Product Development for Seniors: A Second Look
A couple of years ago, my colleague Aaron Vance and I launched a national study of products and services for 65+ consumers in the shadow of the Medicare Prescription Drug Improvement and Modernization Act. This Act did much more than add a prescription drug benefit, it also changed reimbursement rates for many other services, creating general tumult for physicians, durable medical equipment companies, and other businesses with products and services for the aging segment of the population. Our goal with the "50 on 65" study was to examine the effects of this change in Medicare on seniors as consumers, and on the companies, non-profit organizations and governmental agencies that provide products and services for older consumers.
- The new Medicare law would create new business opportunities
- Businesses and non-profits would take a fresh look at their products and services for seniors
- Profitable new opportunities would not be in pharmaceuticals or other established large industries, but rather in areas that have been overlooked until now
This led to several articles in national publications including Aging Today. We also presented the findings at the 2007 American Society on Aging annual meeting in Chicago.
In taking a look now to see how we did with our predictions, we can say, without a doubt, that the Act did create new business opportunities. Private Medicare insurance plans added a Part D benefit to their offerings and then aggressively pursued new customers, at times using less than completely ethical means. Medicare recipients were taken aback and complained. In response the federal government issued a 53,000 word set of guidelines governing how the new benefit could be marketed. These new private Medicare plans were not exactly the type of product innovation we were anticipating.
This explosition of new plans, over 100 in some geographic areas, created more havoc rather than reasonable new choice options. Seniors needed more than federal marketing guidelines to figure out how to navigate between plans and choose wisely. In response, one of the first areas of business development was services devoted to comparing various drug benefit plans. These were both online and in the form of printed booklets. Unfortunately, navigating a new bureaucracy is not exactly a product innovation. It’s more of a survival mechanism.
On the plus side, we did see a blossoming of businesses and non-profit enterprises that offering much needed services that fall outside the scope of Medicare. One example of this is geriatric care management. What used to be an informal service handled by a hodgepodge of professionals including hospital discharge managers and county Area Agencies on Aging is now a viable business. Geriatric care managers assist elders and their families in finding non-medical home care, financial advisors, will writers, powers of attorney, family mediation, mental and social enrichment programs, etc. all on a private pay basis.