Private Equity Hospice Buys Drive 5.9% Medicare Spending Rise via Longer Stays

The study used Medicare fee-for-service claims from 2018-2022 to compare newly acquired hospices against 1,305 similar for-profit controls, tracking two years pre- and post-acquisition. Spending rose without added clinical visits; social work contacts fell while live discharges increased, indicating selection of lower-intensity patients who generate steady per-diem revenue under Medicare's fixed daily rate regardless of care volume.

Song's prior research on private equity ownership in hospitals and physician groups documented parallel patterns: staffing reductions, higher adverse events, and elevated Medicare outlays. Here the mechanism is patient mix rather than service intensity, exploiting the same payment loophole that already shifted the sector from mostly nonprofit to three-quarters for-profit. Debt-servicing pressure accelerates this selection toward dementia cases with extended eligibility windows.

Vulnerable populations bear the downstream effects. Longer hospice enrollment without proportional support services can delay transitions to higher-acuity settings and strain family caregivers. Regulators lack ownership transparency requirements that would flag such shifts before they scale.

Next steps include CMS ownership reporting mandates and outcome-linked payment adjustments; without them, private equity's hospice footprint will likely expand the live-discharge trend observed here.