'ADLs are the largest HME category, or will soon be'

Friday, August 24, 2012

As Medicare becomes an increasingly difficult business environment for HME providers, it has become apparent that they need alternative sources of revenue. Retail is the most logical strategy, and aids to daily living (ADL) products offer easy access into that marketplace, manufacturers say.

ADLs don’t require a huge upfront investment or a lot of showroom space, they can complement just about any market focus, and, best of all, people are willing to pay cash for them. As a result, more providers are deciding to add ADLs to their product lines, manufacturers say.

“I believe ADLs have had a steady upswing over the past 10 years,” said Wade Lawrence, national accounts manager for Oakdale, Pa.-based Clark Health Care. “People are adding these types of products to increase profits, where they may be getting cut on other products. I would say it’s safe to say ADLs are the largest HME category, or will soon be.”

Hundreds of products could be considered ADLs, though the most common items include bath safety, walkers, reachers or grabbers, dressing aids, pill boxes and personal hygiene supplies. Big-ticket items include lift chairs and portable ramps.

Huge market

ADLs are designed to assist senior adults and demand is expected to swell as the 76 million baby boomers incrementally become candidates for the products. By 2015, the U.S. Census reports that the generation born between 1945 and 1964 will represent 45% of the population, which means one out of every two consumers will potentially need daily living aids.

“Cash is king and baby boomers are willing to spend it,” said Dave Henderson, national and international outside sales manager for Algona, Wash.-base EZ-Access. “Consider your average baby boomer consumers and determine what ADLs will help their quality of life.” 

Mass retailers have long realized the potential of the boomer market, but HME providers are perfectly positioned to sell ADLs to this population, Henderson said. By promoting how these products improve people’s quality of life, he said providers can raise awareness and interest in their community.

“Years ago, we talked about having products that kept a client within the ‘circle of care’ of an HME provider,” Henderson said. “Today we need to expand that circle into an oval that includes ‘quality of life.’ Providing ADLs will secure the potential customer for medical equipment in the future.”

‘Gift shop’ approach

Jo-Ann Tilghman, owner of Lakeland, 

Fla.-based Granny Jo Products, contends that the retail potential for ADLs is “very strong” as long as HME providers can successfully redefine their spot in the marketplace. The key, she said, is to offer a wide range of products and merchandise them in a way that is unique from other retailers.

“They need to not just be a typical HME, but also a ‘useful gift shop’ for the elderly population,” she said. “We would suggest that the HME industry push the gift shop concept, but this is only practical if at least a portion of the sales floor reflects a gift shop atmosphere.”

The HME retailer also must understand the needs of the consumer base, especially that all-important boomer demographic, Henderson said.

“This is an area where many miss the boat and pigeon hole themselves out of the market,” he said. “Don’t minimize the potential of your market. Recognize that the boomer population is a vast, expanding market that is typified by the common desire to improve their quality of life.”

ADL evolution

From utilitarian beginnings, ADLs have undergone a transformation over the years, Tilghman said.

“The biggest evolution has been the shift from a focus on the purely practical and clinical to the demand for items with function and style, allowing for aging with dignity,” she said.

Of all the innovations that have occurred, the most important developments are those that make a difference in the user’s capabilities, Lawrence said.

“What’s important is that if it’s easy for the patient to use, then it’s a good innovation,” he said.

Demonstrating exactly how these products work and how they can make daily routines easier is an effective marketing tactic, Lawrence said.

“First listen to what your customers are looking for and then lead them in a general direction instead of telling them what they need,” he said. “People feel more comfortable when someone takes the time to help them solve their problem.”