Here to stay, here to thrive
There are plenty of factors on the homecare industry’s side to ensure that it is not only here to stay but also to thrive—demography, patient preference, technology development and disease prevalence.
Reimbursement challenges may stand in the industry’s way, but a future of success and opportunity is waiting for providers on the other side, say stakeholders.
“Even in this tumultuous time, we are still seeing a huge growth in demand,” says Mike Mallaro, CFO of The VGM Group. “Most other industries would love to see this kind of unit growth. They would kill for it.”
We asked Mallaro and other industry stakeholders what makes them most hopeful for the future of home care.
The numbers don’t lie
We’ve all heard the numbers—10,000 baby boomers turn 65 every day. Life expectancy is 78.7 years, up from 74.5 30 years ago. More of them own homes, and that’s where they prefer to stay as they age.
“Demography is destiny,” says Val Halamandaris, president of the National Association for Home Care & Hospice. “The baby boomers will transform every aspect of society. They will be the custodians of all of the wealth.”
Our population is changing, too—in 2011, more babies born were minorities rather than the Caucasian “majority.”
“The future is all about minorities—cultures that tend to reinforce caring for their own, in their homes,” says Halamandaris.
That kind of opportunity is bound to bring competitors nipping at our heels, industry stakeholders say.
“The health systems are looking at this as their opportunity to take charge,” says M&A consultant Don Davis, president of Duckridge Advisors. “They own the doctors, they own the brick-and-mortar hospitals, and now they own the home. If they can’t get cooperation from other vendors, they will find a way to do it themselves.”
Cash to the table
It’s a paradox with opportunity on both sides. Americans are more unhealthy than ever before, with more than one-third of them obese. Meanwhile, spending on dietary supplements, wellness products and pain management is skyrocketing. The dietary supplement industry alone is estimated at $25 billion.
After a lifetime of consumerism, today’s patients bring that same mindset to their healthcare consumption. However, the homecare industry hasn’t quite caught up to that change.
“We are too anchored in the traditional model of selling to the referral source,” says Mallaro.
It takes some creativity, too. Industry veteran Shelly Prial shares the story of a provider who recently recruited members of a local fraternity to stage a Wheelchair Wash Day at his store.
“People say, ‘My patients don’t have money (for cash sales),’” says Jim Greatorex, president of Black Bear Medical. “I say, ‘How many of them have an iPad?’ We have to find the iPad in our industry.”
Paraplegic advocate Joel Solkoff sees remote home monitoring as the next horizon of home care. Climb inside the minds of people like him with disabilities, he says.
“If our local supplier would think of themselves as accessibility experts for all kinds of people with disabilities, it can become a one-stop shop,” says Solkoff.
Reaching the future
So if such a bright future is ahead, how long will it take to get there?
“It’s a waiting game, but not passive waiting,” says Karyn Estrella, executive director of the New England Medical Equipment Dealers Association.
Keep up the lobbying. Advocate for yourself. Encourage your patients to be vocal, Estrella says.
“We are at the tail end of the WWII generation that wouldn’t question their government,” she says. “Baby boomers have more money and are more vocal, and they are going to push back.”
Joel Marx, chairman of Medical Service Company and chairman of AAHomecare, estimates another three to six years of reimbursement challenges before policy tides begin to turn in the homecare industry’s favor.
“There are no reasons home care isn’t here to stay except for the challenge of reimbursement,” he said. “Everything points to the growth of demand, and the question we all work on every day is the supply side of how you pay for it.”