Local News

Funeral deal in doubt

June 26, 2013
By Suzanne Pollak
Staff Writer

Area synagogues are concerned that the announced merger of the two largest funeral companies in the United States will result in higher funeral costs for their members.

Currently, 48 synagogues in the D.C. area are members of the Jewish Funeral Practices Committee of Greater Washington and thereby eligible for a complete, although basic, funeral at a price roughly $4,000 less than the cost of an average funeral.

But that contract could be dead and buried if the Federal Trade Commission and the Maryland attorney general’s office approve the merger.

Service Corporation International (SCI), the largest funeral home company in the country, announced May 29 that it had signed an agreement to acquire the second largest company, Stewart Enterprises, for $1.4 billion.

“We hope to complete the deal by the end of the year, or the latest early January,” said Lisa Marshall, spokesperson for SCI. “The wheels are turning.”

If approved, SCI would oversee 1,653 funeral homes and 515 cemeteries, or about 20 percent of this country’s market.

Mergers are known for reducing competition and raising prices to the consumer, but that is not the only fear among synagogues here.

Thanks to the Jewish Funeral Practices Committee, there exists a contract between Hines-Rinaldi Funeral Home in Silver Spring to provide “a complete Jewish funeral” for the price of $1,820. That includes “an all-wood pine rectangular casket” as well as an area for the family to prepare the body and sit with it.

The contract also holds off billing the family during the shloshim, the first 30 days of mourning; in addition, the family doesn’t even have to go to the funeral home to make the arrangements as that can be accomplished by fax or email.

Costs at other funeral homes can rise to $6,000, according to Marc Barinbaum, a member of the funeral practices committee.

Hines-Rinaldi is owned by Stewart Enterprises and has every intention of continuing to honor that contract “so long as we can,” said Denise Westerfield, communications manager for Stewart Enterprises.

However, she said, should the acquisition go forward, it will be up to the new owner to decide whether or not to honor the contract.

The new owner could either be SCI or a totally new entity, should the FTC approve the merger but order SCI to divest itself of some funeral homes so as to avoid a monopoly in that area.

Losing the contract with Hines-Rinaldi would be a real shame, said Rabbi Bill Rudolph of Congregation Beth El in Bethesda.

“I think we’ve been very fortunate here to have that contract, and I’m afraid it will disappear,” he said. “Right now there is lots of competition,” which he believes makes it easier for synagogues to work out special contracts for their members.

“About half the funerals out of Beth El use Hines-Rinaldi, something we highly recommend,” Rudolph said.

Rabbi Jonah Layman at Shaare Tefila in Olney said his synagogue is a member of the funeral practices committee and has worked out special contracts with Danzansky-Goldberg Memorial Chapels and Edward Sagel Funeral Direction, both in Rockville and both owned by SCI. The synagogue also works closely with Torchinsky Hebrew Funeral Home in D.C., which is independent.

It is important to be able to offer affordable funerals, and the merger may reduce choices and price competition, he noted.

A spokesman at Danzansky would not comment on the matter.

David Balto, an anti-trust lawyer in D.C. who is representing the funeral practices committee pro bono, explained that Danzansky-Goldberg and Edward Sagel funeral homes “have never been willing to seriously contract” with the committee.

SCI has not made any decisions on future prices or contracts, Marshall said.

She explained that each of the SCI funeral homes are wholly owned subsidiaries, meaning SCI is the parent company and owns and operates them. Basically the local company reports up the chain of command to SCI’s senior vice president.

Marshall said she was unaware of any contracts made with local synagogues or with the funeral practices committee and couldn’t comment on whether or not they would be honored indefinitely.

“We set pricing at the home office,” she said, but added that the prices vary from region to region. “Obviously we want to be competitive.”

To fight the impending merger, the Jewish Funeral Practices Committee sent out a letter June 13 to area synagogues asking them to write to the FTC and state their opposition. Rather than work against the actual merger, the committee is hoping to convince the FTC and the Maryland attorney general’s office to order SCI not to include Hines-Rinaldi as part of the agreement.

There is precedent for that, noted committee president Bob Hausman of D.C.

“Our efforts have a good chance of success,” he noted.

“We are fighting for this,” Balto said. He called the contract worked out between Stewart Enterprises and the funeral committee “unique” and noted that since the contract was first established in 1976, more than $1.3 million has been saved in funeral costs.

“For the Jewish community, Jewish funeral homes and cemeteries are the only alternatives. Very large portions of the population — regardless of level of religious observance — will only use a Jewish cemetery or funeral home,” according to Balto.

In an email to Washington Jewish Week, Balto noted that “a conservative estimate is that this contract saves consumers over $500K annually.”

While noting that actual savings are estimated at $4,000 per funeral, Balto said they can be considerably more. At the time of a loved one’s death, family members are very vulnerable and can easily be talked into buying fancier caskets and other add-ons, he said.

There are only two choices for caskets in the contract with Hines-Rinaldi. The funeral home is forbidden to suggest an upgrade; change can only be made “at the initiative of the family,” according to the contract. Then an additional $2,542 will be charged.

Neither synagogues nor their members pay anything to be included as members of the Jewish Funeral Practices Committee. Being a member doesn’t limit a particular synagogue from working out funeral contracts elsewhere. Shaare Tefila and B’nai Israel Congregation in Rockville are two of many synagogues that have favorable contracts with other funeral homes.

Besides working out the contract, the Jewish Funeral Practices Committee works with its synagogues and other Jewish organization members to provide training and assistance to bereavement committees. All committee members are volunteers.

spollak@washingtonjewishweek.com

Comments OffComments