The Aging in Place Economy: Entrepreneurial Opportunities

Published in Home Modifications on May 26, 2021

Originally featured in “VGM Playbook: Growing Your Business in Today’s Environment” by VGM & Associates, Vice President of Live at Home Jim Greatorex lays out how those in the home accessibility industry can grow their business within the aging in place market. You can download the playbook here.

Within the last five years, we have been hearing a lot about Baby Boomers and the aging in place market opportunity. Depending on what you read, there are anywhere from 8,500 to 10,000 people turning 65 every day. One in five people will be over 65 by 2030, and the oldest Baby Boomer turns 75 in 2021.

With all the attention around Baby Boomers and this market, we thought it would be a good idea to research this and correlate it to opportunities for DMEPOS and home access companies. But, let’s set the table first.

What Exactly Does Aging in Place Mean?

According to U.S. Centers for Disease Control and Prevention, aging in place means “the ability to live in one’s own home and community safely, independently, and comfortably, regardless of age, income, or ability level.”

Some other mitigating factors to take into account:

An AARP study in 2018 found that 87% of people over 65 want to age in place.
A study by The Joint Center for Housing Studies by Harvard University states that only 4% of homes in the U.S. have any accommodations for people with mobility deficits.
According to Homes Renewed, only 18% of Boomers will be Medicaid eligible and 67% will have financial means to invest in aging in place, however that looks.
An article from Bernard Schroeder from Forbes states that Oxford University has measured the market for people over 50, the so-called “longevity economy,” to be $7.1 trillion and will grow to $13.5 trillion by 2032.
According to NPR, the current life expectancy for females is 77.8 and males is 75.1. Both dropped a year due to COVID-19 deaths and drug overdoses, but it was an all-time high since records have been kept.
According to the U.S. Census Bureau, the fastest growing population segment in the country is the over 90 segment.
Fall prevention is a huge concern. One in four 65+ Americans fall annually, and 2.8 million were treated in emergency care settings. The approximate cost in 2020 was $67.7 billion to treat the injuries according to the National Council on Aging.

To summarize, we have a longevity revolution in which people overwhelmingly want to, and most can afford to, age in place—as long as it’s safe, comfortable, and they can do what they want to in it. The biggest obstacle this huge market has is that current homes aren’t safe and do not prevent folks in elderhood from falling. Other challenges to this population are being isolated, so integrating in the community and making sure that family and friends are connected and available are needed elements to any aging in place arrangement.

How Can DMEPOS/Home Accessibility Grow Revenue in This Market?

Let’s first look at the obvious low-hanging fruit, the home accessibility industry. Clearly, this industry will grow at a very rapid rate. Our in-house estimation is that the industry—with the increased public awareness and less emphasis on congregated senior housing— will grow by three times what it is today in the next five years and then double again between 2026-2030. But, will we be doing business in this market in 2026 as we do today?

Today, 90% of the business performed by members of VGM Live at Home is reactive in nature. Consumers are getting their homes remodeled because they have had a traumatic health incident and can no longer live in their home without accessibility modifications. This market will remain strong, because most people are not going to install a stairway lift, ramp, vertical platform, or overhead lift unless the need is relevant.

But when people understand the proactive measures that can be made to prevent injuries, they will incorporate those changes into any remodeling they do. So low step or no step showers will be a very fast-growing segment, and grab bars and handrails will grow in demand. Lever door handles, pull-out shelving, residential elevators, and updated brighter lighting will be upgrades that consumers will ask for. In this regard, companies who develop proactive services will see that market demand grow, especially if a federal bill for tax breaks on home safety upgrades can be passed by Congress.

How Can DMEPOS Benefit From the Market?

We should become experts in disease states and think beyond the prescription. So whatever disease state your company services, you should have everything a consumer would need at home for that condition. If a consumer has a diagnosis that will require them to need a hospital bed, instead of offering just what’s covered, you should look for manufacturers who make premium hospital beds and accessories. With lower rates, and mostly low quality DME under the Medicare benefit, many consumers would choose a premium product if given the option. Remember, unlike the generation in front of them, Baby Boomers will spend money on their health, wellness, and comfort. Research all the items they may use and take every opportunity to educate them and expose them to these products.

Manufacturers have options to connect patients with underlying medical conditions to their physicians. There are ways your company can participate in that, and VGM can show you some. You can also look to partner with some of the new home monitoring systems on the market, which can result in recurring monthly revenue, and VGM has vendors in that category also.

Your company caring for patients at home is important, but let’s not forget about the caregivers. Caregivers will be looking for all the help they can get as they care for older family members.

Home deliveries for everything will now also take on a greater importance, so think about needed services and consider finding creative ways to deliver those services with care. To take it one step further, think about virtual concierge services. Elders will need a barrage of services, and they are embracing technology more than most think. If you can offer a service that is delivered virtually or by text or even email, it could be a big advantage. The easier you are to work with, the more the longevity economy consumers will want to do business with you.

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