The High Cost of Dying in L.A.

Caskets sold at ABC Caskets, located in Los Angeles, are oftentimes cheaper than those sold at funeral homes. (David Hodari/Neon Tommy)

Originally posted on Neon Tommy.

Written by Vanessa Okoth-Obbo, David Hodari and Rebecca Gibian.

Dealing with the loss of a loved one is always difficult. Not long after mourning begins, the complications of planning for a funeral set in. Given that everyone must eventually confront this difficult process, the costs associated with funerals should not be ignored.

The median cost of an adult funeral in the United States has increased by approximately 35.2 percent over the past decade. Now funerals cost an average of $8,000 to $10,000 (this figure does not take inflation into account), according to the National Funeral Directors Association.

Shannon Shoup, president of the Funeral Consumers Alliance of Southern California, said most people choose a funeral home in their area because of logistics, but in Los Angeles County, the prices at different funeral homes can vary by up to 545 percent.

For example, a full funeral service in Santa Monica could cost up to $8,520. Meanwhile, a full funeral service in Pasadena costs $4,005, according to data gathered in 2012 by the Funeral Consumers Alliance.

At Rose Hills Cemetery in L.A. County, a casket could cost anywhere between $785 and $31,665; a vehicle for transportation costs between $160 and $395; an evening service ranges from $1,145 to $1,445 and the list goes on.

Not only are these extra costs not going away, funeral directors expect to see these price increases continue indefinitely.

“In the funeral industry, I can’t remember prices ever going down,” said Randy Ziegler, vice-president of the Los Angeles County Funeral Directors Association and a licensed funeral director. “Our prices as a rule never reduce — regardless of the economy. Our prices usually go up once a year. Running a business in Los Angeles is expensive … building insurance, workers compensation insurance, car insurance. These are all things that factor into the price of a funeral because they factor into the cost of doing business and those are not going down.”

Mortality Matters

Funeral prices have been rising steadily for years, but now funeral homes have to deal with a new issue: the declining mortality rate.

According to basic economic principles, a decrease in demand should normally lead to a decrease in price and, ostensibly, in quantity provided. But these rules do not apply to the business of burial. Despite the reduction in mortality rates, the costs of funerals and cremations are increasing in Los Angeles County.

A study published in December 2013 by the Department of Public Health revealed that between 2000 and 2010, mortality rates declined in Los Angeles by 19 percent compared to 13 percent at the national level.

Brian O’Laughlin, founder of Kansas City-based Funeral Advocates, said that before the decline big funeral companies bought land and smaller funeral homes, accumulating debt, which made them raise their prices.

But then people started living longer.

“By the decrease in mortality and by having saddled themselves with all this debt by buying all these funeral homes and then the mortality rate turning on them, it’s really turned the industry upside down,” said O’Laughlin.

No More Land

Land scarcity is also adding to funerary expenses as the of cost cemetery plots continues to rise.

“There are cemeteries in L.A. that are 95 percent full, so it comes down to a question of supply and demand,” said Ziegler. “There is a cemetery in Los Angeles which carries out green burials (no casket, no embalming) and spaces can cost between $25,000 and $35,000 because it’s landlocked and spaces are running out,”

The declining mortality rate, lack of land and general inflation all contribute to the rising cost of dying in Los Angeles; yet in spite of these factors, people still have options.

Consumers’ Rights

Under the Federal Trade Commission (FTC) Funeral Rule enacted in 1984, and amended effective in 1994, consumers can choose only the goods and services for a funeral that they want or need. Legally, any consumer age 18 or over must be given a price list and a consumer guide when they walk in to inquire about these services.

“First of all, people don’t like talking about mortality and dying, even though a hundred percent of us are going to do it,” said O’Laughlin. “Therefore, one of the problems I see is that people don’t want to talk about it because people think it’s bad luck.”

However, just as yearly taxes come, so does death. And while Americans pride themselves on being active consumers in most parts of life, that outlook often goes out the window after a death because people are unprepared — emotionally or financially — to bury a loved one. Therefore, many consumers forget to shop around and compare prices and often buy all the funeral add-ons.

“What most people think they know about funerals—what you have to buy, what you don’t have to buy— almost all of that is not true,” said Joshua Slocum, executive director of the Funeral Consumers Alliance during a phone interview. “People are walking around with what I call mortuary mythology in their head, which is as accurate as urban legend.”

This mortuary mythology convinces people that they’re obliged, by either law or tradition, to buy a lot more than is necessary, said Slocum. This ignorance and lack of forethought combined with the fact that most people will just resort to using the closest funeral home means that “we have basically made ourselves into a willingly captive customer market,” according to Slocum.

And for those who do know about the Funeral Rule, it is hard to negotiate in a time of need O’Laughlin added.

“The funeral industry, they kind of operate … like the Wizard of Oz,” said O’Laughlin. “They operate from behind the curtain. Everything they do is kind of in secrecy. You don’t know what you’re getting or what you pay for and they want to make it seem so mysterious and behind the curtain that you don’t question what they do or what they sell you.”

There is a silver lining. While prices may be rising, California is not the worst place to be when you die.

“It’s just a matter of using resources,” said Slocum. “Even if costs are going up, it doesn’t have to be doom and gloom.”

Rose Hill Cemetery has 1400 acres of space, but have only built on 750 acres. (Jessica Harrington/Neon Tommy)

Do Your Homework: Where Consumer and Business Meet

Even in Southern California consumers can save money on funeral costs by planning ahead.

“When a death occurs and you don’t have anything, you’re shopping on emotion,” said Stephanie Ritter-Castañeda. “People want to buy the grandest thing for their dad, the grandest thing for their mom, and they make the bill bigger themselves.”

Ritter-Castañeda stood at the nexus of consumer advocacy and the business that is the funeral industry. She heard about funeral planning from a bereaved friend and after brokering funeral plans for several elderly relatives, she was offered a job at Rose Hills Memorial Park and Mortuary in Whittier.

Funeral pre-planning usually involves most, if not all, of the costs being frozen at their levels when purchased, and installments being paid over a number of years. Since Ritter-Castañeda left Rose Hills over a decade ago, most of her former clients are now familiar with funeral pre-planning.

David Meaux, Rose Hill’s director of sales, suggested that nowadays the percentage of his clients who pre-plan in some way is somewhere between 60 and 80 percent. This, he said, can range from a full burial package (which, with casket included, starts at under $5,000) to purchasing funeral plots.

These funeral plots are one of the main driving factors behind ever-increasing prices. With plans to continue expansion over the next century, Rose Hills has only built on 750 of its 1,400 acres. And yet, said Meaux, like permanent real estate the supply of funeral plots is finite.

Plot prices start at around $3,600 at Rose Hills, whereas at the landlocked Inglewood Park Cemetery, a space in a crypt can cost upwards of $10,000. That said, some private family plots for four at Rose Hills have been sold for up to $600,000.

The Consumer Guide to Funeral and Cemetery Purchases, which is distributed by the California Department of Consumer Affairs, also addresses the issues of emotional vulnerability and rising costs.

“Planning in advance,” the guide begins, “can spare your loved ones the anguish of making difficult decisions while grieving. Shopping ahead of time … may save you money.” This advocacy of pre-planning by both the industry and consumer groups might go some way to explaining the professionalized nature of burial plans.

Ritter-Castañeda crystallizes this idea by saying: “it’s like car insurance, except you pay insurance on the car for as long as you have the car. It’s a 10-year plan that I bought, so I only paid for 10 years.”

While the statistics may look dreary for those in Los Angeles County, Slocum said, California is one of the few states that has the right balance of funeral businesses to the death rate. Because of that there is actual price competition throughout California.

“The good news is, you’re in a part of the country where if you don’t want to be a victim of high funeral prices, it’s pretty easy not to be,” said Slocum.

This multi-media story was produced in collaboration with the 2014-2015 M.S. Graduate Program at USC’s Annenberg School of Journalism.

Rebecca GibianAugust 21, 2014