Funeral and Cemetery Expenses in Charlotte, NC – Lack of Competition Drives Up Prices

July 18, 2009

An excellent article appeared in the Charlotte Observer.  Unfortunately, the news isn’t good for Charlotte area residents as it shows what can happen when Competition is reduced.  The article appears below…

When Service Corp. International, the nation’s largest funeral-home chain, bought its biggest competitor in 2006, it took a commanding stake in the Charlotte market and promised to provide quality services and reasonable prices. But three years later, a new survey shows what consumer advocates at the time feared: Charlotte funeral prices have risen, making the city the most expensive in which to be buried or cremated. According to a June survey by Everest Funeral, a research company that works with consumers and life-insurance companies, average funerals in Charlotte cost $5,500, while cremations average $2,821.

The figure for funerals is $1,600 more than the South Atlantic average and $1,500 more than the national average, according to the National Funeral Directors Association.

Some local independent funeral directors blame the high prices on Service Corp., a Houston-based company that owns more than 1,300 funeral homes nationwide, including 60 percent of the homes in Charlotte.

“It’s called controlling the market, and I hate to say that it’s working,” said Tito Truesdale, co-owner of Rosadale Funeral Parlor, an independent home on Albemarle Road in east Charlotte that competes with Service Corp.

Shawn Strickland, Service Corp.’s market manager for the Charlotte area, says he doesn’t believe the results of the survey because he thinks that funerals in big cities such as New York and Washington cost far more than in Charlotte. He said Service Corp. offers a wide range of prices but that the basic price for a funeral is determined by the cost of that home’s overhead.

“It’s such a subjective question, because it really depends on the family and what they want to see happen,” he said. “We don’t have pricing any much different than anyone else does.”

The president of the local chapter of Funeral Consumers Alliance, a nonprofit group that works to educate consumers about funeral-service options, said Service Corp.’s hold on the Charlotte market easily makes the city the priciest for funeral services.

“I hate that Charlotte is at the top of the list, but I don’t doubt it one bit,” said Mary Brack. The Funeral Consumers Alliance doesn’t have a survey that compares funeral pricing in different cities, but Brack said she’s known for a while that Charlotte had to be one of the most expensive.

Local Service Corp. funeral-home owners offer a variety of explanations for Charlotte’s top ranking. They said cemetery costs and property taxes are rising, and that the move toward less-expensive cremations is forcing up traditional-funeral prices to maintain revenue.

Funeral pricing varies, but experts said smaller, independent companies tend to be less expensive than larger chains because they have less corporate overhead and don’t have to pay dividends to shareholders.

Price shopping

When Mamie Stowe knew she was going lose her husband, Eugene, after his two-year battle with cancer, she almost dreaded the funeral-planning process more than his passing. Stowe wanted to honor him with a church service. But she was afraid of being gouged by a funeral home that wanted to be paid upfront and paid a lot.

After Stowe called around in June for quotes that were “ridiculous” and too expensive, a social worker helped her find T.H. Robertson, owner of a private funeral and cremation practice by the same name. Robertson is able to cut overhead costs by meeting customers in their houses instead of requiring them to come to a funeral home.

Robertson said his prices, starting at $3,295 for funerals and $1,295 for cremations, are lower than Service Corp.’s.

The average price of a Charlotte funeral with Service Corp. has risen 10.5 percent to about $6,300 from about $5,700 in 2006, another Everest survey indicates. Nationally, Service Corp. funerals cost $5,097, which is about $1,200 less than the company’s Charlotte prices, according to the company’s most recent federal earnings reports.

When Service Corp. bought Alderwoods Group Inc. in 2006, the U.S. Federal Trade Commission forced it to sell one of the five Charlotte funeral homes it had acquired. The FTC’s decision reduced Service Corp.’s share of the Charlotte-Gastonia-Monroe market to 44 percent from 62 percent and attempted to prevent the merger from raising funeral prices. But Service Corp. still owns six out of 10 Charlotte funeral homes, and prices have climbed in the years since the merger.

Nationally, Service Corp. controls only 7.8 percent of the funeral industry, with 1,302 funeral homes and 369 cemeteries. The company has its largest presence in Charlotte, owning Harry & Bryant Funeral Home, Forest Lawn West Funeral and Cremation Service, all of the McEwen Funeral Service locations and Wilson Funeral and Cremation Service.

“Charlotte is unique,” said Mark Duffey, president and chief executive of Everest. “Usually you don’t see that level of consolidation, which is what makes (funerals) so expensive there.”

Everest is a national research company that helps clients to compare funeral prices and create a customized funeral service with the home of their choice. Consumers pay $495 for unlimited access to Everest specialists and research data or get help from the company as a life insurance benefit through their employers. The survey is based on a six-month national study that looked at basic funeral prices of homes in a 10-mile radius of each city.

Brandon Cook, manager of Service Corp.-owned Forest Lawn Funeral Home said Charlotte’s high taxes and cost of living escalate the area funeral-home prices. But that still doesn’t explain why Charlotte ranks first on the list of most expensive cities for funerals while major cities with comparable or higher costs of living rank significantly lower – Washington is 12th, New York is 15th and Houston is 20th.

Service Corp. funeral managers also point to Charlotte’s high cremation percentage – 30 percent of Charlotte’s deceased are cremated – as the reason for escalating burial costs. Cremations appeal to people everywhere because they’re cheaper, said Cook, but they are particularly popular in Charlotte because of its transient population.

“If people want to be here only for a brief amount of time, they will be able to take their loved ones with them when they move,” Cook said. The shift from high-cost burials to cremations threatens revenue for the funeral industry, which can force overhead prices to go up. But that doesn’t explain why Charlotte outranks all other cities for funeral expenses because cremations have been on the rise nationwide, attributing for 37 percent of the industry.

Financially squeezed families that are going ahead with burial plans are opting for less formal services. That means cutting out limousine rides, purchasing less ornate caskets and in some cases putting off tombstone purchases, funeral industry experts say.

Antitrust accusations

Service Corp. has run into antitrust accusations before. In 2005, the Funeral Consumers Alliance filed a class-action suit against Service Corp. and other major players in the death-care industry. The suit alleged the companies conspired to overcharge customers on caskets by suppressing competition. While not dismissed, the case has not gone forward.

In 1999, Service Corp. faced charges from the New York state attorney general that the company was dominating the Jewish funeral home business there and hurting consumers by raising funeral prices. Service Corp. settled out of court, agreeing to sell three of its Jewish funeral homes and pay the state $1.2 million for the investigation.

Service Corp. also received civil-investigation demands in 2005 and 2006 from the Maryland attorney general about alleged anticompetitive practices in the funeral industry there.

Barak Richman, a professor at Duke University School of Law, said restrictions are put on monopolies because they can pose harm to market competition.

“When all services in a market are dominated by a single provider, output goes down and prices go up,” he said. “But if a monopolist charges higher prices, that should theoretically allow other people to enter the market and provide services at a lower cost.”

Strickland said Service Corp. does not have a monopoly of the Charlotte area and has continued to meet the needs of residents during their times of grief.

“I don’t want to see you come in when you’ve had a death and have to spend a lot of money,” he said. “We can customize the service to fit any budget.”

By: Cameron Steele cameronsteele@charlotteobserver.com

Do you think that ownership of major funeral and/or cemetery providers in your area has hampered competition?  COMMENTS WELCOME!

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SCI Face Complaints Over Mishandled Baby Remains – Is SCI at Fault?

May 4, 2009

The following is an article that was written by Josh White,a Washington Post Staff Writer.  Read the article and then consider answering the following questions:

  1. 1.  She was told the “Memorial wouldn’t fit” – is it the responsibility of the cemetery to make sure that the merchandise sold will be appropriate for the last resting place of the deceased?

2.  It is alleged that the depth of the grave was insufficient.  It is stated that standard depth for the burial of a coffin would require 18 inches of topsoil to cover the grave.  Therefore, is 8 inches of soil covering the top of the cherub sufficient?

The article is as follows:

A hole began to appear in the fresh dirt over Jordan Hale’s tiny grave at Mount Comfort Cemetery weeks after her burial, prompting cemetery workers to cover the site with a granite slab. Mourning the loss of her stillborn daughter in July 2007 and wondering what was happening, Nsombi Hale was informed that a grave marker she had chosen would not fit and that her baby would have to be reburied. But Hale later learned from a cemetery employee that that wasn’t the real problem.

Instead, Jordan’s small white coffin — called a cherub — had been placed in a shallow grave and covered by just eight inches of soil. When Hale went to witness the disinterment, workers pulled it out in a matter of five minutes, she said.

“It never crossed my mind that something questionable was going on,” Nsombi Hale said, tears slowly rolling down her face. “But it was clear that the grave wasn’t deep enough. They mishandled the remains of my baby, and she deserved more than that.”

The Alexandria cemetery is one of 12 in Virginia owned by Service Corporation International, a Houston-based funeral services conglomerate that is facing allegations of mishandling as many as 200 bodies over the past year at a central preparation facility in Falls Church. SCI owns more than 1,700 funeral homes and cemeteries across the country, making it the largest company of its kind. State regulators are investigating.

A customer, contractors and several current and former employees told The Washington Post in an article this month that conditions at SCI’s central facility at National Funeral Home were disrespectful and unsanitary. They said that bodies of retired military officers destined for Arlington National Cemetery were stored on a rack in the garage for weeks or months and that bodies that had not been embalmed were left in unrefrigerated areas of the facility, where they decomposed and leaked fluids.

Family members of retired Army Col. Andrew Degraff have since filed lawsuits in Fairfax County against SCI. Hale also filed a lawsuit against the company last week in Fairfax, her attorney saying that she had been traumatized by watching her daughter’s grave opened.

“Throughout the disinterment and reinterment, the disturbing odor from the cherub permeated the air at the site, sickening [Hale], who forced herself to remain until her daughter had a proper burial,” said the lawsuit, filed by attorney Jack Burgess.

Virginia law and the Virginia Department of Professional and Occupational Regulation do not specify how deep graves should be, but cemetery officials in Northern Virginia said coffins are generally buried with at least 18 inches of soil above them.

SCI Virginia Funeral Services, a division of SCI, said in a statement that it discovered the problem with Jordan’s grave and “proactively self-reported the issue to the family and made every effort to resolve it.”

“Although Virginia law does not require a minimum depth of interment, once we determined that the interment did not have 18 inches of depth from the top of the casket to the top of ground level, we alerted Ms. Hale to request her permission to disinter and re-inter Jordan P. Hale,” the company said in a statement, also expressing sympathy for Hale’s loss. “As part of our commitment to transparency, if we make a mistake, we are committed to doing the right thing.”

Hale said she now suffers from post-traumatic stress disorder and has nightmares and trouble trusting people.

“I needed to be there for Jordan,” Hale said, adding that the beautiful ceremony weeks earlier, with balloons and goodbyes, was dignified and special, in contrast to the shovels and backhoe that accompanied the reinterment. “I wanted to stay to make sure it was done properly.”

In a letter to Burgess on Feb. 14, SCI Market Director Christopher Downey apologized to Hale but said, “Mt. Comfort performed its services as requested,” and noted that the cemetery provided Hale with a refund check of $2,488.75. She has not cashed it.

Downey, who has management and oversight responsibilities for SCI’s 13 locations in the Washington area, wrote that the initial burial was “too shallow” and that a four-inch-thick granite slab was placed over the grave after “an animal had been spotted by the gravesite.” Downey also wrote that cemetery employees strongly advised Hale not to view the disinterment but “despite our warning and insistence, she demanded to be present.”

He offered to donate $500 to charity in Jordan’s name as recompense, according to the letter.

Whistleblowers who have brought the allegations about mishandling of bodies at SCI’s central preparation facility have said that Downey is at the heart of problems there. Steven Napper, a former Maryland state trooper who worked as an SCI embalmer, said he went to Downey in January to raise concerns about the inappropriate storage of bodies in the garage and unsanitary conditions.

Napper said Downey, whose office is at National Funeral Home, brushed him off and appeared to ignore the complaints. Napper later reported his concerns to a Virginia regulatory board and resigned in February. After the Post article appeared, SCI launched an internal investigation.

“I went to Chris Downey personally in January to explain that there was not enough storage capacity at central and to discuss my concerns about the handling of the deceased,” Napper said. “He knew all about it, but he did not respond.”

Requests to speak with Downey were referred to an SCI spokeswoman.

“All of us want to know the facts behind what happened, and we’re diligently conducting an investigation,” said Lisa Marshall, the spokeswoman. “If we find wrongdoing, we will promptly take the necessary corrective action required.”

Family members of two military officers whose bodies were stored on unrefrigerated garage racks said Downey contacted them just before the first Post story ran and said that the allegations were false and were coming from a disgruntled former employee.

Richard Morgan Jr., whose father, Maj. Richard Morgan, was left in his light oak coffin on the racks before his burial at Arlington in February, said Downey backed down when Morgan said he had seen photographs of the conditions in the garage.

“I got a little irate, and I said, ‘I’ve seen the pictures, and you can’t dispute the pictures. These aren’t just allegations,’ ” Morgan said. He added that Downey offered him a refund and that he recently received a check for $14,111, though he said he does not plan to cash it as he pursues legal options.

Hale, who has a 9-month-old daughter named Zoe, said she is suing SCI because she wants things to change at Mount Comfort Cemetery. Burgess, her attorney, said the company already appears to have acknowledged that the burial did not go as it should have.

“It was done out of laziness, it appears, and out of a desire not to dig a deep hole,” he said. “I don’t think it was done maliciously, but it was done fairly recklessly. Nsombi wants to make sure it doesn’t happen to someone else. With big corporations, sometimes the only way to get their attention is to get into their pocketbook.”

It is easy to understand how there can be concern on the part of the family in this situation.  However, without specific regulations governing the required burial depth for an infant, the question remains – is SCI at fault or is the Washington Post writer capitalizing on other negative news relating to the handling of human remains in their northern Virginia operations?

YOUR COMMENTS ARE WELCOME!


SCI Funeral Home – National Funeral Home of Fairfax, VA Being Investigated? Veteran’s Remains Mishandled…

April 12, 2009

How should the deceased human remains of any person be cared for?  Should one assume that the remains of a U.S. Army veteran be cared for at least as well as the remains of another?  Would it be safe to assume that SCI funeral homes, the largest death care provider in the US, would have knowledge and state of the art equipment to store deceased human remains?

Those questions and others are being asked as the family of a U. S. Army veteran is wondering why his remains were stored for months in a Falls Church ph2009040603506funeral home’s unrefrigerated garage.  They are asking Fairfax County prosecutors to investigate the case as a crime.

The Washington Post reported this in an article dates April 7, 2009.  The article states:

Richard Morgan Jr., a Harrisonburg, Va., criminal defense attorney, hand-delivered a letter to Commonwealth’s Attorney Raymond F. Morrogh’s office yesterday arguing that the actions of National Funeral Home and its parent company, Houston-based Service Corporation International, amount to felonies. Morgan said his father’s body was “defiled” because it was left to rot on a garage rack, a possible felony under a Virginia law regulating the treatment of corpses.

The body of Maj. Richard Morgan was left from November to February in a light oak coffin in the garage at SCI’s central care facility, located in the same building as National Funeral Home, according to current and former employees who saw the coffin and the body inside. Morgan’s family identified photographs of his remains — dressed in a dark green suit, white shirt and red tie — that were taken by former funeral home employee Steven Napper on Dec. 12 as he catalogued problems he felt the company was ignoring.

Steven Napper, an embalmer with the facility, reported unsanitary and unethical conditions to the Virginia Board of Funeral Directors and Embalmers before resigning in February.   His accounts have been collaborated by other employees of the facility.  According to the Washington Post article:

Napper said as many as half a dozen bodies destined for burial at Arlington National Cemetery, including Morgan’s, were left on the unrefrigerated racks because coolers were full and his supervisors said the company did not want to spend more money.

The Washington Post reported Sunday that current and former SCI employees and a customer alleged unsanitary and unethical conditions at SCI’s regional central care facility.

They said the facility stored as many as 200 bodies in unrefrigerated areas, including the garage, and that the bodies, sometimes fully exposed, ph2009040302893leaked fluids on the floor.

More information seems to be surfacing.  In an article by ConsumerAffairs.com the following was stated:

Ronald Federici, 53, a child neuropsychologist, said he followed a removal van carrying his father’s body and was surprised by the “horrific stench” of decomposition that wafted out from a garage door behind the funeral home.

“Bodies were lying buck naked all over the place. There was no dignity whatsoever. It was disgusting, degrading and humiliating,” Federici told the Post.

The driver of the van Federici followed was Keith Stringfield, 36, a licensed funeral director. Stringfield told the Post he and other drivers were instructed to leave bodies in the garage if the coolers were full. Stringfield said he has spoken to state investigators about conditions at the facility.

“You don’t leave a body uncovered. You don’t let a body leak. You don’t leave a body on a stretcher in the garage,” Stringfield said in the Post report.

Richard Morgan stated an SCI official contacted him over the weekend and denied the allegations, although he said he received no explanation for Napper’s photographs, which showed bodies stored in the unrefrigerated garage. Morgan said the SCI official agreed to refund the $14,111.65 the family paid for funeral services.

Founded in 1962, SCI operates 1,500 funeral homes and 400 cemeteries in 46 states, eight Canadian provinces and Pureto Rico. Its Web site boasts of “robust cash flows” that it says have enabled the company to provide “North America’s finest death care services.”

MORE INFORMATION TO COME….AND YOUR COMMENTS WELCOME…