The business model for lead providers that target the senior housing industry is being called into question in a new report from the New York Times.
Companies like A Place for Mom (APFM) have build large business by fielding requests from seniors’ families looking for information on local housing options. In return for the free assistance, APFM is paid by the facilities they refer people to should the person eventually move into the location. As far as APFM, the company works with a network of 18,000 agencies to find housing for their customers.
“It’s been a terrific success story in terms of the growth of the company,” said Sean Kell, CEO of APFM.
But the practice has been investigated by publications like the Seattle Times and led to legislation from Washington State as well, according to the NY Times.
Groups like the National Association of Professional Geriatric Care Managers say the business model of referring customers only to those facilities it has contracts with is unethical.
“If there are five assisted living facilities in your town and A Place for Mom has contracts with three of them but the fourth is the best for your mother—you won’t hear about it,” said C. Byron Cordes, president-elect of the National Association of Professional Geriatric Care Managers during an interview with the Times. “You think you’ve found an ally when you’ve really found a salesperson.”
APFM countered by saying that when a customer is referred to a particular location, the senior isn’t required to choose the facility and could decide to move into another one during their search.
“People then have to tour those properties and make their own decisions,” Kell said. “We don’t expect them to make a decision based on our referral alone.”
Other lead providers like SeniorHomes.com takes a different approach, charging facilities per qualified lead it delivers.
Written by John Yedinak
