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This Is Ugly . . . State Governments Passing Laws to Solve a Non-Existent Problem

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By Steve Moran

Two years ago Senior Housing Forum published an article titled Senior Living Cannibals in California where we talked about how local California senior living referral agencies persuaded California State Senator Mendoza to sponsor a “consumer protection bill” that would protect consumers from “Unscrupulous Elder Care Referral Agencies”.

It was a bill that solved a problem that simply didn’t and doesn’t exist. It was, in reality, a bill that was being pushed by local boots-on-the-ground referral agencies that would give them an unfair advantage over internet referral agencies (primarily Senior Housing Forum partner Caring.com and A Place for Mom).   

That bill made it to the Governor's desk where it was vetoed because it would have created “an expansive and costly licensing scheme” and “the proponents of this measure have not made a convincing case for this new licensing structure.”

Hope Springs Eternal

The same senator has introduced a new bill with the same intent. There is also a similar bill that has been introduced in Oregon. You can wade through both bills at the end of the article.

More Burden, No Benefit

The big problem with these bills is that they, in fact, don’t protect seniors, they only protect local referral agencies. In fact, because they ultimately favor one style of referral options over another, they, by their very nature, reduce competition, which in turn hurts consumers.  

There are simply no credible examples of internet referral agencies doing harm to seniors. There is nothing that needs protecting.

Referral Agencies Get What They Deserve

If you are a senior living provider and pay big dollars to the online referral agencies, you may be thinking . . . even if you wouldn’t say it outloud . . . “go get em”.   

Not so fast . . . here is why;

  • The internet referral agencies will not go away and they shouldn't. Consumers appreciate them, which is why they are successful. They help prospects understand and figure out their options.

  • If these bills manage to get passed in some form, they will force the internet agencies to jump through more hoops, which they will do. It will also force communities to jump through more hoops, keep more records and spend more time sorting how who gets paid.

  • It could all result in the internet agencies charging higher fees.

If You Don’t Like Paying the Fees . . .

Sorry Caring.com, I know you are a partner and I believe in what you are doing . . . but if I were a provider I would not be crazy about paying referral fees to any referral agency, local or internet. I would never be in favor of a law that does damage to any agency as long as they are not abusing elders (something that simply is not happening).

I would do all I could to deeply embed my community in the local marketplace. I would get to know everyone. I would hold big community-based events so that everyone in the local area knows what we do and how we are great members of the marketplace.

Would I end up still needing internet referral agencies? Maybe . . . but not very much and that extra boost I would get from them would be to go from 95% or 96% to 100% and I would be delighted to pay less than a month's revenue to make that happen.

California Bill

Oregon Bill

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