A few weeks ago I got an email from Chuck Bongiovanni, the founder of CarePatrol — a franchise senior living referral system, saying he had a breaking story for me, and he is right.
By Steve Moran
Correction/Clarification Note: My orginal version made note that Caring.com is a partner meaning we have a financial relationship. I am proud of that relationship and I am sorry that it got edited out do.
A few weeks ago I got an email from Chuck Bongiovanni, the founder of CarePatrol, the largest senior placement franchise system in the nation, saying he had a breaking story for me, and he is right. CarePatrol prefers the term senior placement service as opposed to referral service, because they are focused on providing personal, “hands-on” service to families. This means that a trained advisor in a local area meets with the resident and/or family member, figures out what they need and what they can afford. They then tour them through contracted senior living communities. CarePatrol is likely the largest organization providing this type organization, but far from the only one.
All of these referral agencies (internet or local) get paid only when a resident moves into a community.
I have known Chuck a number of years and have a good relationship with him. We have spent a lot of time discussing/debating the value and fairness of the various types of senior living placement/referral services.
Chuck and others are often frustrated when a prospect they worked with moves into a senior living community and discover they won’t get paid because the first touch with that prospect was through an internet referral agency.
The Problem is Real . . . Sort of
Here is the problem that Chuck and others who use a similar business model have:
A family fills in a form with an online referral agency. They speak to an advisor on the phone and receive a list of communities by email.
A “local”, feet-on-the-ground referral agency subsequently provides “hands-on” services to that same family and they move into a community.
After the move-in, the local agency requests payment only to be told that the internet referral agency registered that resident first and, because of the “speed to lead” clause in the contract between the internet referral agency and the community, the local agency was out of luck.
On one hand, it really tugs at my heart that someone works so hard to help a family choose a community and then gets nothing.
On the other hand . . .
They know (or should know) going into the business of being a hand’s on referral agency that this is a risk and they have some obligation to do their own due diligence about whether or not the prospect had an interaction with online referral agencies. They also should be talking to the senior community about whether or not that person has been registered.
I suspect they hate doing this since it would put that resident back on the community’s radar.
These local agencies could pony up a bunch of money to purchase adwords like the two biggies do and then compete head to head with the added benefit of hands on service. Their problem is that the economic equation actually doesn’t leave enough money on the table. In fact, this might be the smartest thing this organization could do.
The reason for all of this disconnect is that the family is getting a very real service that they don’t pay for. They, in effect, become pawns that are owned by either the internet referral service or the local service. It would be fairer if the families paid for the service and the problem would disappear.
I suspect that the problem is not as big as it is portrayed as being, though it is difficult to know, Chuck claims to have thousands of family signatures that say the contrary.
The New Tactic
Chuck and many of the local referral agencies across the country have banded together to form a lobbying non-profit 501(c)(6) organization, called The National Placement and Referral Alliance. Their goals include:
Giving families the choice of who the Agent of Record is
Creating a fair marketplace as defined by the alliance
Creating a set of standard practices (presumably favorable to the feet-on-the-ground organizations and unfavorable to the internet referral services)
They also have future plans for a national certification
The Heavy Editorial Part
I do think the things are creates problems but in talking to Caring.com, it goes both ways. It is pretty clear that it is not an infrequent occurrence that a boots-on-the-ground agency ends up getting paid when the online agency was legally entitled. At the end of the day, it probably ends up being pretty close to even.
I am just fundamentally opposed to the idea that government should interfere in the competitive nature of the marketplace because the new organization doesn’t feel that it is.
I would be delighted if they just decided they were going to compete in a way that would blow the socks off the internet referral companies (oops, can I say that? Sorry Caring.com). At the end of the day, this kind of legislation will likely make it worse for everyone.