Troubled Endings

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

No adverse report was filed by the OIG's office concerning Vitas, nor did that agency seek reimbursement from the company, according to an OIG spokeswoman.


About the same time the OIG issued its "Operation Restore Trust" report, Paula Hackspacher (whose last name was then Shakelton) joined Vitas as a sales representative. Her job was to educate the public about hospice care and to generate referrals, but she quit last fall when she could no longer stomach the company's growing bottom-line mentality. Originally from New York, Hackspacher had worked as a nurse in intensive-care units for many years. "Then HMOs came in," she says. "I didn't want to be told how to practice medicine based on finances. The natural progression for an ICU nurse is hospice, I think."

For a short time, she became a marketer at an acute long-term-care facility in Broward County but came to believe that many of the patients she saw there were more appropriate for hospice care. Thus, she joined the Vitas team. "Vitas had a very good reputation," she says. "I knew a lot of people who worked there. But the Vitas that hired me five years ago was not the one I left last fall."

Hackspacher was assigned the "Holy Land" territory, the company's nickname for the northeast part of Broward County that's home to Holy Cross Hospital. "For 20 years, Vitas wanted a contract with Holy Cross, but it wouldn't allow them in there," she says. Hackspacher says her reputation as an ICU nurse helped land the contract for Vitas, under which patients admitted to the hospital's hospice ward would be attended to by Vitas nurses, social workers, and chaplains. Hackspacher's job as a representative was to increase the number of physicians who referred patients specifically to Vitas. Her commissions were based upon the number of those referrals. Because of that commission structure, Hackspacher says, representatives are not supposed to be directly involved in assessing whether a patient is eligible for hospice, which requires a determination that the patient has less than six months to live if the disease progresses in a typical fashion.

Noncommissioned staff members make the assessments to avoid conflicts of interest.

"I dealt with physicians," Hackspacher says. "Then I'd have a patient-care liaison go out and assess the patient. Supposedly a rep was never allowed to do an assessment on their own patients, but it has happened. We are bonused on our admissions, so it's not proper for us to do the actual evaluation. But it has been done."

Many medical personnel view Vitas with suspicion because of its for-profit status and its aggressive marketing. In the face of withering opposition in the "Holy Land," Hackspacher was chosen Vitas Rookie of the Year in February 1999. "Everything came her way, from being called a bounty hunter in the halls of a hospital, to actually being 'kicked out' of hospitals and physicians' offices," David Sullivan, the director of admissions, wrote glowingly in nominating her. He concluded that she marketed each day "knowing that she will return home that evening with a lot of bruises, simply because her name plate says VITAS."

The push for more patients steadily increased during Hackspacher's tenure with Vitas. "They want to look at our average daily census, what the revenue is," she explains. "Everything is revenue-pushed. Everything is a numbers push." For example, just before Labor Day weekend in 2002, the company e-mailed information to employees about a Labor Day Recognition Program. "Here is another opportunity for you all to earn some extra $$$," the memo began. "For healthcare professionals, the holiday season is often viewed as an inopportune time to speak to a patient about terminal diagnosis... When healthcare professionals delay breaking bad news, terminally ill patients and their families can not benefit from VITAS services during the holidays."

The real pressure had begun, she recalls, after the company announced new financial backing in May 2001. Vitas received $65 million in working capital from four banks, money to be used to retire old debt and "support continued growth," according to the announcement. The restructuring allowed Vitas to buy out a venture capital group's percentage of ownership in the company, and as a result, the group's two representatives were removed from the board of directors. That increased Vitas' control over its own direction, the memo stated.

"The numbers they began assigning us were ridiculous," Hackspacher says. "We'd get beeper pages, saying, 'Make five more calls today.' The numbers were like... 'Where do you want me to get them from? If they're not dying, they're not dying! I can't make them die, you know?'

"I felt the quality of care was going down," Hackspacher says. "How do I sell something that I don't believe in any more?" She and her husband now operate a small neighborhood bar.

Mark Cohen, a spokesman for Vitas, defends the company's assertive marketing. "A lot of people die in hospital ICUs who don't want to. There's no societal good to that," Cohen says. As such, Vitas management made a decision long ago to identify individuals in health care who would be advocates for hospice, he says. "Having hospice reps is not unique to Vitas," he adds. "It's not unique to for-profits. It's common to successful hospice programs, regardless of their tax status."

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