Opportunity knocks as America ages - aging population provides opportunities for medical care and medical equipment businesses

Nation's Business, August, 1996 by Peter Weaver

The fast-growing elderly population's medical and daily-living needs are creating new niches for small companies.

The relentless "aging of America" is causing a revolutionary change in the health-care industry--a change that's tailor-made for small firms.

As more Americans live longer and the numbers of people in the upper age brackets rise, more of them who require medical attention and need help with the tasks of dally living are also managing to live at home rather than spending costly time in hospitals or facilities such as nursing homes.

And many are doing so with help from small businesses that provide such services as on-site medication monitoring, assistance with meals, housekeeping services, and local transportation.

"The elderly have more money these days to make this happen," says David B. Wolfe, a marketing consultant in Reston, Va., and author of Serving the Ageless Market (McGraw-Hill, $24.95). "Those who don't have the wherewithal," Wolfe says, "may have affluent, middle-aged children who can help out."

Americans over age 65 account for more than 50 percent of the nation's health-care market, and the fastest-growing segment of this market is the 80-plus group. According to the Census Bureau, there are 8.9 million people in the 80-plus group, up from 7.5 million in 1990, and the number is expected to grow to 9.2 million in 2001. These individuals tend to need increasing medical attention and help with the tasks of daily living.

"The demographics are definitely there, and the opportunities for small businesses are unlimited," says Michael Reitz, a division president of Genesis ElderCare Centers, in Kennett Square, Pa. The firm owns and operates home-care and institution-care facilities from New England to Florida.

Choosing A Niche

How do small businesses decide what niche to investigate in this burgeoning market?

"If you have parents or grandparents who have needed special care or might need it now," says Reitz, "ask yourself what service or product you could offer that would make life at home better for them."

Finding ways to help an elderly family member stay at home is proving to be a quick way to find a new-product or newservice niche in the home-health-care industw, which is growing at a rate of 20 percent a year. Industry sales increased to $925 million in 1993 from $805 million in 1990, and they were projected to reach $1.4 billion by 2000, according to research conducted by Darla Gill, a former marketing vice president for a medical research firm who went on to help found a Salt Lake City company in home health care.

Marla Gold, a former critical-care hospital nurse, says, "I took care of my grandparents, and I realized that there was a great need for more-personal, in-home assistance." She and her husband, James, are co-owners of Helping Hand Assisted Living, in Lakeland, Fla. Helping Hand provides elderly clients with light housekeeping, laundry service (including bed linens), home cooking, companionship, medication monitoring (correct timing and dosages), and escort service to doctors' offices, shopping centers, and outings.

What gives her firm "an edge," says Gold, is that "we match personalities." When a customer likes to play cards, cook a gourmet meal, or do flower-pot gardening, the Golds try to select a professional caregiver who enjoys the same activity.

This personal touch has paid off. Helping Hand serves a long list of central Florida institutions that offer home-care services for discharged patients. The Golds have a roster of more than 300 independent-contractor caregivers whom they carefully selected and trained.

A Helpful Handle

Randall D. Block, a biomedical engineer, got his business idea after visiting a grandparent who was having trouble coping with a second knee replacement. "I was watching him trying to get out of a chair with his cane," Block says, "and he couldn't do it. The leverage wasn't right." He saw that the cane needed another handle father down on the shaft.

Block bought an aluminum cane and bolted on another handle, which he had made out of an old bicycle-seat post. He added a bicycle handlebar grip to make the handle more comfortable. "That was product prototype No. 1," Block says, "and my grandfather was able to pop right up out of his chair with it."

Block designed a streamlined version of the original double-handled cane, calling it Super Cane. Three years ago he and Darla Gill formed Momentum Medical Corp., in Salt Lake City.

Block and Gill rounded up private-placement investors and started manufacturing the new cane as well as a Super Walker and a SkyingAlong Caddie for walkers, crutches, and wheelchairs. "Last year we did $500,000 in sales, and this year we hope to hit the $2 million mark," says Gill.

Seated And On A Roll

In a similar entrepreneurial scenario, Robert Brantman designed a sliding seat to help his wife, Beatrice, move between her wheelchair and her bed or get into and out of the family car so she could "get out and around." The seat is on rollers that slide in grooves on a plastic board.