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| June 8, 2020

VITAS Healthcare at a Glance

Marina Turea

Marina is passionate about all emerging technologies in the healthcare space and love to write about all of them. Marina is passionate about all emerging technologies in the healthcare space and love to write about all of them.

At Healthcare Weekly we occasionally take a deep dive into prominent players in the industry, profiling their growth and projecting their future. In this post, we turn our attention to one of the country’s leading hospice operators, Vitas Healthcare.

Company Name: VITAS Healthcare Corporation

Year Founded: 1978

Location: Headquartered at 201 S Biscayne Blvd Ste 400, Miami, FL, 33131-4324, with multiple locations across 14 states and Washington, D.C.

What They Do: Vitas Healthcare Corp is a top provider of hospice and palliative (end-of-life) care services to patients and their families across the nation through its network of registered nurses, affiliated clergy, social workers, home health assistants, volunteers, and doctors.

Website: www.vitas.com

Company History

Company HistoryVitas Healthcare Corp was established in 1978 in Miami as Hospice Care Inc., a not-for-profit hospice, by two caring founders: a registered nurse named Esther T. Colliflower and Reverend Hugh A. Westbrook, then a well-known United Methodist minister. The idea to start a hospice had taken root a couple of years earlier when the two teachers noticed a clear lack of care services geared especially towards patients with terminal illnesses.

Over the last four decades, the company has grown from operating just one hospice in South Florida to become one of the nation’s leaders in hospice and palliative care. In that time, Vitas has traversed a colorful, storied, and heart-warming history dotted with unwavering growth, major milestones, and notable achievements, most of which we shall highlight in the following timeline:

1977: The concept to establish a hospice started to gel in 1977 when the teacher duo, Rev. Hugh A. Westbrook and Nurse Esther T. Colliflower, attended a conference on death and dying organized by the Dade County Mental Health Association. A few months later, the two founded Hospice of Miami. They established the hospice primarily to fill the gap in the end-of-life care and treatment for terminally-ill persons.

1978: Emmy Phillhour became the hospice’s first patient after she approached them in May for end-of-life care at her home from terminal cancer of the colon. She passed away a month later. In July, Hospice of Miami was incorporated as Hospice Care, Inc.

1979: In the several months that followed, the new company played a large role in campaigning for hospice to be acknowledged as part of the healthcare system. Thankfully, with the help of national hospice advocates, state supporters, and representatives from state hospitals, the Hospice of Miami’s bipartisan efforts paid off when Florida lawmakers passed a crucial bill defining hospice care.

This also earned Florida the honor of becoming the first state in the country to have any sort of legislation for hospice licensure.

The 1980s

The early 1980s was an interesting time in the development and growth of the company. Soon after recognizing hospice care, the Florida legislature enacted the hospice licensure law in 1980.

This legislative move earned Florida the honor of becoming the nation’s first state to have any sort of hospice licensing legislation. At about the same time, Hospice of Miami was renamed Hospice Care, Inc., which launched the Broward hospice program in Fort Lauderdale, its first office outside of Miami.

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Vita’s founders, including Don Gaetz, continued to fight for the inclusion of hospice care in Medicare coverage.

In September 1982, President Ronald Reagan signed the Hospice Care Reimbursement Act (1982) into law, allowing hospices across the country to receive payment for their services from Medicare. A report by the Congressional Budget Office revealed that covering hospice care under the new Act would save U.S. taxpayers over $110m per year.

In 1984, Hospice Care, Inc. set up shop in Dallas.  Two years later, it opened another office in neighboring Fort Worth. The Houston Hospice program swung its doors open in 1989; five years after Hospice Care, Inc. secured a foothold in Texas.

Between 1988 and 1990, the hospice organization opened 3 locations in the Chicago Metropolitan Area (or what was then popularly known as Chicagoland).

The 1990s

The company made impressive strides and milestones in the 1990s, as well. The most notable was its name change to VITAS Innovative Hospice Care in 1992. The moniker is rooted in the word “VITAS”, which is Latin for “lives,” reflecting its mission of “preserving the quality of life for those who have a limited time to live.”

The freshly renamed company invested in computer systems to help care providers record patient details and their care history.

By 1994, the organization had offered hospice services to nearly 233,000 patients. In 1995, VITAS entered the California market, establishing a total of 6 hospice programs (locations): San Gabriel Cities, Coastal Cities, Orange County, Inland Empire, and San Fernando-Ventura. That same year, it acquired Community Hospice Care.

Vitas acquired Hospice of Central Florida in 1996. By then, the hospice was serving three counties, Seminole County, Osceola County, and Orange County. By the end of the 1990s, VITAS had served more than 380,437 hospice patients.

One other striking point to note is that VITAS played a massive role in offering patient care and designing HIV/AIDS protocols during the AIDS crisis in the 1980s and 1990s, a period when patients with the disease faced increasing rejection, stigma, and fear. In Miami, for instance, VITAS had the only hospice offering dedicated care services for AIDS patients.

The new millennium brought with it good tidings of growth and prosperity for Vitas. Its annual revenue hit $250m in 2000. At about the same time, Vitas’s founder Hugh A. Westbrook donated a whopping $13.5 million to Duke University to create the National Institute on Care at the End of Life. A national pioneer, the institute was founded with the aim of advancing education, research, and caregiving for the terminally ill.

With more than 5,000 employees, the organization opened four hospice programs in 2002: one each in San Francisco Bay, New Jersey Shore, and Palm Beach, plus a Brevard program in eastern central Florida.

In 2003, its charity care reached a worth of $5m, coinciding with the opening of its New Jersey North and New Jersey West programs.

In 2004, the Cincinnati-based Chemed Corporation paid a reported $400m to acquire 100 percent ownership of VITAS. Chemed also hired Timothy S. O’Toole to serve as the CEO of the newly acquired subsidiary. By the time of the acquisition, VITAS’s annual revenue had reached $500m.

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In the same year, VITAS Healthcare added more hospice programs to Northern California, including North Bay, Greater Sacramento & the Foothills, and East Bay. It also opened programs in Delaware and Connecticut.

While under the ownership of Chemed Corp, VITAS acquired Phoenix Hospice in Phoenix, Arizona, and Haven House Hospice in Atlanta, Georgia in 2004.

In 2007, the company extended its reach to Southfield, MI, Richmond, VA, and La Salle, IL. The following year, it expanded programs to Collier County, FL, and Dayton, OH. In the three decades between 1978 and 2008, VITAS had cared for close to 917,000 patients.

In 2010, with a 10,000-strong staff, VITAS Healthcare expanded its hospice services to Fairview Heights, IL, and Columbus, OH.

In 2013, VITAS celebrated three and a half decades of innovative hospice care with revenues topping $1 billion. In the next few years, it made forays into many markets: Pensacola, Mid-State Florida, Lake Sumter, Jacksonville, FL, Fairview Heights, IL, and Columbus, OH.

The year 2013 was not all rosy for Vitas, though. The U.S. Justice Department sued VITAS Healthcare Corp, Vitas Hospice Services LLC, and their parent company, Chemed Corporation, for allegedly filing fraudulent claims between 2002 and 2013. The charges included “billing for Ineligible Patients and Inflated Levels of Care.” The three parties agreed to pay a sum of $75m to settle the federal lawsuit.

In 2018, Vitas Healthcare Corp. continued its long history of expansion by acquiring Hospice of Nature and the Citrus Coast in Florida. The organization celebrated its 40th anniversary in Miami in 2019, complete with the purple illumination of the iconic Freedom Tower in Miami Dade College.

Now, Vitas Healthcare Corporation, with its subsidiary Vitas Hospice Services LLC, is the nation’s most respected provider of hospice care. It works in conjunction with assisted living communities, community-based non-profits, payers, nursing homes, doctors, and hospitals throughout the US.

The Current State of VITAS Healthcare Corporation

As of this writing, VITAS Healthcare Corp is a wholly-owned subsidiary of Chemed Corporation, a holding company that also owns Roto-Rooter Corp., a Cincinnati-based company that provides plumbing & drain services.

With more than four decades of experience on its books, VITAS remains the largest and the most recognized provider of palliative care and hospice care in the U.S. in terms of reach, patient count, and even services offered.

It’s also one of the most prominent providers of charitable end-of-life services Through its social responsibility program, it offers about $13m annually in tangible charity care, which accounts for roughly 1% of the company’s gross revenue.

Today, Vitas Healthcare Corp, alongside its subsidiary Vitas Hospice Services LLC, offers palliative care and hospice care to over 19,200 terminally ill and other qualified patients each day. They employ an interdisciplinary care team comprising more than 12,500 employees (aptly called ‘hospice advocates’).

In addition to registered nurses, social workers, hospice aides, and physicians, the organization partners with several bereavement specialists, volunteers, chaplains, and other professionals who can make sure the patient’s final days, weeks, or months are lived in respect and comfort. Together, they serve multiple hospices across at least 14 states (i.e., CA, CT, DE, FL, GA, IL, KS, MI, NJ, OH, PA, TX, VA & WI) and Washington, D.C.

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VITAS Healthcare business recognizes four levels of hospice care: hospice care at home, continuous home care (also known as Intensive Comfort Care), inpatient care, and respite care.

Hospice care at home: This is the primary way Vitas offers an array of care services, including 24/7 telecare services, to patients in their homes, nursing homes, or long-term residential care facilities, such as assisted living communities.

Intensive Comfort Care: Continuous home care is offered by Vitas Healthcare professionals at the patient’s home or in any other facility to help manage acute symptoms. Patients can expect up to 24 hours of attention each day to avoid the need for hospitalization.

Inpatient care: Vitas Healthcare runs more than 28 proprietary inpatient hospice facilities to offer 24/7 care for patients whose conditions cannot be effectively managed in the comfort of their homes. Most of these units are stand-alone buildings; others are nestled in a floor or wing of other facilities.

With special appointments, patients can receive inpatient hospice care at any local hospital, residential care facility, assisted living community, or nursing home.

Respite care: Vitas also offers at-home care patients short-term (up to 5 days in a row) inpatient services to provide temporary relief (respite) to their primary caregivers or family members.

In addition to these broad-level care services, Vitas Healthcare extends holistic Spiritual & Emotional Care, in which terminally ill patients and their families receive a wide range of therapeutic resources and services such as veteran care, Jewish care, pastoral care, pet visits, and music therapy, just to cite a few.

In the past few years, Vitas has ramped up initiatives to get patients and their families talking about hospice and end-of-life care. For example, in April 2020, it launched an in-depth guide dubbed Thinking About Hospice to help expound on important facts about hospice, including its levels of care, who pays for the services, and how it can help end-of-life patients and their families.

As part of the initiative, Vitas has also built an app and put together a 6-step process for physicians to help them strike up a conversation with their terminally ill patients on how hospice care can benefit them.

VITAS Healthcare leadership constitutes some of the most prominent industry leaders with substantial field and management experience in hospice, nursing, healthcare, and medical care. At the helm is Nick Westfall who serves as the President and CEO, a position he has held since 2016; he has been with the company since 2012.

Kevin McNamara is Vitas Healthcare’s current Chairman, having served in multiple positions in the parent company, Chemed Corp, since 1980.

Other members of the executive leadership team include Joel Wherley, COO; Jeffrey M. Kreger, CFO; Patty Husted, Executive VP of Operations; Bob Miller, Chief Compliance Officer; Naomi C. Dallob, General Counsel; Joseph Shega, Chief Medical Officer; Diane Psaras, Chief HR Officer; Peggy Pettit, Executive VP; and Drew Landmeier, Chief Marketing Officer.

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Where VITAS Healthcare Has Made Headlines

VITAS HealthcareVitas Healthcare boasts 10.1% uptick in 2020 Q1 hospice revenues despite COVID-19 impact

Despite the continued bite of the novel coronavirus (COVID-19) pandemic, VITAS Healthcare managed to pull in $338m in revenue for the Q1 of 2020. This marked a jump of slightly over 10 percent from the same quarter last year. The company attributed the positive results to a 5.9 percent spike in the number of days of care, backed by an uptick of about 5 percent in the average daily census.

That isn’t all; the reimbursement rate from Medicare increased by 5 percent.  This is good news in the wake of disruptions in admissions and referrals. The net income increased by 2.7 percent in the quarter, according to the earnings call conducted by VITAS CEO Nick Westfall.

VITAS Health Corp agrees with the US Justice Department to pay $75m to settle Medicare false claims case

In 2017, the United States Justice Department sued Vitas Healthcare Corp, alongside its sister subsidiary Vitas Hospice Services LLC and their parent company Chemed Corp, for allegedly billing Medicare for exaggerated levels of care and unqualified patients.

In the close of October that year, the for-profit hospice operator agreed with the Justice Department to pay a staggering $75 million to settle the federal lawsuit. While VITAS isn’t the first healthcare firm to be slapped with a lawsuit over Medicare fraud, the speed at which it collaborated with DoJ is commendable.

VITAS Healthcare executives meet with COVID-19 Task Force, including US Vice President Mike Pence

The COVID-19 Task Force led by the United States Vice President Mike Pence met on March 4, 2020, with Nick Westfall who is the CEO of VITAS Healthcare and a board member of the National Hospice and Palliative Care Organization (NHPCO). Westfall was among the key leaders from fields like palliative care, post-acute care, and long-term care.

The CEO emphasized that palliative and hospice care providers are best positioned to reduce further transmission and provide the best care for vulnerable patients. The leaders of the White House coronavirus taskforce, on their end, urged the private care sector to pay more attention to populations at greater risk for COVID-19.

Where VITAS Healthcare Is Going

Since he took the helm of VITAS Healthcare in 2016, Nick Westfall has always championed advocacy as the overall growth tactic for the hospice industry. In fact, in September 2019, he was quoted urging hospice leadership teams to be advocates for not only patients but also the industry as a whole.

Speaking of advocacy, VITAS has released Thinking About Hospice, a comprehensive guide to help terminally ill patients, their families, and physicians discuss their end-of-life options and make informed care decisions. The guide release came right in time for National Healthcare Decisions Day. It will be coupled with a referral app and a six-step SPIKES process specially designed for physicians.

Westfall has emphasized that VITAS will focus primarily on organic growth going forward in order to drive revenues and admissions. Another key strategy, according to Westfall, is to look for acquisition opportunities, especially in new markets, to drive growth. He noted that acquisitions may help speed up new-market entry without the need to recruit, train, and onboard staff.

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All things considered, we anticipate that VITAS will continue to prioritize its core hospice organic growth, followed by de novo strategies, in which Vitas will establish new programs and units in existing and new markets. The last leg of the growth engine would entail opportunistic acquisitions.

Three Big Questions for VITAS Healthcare

VITAS Healthcare1. How will Vitas Perform in the Next Few Years?

Currently, the palliative and hospice care industry is worth more than $28.6b, and VITAS Healthcare commands the lion share of that amount. With a projected industry-wide growth rate of 0.3 percent for 2020, we anticipate that VITAS will grow at a higher CAGR rate in the neighborhood of 3-5%, give or take, depending on the eventual effect of the COVID-19 pandemic.

Our projection is informed by several positive factors: i) VITAS will continue to witness a rise in the number of days of care despite the impact of the novel coronavirus, ii) its quarter-over-quarter revenues have surpassed expectation, with a commendable net revenue of $338 million for the first quarter of 2020, and iii) the future growth of the industry rests in the shoulders of hospice chains like Vitas, as noted by Forbes.

2. How equipped is VITAS Healthcare to handle any major technological shifts in hospice care?

VITAS Healthcare has always responded surprisingly well to big-picture technological changes. After all, the company was among the few to introduce computers to its teams to improve care delivery and accuracy.

VITAS Healthcare has already created a telecare mobile application for physicians, and more telehealth, mHealth, and digital health solutions are in the pipeline. On a different note, shifting dynamics between caregivers and patients and their families might present a slight barrier to the adoption of technologies like artificial intelligence, Big Data, etc.

3. How would an overhaul of Medicare affect VITAS Healthcare?

As it stands, the Medicare Hospice Benefit Act guarantees that all palliative and hospice care services offered to terminally ill patients are fully covered by Medicare Part A (Hospital Insurance). That means no paying out of pocket or co-pays. As such, any major overhaul of Medicare will certainly affect VITAS operations, particularly the revenue side.

Of course, it depends if the overhaul will favor coverage of more hospice services or fewer. The latter case will definitely adversely hit VITAS revenues.

Conclusion

With a 12,500-strong care staff, 28+ inpatient facilities, and more than 45 palliative & hospice care programs across 14 states, Vitas Healthcare remains one of the most prominent end-of-life care providers in the US. The company’s future is bright thanks to the top leadership’s focus on organic growth coupled with de novo activities and opportunistic acquisitions.

 

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