Miami hospice pioneers cash in
The Miami Herald
Dec. 28, 2003
Miami hospice pioneers cash in
By John Dorschner
Starting with a few volunteers and a small office in a Miami Methodist church, the minister and the nurse had a simple, idealistic mission. “We wanted to change the way America took care of terminally ill patients,” said Esther Colliflower, the nurse.
A quarter-century later, they head the largest hospice organization in the country, a for-profit firm specializing in the business of death. They have become fabulously wealthy, and now they are cashing in, selling out to Roto-Rooter in a $410 million deal announced last week.
The minister, Hugh Westbrook, stands to gain about $200 million and Colliflower somewhat less.
For some who work with the dying, these huge sums are unseemly. “We feel strongly that excellence in hospice care is a local, community-based concern
with neighbors, friends and families caring for one another,” said Mike Bell of the nonprofit Hospice of the Florida Suncoast, which serves the Tampa area. “Certainly when it’s a business, there’s a risk decisions might not be guided in a way that puts patient and family care first.”
Westbrook will remain a consultant, receiving $25 million over the next seven years, but control of the firm will pass to Tim O’Toole, a Roto-Rooter executive.
Graying baby boomers and the growing acceptance of hospices appear to make
this a solid growth business. Since the deal was announced Dec. 19, Roto-Rooter stock has shot up more than 35 percent.
“Under new ownership,” (investment analyst Jim) Barrett wrote, “we would expect (Roto-Rooter’s) VITAS’ overhead to be reduced.” Barrett didn’t specify, but a prime target for cuts would be the $5.8 million in annual charity care.
Is Westbrook afraid a bottom-line focus will reduce care for the dying? “We’ve always had fears,” he acknowledged, but said the firm is in good hands.
http://www.miami.com/mld/miamiherald/business/7582675.htm Comment: PNHP has not only supported an equitable system of funding universal health care, but we have also opposed the for-profit, corporate model in health care which must place the interests of investors above all else, including patients. The Roto-Rooter takeover of this hospice chain exemplifies why we need reform in both of these arenas of concern.
A minister and a nurse dedicated to meeting the needs of the terminally ill represent amongst the noblest of efforts of the healing professions. The hospice movement has been one of the more important advances in the care of those with the greatest needs for relief from suffering. If the story ended here, Westbrook and Colliflower might be considered for secular sainthood. But what happened? The for-profit conversion shifted the prime mission of the organization to its obligatory requirement to enhance shareholder value. Merger and acquisition activities are a major contributor to shareholder value. The surviving entity is mandated to further enhance value. And in hospice care, what could improve the bottom line more than eliminating uncompensated (charity) care?
The for-profit, corporate model must always place shareholders above patients, or risk SEC sanctions. But a public service model will always place the patient first. There has been no exception to this rule, and Roto-Rooter’s anticipated intent to ream out this hospice chain would be only the latest example.
Thus PNHP will continue to oppose for-profit, investor-owned corporate entities in health care. But our other mission of supporting an equitable, efficient method of funding care also applies here. A publicly-owned third party payer is ethically obligated to demand value from the provider of services. Diverting huge sums away from health care and to private investors does not provide health care value. If we had our own universal system of social insurance, we would be in a position to demand value from all providers of health care. Merely introducing an equitable single-payer system would have a suppressive effect on investor-owned entities since they would not be able to provide the same value as non-profit entities.
Let’s establish our own public health insurance program and thereby take control of our health care system. Let’s send Roto-Rooter back to the sewers where they can continue to do what they do well.