Hospice inpatient services provision, utilization, and financial performance

Background Hospice performance is an overlooked area in the health care field due to the difficulty of measuring quality of care and the infrequent quality inspection. Based on the daily reimbursement mechanism for different levels of hospice care, inpatient services provision could influence both hospice-level length of stay (LOS) and financial performance. Purpose The objective of this study was to explore the relationship between hospice inpatient services provision and hospice utilization and financial performance. Methodology/Approach A longitudinal secondary data set (2009-2013) was merged from three sources: (a) Hospice Cost Reports from the Centers for Medicare & Medicaid Services, (b) the Provider of Services files, and (c) the Area Health Resources Files. The dependent variable in this study was hospice average LOS and financial performance measured by total operating margin (TOM) and return on assets. The independent variable was hospice inpatient services' offering. Mixed-effects regression models were used in the multivariate regression analyses. Results When comparing to hospices not providing inpatient services, offering inpatient services by staff was negatively related to average LOS (b = -0.063, p < .05) and TOM (b = -0.022, p < .05). The combination method with providing inpatient services by staff and under arrangement was negatively associated with return on assets (b = -0.073, p < .05). Conclusion Hospice inpatient services provision was associated with average LOS and financial performance. Practice Implications Offering the inpatient services to patients by staff decreased average LOS and TOM. Hospice agencies may seek strategies to maintain their financial sustainability through outsourcing.