'Death care giants' team up with
church
By LESLIE WIRPSA
NCR Staff LOS ANGELES
Imagine your local diocese signing a lease with an oil giant
allowing the company to build gas stations on half of the parish parking lots
in your diocese.
What if priests sent a message to parishioners to use those
businesses even though their prices might be higher than independently run
pumps? What if parishioners then found out that the church and the oil giant
expected considerable financial gain from this partnership?
No, the church is not twinning with the gas business. The
hypothetical scenario was raised by funeral industry expert and critic Darrell
J. Roberts to dramatize growing concern over the leasing of land by the Los
Angeles archdiocese to death care giant Stewart Enterprises Inc. The leases
will allow Stewart, the third largest funeral chain in the country, to build
and operate upscale mortuaries at six of 11 Catholic cemeteries in the
archdiocese.
The announcement of the agreement has already had significant
implications. SCI -- Service Corporation International -- the largest chain in
the United States, was spurred by news of the agreement to form a wholly owned
subsidiary, Christian Funeral Services Inc., dedicated to the management
of funeral homes, cemeteries and related assets for Catholic dioceses
throughout North America.
If the business were gas, Roberts argued, The public would
be in an outcry. All of Los Angeles would be in an outcry. But when its
death care, the response is, I dont understand. Gas
stations or mortuaries, whats the difference? he asked.
The death care business is really a big, big business.
It is also a quickly changing business. A relentless series of
acquisitions and mergers is fundamentally reshaping the funeral industry,
spawning a new breed of death care giants. The new conglomerates are gobbling
up traditional, smaller funeral homes as well as cemeteries, enabling the large
firms to offer one-stop shopping -- from embalming to burial to post-funeral
receptions.
Within the last year, the Catholic church has evolved as a major
component in the conglomerates growth plans. The announcement of the
cooperative agreement between the Los Angeles archdiocese and Stewart
woke us up, said John Morrow, executive vice president of SCI and
president of Christian Funeral Services.
Until the Los Angeles deal was announced, he said, SCI had been
talking, but not very seriously, to a number of dioceses and parishes. The
development in Los Angeles made SCI leaders think maybe the need we have
heard about is upon us. If the diocese of Los Angeles goes out and seeks the
counsel of Stewart and makes a contract with them, there may be other
dioceses that have similar needs, he said in a recent interview.
Some consider the church-conglomerate alliance inevitable, given
the state of the funeral industry today. For others, though, the alliance
raises new questions about whether the church is drawing too close to an
industry that critics say is diminishing the sacredness of the rite of burial,
causing excessive hikes in funeral costs and accelerating the demise of
traditional family-run funeral parlors nationwide.
The Los Angeles mortuary project has also prompted debate over the
role of the church in its ministry to the deceased and bereaved. Those
supporting the operation say no one will be forced to use the new facilities;
they point to the convenience of all-in-one services at the cemetery sites; and
they also argue that the move will help the archdiocese to counter large
secular cemetery operations to which many Catholics have defected
in recent years.
Further, supporters of the Stewart proposal say the plan is a
response to recent directives from the National Catholic Cemetery Conference,
based in Des Plaines, Ill. The conference is affiliated with the United States
Catholic Conference in Washington.
Convenient services
According to a news release bearing the names and phone numbers of
archdiocesan media relations director Fr. Gregory Coiro and Stewart vice
chairman and CEO Joseph P. Henican III, the intent of the mortuary construction
plan is to provide Catholic families with the finest and most convenient
services and facilities at the time of their bereavement.
To accomplish this, Stewart and Catholic Cemeteries will work with
nationally renowned mortuary architects J. Stuart Todd, Inc., on designs for
the for-profit facilities that will reflect California mission-style
architecture. Comfort and aesthetic beauty, the news release states,
were the primary criteria considered for the final site selections
of the mortuaries that will serve Los Angeles 3.6 million Catholics.
Construction of the six buildings, each with fountains and lush
greenery, represents a multimillion dollar investment by Stewart
shareholders, according to the news release.
Four of the six mortuaries will house chapels; all will include
full-service flower shops, visitation and arrangement rooms, and most will
include after-service reception areas, visitor lounges and family meditation
rooms.
According to the archdioceses media relations director
Coiro, Stewart was selected for the Los Angeles project because of its
high-quality services, its experience and its own tradition of having
dealt successfully with Catholics and with the church.
Stewart was founded in 1910 as a family business. In 1991, when
Stewart Enterprises went public, the firm owned 43 funeral homes and 29
cemeteries in six states in the United States, according to a company fact
sheet.
Expansion has occurred quickly. As of November, Stewart owned and
operated 401 funeral homes and 130 cemeteries serving more than 149,000
families throughout the United States, Puerto Rico, Mexico, Australia, New
Zealand, Canada, Spain and Portugal. Most of the properties we own were
acquired as existing family businesses; they continue to operate under their
original names and maintain the local traditions that were established under
the previous owner, the fact sheet states.
One Los Angeles priest who requested anonymity is suspicious of
the new development in the archdiocese. I really think this is negative.
We are getting into the business of death, and the church is not supposed to be
about death, he said. Obviously, we have to have places to rest our
dead but now we are getting into the whole Forest Lawn concept of all-in-one,
one-stop shopping for your beloved deceased.
But representatives from Catholic Cemeteries of Los Angeles said
their lease agreement with Stewart will keep the archdiocese out of the
mortuary business but enable it to continue its traditional role in cemetery
services. The project, they said, represents a source of income for the church
and an effective means to both serve families and make Catholic cemeteries
competitive with other commercial, non-Catholic operations.
The Los Angeles plan, archdiocesan personnel say, responds to the
directives outlined in the National Catholic Cemetery Conferences
document The Catholic Cemetery: A Vision for the Millennium issued
in August. The document acknowledges that neighborhood funeral homes have
traditionally assisted families, but says that these locally operated
funeral homes are being purchased by publicly held international
conglomerates.
In response and as a means to emphasize church teachings and to
promote the universal application of the Order of Christian Funerals, the
Catholic cemetery may consider operating its own funeral home(s), the
document states. The document says families should have an opportunity to
access the services of a priest, the funeral home and the cemetery at one
location and endorses the importance of providing access to
competitively priced funeral services without the pressure to select items and
services inappropriate or beyond the means of the family.
Nowhere does the document discuss lease arrangements with firms
like Stewart. What it encourages, in addition to church-owned and -operated
funeral homes, is the use of a parish-based funeral network that
would allow the parish of today to be the funeral home of tomorrow
through the use of church space for wake and vigil services and the funeral
Mass. It also suggests the use of central embalming or preparation
facilities or affiliation with one or more funeral homes willing to
provide these services to the parish.
Stemming the loss
Sam Frias, pastoral relations director for Catholic Cemeteries in
the archdiocese, spoke of both pastoral and financial concerns during a lengthy
interview with NCR. He said the mortuary project, in part, responds to a trend
of the past three decades that saw families of deceased Catholics choose
non-Catholic enterprises that combine mortuary and cemetery services.
Bob McConneghy of Western Sequoia, a firm hired by the archdiocese
to do pre-need sales of cemetery plots and other funeral items,
confirmed the loss: In 1965, he said, the archdiocesan cemeteries handled
roughly 85 percent of all Catholic burials; by 1985, that figure had slumped to
35 percent. The concern Frias expressed over losing families to
fancy secular operations, is both pastoral and financial.
Catholic Cemeteries, which Frias said is the number one
money-generating department in the diocese, has begun to recoup the loss
of business by building new mausoleums and boosting cemetery plot sales by
using outside contractors. The deal with Stewart is expected to help the church
recapture even more sales.
He said the Catholic on-site mortuaries would allow the church
to serve our families quicker in the hours of death.
Quick may not be the wisest evangelizing strategy, however,
according to the Cemeteries Conference guidelines, which say that funeral
rites and prayers are powerful moments of evangelization for the alienated and
the unchurched, and they challenge secular tendencies to remove death from our
life experience through quick disposition, without mourning or prayer.
But Frias and Msgr. Terrance L. Fleming, vicar general and
moderator of the curia, both emphasized the convenience of the
combination mortuary-cemetery services. When families are seeking such
services, Frias said, we can say Here they are.
It is precisely that convenient link between the archdiocese and
Stewart that has drawn fire from other church sources, consumer advocates and
independent morticians. Roberts, 53, the funeral industry critic, spent his
life in the industry, learning the trade from grave-digging as a youth to
managing 23 funeral homes in later years. Admitting his own participation in
aggressive business practices, Roberts said he authored the recently released
book, Profits of Death: An Insider Exposes the Death Care Industry
(Five-Star Publications, Chandler, Ariz.) to help consumers make better death
care choices by becoming aware of death merchants who appear
to profit without regard to conscience.
Arrangements like the one struck in Los Angeles benefit the
religious organizations and conglomerates involved at the expense of the
consumers, Roberts said, and represent unfair competition to others in the
business.
The implications of a conglomerate coming in, whether it is
through a Catholic diocese or a Jewish synagogue, are really catastrophic to
the consumers. The organization, whichever they come into, has a very closed
audience, and when the leader of the organization says this is what we need to
do, the members of that organization are going to tend to follow that
leadership for whatever reason. They lead the parishioners, he said.
Conglomerates have a policy already of charging the highest prices in the
industry.
'Humongous operation'
The archdioceses Coiro said, No one will be under any
compunction, compulsion to use Stewart. There are always options available to
people. There is always going to be competition.
When asked about the trend of corporate acquisitions in the
industry, he said that situation existed before the archdiocese began planning
its project. The market is dominated by large chains, instead of the
old-fashioned, neighborhood, give-you-the-calendar-every-year funeral home. I
dont think we are contributing to it one way or the other. Its
already arrived, he said.
Endorsement by the archdiocese of Stewarts ventures will
apparently go beyond the implicit, however. When chains purchase family-owned
mortuaries, they commonly keep the name of the establishment and staff it with
employees who have dealt with the community for years. In Los Angeles,
archdiocesan personnel said that Stewart will most likely name the mortuaries
after the Catholic cemeteries. Those names have been engraved in the minds of
many Catholics in Los Angeles for decades. In the case of Calvary Cemetery, the
oldest Catholic burial ground, for example, it could be argued that Stewart
would stand to benefit from 102 years of name recognition.
Other overt overlaps may also occur. Lewis J. McAdams, Catholic
Cemeteries director of property development, insisted that the church, the
cemetery and the Stewart mortuaries will remain three separate entities.
... Youd contact the mortuary and the cemetery. The mortuary doesnt
contact the priest. The cemetery does not contact the mortuary. He
repeated that the mortuary at the Catholic cemetery will be distinct and
separate from the cemetery.
But other archdiocesan personnel suggested that Stewart and the
church will build a much more intimate relationship. Media relations director
Coiro said that cemetery and mortuary offices, for example, might both be
housed at the facilities Stewart constructs on consecrated land. Communications
between Stewart and the archdiocese are already close: It was Coiro in Los
Angeles who first responded to a call a reporter made to the public relations
office at Stewarts headquarters in Metairie, La.
On the sales front, collaborative efforts are expected. James M.
Tixier, who runs the archdiocesan pre-need sales programs of cemetery products
and services, said his field representatives currently do not recommend
any funeral home over another. We dont give preference over another. All
are good. But, he said, Stewarts presence on the cemetery property
will change the arrangement.
The procedure will be to refer them to Stewart on property.
Its a natural referral. But we will not be selling (mortuary services) to
them. Well say, Theres a facility inside the cemetery
location -- All Souls Mortuary here in Long Beach, Tixier said.
Cemetery sales contractor McConneghy said Stewart and Western
Sequoia, meanwhile, both have the intent of working well together on this
project. McConneghy said that sales will remain separate, but the
possibility of teamwork exists. Asked if sharing of customer lists, for
example, would occur between the two sales divisions, McConneghy said, I
am sure there will be.
McConneghy said he expects Stewart to aim for large volume with
the Catholic cemetery mortuaries. Now, there are 11,000 burials. If they
can capture 35 percent of that in a short period of time, once they open their
doors, in three to four years, its a humongous operation. That would be
one of the fastest start-ups in the history of the business, he said.
Such a takeoff will not be easy, he said, but the third-party influence
of the church will be beneficial to them.
Stewarts competitor, SCI, headquartered in Houston, Texas,
is staking its hope of expansion into the Catholic world on that kind of close
cooperation. It has only one Catholic operation in North America, a funeral
center, including a large chapel, built on land owned by the parish cemetery of
the Basilica of Notre Dame in Montreal, Canada, the oldest Catholic church in
North America.
In the United States, SCI recently has had a dozen or so
face-to-face contacts with cemetery management in different dioceses across the
country, said Morrow. SCI formed its Christian Funeral Services
subsidiary to reassure those concerned that conglomerates will give short
shrift to the spiritual dimensions of death care. We wanted this outside
of our own infrastructure, he said. Morrow added that SCI will set up a
separate advisory board made up of representatives from each diocese with which
the firm has an agreement to assure that church concerns about pricing, care
for the indigent and other matters are addressed.
Chairman of SCIs Christian Funeral Services board is
Matthew J. Lamb, described in an SCI release as an internationally known
artist and a respected leader in the Chicago Catholic community. Lamb, a
member of the Knights of Malta, is also chairman of Blake-Lamb Funeral Homes
Inc., the largest family-managed funeral home group in the Midwest and an SCI
affiliate since 1987.
No publicity
NCR asked Coiro and Hughes Drumm at Stewarts
corporate communications office to disclose details of the financial
arrangements and anticipated benefits of the mortuary project -- for instance,
the income the church expects to earn from the land leases or from percentages
of sales. We havent publicized the financial arrangements. I am not
sure they are going to be publicized, Drumm said.
Coiro cited no specific reason for the lack of disclosure except
that the finances are basically an internal matter.
The archdiocese is apparently willing to make certain
accommodations to ensure that Stewarts mortuaries are Catholic-friendly,
even bending one of its own internal norms. Coiro said the Stewart
establishments will be exempt from a rule denying priests permission to
celebrate Mass at commercial mortuary chapels. Because these chapels
within these mortuaries are at Catholic sites, that rule will not apply to
these mortuaries, Coiro said. This will serve a need.
Manuel Baughes, 68, a Catholic mortician whose family has offered
lower-priced funeral services to Catholic families in the East Los Angeles area
since 1928, was incensed by the arrangements with Stewart.
Baughes, whose establishment is located in a low-income, largely
immigrant area, said he offers a full funeral for $980 to $1300. He claims that
when chains come into an area, they commonly charge $1,500 just to walk
in, plus the embalming, plus the chapel. Just to walk in with nothing
added. He said he would be tempted to hike his rates with the growth of
high-priced chains.
Indirectly, this might help me. If a giant corporation buys
a mortuary and charges $1,600 just for services, I can charge $1,500. Im
not going to stay at $980 if all of a sudden Calvary is at $1,600. Ill
jack mine up. But who is going to be hurt? Parishioners are, he said.
Why will priests be allowed to say Mass (at the Stewart
mortuaries) but not at my place? he asked angrily. When you write
your article, he told NCR, put over it a different color
dollar sign, because they are not thinking of the parishioners. They are just
thinking of the dollar sign.
The director of another long-established Catholic funeral home in
the Los Angeles area, who asked not to be identified, said the
archdiocesan-Stewart plan is on my mind constantly. I feel hurt, let
down, betrayed. Only a handful of independent operators are left, he
said, establishments that have been as supportive to the Catholic church
as I.
At the Catholic Cemeteries office, both McAdams and Frias said
they had no knowledge of conglomerates charging higher prices. If
they are not competitively priced, well, people will not come to them,
said McAdams. People out here in Los Angeles are service-conscious and
price-conscious. They are aware of whats being offered. I dont
think they go at it blindly. But McAdams admitted he couldnt
tell you the price of a casket or services. Such a lack of information is
common among consumers of funeral services, say industry experts. According to
Lisa Carlson, executive director of the Funeral and Memorial Societies of
America, industry studies show that more than 80 percent of families do not
shop around for funeral homes when in need of services.
>Roberts said that funeral industry profits are fed by this
ignorance, which allows the large companies to defy the price logic of
economies of scale. Everything else that consolidates in the United
States ends up in cheaper prices for the consumer. It brings forth the
long-founded tenets of saving money through size, Roberts said.
He said with the funeral industry hard costs are down
when large companies take over an area, but prices remain high because
consumers do not understand costs.
Stewarts Henican disputed the criticism.
Generally, in the markets we serve, we do not offer our
products and services at the highest prices. Our prices tend to fall in the
middle of the range, he said. Furthermore, we know that we must be
competitive in each market served because we want to attract families to our
funeral home. We believe families should shop prices in the market and choose a
funeral home that offers the products and services they want at a price that
they can afford.
'Funeral rule'
Complaints about prices and practices in the industry prompted the
Federal Trade Commission to impose a Funeral Rule back in 1984
requiring mortuaries to provide detailed price lists of services. But consumers
are still uninformed about rates, a condition that makes them especially
vulnerable to price-gouging when death and grief are influencing their
decisions. Add to this the twinning of conglomerates and religious
institutions, and what you get, Roberts said, is another way to keep prices
high.
With explicit or implicit endorsement of a chain by a religious
institution, people ... wont think about price-shopping. Itll
be Father Henry told me to go here, and theyll go
there, Roberts said.
Lance Yost, a Baptist minister for more than 23 years who runs the
consumer-oriented funeral consultant firm Eulogy International, agreed.
Seeing Stewart funeral homes on Catholic cemeteries says to the average
Catholic, This is OK. This is where I should go. It may say to
them, This is the best choice, when in honesty it may not be the
best price for the services, Yost said.
Frias of the archdiocesan Catholic Cemeteries office agrees with
critics that these conglomerates are eating all the little guys up. ...
Some of the family-owned are my friends and they are going to hurt, he
said. Still, he believes that the bottom line is were going to
serve the community better.
An East Los Angeles priest who requested anonymity described the
prices and services of Baughes and Sons, mentioned above, and of other
neighborhood funeral homes as absolutely wonderful. But he said he
is afraid they wont be able to compete with Stewart. Neighborhood funeral
homes have a commitment to the community. Theyve been here a long
time, he said. His poor parish depends on donations like raffle tickets
and calendars from mortuaries like Baughes, he said. The parish also benefits
from stipends for funeral services performed at the church.
By allowing priests to offer Mass at Stewart mortuaries at
Catholic cemeteries, he said, he would be put in a position all of a
sudden of competing ... against our own Catholic system ... and thats
stupid. It gets messy. Were getting into something we dont like to
talk about.
A second priest consulted, from a poor parish across town, said he
has already called my mortuaries and told them, Please not to
worry. Youve been a great member of the family, and if people want to go
to the Catholic mortuary, fine, but I am not going to discourage them from
coming to yours.' "
That parish, however, is not flanked by two of the
mortuary-cemetery projects. The first parish mentioned is.
That the church would use the mortuary-cemetery project for profit
did not bother the second priest. The bottom line is that we are the
archdiocese of Los Angeles corporate sole. Like everything else, youve
got to find it somewhere, he said. The profits go into the
cemeteries, into the operation of the diocese. It doesnt go into the
cardinals pocket. It would be stupid if they felt they could take
advantage of the situation and they did not.
Ventures like these are part of the institutional side of
the churchs responsibility to try and keep itself in the black and
noble, he said, and you cannot knock the church for trying to make
a few bucks when it gives out so much to other needy organizations, including
my own parish. ... Its just kinda smart.
The archdioceses Frias said that Catholic Cemeteries would
continue to provide discount and even free plots to poor families. When asked
if he thought Stewart would do the same with mortuary services, Frias, who has
worked closely with Los Angeles Cardinal Roger Mahony for years, implied that
the church would wield some influence over Stewarts business practices.
Once theyre on the property, I have no qualms,
he said. All you need is for them to not serve a poor family one time,
and every bishop in the diocese will be down on them. Knowing Cardinal Mahony,
that will not happen. Hed come down on somebody so fast and say,
Adjust this.
Ruth Harmer, a pioneer of the funeral society movement (see
accompanying story) and author of the 1963 exposé The High Cost of
Dying, was more skeptical about the church-corporation relationship.
Mahony is a very modern churchman. He knows where the stocks
and bonds lie and where the clout is, Harmer said. You can imagine
how Stewart is chortling with this. The proximity of sanctity is going to make
their cash registers ring.
National Catholic Reporter, January 30,
1998
|