Hospice sale reveals nonprofit is struggling

Care center to continue operating, but future at risk

Rising costs, declining reimbursement rates and pandemic-related nursing shortages have undercut Community Home & Hospice and put the future of the respected medical institution in jeopardy.

Earlier this week, CHH announced sale of its in-home medical and home-based hospice care business to Eden Health, an employee-owned, Vancouver-based firm.  

CHH plans to continue to own and operate its in-patient hospice care centers in Longview and Vancouver, but the future of those facilities is in doubt unless the community rallies around them, said Jason Muenier, acting CEO.

The organization will need to find local partners to help sustain the operation. Funds from the Eden sale will help (the sales amount has not been disclosed). However, if CHH cannot put the care centers on a sound financial basis, they would be closed and sold, Muenier said. 

Proceeds likely would be put in a community foundation to support local health care efforts, much like the one set up after the closure of the old Monticello Medical Center, Muenier said.

“A sale is not what anyone wanted to do,” but it had to be done to preserve services, employee jobs and at least a hope of continuing in-patient hospice care, Muenier said of the Eden sale.

“As of this point in time … our primary focus is to figure out how to keep both the hospice care centers operational. We view the care centers as community assets and are looking for ways to continue” to operate them, Muenier added.

Nationally, hospice center ownership has been shifting from nonprofit to for-profit enterprises, raising concerns that the quality of care will suffer in the demand for returns on investment.  

I don’t know how well Eden will operate in-home hospice care, but CHH has set a high bar. 

Losing the hospice care center — if that comes to pass — would be a terrible blow. Surely, most people in the community have taken comfort from the high-caliber, end-of-life care that relatives or close friends have received there.

Founded in the late 1970s by the late Lorraine Berndt, CHH provides home health, home hospice, inpatient hospice, grief support, respite and tele-monitoring to anyone in need, according to its website. It once had as many as 300 employees and 60 volunteers (current employment levels were not immediately available), according to its website.

Donors in Cowlitz County have contributed millions of dollars to the operation and expansion of CHH. The sale, for example, comes after CHH started a $4.2 million fundraising campaign last summer to renovate the care center.

Eden Health will take over in-home services on May 1.  Eden is an employee-owned  company with 36 care locations across the West, including seven in Washington and four in Oregon. It specializes in home care and home hospice services. Eden has agreed to hire CHH employees.

According to its publicly available tax returns, CHH lost a total of $1.7 million in fiscal years 2011 through 2020. It operated in the black for several of those years, but it lost $1.54 million in 2019-2020 alone, according to the tax returns.

 (Its 2021 was not immediately available, and CHH still is working on its 2022 return.) 

In 2020 — the first pandemic year in the U.S. — CHH reported $26.2 million in expenditures, finishing nearly $860,000 in the red. Its major expenses — as is typical for such an organization — are for salaries, which totaled $16.2 million that year. 

The top four paid employees collectively earned nearly $700,000 in 2020. Former CEO Greg Pang, who left Hospice last fall, made $168,000 that year. (Muenier is acting CEO and also continues to serve as CFO.) The highest paid employee was medical director Frank Rinella, who earned $228,000.

Muenier said the pandemic walloped the organization. It had difficulty hiring and retaining nursing and other staff, and that in turn forced it to reduce in-home care, which feeds patient flow into the care centers. Its 2022 center caseload — measured as 3,400 patient days — was down 27 percent and 22 percent down from pre-pandemic levels in 2018 and 2019, respectively, Muenier said.

The pandemic “shrunk the nursing work force significantly” through burnout, vaccine mandates and the need to care for school-age kids, and some nursing staff chose to remain home when schools reopened, Muenier said. 

“The need (for nursing staff) is as great as ever, but everyone is competing for a small pool of workers. That has driven costs up significantly, and even when you are willing to pay, you still can’t find people.”

CHH also has been hit by declining reimbursement rates from Medicare and other health insurance providers, he said. 

Reimbursement for services “hasn’t increased at the pace of the cost to provide them in a lot of cases,” Muenier added. “Everything from gas to supplies to labor and most other expenses have increased significantly during the past couple years. It is a very challenging environment (for) a relatively small nonprofit.”

“I’m glad we were able to find a strong partner in Eden, so that our staff can continue to provide quality care for the populations we currently serve.”

Eden Health is part of the EmpRes Healthcare Management family of companies, which owns the Americana Health and Rehabilitation Center and Frontier Rehabilitation and Extended Care Center in Longview. It has offered in-home care and hospice services since early 2013, according to the company.

Nonprofit hospice centers have been undergoing radical changes across the United States in recent years. Forbes magazine in July reported that two-thirds of hospices nationwide now operate for-profit entities, and that private equity firms are a new breed of owners

The shift has “many hospice veterans worried that the original hospice vision may be fading, as those capital investment companies’ demand for return on investment and the debt load they force hospices to bear are hurting patients and their families,” Forbes reported.

Although there’s debate about the impact of this trend on quality, there’s no doubt that investors are in it for a solid return.The Medicare Payment Advisory Commission reports that for-profit hospices had Medicare-related profit margins of 19% in 2019, compared with 6% for nonprofit hospices. 

This community has always rallied around hospice. It may have to deepen that commitment to keep its mission alive.