Hospice care focuses on comfort and support for individuals nearing the end of life, emphasizing palliative care to relieve symptoms rather than pursuing curative treatments. The goal is to maximize the patient’s quality of life and dignity during their final months, typically when a prognosis of six months or less remains. Care is delivered by an interdisciplinary team addressing the physical, emotional, and spiritual needs of the patient and their family. Providers offering this service operate under both non-profit and for-profit structures.
The Landscape of Hospice Providers
Hospice services are delivered by organizations that operate as either non-profit or for-profit entities. The hospice movement in the United States began primarily with community-based, non-profit organizations, many of which held 501(c)(3) tax status.
The landscape has shifted dramatically over the past few decades with significant growth in the commercial sector. In the early 1990s, nearly 95% of hospice organizations were non-profit. By 2021, the majority of providers—approximately three-quarters of all hospices—were operating as for-profit businesses, fueled by the financial stability of the Medicare Hospice Benefit.
For-profit hospices are owned by investors or corporations and are legally permitted to distribute surplus revenue to their owners or shareholders. Conversely, non-profit hospices must reinvest any financial surplus back into the organization.
Key Differences in Mission and Funding
The core distinction between the two organizational types lies in their financial imperative and mission-driven priorities. A non-profit hospice is governed by a volunteer board and focuses its resources entirely on patient and community care.
Its tax-exempt status requires that any revenue exceeding operating costs be used to expand services, provide charity care, or enhance specialized programs. This structure often allows non-profits to offer comprehensive bereavement support or complementary therapies that extend beyond core reimbursed services.
For-profit hospices have a primary fiduciary responsibility to generate a return on investment for their owners. While committed to patient care, financial decisions are measured against the need to deliver a profit margin.
Non-profits often spend substantially more per day on direct patient care and staffing compared to their for-profit counterparts. The average profit margin for for-profit hospices is significantly higher, often around 20%, compared to the low single-digit margins typical of non-profits.
Non-profit providers often supplement operational funding through community donations and fundraising efforts, directed toward programs not fully covered by the standard payment model. For-profit hospices are not allowed to use charitable donations for direct patient care.
Regulatory Oversight and Quality Standards
Regardless of profit status, every hospice provider participating in the Medicare program must adhere to the same federal requirements for patient care. These mandatory rules, known as the Medicare Conditions of Participation (CoPs), establish a uniform floor for quality and service delivery.
The CoPs require all hospices to provide specific services, including physician services, nursing care, social work, counseling, and spiritual support, delivered by a coordinated interdisciplinary group. Compliance with these federal standards is monitored through regular surveys and inspections.
The Medicare Hospice Benefit utilizes a fixed per diem payment rate, meaning both non-profit and for-profit providers receive the exact same daily reimbursement from Medicare for routine care.
Despite this mandated regulatory floor, data from patient and caregiver surveys indicate performance differences between the two sectors. Studies analyzing the CAHPS Hospice Survey show that family caregivers of patients in non-profit hospices tend to report better overall experiences and higher satisfaction rates. These quality variations reflect differences in resource allocation, as non-profits are observed to provide a greater number of nursing, social work, and physician visits per patient day.