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Hospices look to consolidation to remain competitive

On Behalf of | Jan 15, 2024 | Healthcare Business

The end-of-life health care sector has grown significantly in recent years, which means hospices in Texas and around the country have more competitors. To adjust to this new market paradigm, many end-of-life care facilities are exploring consolidation options to streamline their operations and lower their overheads. Most hospices are nonprofit organizations, but they must still control their costs to remain competitive. The economies of scale that combining or merging with other hospices provide is seen as a relatively straightforward way to meet this goal.

Mergers and acquisitions

Some hospices consolidate their operations by merging with or acquiring their competitors. Buying another company outright allows a hospice to put consistent processes and technology systems into place, which improves efficiency and can lower costs. The organization that emerges from a merger or acquisition could also find it easier to secure financing for new equipment or facility upgrades. This was the path chosen by a nonprofit hospice organization in North Carolina. The organization now operates facilities that serve 32 counties in two states.


Hospices that do not want to merge with or acquire their competitors can still reap the benefits of consolidation by affiliating with other end-of-life care facilities. Affiliated hospices can improve the care they provide by sharing best practices, and centralizing billing and other back-office functions can save them money. Affiliated end-of-life facilities operate as independent parts of a connected system, and they do not have to change their branding. Affiliation does not always involve a capital investment, but organizations that choose this option must comply with hospice law.

An evolving market

An ageing population is driving up the demand for hospice care, which has made the end-of-life health care sector far more competitive. To remain viable in this evolving marketplace, hospices around the country are considering consolidation options like mergers, acquisitions and affiliations.