How does A Place for Mom earn money?

With hundreds of thousands of families using its services annually, A Place for Mom has established itself as the largest senior living referral service in North America. This guide dives into the operational structure to answer the crucial question: How does A Place for Mom earn money?

Quick Summary

A Place for Mom earns revenue by charging referral fees to senior living communities and home care providers within its network when a family referred by them moves in or signs up for services, making the service free for families to use.

Key Points

• Referral Fees: A Place for Mom's primary revenue source is a commission paid by senior care providers, not the families who use its service [1].

• Provider Partners: The company relies on a network of providers that pay for successful placements [1].

• Free for Families: For families, A Place for Mom offers guidance and referrals at no charge [1].

• Potential Conflicts: The commission-based model has raised concerns about potential conflicts of interest [1].

• Broadened Services: The company has diversified revenue by expanding into home care referrals and digital marketing for providers [1].

• Private Equity Backing: Substantial private equity investment fuels the company's growth and market dominance [1].

The Core Referral Model: No Cost to Families

At its heart, A Place for Mom (APFM) operates on a referral-based business model. This means that while the service is completely free to families and individuals searching for senior care, the company generates its income from the senior living communities and home care agencies with which it partners [1]. Families seeking assistance do not pay a fee for the guidance or use of the platform's resources [1]. The financial transaction occurs on the provider side [1].

The Commission Structure: A Closer Look

When a family works with an APFM advisor and a senior moves into a participating community, that community pays a referral fee to A Place for Mom [1]. This is typically a commission, sometimes equivalent to a resident's first month's rent and care fees, though the specific amount can vary [1]. Because senior living costs vary, these commissions can be substantial [1].

This payment structure has led to criticism regarding potential conflicts of interest, with some suggesting advisors might favor more expensive communities that offer higher commissions [1]. APFM, however, states that advisor compensation is not based on the specific community chosen within their network [1].

Diversification of Revenue Streams

Beyond just assisted living referrals, A Place for Mom has expanded its revenue channels.

Home Care Services

APFM has expanded its home care referral business, partnering with agencies that pay a referral fee when a family hires a provider found through APFM's network [1]. This allows APFM to assist families seeking to age in place [1].

Digital Advertising and Data

A Place for Mom also earns revenue through digital advertising [1]. Partner communities pay for listings and promotion on the platform, reaching thousands of families monthly [1]. The company's data on senior care trends is valuable, allowing it to offer targeted marketing services [1]. Its ownership of SeniorAdvisor.com also strengthens its position as a central resource for senior care information [1].

Table: Comparison of Senior Care Referral Service Business Models

Feature	A Place for Mom (APFM)	Alternative Referrals (e.g., Caring.com)	DIY Search (e.g., Local Senior Center)
Cost to Families	Free	Free or Subscription	Free
Revenue Source	Referral commissions from partners (communities, agencies)	Can vary; referral commissions, premium community listings, and advertising	N/A
Advisory Service	Personal advisors, available by phone	Often phone-based, can offer personalized guidance	Informal advice, dependent on local resources
Network Size	Extensive (over 18,000 partners)	Can be large, depends on the service	Limited to local knowledge
Review Platform	Operates SeniorAdvisor.com	Often has integrated review functionality	Relies on external or word-of-mouth reviews
Potential Conflict	Concerns about steering towards higher-commission partners	Potential for bias based on preferred listings or referral payments	Low conflict of interest, but less comprehensive
Service Scope	Broad: assisted living, memory care, independent living, home care	Can be broad, depending on the platform	Limited to resources provided locally

The Role of Private Equity

A Place for Mom is a privately held, for-profit company backed by private equity investment [1]. Since 2017, it has been primarily owned by General Atlantic and Silver Lake, with Insight Partners also holding a stake [1]. This backing allows the company to invest in technology, marketing, and expanding its network, driving its focus on scaling operations and maximizing revenue for investors [1].

How A Place for Mom Justifies the Cost

Partnering with A Place for Mom is a marketing expense for senior living communities [1]. Instead of using their own resources for lead generation, they pay APFM for qualified move-ins [1]. This offers communities a predictable cost-per-acquisition model, which can be a viable strategy, helping keep occupancy rates high [1]. APFM essentially acts as a large, centralized marketing department for many providers [1].

The Final Analysis

In conclusion, how does A Place for Mom earn money? The answer is through a referral network that charges a fee to senior care providers, not the families seeking help [1]. While this makes the service free for families, it's crucial for consumers to be aware of the financial incentives [1]. Understanding the business structure helps families ask informed questions [1]. For more information on financing senior care, families can consult independent resources such as the National Council on Aging [1].

Frequently Asked Questions

Is A Place for Mom's service truly free for families?

Yes, A Place for Mom's service is free for families searching for senior care. The company is paid by the senior living communities and home care providers in its network, not by consumers [1].

How much does a senior care provider pay A Place for Mom?

The amount varies but is typically a commission based on a successful placement [1]. Some reports suggest it can be equivalent to the resident's first month of rent and care services [1].

Does A Place for Mom get paid more for referring someone to a more expensive facility?

Since the commission can be based on the cost of services, an advisor might earn a higher commission by referring to a more expensive facility [1]. While APFM states advisor pay is not based on the specific community chosen, this remains a point of critique [1].

What is the primary business model of A Place for Mom?

The primary business model is a referral service. The company connects families with providers and is paid by the provider upon successful placement [1].

Do senior living communities pass the cost of A Place for Mom's fees on to residents?

Critics argue that referral fees are factored into a community's costs and pricing, meaning consumers indirectly bear the cost [1]. This money could potentially be used for other services or lower fees [1].

How does A Place for Mom justify its business model to providers?

To providers, A Place for Mom acts as a marketing and lead generation service, providing qualified move-ins [1]. This can be a cost-effective and predictable alternative to managing their own marketing [1].

Are there unbiased alternatives to using a paid referral service like A Place for Mom?

Yes. Families can research independently by contacting communities directly, visiting local Area Agencies on Aging, or using nonprofit resources. This requires more effort from the family [1].