They Make House Calls

May 20, 2010
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The average life expectancy in the United States long has been on the upswing, increasing from 70.8 in 1970 to a projected 78.3 for 2010. And with that rise in life expectancy comes an increase in age-related chronic conditions. Factor in the high cost of medical office visits, and it’s easy to see why home health care products have become big business in the United States. 

The average life expectancy in the United States long has been on the upswing, increasing from 70.8 in 1970 to a projected 78.3 for 2010 (according to data from the U.S. National Center for Health Statistics). And with that rise in life expectancy comes an increase in age-related chronic conditions.

Meanwhile, the American Diabetes Association reports that 23.6 million U.S. children and adults - 7.8 percent of the population - now have diabetes (including type 1 and type 2, as well as undiagnosed cases). And an estimated 74.5 million U.S. adults (20 and older) have high blood pressure, according to the American Heart Association.

Factor in the high cost of medical office visits, and it’s easy to see why home health care products have become big business in the United States. In fact, the U.S. home health care products market - which incorporates everything from diagnostic and monitoring devices to wound care therapy and durable medical equipment - is valued at more than $4.3 billion, according to a January 2009 report from Irvine, Calif.-based Medtech Insight.

“Several macro trends have affected the market,” notes Chrystal Larsen, lead market analyst for Medtech Insight. “Rising rates of obesity have resulted in more and better products designed for bariatric patients, and aging of the population has increased demand for home health products and services.”

Although new competitive Medicare bidding and price constraints are pressuring reimbursement rates and margins for some products, forcing some manufacturers to exit the market, Larsen points to continued strong demand in the durable medical equipment arena. This segment encompasses items ranging from bathroom safety equipment and home care beds to wheelchairs and scooters. But the greatest opportunity for retailers, at least on the private label side, likely is in home health care diagnostic and monitoring devices and kits. Case in point: Data from Chicago-based SymphonyIRI Group Inc. (formerly Information Resources Inc.) show that dollar and unit sales of private label home health care kits skyrocketed 46.6 percent and 26.5 percent, respectively, during the 52 weeks ending Jan. 24 (supermarkets, drugstores and mass merchandisers, excluding Walmart).

“There’s been just a wholesale change in terms of a rush to private label,” says Mark Bufford, vice president of sales and marketing for Microlife USA, a Dunedin, Fla.-based supplier of home diagnostics product solutions. “For the most part, in the categories that we’re dealing in, blood pressure monitors and thermometers, the consumer is making their choice based on where they shop, and brand continues to play less and less of a role.”

Value, of course, is important in the private label purchase decisions. (And any effort the retailer puts in to make the category easier to shop certainly helps, too.) But what also plays a crucial role, Bufford says, is the trust consumers have in a particular retailer. The greater that trust, the greater consumers’ tendency to fill their home health care needs with the retailer’s own products.

Although Bufford encourages retailers to expand their private label offerings in the home health care segment - and notes that his company continues to grow its private label program to keep up - he cautions against complete removal of national brand items.

“There’s certainly a shift toward less branded,” he says. “It just depends on the category. When you get into thermometry, for example, you can have branded just at the upper end. But you need an ear thermometer, a stick thermometer, a forehead thermometer - you certainly need at least one branded option in every segment within a category.” PLB

Private Label a Bright Spot in First Aid

Covering the more mundane side of home health care - those everyday sprains and scratches - the first aid segment saw little in terms of dollar sales growth during the 52 weeks ending Feb. 21, according to data from Chicago-based SymphonyIRI Group Inc. (formerly Information Resources Inc.). But private label products fared much better here than the overall category, with first aid accessories posting a 13.3 percent rise in dollar sales and first aid treatment recording a 3.2 percent increase (supermarkets, drugstores and mass merchandisers, excluding Walmart). 

In its April 2009 “Health and Wellbeing - U.S.” market reforecast, Mintel International Group, Chicago, notes that the strong presence of private label within the category will play a key role in the years to come, “as consumers shift to less-expensive products.” Mintel also sees the potential for consumer cutbacks in “non-essential” first aid products and a “return-to-basics mentality.” To get the most out of the category, Mintel recommends pairing treatments with accessories (e.g., antibiotic creams with bandages), as well as altering package sizes to fit various consumer demographics.

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