Hospice of Michigan and Arbor Hospice & Palliative Care announced they will join in an affiliation Jan. 1 that will create Michigan's largest hospice provider.
The affiliation will allow both hospice providers to continue to offer their current programs and services under their own names, but executives said in a statement that the combination will allow them to dedicate more resources to patient care.
Jointly, Detroit-based Hospice of Michigan and Ann Arbor-based Arbor Hospice care for more than 2,200 patients in 58 counties in the state.
Financial statements of the two hospice nonprofit organizations were not immediately available. Hospice officials said both companies are in good financial shape.
However, over the past several years, Medicare has cut hospice reimbursement, leading to financial challenges at most hospices.
Under the Affordable Care Act, hospice providers are having their rates cut 12% through 2020. These cuts are on top of a 4.2% rate cut that began in 2010 and will be phased in over seven years.
In a recent study, Medicare cuts are expected to reduce hospice provider margins that averaged 2% in 2008 to a -14% margin by 2019, said the National Hospice and Palliative Care Organization.
Under the new, yet unnamed unified organization, Robert Cahill, who has led HOM the past several years, will become CEO. Gloria Brooks, current president of Arbor Hospice, will become vice president and chief strategy officer of HOM. She will continue as president of Arbor Hospital and the Arbor Hospice Foundation.
“Arbor is excited to form an affiliation with HOM that aligns our missions and allows us to share best practices to better serve our patients and families,” Brooks said in a statement.
Cahill added in a statement: “We are both financially sound organizations and are making this affiliation from a position of strength. This new affiliation will allow both of us to enjoy the financial benefits of being part of a larger organization without sacrificing our names, brands and legacies.”
Under the affiliation agreement, Arbor and HOM will continue as independent nonprofit 501(c)(3) organizations and operate under their respective names. Arbor will continue to serve patients throughout Washtenaw County and its current service area out of its Ann Arbor office and HOM will continue to serve patients throughout Michigan.
Earlier this year, Arbor Hospice announced expanded services in Washtenaw and Wayne counties through new affiliations with Glacier Hills Retirement Community and C.S. Mott Children's Hospital, both in Ann Arbor, and Henry Ford Village in Dearborn.