The Hospice Hustle: When Dying Became a Venture-Backed Business
What happens when the most humane benefit in Medicare meets private equity's demand for double-digit returns.
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In 1982, when Congress made hospice a permanent Medicare benefit, the goal was simple: keep dying people comfortable at home, paid for entirely by the government. It was designed as a non-profit, volunteer-heavy service for people with weeks left to live. Today, hospice is a $22 billion industry dominated by private equity firms and Wall Street. If that transition sounds like a recipe for a conflict of interest, that is because it is.
The direct answer
Hospice is supposed to provide an active team—a nurse, a social worker, a chaplain, and an aide—to manage pain and support the family at home. In reality, many for-profit providers stretch their staff so thin that visits are brief, infrequent, and rarely occur during weekend or nighttime crises. To get the care your family actually needs, you must bypass the glossy brochures, demand to see their staffing ratios, and choose a provider based on hard performance metrics.
The Per-Diem Trap: How For-Profit Hospices Make Money
Medicare pays hospice agencies a flat daily rate for every person on their roster, regardless of how much care that person actually receives on a given day. In 2024, the base rate for routine home care is about $218 per day. If an agency sends a nurse, a social worker, and an aide to your house, they get $218.
If they send absolutely no one, and just answer a single phone call, they still get $218. This structure creates an obvious financial incentive: sign up as many people as possible, keep them on the service for as long as possible, and deliver as little hands-on care as you can get away with. For-profit agencies, which now make up more than 70% of the industry, excel at this math.
They actively recruit people who have slow-progressing conditions like dementia, who may live for months or years without requiring intense daily intervention. This is why you will see representatives roaming the halls of a nursing home or memory care facility, offering free manicures or music therapy to sign people up. They want stable, long-term clients who draw that daily Medicare check.
Meanwhile, people with fast-moving cancers who require expensive pain medications and frequent nurse visits are less profitable, and sometimes subtly turned away.
The Ghost Nurse Phenomenon
When you interview a hospice
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