Hospice Provider’s Assisted Living Acquisition Highlights Growing Trend

Prairie Home Hospice & Community Care, a Marshall, Minnesota-based provider of hospice and home health services, announced last month that it was acquiring Fieldcrest Assisted Living in nearby Cottonwood. The community will begin operating under Prairie Home’s license on March 1.

This is the latest example of the increasing interest hospice providers are showing in senior living, particularly assisted living, where hospice is a growth industry.

While hospice utilization among Medicare enrollees grew by 35% between 2011 and 2019, the demand in assisted living skyrocketed by over 100%, according to a Senior Housing News report released last October.

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The trend is corroborated by a recent report from SHN sister site Hospice News, where 36% of survey respondents identified assisted living as the top growth area for hospice services outside of the home.

There are a few primary drivers for the increased interest, Healthcare Strategica Managing Partner Michael Ferris told SHN. Healthcare Strategica is a consultancy that provides training for home health and hospice companies looking to grow in scale.

Skilled nursing facilities are increasingly focused on length of stay for their residents, which can lead to compliance issues for hospice providers.

“As a result, hospice providers view skilled nursing as a flat growth environment,” he said.

The arrival of baby boomers to senior living is expected to shift the supply-and-demand dynamics over the next decade, as well, fueling hospice providers’ interest in expanding within these settings. To accommodate the boomer wave, the total number of assisted living facilities has increased 15% over the past 15 years, WellSky Advisory and Outsourced Services Director of Hospice and Palliative Services Catherine Dehlin told SHN. WellSky provides advisory and outsourced services for hospice and palliative care agencies.

“Since the number of seniors is expected to more than double by the year 2060, the growth of assisted living communities will reach record numbers,” she said.

Adding hospice care to assisted living settings serves two main purposes, Ferris said. First, hospice services can help reduce the number of falls in an assisted living facility, which are reportable offenses.

Second, hospice care can help with an assisted living facility’s occupancy rate, allowing residents to age in place longer and with dignity. In 2017, the average length of stay for hospice patients residing in assisted living communities averaged 163 days, compared to 111 days for home health patients and 103 days in skilled nursing and long-term care settings.

“If a patient’s eligibility is closely monitored, longer length of stay is equivalent to higher margins,” Dehlin said.

Demand for hospice services is also expected to grow over the next decade. Prior to the Fieldcrest acquisition, Prairie Home Hospice operated just two homes totaling nine residents. There is a months-long waiting list for the provider’s services, Prairie Home Hospice CEO Pat Mellenthin told SHN.

Moreover, two skilled nursing communities in Prairie Home’s target market closed in the past year. Having hospice in an assisted living setting can prolong the transition to skilled nursing.

The Fieldcrest facility was struggling with occupancy. Prairie Home recognized that it could reposition some of the empty rooms for hospice care and meet the growing demand for hospice.

“[At Fieldcrest], people can move in with little [care needs] but as their care needs change, we can now accommodate [higher acuity levels of care],” Mellenthin said.

Adding hospice care to assisted living facilities can also benefit an assisted living provider’s balance sheet through reduced operating expenses, particularly regarding staffing, Ferris told SHN.

Contracts are typically not required between an assisted living facility and hospice provider, opening the door for fair and unbiased patient choice of hospice provider, Dehlin said.

As demand for hospice increases, however, hospice providers will need to contend with finding qualified staff, especially on the nursing side. While nursing is one of the fastest-growing occupations in the U.S., with 12% growth expected through 2028, according to the Bureau of Labor Statistics; hospice is considered a specialty nursing practice.

As such, many providers require previous hospice experience, narrowing the pool of applicants. Some state hospice regulations require up to two years of full-time nursing practice to be employed as a hospice nurse, Dehlin told SHN.

Another contributing factor for hospice nursing shortage lies in the physical and emotional toll that a dedicated hospice nurse experiences. In addition to the strain of caring for dying patients, due to overwhelming regulations, hospice nurses must be tech savvy, organized, and efficient while displaying compassion and empathy.

“This is a skill that’s difficult to teach and many organizations do not have the time or resources to devote to that level of training,” Dehlin said.

Interested in learning more about the hospice opportunity in senior living? Click here to access Senior Housing News’ deep-dive report on the topic.

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