The Organizational Behavior of U.S. Hospices: Examining the Relationship Among Ownership, Market Structure, and Quality Through the Lens of the Institutional Theory Framework

Background: The hospice industry in the United States has experienced exponential growth over the last few decades. Growth has primarily occurred due to an increase in the number of for-profit hospice organizations. However, evidence on the impact of hospice ownership and market structure on hospice quality remains poorly characterized. In 2012, the Affordable Care Act (ACA) mandated that all Medicare-certified hospices submit data on specified quality measures to the Center for Medicare and Medicaid Services (CMS). Using this data and the Institutional Theory as a conceptual framework, this study examined the relationship between hospice ownership type, market structure, and the quality of care provided in U.S. hospices, and it explored the potential occurrence of mimicry in hospices as it relates to the provision of quality care. Methods: The study used merged data from the CMS Hospice Compare, CMS Provider of Service files, and the University of Wisconsin’s County Health rankings. The study sample included 4,504 Medicare-certified U.S. hospices reporting quality data to the CMS from January 1, 2017 to December 31, 2017. Multivariable logistic regression analysis was used to assess the relationships between the market structure (assessed as ownership mix within the market), ownership type, and quality of care. An interaction term between ownership and ownership composition was included to assess the mimetic effect of market ownership composition on individual hospice behavior. Results: The findings indicated the relationship between hospice ownership and quality of care was moderated by market structure. Specifically, hospice quality was found to be higher in for-profits located in a non-profit-dominant markets. Other organizational and market level factors, including hospice size, staffing, competition, and demand were also found to be associated with quality. Conclusion: The findings of the study suggest that for-profit hospices in non-profit dominant markets may be mimicking the best practices and attributes of nonprofit hospices as related to the provision of quality hospice care. Taken together, the findings of this study highlight the importance of market influences in shaping hospice behavior