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Abstract

The objective of the study was to examine the financial and operating performance of newly established, free- standing hospices relative to existing, freestanding hospices. A nonparametric median test was used to compare the median values of operating and financial performance measures between newly established hospices and existing hospices. Operating and financial data were measured for the 2 groups using cost report data from the Centers for Medicare and Medicaid Services. The authors sampled 44 new, freestanding hospices and selected 312 freestanding existing hospices and analyzed their data over 2 years from 2002 to 2003. The study found that 91% of these new hospices were owned by for-profit organizations and were located in the southern region of the United States. New hospices served fewer patients; however, they had a longer length of stay compared to existing hospices. They offered fewer imaging services and radiation therapy services. New hospices generated significantly higher revenue but incurred significantly higher expenses. The results suggest that longer lengths of stay allow these newer hospices to increase revenue and improve overall profitability.

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Operational and Financial Performance of Newly Established Hospices

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