Troubled Endings

For-profit hospice care provider Vitas Healthcare sacrifices patient needs for the bottom line

Still, Hines believes that her grandmother should have received nourishment of some kind. "We knew that this was not a rehabilitative process, but wouldn't you think that you'd feed every living being?" Hines asks. "They literally starved her to death."

Dian Backoff, general manager of Vitas in Broward County, says that such perceptions are common among families unfamiliar with hospice care. "The emotional stress level is so high," she says. "They perceive things like, 'Oh, hospice is going to starve my mom to death.' We don't aggressively force-feed patients. This is about patient comfort. We don't want to starve patients."

Candess Rollins, who is Rourke's daughter, and her husband, Joe Moran, claim that Vitas' staff was bottom-line conscious and short on compassion
Colby Katz
Candess Rollins, who is Rourke's daughter, and her husband, Joe Moran, claim that Vitas' staff was bottom-line conscious and short on compassion

The roots of Vitas Healthcare can be traced to the very infancy of the hospice movement, which began in the early 1970s in England. Medical advances after World War II allowed doctors to extend the lives of patients through artificial life support or radical new therapy and treatment. Some, however, believed that such measures ignored the inevitability of death and sometimes left patients to suffer needlessly. Hospice intended to reintegrate death as part of life.

In 1978, Hugh Westbrook, a Methodist minister, and Esther Colliflower, a nurse, established Hospice of Miami, the first in South Florida. With the aid of local legislators, Westbrook lobbied for the creation of a special license for hospice. The bill passed in 1979 and required hospices to operate as nonprofits. Around the same time, Hospice Inc. became part of a federal pilot program to test whether hospice could keep health-care costs down. A bill expanding Medicare coverage for hospice passed in August 1982. By the end of the 1980s, Westbrook had opened hospice programs in Houston, Fort Worth, Chicago, and Boston.

Westbrook wanted to convert his entire Florida operation into a for-profit business, just like other Westbrook facilities around the country. To accomplish this switch, he recruited long-time friend and state representative Mike Abrams. During the 1989 legislative session, Abrams offered an amendment providing that "any hospice operating in corporate form exclusively as a hospice, incorporated on or before July 1, 1978, may be transferred to a for-profit or not-for-profit entity, and may transfer the license to that entity." Westbrook's Hospice Inc., formed on June 13, 1978, was one of only three hospices incorporated before the cutoff date. (The other two were in Pinellas and Orange counties and posed little threat to Westbrook's South Florida operations. Neither converted to for-profit.) The amendment gave Westbrook a monopoly on for-profit hospice care in South Florida. The company was renamed Vitas Healthcare in the early 1990s.

Profiting from the dying, however, can lead to ugly excesses. In August 1990, the Chicago Tribune obtained several memos issued by Hospice Care Chicagoland, which was Westbrook's for-profit operation in Illinois. The memos described cash bonuses paid to nurses who recruited patients and directed staff members to send as many patients as possible to inpatient hospice beds to increase revenues. At least a dozen employees quit because they considered the practices unethical. At that time, Medicare reimbursements for at-home hospice care was $87.24 a day, while the inpatient rate per day was $384.60. The Tribune reported that former team directors and admissions counselors from Hospice Care Chicagoland said they were pressured to enroll unqualified people into the program, claims that HCI officials denied. Other former staff said Chicagoland's nurses received bonuses of $10 to $20 for each new patient recruited from hospitals, nursing homes, or doctors' offices. In a follow-up article, the Tribune reported that Chicagoland admission counselors hungrily perused nursing-home records in search of eligible patients for recruitment.

The Office of the Inspector General for the U.S. Department of Health and Human Services subsequently investigated the Tribune's allegations. Its findings were released in April 1991. "Investigation revealed that [HCI] employees felt undue pressure was put on them by management to hospitalize patients," the report stated, adding that employees in other regions had complained about pressure to enroll patients. The report also audited billing for 11 HCI in-hospital patients and determined that the company had been overpaid more than $54,000 by Medicare for those patients alone.

The Office of Inspector General (OIG) for the federal agency began investigating the growing field of hospice care in 1994, beginning with two hospices in Puerto Rico. Concentrating on cases that had been active for more than 210 days and cases in which beneficiaries had been discharged for reasons other than death, the inspector's office found that more than 70 percent of the cases reviewed were ineligible for hospice. Hospices were enrolling patients with chronic, non-life-threatening illnesses. Medicare payments for those cases exceeded $2.6 million. A subsequent review of all 37 hospice providers in Puerto Rico estimated that $19.7 million had been paid out on behalf of ineligible patients.

The findings prompted a joint initiative in 1995 called Operation Restore Trust, which was conducted by the inspector general's office, the Health Care Financing Administration (which oversees Medicare), and the Administration on Aging. Among its investigations, the operation focused on 12 hospices in Florida, Illinois, Texas, and California. Half belonged to Vitas Healthcare. In November 1997, the inspector general concluded that the problems discovered in Puerto Rico were widespread. The review found that 60 to 85 percent of long-term cases served by Vitas had been ineligible for hospice benefits.

Among the reasons ineligible patients were routinely categorized as terminally ill, the report said, were aggressive marketing and sales techniques. During 1994 and 1995, Vitas paid more than $1 million in commissions, based upon patients' length of stay in hospice, to about 100 sales staff in its nationwide operations. Top salespeople earned up to $100,000 a year. The report noted, "We recognize that effective marketing techniques are essential to health care providers that compete with one another for business. Commission payment systems such as the one used by this chain, however, promote a review enhancement mentality at the sales staff level which is contrary to the best interests of the beneficiaries and the Medicare program." Vitas subsequently announced that it had stopped paying commissions based on length of stay.

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