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Business Clinic
Diversification in hospice care – Creating new pathways

St Margaret’s Hospice has diversified its business to offer funerals as ‘a natural extension’ of the services it provides to the community in Somerset. It is intended to become a franchise offering for wider roll-out.

St Margaret’s Hospice based in Somerset delivers high-quality, responsive and compassionate care to patients and their families facing a life-limiting illness.

Like any provider, the pressure of an ageing population and ongoing funding cuts have impacted on St Margaret’s. As a result, over the last two years it has undertaken a review of the organisation and how it services its communities in order to ensure its services and model are fit for the future.

This has led to the hospice’s team joining forces with funeral service provider, Low Cost Funeral Ltd to establish Hospice Funerals LLP.

Described as the first hospice funeral service, Hospice Funerals LLP’s first funeral home will be opened by St. Margaret’s in Taunton in January 2018. The business will be run as a franchise and services will be offered through funeral shops on the High Street.

Not only is this venture unique for the hospice industry, it is also described as one of the biggest developments in the funeral market. It is part of Low Cost Funeral Ltd’s parent company, Memoria Group’s commitment to changing the funeral market to ensure the cost of funerals are more transparent and to introduce more affordable, fixed price packages.

Funeral services

The new funeral franchise, Hospice Funerals LLP will provide quality, caring, transparent and personal funerals at affordable prices. It is currently only open to hospices, but the plan is to establish a franchisee network that can offer a national service. It is intended that franchisees will be able to offer a range of funeral services through hospices across the country, from unattended direct cremation to a personalised funeral.

Hospice Funerals LLP will also offer pre-arranged, guaranteed fixed cost funeral plans. Prices for funerals start at £1,295 which is some 66% (£2,500) lower in cost than an average traditional funeral. The service will be available to everyone in the community, irrespective of whether they have been a hospice patient or not.

Diversifying the business

The idea to enter the funeral market was the brainchild of Ann Lee, Chief Executive of St. Margaret’s Hospice when she was introduced to Howard Hodgson, Chief Executive of Low Cost Funeral Ltd.

Upon meeting to discuss the opportunity, Howard came up with the idea of a joint venture and since then the two parties have been working together to develop the new business model.

Ann explained, ‘We wanted to provide people who need end of life care either in their hospice or at home, a modern, transparent, personal and affordable funeral service.
‘This is a natural extension of the care we provide our patients so that their final time, be it years, months or weeks, is free from worry about the practicalities of a funeral. It also offers patients and their families more choice, whether under our care or not.

‘The initiative emerged from a major public consultation carried out by St. Margaret’s looking at innovative new models of support to ensure sustainability of its services in the face of a growing elderly population and a reduction in government funding – a challenge faced by the hospice movement and other care organisations across the country. We also sought the views of the general public to our plans and there was a resoundingly positive response.’

Hospice Funerals

Hospice Funerals believes that there will be strong demand for a hospice-based funeral service that will offer both affordability and continuity of care in the later stages of a patient’s life, so that it is free from the worry of the costs and practicalities of a funeral.
Hospice providers that become franchisees will operate exclusively within a defined area or number of areas.

Hospice Funerals will provide support to the hospice providers in their dealings with preferred suppliers (eg funeral shopfitters) but will not financially gain from these suppliers. Hospice Funerals will also select, train and manage staff and provide all administrative support, as well as providing a bespoke software system for making funeral arrangements.
The profits generated from funeral services operated by the hospices will be re-invested into their local communities to enhance the care and support they provide to people with life-limiting illnesses and widen provision in areas such as bereavement services.

The future

The current focus is to get hospices signed up, with interested hospices already meeting with Hospice Funerals. Beyond that, there may be an opportunity for the wider care sector to be involved.

Ann continued, ‘We are extremely confident that it will be a significant success given the interest levels amongst hospices since we launched the venture and the communities we have engaged with as part of our consultation process.

‘Ultimately within the next two years, we want to be in a position to offer a truly national funeral service so that we are not only providing choice, affordability and continuity of care to local people across the country, but are also able to reinvest the profits generated to sustain and extend our end of life care for those with life-limiting illnesses.

‘That will be a major achievement for a sector that needs to think innovatively in the face of a growing ageing population and reduced government funding and one which will hopefully stimulate new approaches across the wider care industry, which has the same challenges as the hospice movement.

Over to the experts…

What are your thoughts on this development to the hospice and funeral markets? Does it have potential to shape the market? Is it a way to future-proof the hospice model? Could it also be an opportunity for social care providers? 

An interesting initiative but not without risk

Hospices are well-respected by the public. They are considered a trusted ‘brand’ and one which is very much supported in each local community where they are located.
Funding-raising has always been a large component of what hospices have done to maximise their income generation in order to achieve the best outcomes for the people they serve.

Bearing that in mind, this proposition by St Margaret’s Hospice in Somerset, to establish the Hospice Funerals franchise with a funeral service provider, is an interesting initiative both as a new income stream for the hospice to ensure its sustainability and also as a way of extending a service to people which is clearly needed.

The fact that hospices are trusted by the general public in the way they are could be seen as a benefit for this initiative…but it is not without risk and may play with people’s perceptions of hospices if they are offering funeral services too.

I feel that the public will welcome the opportunity to plan ahead for the future and for funeral wishes. I’m sure they will also be attracted by the affordability and transparency that this franchise, offered by St Margaret’s Hospice, brings.

I do not believe this initiative alone will futureproof the funding requirements of the hospice model, though. However, I think it is a ‘watch this space’ initiative that could mark the start of change and innovation.

As for transferability to the wider care sector, I believe society’s views of care is very different to that of hospices. The image of social care, whilst improving, still has a significant way to go to be held in the trusted esteem of the public in the way that hospices are.

Sharon Blackburn CBE RGN RMN Policy and Communications Director, National Care Forum  

The logic is difficult to challenge

The country is facing a massive increase in the elderly population. This increase is likely to carry through until the thirties or even forties.

With that in mind, it is important to consider how we, as a society, are going to cope with the naturally increased death rate. Added to this is the question of whether the population can afford the costs of a funeral. It is usually the relatives who have to organise this, and many finish up paying for it too.

When looking at this new funeral franchise by St Margaret’s Hospice and Low Cost Funerals LLP, I must say that my initial reaction was to suck my teeth a little.

However, I reflected on this for a while and finally concluded that the St Margaret’s proposal seems to work well; the cost of funerals is much reduced, the delivery franchise makes a profit and provided the hospice benefits in order to reinvest in its excellent services to the community, everyone wins. I would not be supporting this proposal if this is not the case.

Ok, so the proposal is coming from a commercial organisation and they will benefit from it, but let’s face it there are more people in commercial care homes, hospices and being cared for in their own homes by commercial agencies, even those at the end of their lives, than in the public sector.

The naysayers seem to be against it almost entirely because it smacks of commercialisation.
Once the baby boomer bulge has worked through the population, the country will continue to be faced with people living longer, so my question is, why not?

Roger Wharton Independent Care Consultant  

This is neither necessary nor desirable

As independent observers and commentators on the funeral industry, The Good Funeral Guide has extremely strong reservations about the introduction of a franchise funeral scheme such as this proposal by Hospice Funerals LLP. We have written to trustees of all UK hospices to express our concerns.

The set-up costs of £100,000 per branch plus annual franchise fees of £10,000 will need to come from hospice central funds, a mix of NHS money and donations and funds raised by the public to fund the hospice’s work.

We feel that venturing into direct competition with existing providers of funeral services is not good use of money that has been raised to help hospices care for people at the end of life. Far from future-proofing the hospice model, we believe it carries with it an unacceptable level of risk.

Figures supplied by Hospice Funerals LLP are based on 100 funerals per branch in year one, rising to 200 in year three. We contend that this is wildly optimistic when current providers are already catering for all funerals required.

The funeral market, by admission of one of the directors of Hospice Funerals LLP, is already ‘saturated’, with around 5,000 funeral directors currently operating. Most of these are small, family-run businesses with owners and staff who are devoted to their work and who provide a modern, transparent, personal and affordable funeral service.

This is an arms-length, turnkey operation, under the branding of the local hospice, backed by a large crematorium operator. It is neither necessary nor desirable, and we would counsel providers to heed our warnings before getting involved.

Fran Hall Chief Executive, The Good Funeral Guide 

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