Some funeral homes in Vermont are being bought up by private equity firms. Death care businesses like crematories, funeral homes, and cemeteries are often ones that have been, historically, family-run. But as the industry becomes more and more consolidated, that's changing. Ken Picard is a reporter for Seven Days in Vermont, and he's been talking to funeral directors and private equity firms in the state about the transition. He spoke with WAMC's Molly Anderson.
INTERVIEW TRANSCRIPT
Editor's note: This conversation has been lightly edited for clarity.
Anderson: Welcome, Ken. It's great to have you.
Picard: Thanks for having me, Molly.
Anderson: So, to get us started, can you tell me what brought you to this reporting? Where did it start for you?
Picard: This story came to me from a young funeral director, a woman named Rachel Bishop, who works at Day Funeral Home. I believe it's down in Randolph, Vermont, and I had written about Rachel some years ago. She's sort of bucking a national trend of being, for one, a woman, but also somebody in her, at the time, 20s who was getting into the funeral industry. Most of the people who are in the industry right now are on the older side. They tend to be in their 50s or 60s. They're facing retirement.
And she had observed in Vermont that a number of funeral homes, including some that she had worked at, had all been bought up by these private equity firms. These are financial management companies that pool the resources of either wealthy investors or large institutional investors, and they typically buy a business where they see an opportunity to perhaps streamline the operations, maybe consolidate with several other local businesses. And then, often is the case, they will sell the business maybe a few years later. The goal is generally to make a profit for their investors. Sometimes they will run it for the long haul, but it is very common that they will take it and kind of extract wealth from it, and then flip it.
Anderson: What is at stake with that? What is the argument for the pushback, perhaps, against that?
Picard: The concern from consumer advocates is that this trend can, for one, reduce competition, and two, increase prices. Now, if you look at other industries that private equity firms have gotten into - dentistry, veterinary clinics, addiction treatment centers, nursing homes - they've gotten into all sectors of the economy. And typically, the case is that they reduce competition and prices go up. And so the concern for the funeral industry is people generally don't shop around when it comes to a funeral. You tend to go to the one that is close by, generally within 20 miles, and all of a sudden, the price of that funeral is maybe $4,000 more than it was, maybe, a few years ago.
Anderson: This idea of private equity firms buying up death care businesses in Vermont, it feels markedly different than this industry that you might just kind of fall into because maybe your family, [maybe] you come from a family of people that work in funeral homes or went to school for mortuary science. It feels like it's shifting from this, sort of, happenstance career that you might just kind of land in, to something that, “Oh maybe this is something I want to go to school for and like get into this business.” Can you talk about that?
Picard: So, if you think about the rise of the funeral industry generally, what we think of as a funeral parlor, before the Civil War, people handled their own dead. Pretty much, it was really after the Civil War and then the decades after when it became a profession. And as it became a profession, it was, for probably over a century now, it was expected that if your father was a mortician, that you would become a mortician as well.
But in recent years, as a new generation has come up, and they've seen the lifestyle that their parents had, where, say mom and dad are on call 24 hours a day, seven days a week, They don't get to take vacations, they look at this lifestyle and they say, “You know what, this is a really challenging lifestyle. I don't know that I really want to go into this profession.” And so then you have these funeral directors who are in their 50s or 60s, and they don't really have a succession plan. So they start looking around, “Well, there's no one to buy my business. Here is this private equity firm that is willing to offer me quite a lot of money, and I could sell it to them. I could have a more comfortable retirement, and in the process, this company, which has much deeper pockets, maybe they can get younger people to go into it because they could offer you more regular hours.”
They could say, "Well, you're only going to be on call one night a week instead of six nights a week, we can give you maybe some health benefits.” All of a sudden, these people can have sort of a more predictable, better work-life balance. And work-life balance is something that a younger generation is looking for. They want to know that, “Hey, I could also go to my kids' soccer games, and I could have health benefits for my spouse and for my kids” and so, there is something attractive to this.
Anderson: And another thing that you write about in your piece that I found interesting, and I perhaps hadn't really thought about: that relationship between the funeral director and their client, the family that they're caring for. When you have this more sort of like chain business model, you kind of lose that relationship, perhaps, with your customer.
Picard: Absolutely. This is a difficult time for anyone, when you lose someone, you lose a parent or a spouse, you'll pick up the phone and you'll call them at what may be the worst moment of their life. And what you want is somebody who is doing it because they believe in the work itself, and it's not just about making a profit. The people in the funeral industry who feel somewhat threatened by this feel as though they are losing touch with their clients, and some of them just don't feel comfortable with that.
