our investment ecosystem …by driving towards a singular goal: to transform healthcare.”

Compassus is headquartered in Tennessee, operates in 30 states in the East and Midwest, employs 7000 and serves 120,000 patients. This will be their first foray into the Far West.

My Attempt to Read Between the Lines

Having worked for three years as a hospice physician for Providence until mid-2020, I found the news a surprising and dramatic change. The news release left me with many questions.

I reached out to Providence and spoke with Melissa Tizon, Providence’s vice president for communications and liaison for the Compassus transition, to take the time to talk.  

Here’s what I learned:

• Providence St. Peter’s and other brick and mortar hospitals intend to take home health services out of their acute care structure (that is, hospital) where the competition for capital investment has been challenging. Whether to invest in home health or a new hospital elevator poses a priority dilemma.
• Providence believes Compassus will speed up patient discharges. The hospital bed shortage locally is, at least in part, due to the difficulty of discharging complex patients. This goal is, in principle, benevolent if feasible and accomplished safely. Done inappropriately, it leads to hospital readmissions or worse, unnecessary expense and suffering.
• Tizon said Providence intends that this partnership will grow home care services in a time of increasing need.
• After a year-long review of this proposed partnership, Providence felt that Compassus’s experience in home health care would be a good fit for achieving its goals.
• Compassus’ technology and predictive analytics focus on home health are touted to improve charting, communication, and scheduling, thus streamlining care.
• Providence expects that partnering with Compassus will improve staff recruitment.
• Compassus’ ownership by Ascension aligns with Providence’s Catholic mission.

Albeit grateful for the time with Ms. Tizon, I was still left with unanswered questions:

• I was unaware of barriers to accessing home health care in our community. In fact, during my time with Providence Hospice, the environment was competitive for patients.
• How will changing the ownership and management of hospice, home health, and caregiving services allow those nondischargeable patients to be discharged?
• With the national shortage of healthcare professionals, how will a company based in Tennessee achieve greater success recruiting than Providence, a respected long-term local employer? Home health agencies in our area currently have 50 job openings. Those openings exist because of a shortage of healthcare personnel to fill them, not because of inadequate recruiting.
• How will technology and predictive analytics make a difference?
• What exactly does this 50/50 venture mean financially?

I don’t expect to gain any further clarity for my readers without being privy to conversations in the executive suites from where these decisions are made.

An aha came from the internet

The Compassus website shows a novel solution that could facilitate earlier discharges. Its Skilled Nursing Facility (SNF) at-home program reads a lot like Providence's existing Hospital at Home program. Such a program might help facilitate challenging hospital discharges. This is particularly true with the current shortage of SNF beds and staff. Whether such a program could solve the challenges in our community if instituted, is conjecture at this point.

What does this mean for the current staff?

Providence Home Health Services locally employs approximately 170 staff including nurses, aides, social workers, therapists, physicians, administrators, and chaplains. Compassus has agreed to honor the current union contract. All benefits will change under the new company, the details of which have not yet been revealed to current employees. The uncertainty and change have left employees feeling stress and job insecurity.

The situation reminds me of my last months working in the system as the pandemic unfolded. Uncertainty combined with a lack of transparency fueled fear and unrest.

Home health is a unique form of delivering healthcare: it is neither office nor hospital-based

 My hospice RN colleagues had the back of their SUVs filled with medical supplies for the patients they visited. They carry work cell phones, travel computers, and have mileage to report. Home health staff need to own reliable vehicles to make home visits. Most homes are clean and safe; some are rat-infested hovels. Home health and hospice attract highly skilled and compassionate professionals. They are paid less than for hospital work, and they care for some of the most vulnerable people in our community who are gravely ill and/or dying.

What will these changes mean to the community?

Providence’s public relations messages paint a rosy picture.

How have such partnerships worked out across the country? Weeks of investigative reporting on this author’s part would be required to answer that question.

This joint venture brings further consolidation, corporatization, and nationalization of home health and hospice services to us locally, which is in step with the national trend.

Compassus is a private equity company. Private equity companies, by definition, do business for their investors’ profit.  

How does a company make a profit? The basics are simple:

Sales (or in the case of healthcare, reimbursed services)
minus Overhead and direct expenses  
= Profit.

 With reimbursement by Medicare, which covers most home health care, set low by the government, the path to profit lies in cutting costs.

Costs in healthcare are cut by decreasing staffing and/or increasing workload, possibly improving efficiency with technology (we know how that goes…), limiting employee benefits, and cutting costs on equipment and inventory. Remember mask and now IV (intravenous) supply shortages? Healthcare is not hardware and building materials, the businesses of my family. Profit-improving strategies risk safety and quality.  The workload demands of the epidemic saw many important staff (think nurses and doctors) leave their careers. It is one of many causes for the current healthcare staff shortage.

It is conceivable that an organization with home health care services expertise and technology could bring needed expansion and improvements of services in our community.  

I do not believe that bigger and more centralized is better, but time will tell.

Who is currently providing home health and hospice care here?

The two largest hospice and home health providers locally are Providence and Assured, each carrying similar caseloads.

Assured is part of an even larger healthcare for-profit private-equity corporation, LHC Group, Inc. LHC is a national provider of in-home healthcare located in 38 states, has 27,000 employees and serves 68% of the US population. As Compassus intends to do with Providence, it partners with 400 hospitals nationwide to "help patients seamlessly transition from acute to post-acute care." LHC is headquartered in Louisiana.

There are two smaller hospice agencies locally, Puget Sound Home Health and Hospice and Envision Hospice.  Neither responded to my request for an interview before publication.

Will the further corporatization and monopolization of Home Health services be advantageous to the health of Washingtonians?

I hope the Washington Attorney General’s office regulatory review will address this fundamental question.

My skepticism about private equity’s ability to improve healthcare is transparent. The mission and values of the Sisters of Providence, no longer lead the show. Nor do doctors and nurses. MBAs do.

Though you and I are powerless to change this current direction in our local home health landscape, my mission is to inform readers of what is happening in our midst.

I do believe knowledge is power.  

Debra L. Glasser, M.D., is a retired internal medicine physician in Olympia. Got a question for her? Write drdebra@theJOLTnews.com