From the Washington Post newspaper's account of a decision by the Washington Post Co. to acquire Celtic Healthcare, a hospice and home healthcare firm:
Celtic Healthcare relies heavily on funds from Medicare, which provides hospice benefits "for extended periods of time based on the assessment of the patient," according to Celtic's Web site. In its blog last November and again last month, the company posted appeals from health industry groups asking people to lobby Congress to defeat Medicare funding cuts and increases in co-pays.
Warren Buffett left the Post Company's board but he still is a major shareholder. The Post's Kaplan education subsidiary has successfully profited from the flow of government money into education; now it looks like the company is headed into a similar direction with health care. One can see the logic of this move from the Post Company's perspective: aging baby boomers mean more demand for home health care, and fiscal pressure to decrease Medicare spending will probably push more patients into hospice as opposed to more expensive traditional end-of-life medical care. Health care, like higher education, is a sector that has a lot of nonprofit involvement that could be challenged by a for-profit innovator that uses technology to deliver better value. People say the Washington Post is an education company that also owns a newspaper; it sure would be interesting if a few years from now it is an education and healthcare company that also owns a newspaper.
