Business

Will we see a “Pull-forward” effect?

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Since the world started to deal with the deaths related to the Covid-19 pandemic beginning in March and April of 2020 there has been a question in the death care world about the theory of “pull-forward” deaths. . .and if there are “pull-forward” deaths, what will that do to the profession in the years following the pandemic.

First of all, the theory of “pull-forward” deaths are that in many cases the pandemic virus weakened the oldest and most frail in our communities.  While we all know that the virus affected younger adults also, the theory of “pull-forward” is that many of those who died from Covid-19 were older adults with other issues and maybe would be dying in the next two or three years because of those other issues if they had not contracted Covid-19 and died during the past two years.

The theory goes on to say that funeral homes, in the years following Covid, will have fewer deaths because some of those deaths were “Pulled-Forward” into the pandemic time period.  We also originally believed that America had about 12-15% more deaths than were planned with “normal” mortality in 2020 and 2021.

This recent article from the Census Bureau indicates the number of deaths in 2020 increased by 19% over 2019 — from 2.85 million to 3.39 million.

While we have not seen 2022 numbers for the USA, last week Great Britain’s Continuous Mortality Investigation (CMI) announced “that mortality in the first quarter of 2022 was slightly lower than in the first quarters of 2019 (before the pandemic) and 2020 .”  They came to that numerical conclusion with the facts of 2,200 fewer overall deaths despite 14,800 1Q 2022 deaths in the UK that were Covid-19 related.

Cobus Daneel, chair of the CMI Mortality Projections Committee said, “Despite Covid-19 deaths averaging over 1,000 a week in the first quarter of 2022, overall mortality rates during this period are slightly lower than the pre-Covid rates seen in the first quarters of 2019 and 2020.”

Those findings may indicate the fact that a “pull-forward” effect has taken place in reference to deaths of the Covid-19 pandemic.

Thomas Ryan, CEO of Service Corporation International (SCI) said this on the company’s Earnings Call on February 11, 2022, “As the year goes on, we would anticipate that the COVID impact becomes immaterial and that we should begin to see the pull-forward impact from 2020 and 2021 having a mildly negative effect on funeral volumes and at-need cemetery revenue, thereby making the quarterly comparisons increasingly more difficult.” 

So, there is some evidence from that statement, that America’s largest operator of funeral homes and cemeteries believes in the theory of the “pull-forward” effect.

Funeral Director Daily take:  If the “pull-forward” theory is correct the next question is how far were these additional deaths pulled forward.  If many of the people who died of Covid-19 would have died in the next year or two then the next year or two would, on a statistical basis, consist of quite a few less deaths.

Tom Anderson
Funeral Director Daily

For most funeral home owners, will it really matter?  I’m not so sure that it will. . . .My guess is that if you own and operate a 100 to 400 call funeral home, the variable numbers of calls that you receive should fit within your annual variables of more or less death calls for the statistical 12-month period that you budget for.  Funeral homes that are larger in nature or aggregate the calls of several locations — especially the public companies with many locations — may have to be a little more diligent on watching their call volumes and ensuing revenue declines.

Finally, I think the biggest ramifications of the potential of “pull-forward” deaths will be with national suppliers.  Those that supply caskets, vaults, cremation containers, and prep room supplies are apt to be harder hit simply because they are not based on a “one-location” at a time budgetary process.  These companies that sold more product because of increased deaths during the pandemic, will simply sell less products of need moving forward.  The result would be an expected revenue decline.

The theory has been talked about and hypothesized since the pandemic began. . . . we are now going to see the actual results play out as we move forward from the pandemic.  Like many things, it may play out as theorized or it may play out in a way that we never thought of.

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