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For-profit PACE programs: Cause for worry?

Written by Diane Archer

Sarah Varney reports for Kaiser Health News that the for-profit sector will now be providing a program for all-inclusive care for the elderly (PACE). Click here to learn about PACE on Just Care. Until recently run exclusively by non-profit organizations and paid for by Medicare and Medicaid, PACE has provided valuable services. But it has reached only a small fraction of older adults. Are for-profit PACE programs cause for worry or can they reach more adults and deliver as good results as non-profit PACE programs?

Last year, Congress changed the law governing PACE to permit for-profit companies to run PACE programs. The alleged goal is to reach more people. And, now private equity firms are funding companies to deliver for-profit PACE programs, reaching many more people.

PACE is intended to help older adults age in place through comprehensive medical and social supports. Medicare and Medicaid pay for the services because they can save money on people in PACE who remain at home, do not need nursing home care and are not as likely to be hospitalized. But, only 40,000 people were enrolled in the program at the beginning of 2016.

With for-profits in the picture, more people will receive PACE services. And, that could have great value to patients who want to remain at home, as most do, and still be able to socialize and enjoy the services available in their communities. Without PACE, many would remain isolated and homebound, jeopardizing their health and well-being and putting them at increased risk of an early death.

PACE programs provide key services many older adults would not otherwise be able to afford or access. People may get comprehensive rehabilitation services. They also generally receive critical dental care that Medicare does not pay for outside the PACE setting. Dental care helps prevent infections that can land a person in the hospital. It also helps to ensure good nutrition.

And, PACE programs also help patients with basic services at home, such as housecleaning and laundering.

The question remains whether the for-profit sector will deliver the value that non-profit PACE programs have delivered. When for-profit companies began delivering hospice services, the U.S. Office of the Inspector General found that they were treating patients with less costly conditions, avoiding patients who would cost them more money, and they were holding back on services people needed.

The for-profit programs are paid a flat fee and lose money if PACE enrollees spend too much time in hospital or visit the emergency room frequently. So, for-profit PACE programs may try to avoid patients more likely to use these services, like the for-profit hospice agencies, avoiding patients who would cost them more money. To save money, they may also be more inclined to deliver care through telehealth rather than transporting patients to facilities, failing to recognize the negative health consequences of social isolation and the value of socialization.

Here’s more from Just Care:



  • I am concerned anytime a for-profit organization claims it can provide a service better, cheaper, or more efficiently than a non-profit or governmental entity. Just exactly does that work? Do they pay higher wages and provide better benefits to attract more qualified staff? Not likely. It is far more likely that they pay less for non-unionized, untrained staff and skimp on staff benefits creating a constant staff turnover. If they are not cutting staffing or staff pay and benefits to turn a profit, then they must be cutting or limiting services to clients. I do not see that either is a good situation for staff or for clients.

  • …sounds like a version of the ACA for independent seniors. For profit companies exist to make profits, not give what they call “charity services”.

    This is why the ACA ended up in the situation with Aetna trying to blackmail the government with the threat of leaving the programme if their merger with Humana wasn’t approved. What happens if say Cigna is a provider for the PACE programme and then want’s to merge with BCBS to which the DOJ says “No”? Who loses out?

    Keeping the for profit insurance industry in the loop was the major flaw in the ACA. Having them involved in PACE would be a similar mistake.

    • I agree that using for-profit providers was the major flaw with the ACA and with Medicare—Part C (aka Medicare Advantage) and Part D (Drug Coverage). Giving the for-profit industry access to a vulnerable elderly population is not just a mistake; it is setting elders up for fraud and abuse. We need a single-payer healthcare system for all—not more greedy for-profit insurance companies picking off government programs piece by piece!

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