Healthcare Roadmap: Are you Headed in the Right Direction?
Healthcare Roadmap: Are you Headed in the Right Direction?
We have seen many changes in the Healthcare textile industry in the last few years. Like many in the industry, you may be wondering what this means for you. Both a boom in the aging population and legislative changes are contributing to what could mean record growth for your organization. In order to steer your company in the right direction, you must truly understand what is happening within the healthcare industry and how to utilize this information to grow your business.
Boom in Aging Population
The U.S. has seen a constant increase in the older population—persons 65 years or older—since 1900. Those aged 65 years or older has tripled since 1900 from four percent to 13 percent of the U.S. population or 40 million people in 2010.1 The U.S Census Bureau projects those 85 years or older will triple in the next ten years, reaching 19 million people by 2020. This group could grow at an even faster rate as some researchers predict that death rates will decline more rapidly than represented in projections due to health advances.
During 2010 to 2030, the number of older Americans is projected to increase dramatically as a result of those born between 1946 thru 1964, known as the “baby boomers” joining the older population. According to a 2011 trustees report from the Center for Medicare and Medicaid Services, “baby boomers” are reaching Medicare’s eligible age for benefits at the rate of 10,000 a day.2 By 2030, the older population is projected to reach 72 million, representing nearly 20 percent of the total U.S. population.3
The aging population will continue to grow, but the rate is projected to slow down after 2030 and remain at an unwavering 20 percent of the U.S. population thru 2050.
Surge in Non-Acute Care
Recent studies show that over the next five to seven years, acute healthcare opportunities will grow at steady rates, but with no major increases anticipated. However, the non-acute market is expected to surge, with growth rates in double digits — expected to be at least 12 to 15 percent. Baby boomers, as well as non-baby boomers, are now taking advantage of the advances in medicine and surgery.
A specific area of non-acute care that is expected to experience steady growth over the next few years is the long-term care market. This growth can be attributed to the boom in the aging population as those 65 years and older currently represent 13 percent of the U.S. population or about one in every eight Americans. According to Kalorama Information, total revenue for the long-term care market is projected to increase to $353.5 billion in 2015 from the estimated $289.5 billion in 2012.4
Changes in the national healthcare policy landscape are also playing a huge role in the surge of non-acute care. Acute facilities (hospitals) are pushing patients to non-acute facilities (outpatient) in an effort to free up valuable space and trim growing costs. These high costs are attributed to patients staying extended periods of time in acute facilities, known as “permanent patients.”
The Affordable Care Act
Championed by President Obama and enacted by Congress in 2010, the Affordable Care Act is intended to provide more affordable, quality and comprehensive healthcare and insurance coverage for Americans. A key facet affected by these changes is healthcare careers.
As healthcare becomes more attainable for Americans, we will see an increased need for healthcare employees in clinical and non-clinical roles. “The bulk of the Act involves access to care, and insurance coverage, so anyone in a hands-on caregiving role is going to be in huge demand,” says Susan Odegaard Turner, career counselor and author of “Health Care Career Guide.” Healthcare roles that are expected to benefit from the Act include hands-on caregiving roles like medical assistant, physical therapy assistant, diagnostic medical sonographer, pharmacy technician and health information technician.5
Roadmap for the Future – Driving Growth
These changes within the healthcare industry will directly affect various aspects of the healthcare textile industry, including product selections, target markets and customer strategies. Your overall healthcare strategy should be examined and revised to assure that your company is structured for growth.
- Identify Strategies
The healthcare industry is flooded with competitors. Rather than diving in head first you should identify key strategies in order to grow your business. As demonstrated in the book “Blue Ocean Strategy: How to Created Uncontested Market Space,” most companies have a “red ocean” strategy 6, meaning they try to outperform their rivals to grab a greater share of existing demand. As the market space gets crowded, prospects for profits and growth are reduced. Products become commodities, and cutthroat competition turns the ocean blood-red.
In contrast, consider building your business plan based on a “blue ocean” strategy. This is untapped market space where you can create demand, making your competitors irrelevant. Blue ocean strategies can even be created from within red ocean strategies by expanding existing industry boundaries. This is known as value innovation. A blue ocean strategy for the long-term market would be targeting the non-clinical departments, such as patient transportation/valet, maintenance, food service or security, for business. A long-term care chain, for instance, should appreciate the fact that they would be able to outfit the entire staff through one source.
- Develop Targets and Value Propositions
With the healthcare industry encompassing numerous sub-markets, it is best to develop specific target-markets rather than attempting to penetrate the industry as a whole. A key determinant in selecting targets should be the sub-markets growth potential. For instance, the long-term care market is poised for growth as the aging population is living longer and therefore increasing in size.
After determining key healthcare targets, value propositions should be created for each target market. A value proposition should be personalized to the needs of the market and highlight the benefits your company can provide to better their organization. If you were creating a value proposition for long-term care, a key touch point would be how your products would improve the resident experience as security and employee recognition is important in this environment.
Brand awareness is critical in the healthcare industry where brand representation can enhance the resident experience and the image of a facility. This is more important than ever because residents/patients and their families are consumers that truly have a choice of where to receive their medical care.
Uniforms play a direct role in the patient experience as a strong, branded program can create a professional look that is appeasing to patients. A branded uniform program also assists patients in identifying their caregivers, thus giving them a better sense of security. Additionally, research shows that a patient responds more positively to someone in a uniform, and therefore is more willing to have open communication – which is critical in a medical setting.
A uniform program also ensures the healthcare facility’s brand is projected consistently by all uniformed employees. A 2011 study on the effectiveness of uniforms found a majority of companies surveyed said that outfitting their employees in corporate branded uniforms outperforms internet, newspaper, TV, radio and billboard advertising by margins of up to nine to one.7
- Sales Organization Realignment
With the healthcare industry encompassing a variety of unique sub-markets, it is essential to examine your sales organization for realignment to confirm that each sub-market is addressed adequately. By strategically placing and designating your sales team members to specific sub-markets, your company will be aligned to penetrate the most healthcare business.
- Market and Product Training
Your sales organization must be knowledgeable in all of the apparel products needed in healthcare facilities, as well as understand the nuances within the healthcare industry. For instance, a good topic to understand is how quality textiles matter to the booming long-term population. An article from American Laundry News recently said, “Residents and their family members are becoming increasingly discerning about the level of services provided and are turning a keen eye to the appearance and cleanliness—or lack thereof—of linens and textiles.”8
Beyond bettering your company’s capabilities, laundries are now looking to suppliers for expertise in the field. Suppliers can help laundries grow their business by training their internal staff on the key features and benefits of your products, as well as how to address and successfully sell to companies within the varying healthcare sub-markets.
As we continue to see changes in population trends and the national healthcare policy landscape, organizations within the healthcare textile industry must further educate their internal team members and adjust healthcare business tactics accordingly. This will poise your organization for what could be record growth in the next few years.
1. Administration On Aging, A Profile of Older Americans: 2011
2. American Enterprise Institute for Public Policy Research (2013, April 23) Five Facts from the 2011 Medicare Trustees Report
3. Federal Interagency Forum on Aging Related Statistics. Retrieved from www.agingstats.gov
4. Kalorama Information, Retrieved from www.americanlaundrynews.com OPL 101: Long-Term Care Laundry Solutions, (2013, January 13)
5. Hirt, A.H. (2013, January) How Obamacare Is Changing Health Care Careers Yahoo! Education
6. W.Chan Kim & R.Mauborgne (2005) Blue Ocean Strategy : How To Create Uncontested Market Space
7. Poojary, A.K., (2011, February) Are Uniforms an Effective Marketing Tool? Sawyer Business School, Suffolk University
8. Dejesus, M. (2013 January 29) OPL 101: Long-Term Care Laundry Solutions American Laundry News