For-Profit or Nonprofit Hospice—Is There a Difference?


(Photo courtesy of Partners in Care)

When my parents were referred for hospice care, the last thing on my mind was whether the hospice provider was a nonprofit organization or a for-profit company. There were few options in their rural area, and frankly, I didn’t even think to ask. But I clearly recall my mother not wanting to be treated like a “case” and my father just wanted to be physically comfortable yet mentally alert as he said his goodbyes—at home on the farm. Looking back on this time, I can see how both were supported by their hospice caregivers who made sure their individual wishes were honored. That’s what mattered most.

In 1990, only five percent of hospices were for-profit; by 2013, they comprised more than half of the total. Here in Central Oregon, Partners In Care, St. Charles Hospice, and Hospice of Redmond are local nonprofit organizations while Boise-based Heart ‘n Home is a for-profit hospice.

The delivery of end-of-life care has changed a great deal over the past forty years, challenging both for-profit and nonprofit organizations to be organized, efficient and profitable in order to sustain high quality care in a complex healthcare environment. They are unified by a common mission to support patients and families facing serious and life-limiting illness with the best care possible.

All hospices, regardless of ownership or tax status, receive most of their operating revenue through Medicare reimbursement—at a fixed daily rate regardless of how long a patient is on service. The Hospice Medicare Benefit is a highly regulated program with Conditions of Participation. These are specific requirements that monitor physician services, nursing care, medication use, social work services, spiritual care, volunteer participation, and bereavement services.

In fact, the determining factor in choosing a hospice provider should be quality of care—not their tax status. Having said that, every hospice has the freedom to do things their own special way and provide “extras” to make them unique and establish a personal fit for those entering hospice. Due to the cost, some hospices may be reluctant to provide additional services such as community education programs, palliative care consultations, transitions, or community bereavement programs. Still others may go well beyond the basics and even offer complementary therapies such as massage, acupuncture, Reiki, or music and art therapy.

A nonprofit hospice can seek Foundation and Corporate grants and provide charitable tax receipts for individual gifts. In order for a for-profit hospice to accept tax-deductible charitable gifts, they oftenestablish a Foundation that can distribute funds for specific purposes based on their mission.

Another difference between for-profit and nonprofit hospices is what happens at the end of the year. The nonprofit hospice can choose to invest any excess revenue in less profitable programs such as an in-patient hospice facility, flu clinics, home health care, or community-based palliative care. They file IRS Form 990 that provides financial transparency and accountability to the public. The for-profit hospice pays taxes on its profits and the shareholders financially benefit. Tax returns and financial statements are not generally available to the public.

Regardless of how they are organized, hospices are here to help people live out their lives with dignity and in comfort. They hold dear many of the same values: compassion, dignity, respect and excellence in patient care.

The difference that really stands out is one of personal choice. Choose the organization that embodies the values that are important in your family. One that has a reputation for quality care. One that goes above and beyond what is basic or required. One that works with your other care providers and specializes in end-of-life care. And most of all, one that you can trust during this important time.

Marlene Carlson is a steering committee member of the development, public relations and marketing section of the National Hospice & Palliative Care Association and part of the leadership team at Partners In Care.

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About Author

Marlene Carlson of Partners In Care

Marlene Carlson is the chief development officer at Partners In Care, Central Oregon’s only independent, non-hospital based, not-for-profit hospice, home health and palliative care organization.

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