Large multi-agency, multi-state hospices are fast become the primary source of end-of-life care in the U.S.

According to a new study, chains cared for nearly half of all hospice patients in 2011, a dramatic increase from a decade before when small organizations (mostly non-profits) provided three-quarters of all care. And my own review of their financial reports suggests the biggest chains have grown even more since 2011.

The paper, authored by David Stevenson of Vanderbilt University and Jesse Dalton, David Grabowksi, and Haiden Huskamp of Harvard Medical School, was published in the January issue of Health Affairs (firewall). The authors did not look at the relative quality of care at any of these facilities. Nor did they calculate how long patients remained in hospice care at the chains. But they shed valuable light on how the business of end-of-life care is changing.

Hospice care is overwhelmingly funded by Medicare. And payment rates are generous enough that for-profits have long made inroads into this care model. The new study shows that, like many in the medical care industry, hospices are scrambling to consolidate so they can benefit from the economies of scale and marketing advantages of being big. Publicly-traded companies are responding to investor demands for increasing revenues.

Small non-profits still served more patients than for-profit chains in 2011, but Stevenson and colleagues found their share has been shrinking rapidly. In 2000, they cared for about 53 percent of enrollees. By 2011, they were caring for only about 37 percent. Over the same period, the for-profit chains’ share of enrollees grew from about one-quarter to nearly half. Non-profit chains accounted for roughly another 10 percent.

in 2000, a typical for-profit chain operated 5.6 agencies with 2,300 enrollees. By 2011, those firms owned an average of seven agencies with an average roster of 2,700 Medicare patients, according to the study.  By contrast, a typical mom-and-pop for-profit cared for only one-tenth as many people–about 220.

In some cases, corporate hospices are not just growing, they are getting huge. The paper reports that in 2011, the five largest for-profit chains owned 283 agencies with 190,000 patients. But the biggest players have grown even more since.

Many of these giant for-profit chains are themselves subsidiaries of larger corporations. For instance, Vitas hospice, a subsidiary of Chemed Corp, owns 50 agencies in 16 states and has care contacts with 2,700 skilled nursing facilities. Last October, Gentiva Health Services, which runs 210 hospices in 30 states, was acquired by Kindred Healthcare, one of the nation’s largest providers of skilled nursing and rehab services. In 2013, prior to the merger, Kindred operated 159 hospices in 13 states.

While not-for-profit chains (many faith-based) are much smaller than their for-profit competitors, they too are adding patients in a drive for size. The Health Affairs study found that in 2000, the average non-profit chain owned 2.6 agencies with an average roll of about 840 people. In 2011, those chains grew to about 3.3 agencies and their enrollment doubled. Yet, in 2011, only one non-profit chain, Hospice of the Valley in Arizona, was among the 10 largest.

Even small non-profits increased enrollment, from an average of about 290 to 540 in an environment when overall hospice participation grew dramatically and size became imperative.

While the Health Affairs paper did not attempt to measure quality, the authors did suggest how regulators might do so while providing better oversight of these large chains. For instance, regulators might review performance of all of a chain’s agencies when renewing the license of each of its units. Similarly, they could use company-level quality measures that would be transparent to consumers as well as regulators.

Many hospice advocates deeply distrust corporate chains. They argue that end-of-life care ought to be a mission, not an industry. But, like it or not, the business model of hospice providers is changing dramatically. Without major changes in the way they are paid, the growth of big chains won’t reverse and will likely accelerate.

The challenge now is to be sure they provide excellent care for their patients. We know very little about the relative quality of the big chains compared to smaller hospices. Improving quality measures and transparency at the corporate level is a good way to start,