Private Equity Hospice Deals Raise Medicare Spending

Hospice operators paid under Medicare's daily rate should track how ownership changes shift length of stay and patient mix.

Updated on Nov. 3, 2026 in Healthcare

Private Equity Hospice Deals Raise Medicare Spending

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A Health Affairs study of 191 hospices acquired by private equity firms found Medicare spending rose 5.9 percent per hospice stay after acquisition, compared with matched for-profit control hospices. The analysis covers acquisitions from 2018 to 2022 and was published in the journal's November 2026 issue.

Why it matters

Medicare pays hospices a set daily fee regardless of how much care a patient needs, so changes in length of stay and patient mix directly affect what a hospice earns and what it spends. The findings arrive as hospice ownership in the United States has shifted to nearly three-quarters for-profit, with private equity now the fastest-growing type of owner.

The study covers 191 private equity-acquired hospices compared with 1,305 matched for-profit control hospices, using Medicare fee-for-service claims for acquisitions from 2018 to 2022. Nearly half of U.S. decedents are Medicare hospice users, and nearly three-quarters of U.S. hospices are now for-profit.

The players

Health Affairs

A peer-reviewed health policy journal published by Project HOPE that examines the economics and management of the U.S. health system.

The details

Under Medicare's hospice payment structure, a daily rate is paid per patient regardless of care intensity, which gives owners a financial reason to attend to length of stay and patient mix. The study found acquired hospices had fewer social work visits after acquisition and more patients discharged from hospice alive. Researchers say the rise in length of stay is likely tied to a shift toward patients who use less daily care.

Acquisitions analyzed occurred between 2018 and 2022.
The study was published in the Health Affairs November 2026 issue.

Market Landscape

Hospice ownership in the United States has moved to nearly three-quarters for-profit over the past two decades, with private equity now the fastest-growing type of owner. This study adds evidence on how those acquisitions affect Medicare spending and patient care under the existing per-day payment system.

Operators in hospice and related healthcare services should watch how Medicare's per-day payment structure interacts with length of stay and patient mix, since those factors drive revenue and cost. Businesses weighing ownership changes or acquisitions should consult qualified healthcare counsel and an accountant on how Medicare payment rules apply to their situation.

The takeaway

The study points to Medicare's per-day hospice payment as the mechanism linking ownership changes to longer stays and fewer social work visits, so payment policy is the variable to monitor. Operators should track length of stay and patient mix as leading indicators of how ownership changes affect revenue and compliance.