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The "Graying of America" unofficially began when Baby Boomers began turning 50 years old at the rate of one every seven-and-a-half seconds for the next ten years. By the year 2020, one out of every five Americans will be over 50 years old, and one out of three will be over 65 years old.
As a result of these demographic trends in correlation with the growth of managed care and increased high technology, home health care (HHC) is one of fastest growing markets in the United States and is projected to increase 10% for the next ten to fifteen years. Retail pharmacists and home medical equipment (HME) providers are taking advantage of this growing niche market by providing HHC products and services that meet the needs of our aging population.
Home Health Trends
By the year 2020, there will be approximately 100 million Americans over 50 years old who will be the potential patients in need of local community HHC providers. Of this 50+ population base, 39% will be elderly, 27% will be wound care patients, 18% will be incontinent and 12% will be urological patients (see pie chart).
Patients today are already directed to leave the hospital "quicker and sicker" due to managed care, and the majority are recuperating at home with a caregiver. Managed care's focus on cost-effective health care has successfully reduced the highest medical cost of hospitalization: acute hospital days have been cut in half over the past 25 years, while the number of same-day surgeries has increased almost 400%.
Factor into these trends the hi-tech revolution and you understand why the hottest selling HHC products last year in retail drug stores were self-diagnostic aids such as blood glucose meters and strips, pregnancy and ovulation test kits, Thermoscan thermometers and cholesterol test kits. Home IV therapy became the fastest growing home care niche after managed care organizations, in an effort to reduce extended hospital stays, designated IV therapy as a reimbursable benefit at home. Other hi-tech HME products include apnea monitors, CPAP therapy, nebulizers and ventilators.
Market Professionalism
The one fundamental difference between HHC providers and mass market retailers is that providers improve the quality of their customer's (or patient's) life. Mass market retailers simply sells commodity products at discount prices. The knowledgeable providers who sell HHC products are professionals such as pharmacists, nurses, therapists, trained technicians and fitters. They educate customers first, then demonstrate how specific quality HHC products meet their needs and finally sell in response to fulfilling these needs.
There are four primary means to differentiate retail businesses in the HHC market: product, service, reliability and information. Many HHC providers specialize in market niches in which they sell product or provide educational and support services as the result of their professional staff's specific training and/or skills, such as rehab, respiratory, IV infusion, mobility, diabetes, pediatrics, women's health or sleep apnea. Pharmacists are always rated as the most trustworthy professionals, and this reliable reputation is equally as important for being a professional HHC provider.
Home health care is primarily an information business, because patients and consumers do not necessarily know what products or services are available that will meet their needs and improve the quality of their lives. The niche marketing goal of HHC providers is to become the primary source of information and education for their respective category of HHC products and services. Statistically, once a retail business accomplishes this marketing goal, then 75% of the customers who depend upon them for information will also buy related product when the need arises.
Touch, Try & Buy
The HHC market is literally a "hands-on" business, because patients and customers need to try out these products before they buy them. Often a product's direct personal benefits are not easily visible or understandable and must be explained by a professional salesperson. Other products must be used to appreciate. For example, walkers and canes will not sell when hung from a wall because customers must walk around using them. Back cushions don't sell by sitting on shelves, but from being tried by customers who are waiting in the pharmacy's waiting area chairs.
The best educational tools that HHC providers use are retail displays that demonstrate products in their respective settings. Bedroom, bathroom and kitchen floor displays visually show customers how numerous related and impulse products will meet their similar needs. Cross-selling related products displayed in these settings produces the highest product turns in the HHC market. For example, a customer requesting an elevated toilet seat would first find a related grab bar to also be helpful, and then see how a bath bench meets a similar need due to their reduced mobility.
These products are only part of the retail packages provided by their suppliers to increase sales. Marketing and merchandising aids that help sell-through products include point-of-purchase (POP) displays to both attract and educate consumers, shelf signage to direct and inform customers, retail packaging that is eye-catching and personal-benefit oriented, coupons and rebates to reward loyal customers and co-op advertising programs to help increase the retailer's ad frequency and foot traffic.
Demographic Merchandising
Although there are core HHC categories such as mobility (i.e., canes, walkers and scooters), bath safety, incontinence/urological, rehab and respiratory, no one product mix works for every HHC provider. Successful HHC providers use customer demographics to merchandise their showrooms for increased turns and higher return-on-investment (ROI). By knowing who your customers are in regard to age and sex, HHC providers can merchandise basic demand products and then stock and cross-sell related and impulse items.
Three basic groups of customers exist in HHC: seniors who are buying for themselves, caregivers who are buying for patients or family members and baby boomers who are buying self-care products. Seniors are usually repeat customers for disposable (demand) products such as incontinence, diabetes and wound care. Top selling add-on (related) and impulse products that appeal to their similar needs or values include bath safety, mobility and aids to daily living (ADL).
Caregivers buy personal products that relate to their respective age and sex: senior females buy incontinence products and ADL, while middle-aged professionals buy self-diagnostics and soft goods. Baby boomers usually return to buy self-diagnostic kits, and also buy creature comforts such as sports rehab and hot/cold therapy products.
Marketing Strategies
Before customers will even think of shopping at a specific drug store or HME provider to buy HHC products, that retailer must generate interest and an increased level of understanding about home health care. Begin this educational process by marketing generic information on HHC categories, illnesses, diagnoses and health and wellness education at every point of contact with customers: in-store sales, delivery, support groups, community events, inservices, open houses, health fairs, direct mail and advertising.
Develop a marketing program to highlight and sell specific categories on a seasonal or quarterly basis, such as mobility in the spring, sports rehab in the summer and respiratory in the fall/winter. Then build momentum with a marketing plan:
* Select the respective products in coordination with available co-op programs, merchandising aids and collateral marketing literature.
* Use generic literature stuffers in every pharmacy purchase, handouts at each register, and stuffers in every statement.
* Schedule advertising to spotlight the category and products.
* Hold a seminar or community event such as a "Diabetes Awareness Day."
* Target appropriate referral sources with inservices on the diagnosis, demonstrating how they can better care for these patients at home.
* Advertise related products frequently with continuity, i.e., weekly in newspapers and three or four days per week on radio or cable TV.
Marketing on a coordinated and continuous schedule will help to create the consumer's perception of a pharmacy or HME provider as the primary community supplier of HHC products and services. Advertising with frequency and repetition will reinforce their store choice and remind them repeatedly that they made the right decision.
Developing a successful HHC business is no different from other retail concerns. Sell customers HHC products that meet their needs and expectations. Then customers will keep returning to buy more, and these loyal customers will generate more sales per customer and higher profit margins.
Jack Evans, president of Global Media Marketing, is an HHC marketing specialist who creates advertising and marketing programs for HME suppliers, drug stores, manufacturers, wholesalers, associations, MCOs and third-party payors. He is editor of the "Winning Strategies" retailing newsletter in HomeCare Magazine, and also presents CEU seminars and training at national HME and pharmacy conventions and trade shows.
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