Warren, Wyden, Brown Probe Private Equity Ownership of Kindred at Home
Letter to Kindred at Home Highlights Rapid Growth and Lower Quality of For-Profit Hospice Companies
Washington, D.C. – United States Senators Elizabeth Warren (D-Mass.), Ron Wyden (D-Ore.), and Sherrod Brown (D-Ohio) launched an investigation into private equity ownership of for-profit hospice companies and subsequent reductions in the quality of care. The investigation centers on Kindred at Home and the period where the company was purchased and owned by Humana and two private equity firms, TPG Capital and Welsh, Carson, Anderson & Stowe.
“We are concerned that when applied to hospice care, the private equity model of generating profit on a rapid turnaround can occur at the expense of dying patients and their families,” the senators wrote. “Since its inception as a small volunteer-run movement in the 1960s, the hospice industry has transformed into a $20 billion industry with a marked increase in for-profit ownership.”
The lawmakers continued: “Evidence suggests that care quality is lower in for-profit hospice companies, making these ownership trends in the hospice industry a cause for concern.”
In 2017, more than two-thirds of hospice providers were for-profit, compared with less than a third in 2000. According to the Medicare Payment Advisory Commission (MedPAC), “the number of hospices doubled from about 2,300 to nearly 4,500 from 2000 through 2017, and for-profit hospices accounted for the entirety of the net increase during that time period.”
A recent report from the Government Accountability Office (GAO) found that hospices with the lowest quality scores are most likely to be for-profit. For-profit hospices are more likely than their non-profit counterparts to have low rates of home visits in the last days of life and high rates of live discharge from hospice, both important quality measures. GAO found that non-profit hospices had slightly higher percentages of white beneficiaries, and for-profit hospices had a greater proportion of patients enrolled in both Medicare and Medicaid, indicating that for-profit hospices are more likely to serve patients of color and low-income patients.
The letter requests data on a range of quality indicators at Kindred at Home over time, and information about private equity ownership and activities between 2017 and 2021, when the company was purchased and owned by Humana and two private equity firms, TPG Capital and Welsh, Carson, Anderson & Stowe. The senators have requested responses no later than September 3, 2021.
Senator Warren has conducted a series of investigations into private equity abuses in health care and other industries throughout her time in the Senate.
At a Senate Banking, Housing, and Urban Affairs Committee nomination hearing and during an exchange with Senator Warren, a Department of Housing and Urban Development (HUD) nominee committed to consider changes that facilitate sales of distressed homes to homeowners, not private equity firms.
Senators Warren, Sherrod Brown (D-Ohio), and Bernie Sanders (I-Vt.) applauded a Government Accountability Office (GAO) for agreeing to their request to investigate the operations of commercial Institutional Review Boards (IRBs), the private, for-profit entities that approve drug research and other studies involving human subjects.
Senators Warren, Brown and Tammy Baldwin (D-Wis.), along with Representatives Mark Pocan (D-Wis.), and Pramila Jayapal (D-Wash.), introduced the Stop Wall Street Looting Act, a comprehensive bill to fundamentally reform the private equity industry and level the playing field by forcing private equity firms to take responsibility for the outcomes of companies they take over, empowering workers, and protecting investors.
In November 2019, Senators Warren, Brown, and Representative Pocan wrote to four private equity firms that currently invest or have recently invested in companies providing nursing home care and other long-term care services, citing reports that show private equity investment has played a role in the declining quality of care in nursing homes and requesting information about each firms' management of this sector.
Senator Warren, Representatives Pocan, and Lloyd Doggett (D-Texas) wrote to five private equity firms with investments and physician staffing and emergency transport companies, questioning the role these companies play in patients receiving exorbitant surprise bills for out-of-network medical treatment.
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