Zen & The Art of Hospice Contract Maintenance

There was a great book I read in either high school or college titled “Zen & The Art of Motorcycle Maintenance”. Written by Robert Pirseg, it was probably the first truly profound and deep reading I ever did – and it made a lasting impression on me. (Full disclosure: I read it twice in my life; both times were over 35 years ago and I have not re-read it since). The book told the story of a father and son crossing the country on a motorcycle. The motorcycle would break down or need some work or repair and the father son duo worked through it together.

But the book had a much deeper meaning, which critics would later describe as “a search for the philosophical explanation of quality”. Quality, in the book, was quality of life and all that it entails. What brings you joy. Why we are here. What is our purpose. Motorcycle maintenance was a metaphor for reconciling reason, objectivity, and technology from art, emotion, and our spirit.  

In retrospect, the book contained many life lessons and imparted on readers –at least this one—a sense that business, medicine, sports, and just about any passion or career or hobby or pastime you pursue, has elements of “art” and “science” to them. You need to consider both the practical (the science) and the romantic (the art) aspects to evaluate the worthiness of any pursuit you are considering. I’ve used that philosophy in business decisions all the time. A good, solid business plan and deep dive exploring any investment is important, but you have to feel with your heart as well as the brain.

I worked with several companies recently that have hospice contracts. A few of these companies had a significant (but not exclusive) amount of their overall business derived from their hospice contracts. And one company existed solely to service hospice contracts.

There were several unique things about this business model that became apparent while I was working with them. For one thing, the contracts typically allow for fairly slim margins—even by DME industry standards. They were typically “volume” businesses, which needed to increase the number of contracts and patients (referred to as “patient census” in the business) to make money. Companies were constantly looking for additional contracts to build their book of business.

Another thing I noticed was that the contracts were very labor intensive for the DME provider. The contracts called for speedy service 24/7. After hour deliveries were quite common. If the hospice patient gets short of breath at 3am, the hospice nurse calls the DME, who brings out oxygen. On the flip side of that, and on a sadder note, when the patient passes, hospice philosophy was to get the DME out of the home as quickly as possible. After hour set ups at midnight and equipment pick up because the patient has died at 6am were closer to the norm than to the exception.

This type of a business model presents a few challenges to the typical DME:

1. Constant movement of equipment, which requires multiple deliveries and also multiple incidents of cleaning, disinfecting, between-patient maintenance, etc.
2. Tracking equipment that moves a lot leaves more room for error and mistakes.
3. The need for large volumes of inventory to meet this need, which can be very cyclical. I saw a provider that had an average census of about 500 oxygen customers on service at any given time. To keep up with that need, he maintained a fleet of over 1000 concentrators because there wasn’t always time to process and clean equipment.
4. Communication with family, care givers, the hospice program, and physicians can be difficult. Typically, the hospice patient is admitted to hospice service with standing orders for DME. That DME can include oxygen equipment. Communication about liter flow at 3am is challenging. The best hospice contracts spell out the standing orders and may be set up for “PRN” orders at a given liter flow. The contract spells out how to set up the patient and serves as the order/prescription. Communication can also be challenging with regards to the plan of care. Hospice nurses and family and care givers do not always pass along hazards, goals, or interventions taken to the DME company or staff.

That being said, hospice contracts are not only good community service, they are also a good way to network the public and market your customer service skills to referral sources, such as doctors and home health agencies that you work with on hospice contracts.

If you are chasing hospice contracts now or thinking about trying your hand, keep in mind the following:

• You’ll want to spell out response time and after-hours expectations in the contract. Deliveries at 3am come at cost and should be compensated accordingly.
• Make sure you communicate with the hospice about expectations for equipment set up and patient education. If you are simply dropping off DME at the door for a nurse to set up and explain, that “costs” less than a full-service delivery with patient education.
• Decide up front what clinical staff roles will be with regards to the contract. If the hospice wants to rent a non-invasive ventilator for a patient, it makes a big difference if they expect your company to titrate the settings with clinical visits.
• Educate hospice staff for a better relationship. One company I worked with invited the hospice nurses and home aids in quarterly to review various DME equipment and see how to set it up and care for it.
• Have hospice educate your staff about their processes. Hospice loves to educate their staff, their patient’s care givers, and the community in general about hospice. Let them educate your staff about death and dying and caring for patients that are terminal. It can be emotionally tough on ill-prepared staff to pick up equipment every day from patient homes where the patient has died.

Like that book that I read so long ago, establishing and maintaining hospice contracts is both an ART and a SCIENCE. Think about the business in objective, reasoned terms. But also take into consideration the extrinsic rewards that come from caring for a dying patient and making their transition easier and more comfortable. Analyze the contracts with your mind, but also your heart.

I’m going to give that book another read sometime soon. And I hope you will too.