Right-sizing your hospice facility: Finding the Goldilocks point for hospice beds

I spoke to a colleague a few days ago and mentioned that I’d recently consulted to a hospice that plans to open a new hospice facility later this year. “Are people still doing that?” she asked me.

There’s been so much ink spilled about the financial risks of hospice facilities (some of it written by me, I admit) that you too, might be surprised to learn how much activity there is in the U.S. around building, expanding and re-formulating hospice facility beds. But hospice beds continue to be a critically important part of the provision of quality hospice care.

It's true that successfully planning a hospice facility is more complex than in years past. Whereas in the 1990s many hospice facilities opened to greater than expected demand and high occupancy rates, these days a provider must be very careful to calibrate the likely demand to the number of beds built and staffed.

But there are still very good reasons to grow or increase the number of hospice beds in many markets. Among the reasons you might consider adding beds to your capabilities:

• For defensive competitive reasons, to keep another competitor from stealing hospice market share
• High-acuity hospitals in your market are seeking a partner to whom they can discharge high acuity end of life patients
• Your existing facility is always full and you’re turning patients away (yes, this is happening in several markets)
• You have an opportunity for partnership with another provider that may be a consistent source of new referrals
• You see an opportunity to add to your overall patient volume by gaining a reputation for expertise in managing complex illness and challenging patients

The real question is, how can your hospice best plan to meet the needs of your community responsibly? And consider, too, that perhaps the root of the problem isn’t the number of beds, but how they’re configured. Cost structures for hospices vary widely, depending on how beds are housed. Many providers are finding that while freestanding structures are high-cost, high-risk, beds located within a dedicated hospital or nursing facility wing have much lower fixed cost burdens.

On April 22, I’ll be speaking at the upcoming NHPCO Management and Leadership Conference, leading a special half-day session for hospices interested in the latest strategies around right-sizing hospice facilities.  I’ll be sharing the latest news and planning tools from the many innovative programs in the U.S. that are finding new ways to achieve the best and highest use for hospice beds in their markets. (Online registration is available through April 2 and onsite registration will be available on April 22.)

This will be an interactive workshop with limited attendance to allow participants to share individual problems, ideas and opportunities with their peers and with me.

by Sue Lyn Schramm, MA
Principal
Schramm Consulting LLC