Fee-for-Placement Services: The Debate

The New York Times features an article covering fee-for-placement services, including some information from an interview with two members of the SeniorHomes.com founding team, Chris Rodde and Jay Goldstein. There are a few different types of senior care referral services:

  • Pay-per-lead: This is the model used by SeniorHomes.com, as we outline in our “How we make money” section. We list all providers in a geographic area, whether or not we have a business relationship with them, but featured providers are listed at the top of a geographic page with photographs. We refer families to any facility that may meet their needs, regardless of whether we have a business relationship with that particular facility.
  • Pay-per-move-in: This business model relies on whether or not an individual actually moves in to a facility, and the referral service gets paid only if a move-in occurs. The issue here is whether these referral services will recommend facilities with which they do not have a contractual relationship.
  • Pay-for-service: This describes the typical geriatric care manager relationship, in which the family or individual pays the professional for referrals to appropriate facilities, instead of facilities paying for leads.

In any case, the professional agency or individual making the referrals is getting paid, whether by a facility or by the family. Not surprisingly, this has sparked a discussion on the NYTimes site, and we’re interested in hearing your thoughts. Is the issue here merely a matter of transparency, whether the family is aware that the referral agency is being paid? Or does the issue lie solely with referral services who refer families only to facilities that they will earn money for, theoretically (in some cases) ignoring what could be a better fit for the resident?

Is the business model any different than, say, a job site, such as Monster.com, CareerBuilder.com or any number of other websites? In terms of job leads, it works in a similar fashion: In some cases, an employer pays to post an opening. In others, job seekers pay for a membership to the website in order to view open positions. In either case, the website is making money.

Please weigh in with your comments, either here or on the NYTimes article. We’d love to hear your thoughts!

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