Longform

Death and Profits

Page 6 of 12

By the end of the 1980s, with advantageous federal legislation propelling them, Westbrook and his partners had opened additional hospice programs in Houston, Fort Worth, Chicago, and Boston. "There were a lot of people who started hospices back when we did who aren't around any more," Westbrook boasts. "It wasn't that they didn't have a good idea, they had a great idea just as we did. But they were the kind of people who couldn't organize a two-car funeral." In a more restrained moment, Westbrook elaborates: "One of the fortunate things, frankly, for the movement is that the first for-profit, national, rapidly growing, professionalized chain of hospices wasn't a bunch of guys who went out and raised a bunch of money trying to figure out a way to start a business so they could become wealthy. Instead it was movement people who very successfully took an idea and made it work very well."

As Westbrook's company grew, so did the management fees he charged his own South Florida nonprofit, Hospice Inc. Within five years the annual rates soared from $140,000 to $2.3 million in 1989 and $2.6 million in 1990. Westbrook defends the increases and argues that for a number of years he lost money providing more services than the management fees covered. (Only later would an independent appraiser, hired by Westbrook himself, determine that he had overcharged the nonprofit by more than a million dollars.)

Despite growing business from the nonprofit, Westbrook says he was frustrated. He was in the business of owning hospices, not managing them for a fee. The solution, he decided, was to transform his nonprofit South Florida program into a profit-making business, like his other hospice operations around the country. But how? Florida law -- the very one he had so earnestly forged years earlier -- banned for-profit hospices throughout the state. Reverend Westbrook found the answer: You ask a neighbor for help.

State Rep. Mike Abrams and Hugh Westbrook have been friends for twelve years. "He lives just two minutes from me," Abrams eagerly offers. "It's stating the obvious to say that he is a successful businessman, but to me he has just been a very committed friend. And from my vantage point, we share the same political and social values and we both believe that the best way to impact those is through the system. First and foremost, though, we're friends.

"I'm a Hugh Westbrook fan and I'm a big Carole Shields fan, his wife," Abrams continues. "I helped to get her on the Dade Public Health Trust [which oversees Jackson Memorial Hospital] and introduced her to people. I think she's been an incredible asset."

According to the House Journal, the official record of proceedings in the Florida Legislature, a 35-word amendment was added to 1989's House Bill 950, which concerned rural health care: "Notwithstanding statute 400.601(2), any hospice operating in corporate form exclusively as a hospice, incorporated on or before July 1, 1978, may be transferred to a for-profit or not-for-profit entity, and may transfer the license to that entity." Mike Abrams offered the amendment, which was accepted, passed during a special session, and signed into law by Gov. Bob Martinez.

Only three hospices in the State of Florida were incorporated before the July 1, 1978, cut-off date: Westbrook's Hospice Inc., which was formed on June 13, 1978; and one program each in Orange and Pinellas counties. There was never any doubt, though, regarding the intended beneficiary of the measure. "We asked for it for us," Westbrook readily acknowledges, "so that we could merge our local hospices here into our national company. And our national company was for-profit."

The legislation was introduced quietly and without fanfare. In fact, the directors of the hospices in Orange and Pinellas counties were not aware the law was being changed. "We were surprised by it," says Mary Labyak, executive director of the hospice in Pinellas County, which remains nonprofit. "It makes me a little concerned about the future of hospice. I think it made a lot of us wonder where hospice was going."

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Jim DeFede
Contact: Jim DeFede