COVID-19 and funeral homes: Where are we. . .where are we going

April 10, 2020/Business/

The other day I received a phone call from a national writer doing a story on how the COVID-19 pandemic is and will affect funeral homes now and into the future. I shared some of my thoughts and I don’t know if that reporter will use them or not, but I thought I would recount my views and let the readers of Funeral Director Daily know my perspective.

First of all, you all know that a lot is still up in the air as to the COVID-19 pandemic and how it will play out in both a health care realm and an economic realm. New facts and statistics emerge everyday. But, at least as of today, here is how I see funeral homes faring in this environment.

On funeral homes and their financial health: My understanding is that there are about 19,000 funeral homes in the United States. It is also my belief that about 85% of those funeral homes are family owned and operated. How will these funeral homes fare?

My answer to that question was that family owned funeral homes are resourceful, they are entrepreneurial, and they can figure out a way during tough economic times to get by and live to profit another day. They – the owners and employees – are extremely proud of their communities and they will be out in this environment working 24/7, if they have to, to provide a valuable service to their communities.

Finally, from my point of view, family owned funeral homes – especially those established for a period of time – don’t historically carry a substantial amount of debt in relation to equity. So, they are able to weather storms. And, even those that do carry an above average amount of debt, lower interest rates in these economic times will be a benefit to them.

On the Surge in Deaths sure to come: Until recently, the President’s Task Force on COVID-19 had estimated that the number of deaths in America during the COVID-19 pandemic will be somewhere between 100,000 and 240,000. Now, that is a large number and a sad number when you think of individual people losing their lives prematurely.

However, the United States was expecting a number of annual deaths somewhere near 2.8 million prior to knowledge of COVID-19. So, if the task force numbers are correct, that is an increase in expected U.S. deaths for the year of between 3.5% and 8.5% over the expected number. Again, that number is a lot of individual deaths but not out of the ordinary work load for a high-year flex of most funeral homes.

Tom Anderson
Funeral Director Daily

The difference, however, is that those numbers will not be evenly distributed among the nation’s 19,000 funeral homes. As we are seeing play out right now, there will be areas of the country with a great number of increase and those areas that may be affected very little. Take a look at the number of deaths in New York City today as compared to my small county of 40,000 people in Minnesota. In my county, for instance, we have one documented case of COVID-19 and zero deaths at this time. So, our funeral directors are seeing a much different picture, at least at this time, than their colleagues in NYC.

The other issue in these “hotspots” is that increase in deaths will not come over a 12 month period. It is my opinion that their additional deaths will all come in about a 60-day period. These localized “hotspots” are where help will be needed and I’m extremely proud of my association with NFDA as they have issued the call and our fraternity of directors has answered that call as, according to NFDA, our profession “has hundreds of volunteer funeral directors at this time willing to deploy to NYC to help ensure the dead are buried with dignity.”

I believe that our colleagues in these “hotspots” will be incredibly stretched at almost 24/7 for that 60 day high death period. However, I also believe that there is no other occupation in America willing, able, and trained for the task like they are.

On “No Large Gatherings”: At the end of the day, my biggest worry for the future of the funeral profession is the “No Large Gathering” order that is going on in most states across the country. I don’t disagree with the order, but I think it has the ability to disrupt the economic end of the traditional funeral home like no other part of this pandemic.

From my point of view there has always been two distinct revenue sources in the funeral home business. Those being 1) Revenue brought in for the actual disposition of the human remains – which in my book is revenue for the care of the dead, and 2) Revenues brought in for the visitation, memorial service, funeral service, or celebration service of the deceased – which in my book is revenue for the care of the living.

We’ve all seen in the last ten years what a change in consumer behavior about the disposition of the human remains has done with revenue brought in for the disposition of the human remains. With the advent in popularity of cremation we have seen less revenue per case with the loss of embalming and other care of the deceased.

However, we have many times continued to serve those families with visitations, memorial services and celebrations even when there has been no deceased body present at those events. Now, however, in many cases families see no reason to hold those types of services since there can be only ten people in attendance. And, this is not just for COVID-19 deaths but for all deaths everywhere.

Historically, trends — even forced trends — have led to change.

The concern here begs the question, “Will families continue on this trend when COVID-19 subsides.” I hope not, but I do think it is the main financial worry of funeral service going forward.

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