A Place for Mom's Referral-Based Revenue Model
Unlike many consumer-facing services that charge the end user, A Place for Mom's business model is structured around a payment system involving senior living communities and home care providers. This means that the extensive personalized guidance and assistance offered to families throughout the senior care search process come at no direct cost to them.
The company’s revenue is generated through a commission system paid by the partner communities. When a family is successfully placed into a senior living community or with a home care provider from A Place for Mom's network, the provider pays a fee for that successful referral. This model has been in place since the company's founding and is clearly outlined on its website.
How Partner Communities Compensate A Place for Mom
- Referral Fees: The primary source of income for A Place for Mom comes from referral fees. After a family uses the service and a loved one moves into a partner facility, that facility pays a fee. Public reports suggest this fee is often equivalent to a resident’s first month's rent at the facility.
- Premium Listings: To supplement their referral-based income, A Place for Mom may also offer partner communities premium or featured listings on their platform. This provides extra visibility to facilities willing to pay for increased exposure to potential residents.
- Advertising Services: Some revenue can also be generated through advertising fees paid by senior living communities looking to market their services to A Place for Mom’s audience.
This payment structure means the company has a financial incentive to place families within its network of thousands of communities across the United States and Canada. The organization asserts that communities agree not to charge families additional amounts for using the service, with families receiving the same rates and discounts as other residents. However, critics argue that the referral fees could potentially influence which communities are recommended to families or lead to higher overall rates for all residents to offset the cost.
What are the costs to families and communities?
| Aspect | For Families | For Senior Living Communities |
|---|---|---|
| Direct Payment | $0. There is no direct fee for families to use the senior living advisory and referral service. | Varies. Fees are based on a contractual agreement, typically a commission paid per resident placement. |
| Associated Costs | Families pay the standard monthly fees for the senior living community they choose. A Place for Mom confirms that their fees should not be passed on to the family as a hidden charge. | The primary cost is the referral fee paid to A Place for Mom when a referral leads to a new move-in. |
| Services Rendered | Families receive personalized guidance from Senior Living Advisors, access to a wide database of communities, and resources to help with the decision-making process. | Communities gain a consistent source of qualified leads and marketing exposure to a large audience of families searching for senior care. |
| Potential Conflicts | The potential for bias exists since advisors receive recommendations from a network of paid partners, although A Place for Mom states its advisors are not compensated based on which community a family chooses. | Some critics argue that the system favors facilities that can afford to pay referral fees, potentially excluding smaller, but high-quality, communities from being recommended. |
The process for families and the provider network
When a family contacts A Place for Mom, either online or by phone, they are connected with a Senior Living Advisor. This advisor works with the family to understand the senior's needs, budget, and location preferences. The advisor then provides a list of potential senior living options from A Place for Mom's partner network, and can help schedule tours and facilitate the move-in process.
For senior living communities, partnering with A Place for Mom provides a powerful marketing channel for attracting new residents. In exchange for a referral fee, the company directs a stream of pre-qualified leads to the community, helping to streamline their sales and marketing efforts. The success of this model for both parties hinges on the advisor's ability to make a good match, leading to a successful and lasting placement. The Washington Post reported in 2024 that some experts suggest that the "pay-to-play model" is not well-understood by consumers, despite A Place for Mom’s transparency claims.
Conclusion
A Place for Mom is able to provide its senior living referral and advisory services to families at no cost by operating on a referral-based business model, where participating senior living communities and home care providers pay a fee upon a successful placement. While this is beneficial for families looking for assistance without upfront costs, it is important for consumers to understand that the recommendations they receive are limited to the company's network of paying partners. By being aware of this business structure, families can better navigate the senior living search and placement process. This can be the starting point for a search, but should not be the end.
