Life Choice Hospice, of Dresher, has expanded from three to 12 states and more than doubled its size with the $85 million purchase this month of SolAmor Hospice Corp. from Genesis Healthcare Corp.

Genesis, a national nursing home and rehabilitation company in Kennett Square, retained a one-third stake in Life Choice, which was founded in 2003 in Philadelphia and sold in 2009 to investors counting on increased demand for hospice services as the U.S. population ages.

Despite the turmoil in the health-care sector and broad efforts to reduce spending, prospects for hospice care remain strong, Life Choice chief executive David Glick said Tuesday.

"I think hospice is seen as the lowest-cost end-of-life care," said Glick, who is based in Life Choice's River Edge, N.J., office, in New York's suburbs.

At the end of 2009, when investors, including Formation Capital, which also controls Genesis, bought Life Choice, the company was caring for 125 patients a day on average, Glick said.

That number had climbed to 700 patients - with much of the growth from internal expansion rather than acquisitions - before the purchase of SolAmor on Dec. 3. With that deal, the average stands at 1,750, Glick said.

The hospice industry overall has been growing rapidly.

The number of Medicare-certified hospice organizations climbed 53 percent between 2000 and 2010, with for-profit providers accounting for almost all of the increase, according to a March report by the Medicare Payment Advisory Commission.

Over the same period, Medicare spending on hospice services for people with no more than six months to live more than quadrupled to $13 billion, as more people chose hospice care and the length of time spent in hospice care increased for some, the congressional advisory group reported.

In 2010, 44 percent of the Medicare beneficiaries who died received hospice care, up from 22.9 percent of those who died in 2000, the group said.

Medicare's payment this year for routine hospice care at home is $151 a day.

The growth has attracted investors. The number of acquisitions in the hospice industry soared from about a dozen in 2007 to more than 40 in 2011, according to the Braff Group, a Pittsburgh mergers-and-acquisition advisory firm specializing in health-care services.

Investors "see in the hospice space, and I would say correctly so, an escalating demand for hospice services as a function of demographics and an embracing of the hospice paradigm," said Steven Braff, managing director at the Braff Group.

Moreover, the federal government has left reimbursement levels for hospice care unscathed compared with those for hospitals, nursing homes, and home health-care providers, Braff said.

Life Choice founder Doug Kosmin remains president and will oversee operations in Pennsylvania and New Jersey.

"Doug had a good product to begin with, and we did our best to improve it," Glick said.