How Does Health Insurance Mesh with Hospice Care?

Can an insurance company also run hospice?

Death has always been lucrative enterprise, whether it involves mahogany caskets or teams of estate and tax lawyers. But hospice, the business of caring for those who are nearing death, has become a booming multibillion-dollar industry that is attracting more and more for-profit companies, including one of the nation’s major insurers.

That insurer, Humana, is making an unusual bet beyond the current strategy of health insurers to merge with pharmacies or buy up doctors’ practices. In teaming up with two investment firms, Humana plans to buy two hospice chains that together would create the industry’s biggest operator with hundreds of locations in dozens of states.

Humana, which specializes in offering private Medicare Advantage plans, joined forces with TPG Capital and Welsh, Carson, Anderson & Stowe, two private-equity firms, last December to take over a division of Kindred Healthcare that offers both home health and hospice care. In April, the same group said it planned to buy another large hospice outfit, Curo Health Services, owned by another investment firm, Thomas H. Lee Partners.

In short, Humana, which provides Medicare Advantage plans to about 3 and a half million people for their medical needs, also wants to dominate care for those at the end stages of life, whether it provides aid in a home setting or in a facility.

But a spate of government lawsuits charging negligence and malfeasance against some hospice providers underscores the risks of profiting from the dying: Companies have been accused of signing up people who are not terminally ill, denying visits from a nurse or even refusing a needed trip to the hospital.

When a Health Insurer Also Wants to Be a Hospice Company