The Healthcare Industry in 2017 at a Glance
With the still simmering public debate over the benefits and detriments of Obamacare - and over its possible reversal - it gets easy to let our eyes glaze over and wait for the smoke to clear. But hiding behind the controversy are health-care industry trends that offer tremendous business opportunities for entrepreneurs - no matter which way the political winds blow.
Health Care: What are You Good For?
Health care can be broadly defined as providing medical products, equipment and services to protect, extend, or increase the quality of patients’ lives. Increasingly, the industry encompasses a network of interrelated providers with different areas of expertise, all coordinated to varying degrees to keep us healthy.
The Global Industry Classification Standard (GICS) breaks the space into two broad subgroups:
Health Care Equipment and Services
Pharmaceuticals, Biotechnology and Life Sciences
But that hardly tells the whole story. Everything from the physician to the manufacturer of the stethoscope to the x-ray technician play a part. The pharmacist writing prescriptions and the firm databasing medical records all contribute to a rather complex health care system.
The healthcare industry is also evolving, and not just through government intervention. More and more, health care is taught as a way of life, rather than as a crisis to be dealt with. Annual doctor visits are increasing and more employers are supporting healthy lifestyles through incentive programs (like gym-membership reimbursement) and employee education initiatives. Consumers, meanwhile, are looking to eat better and exercise more. To meet demand, green industry franchise opportunities have sprung up promoting organic restaurant options and sustainable food practices, while modern fitness franchises have evolved beyond traditional weight rooms and cardio equipment and now offer wellness activities like yoga, pilates, and kickboxing.
Clearly, opportunity is being created both by changes in the healthcare industry itself and by changes in our own beliefs about well-being. The result is rising spending on health care products and services of all kinds. Entrepreneurs have responded, finding better solutions to old problems and launching new businesses to meet the needs of an aging but increasingly health-conscious population.
Health care spending typically accounts for more than 10% of GDP in developed nations, and in the US the figure is even higher: 17.5% in 2014. In that same year, over $9,500 was spent per person in the United States, totalling $3 trillion! And spending is increasing - US health care spending increased 5.3% in 2014 after 2.9% growth in 2013. Coverage expansion under Obamacare is driving much of this growth.
Sweatin' to the Oldies
Part of the increase in health care spending is due to our aging population. In 2011, baby boomers started turning 65 in mass numbers. For the next 20 years, 10,000 individuals will turn 65 every day! By 2030, the percentage of our population over the former retirement age will have grown from 13% to at least 18%. And improved medical care and healthier habits are helping more of us live longer. With average life expectancies now approaching 80 years, the healthcare industry has many reasons to expand!
But spending is still largely tied to treatment rather than prevention. Despite increased awareness, more than ⅔ of Americans are reported as overweight, and half of those as obese. Less than 20% of youths and adults meet or exceed exercise guidelines recognized by the President’s Council on Fitness, Sports & Nutrition. Sedentary lifestyles and overeating are known to increase the risk of diabetes, and diagnoses of the disease are predictably on the rise. More people are hospitalized for cardiovascular disease than nearly anything else, yet such simple precautions as reducing blood pressure and cholesterol continue to be ignored by large components of the population. In simple terms, despite knowing how to live right, many of us still have a long road to travel, and that means the demand for health care services will only continue to increase.
Health Care Franchise Opportunities
While health care reform has been hotly debated, stalled, stymied, and may even be repealed on Capitol Hill, rising medical and administrative costs continue to be addressed at the business level, as modern service models increase efficiency and advances in technology create a system that’s both smarter and faster.
Franchise businesses, which specialize in efficient systems and standardized processes, have taken advantage of these changes, often leading the way in implementing new service delivery methods and technologies. Put simply, entrepreneurs are recognizing the shift toward a more modern and holistic healthcare industry, and profitable franchise opportunities have emerged to cover every angle.
There are many health care technology and process improvement franchise examples: Online record-keeping has begun to make care providers more efficient, while web-based consultations have helped to increase convenience and reduce costs for the consumer. Medical and dental equipment repair technicians fix and maintain x-ray machines and EKG machines, helping hospitals and imaging centers run their equipment for longer and at reduced cost. Mobile lab services and drug testing operations bring testing to the consumer (and preclude the need for expensive overhead costs for rent). Medical record maintenance innovations are particularly interesting, as web and mobile technology advancements make it easier for doctors to access, update, and share patients’ case histories and prescription drug details, enhancing diagnoses while reducing the likelihood of complications.
Franchising has played a major role in the expansion of health care services as well: Focused primarily on the aging population, home health care franchise opportunities include in-home nursing and day care for elders. Entrepreneurs are also building handicap ramps and delivering prescriptions. Health and wellness franchises, meanwhile, have grown to include any number of gym and fitness centers, weight loss systems (such as Medi-Weightloss Clinic and Bouari Clinic), and spa and beauty franchises (such as Faces365 Spa, MiniLuxe, LaVida Massage, and Evolution Hair Centers). These franchises can expect strong growth as parents, corporations, and governments continue to seek ways to reduce long-term health care costs through stress reduction and overall healthier living.
Here are just a few examples of the opportunities available in the healthcare industry:
Home Health Care
Elder Day Care
Medical / Dental Equipment Repair
Gyms / Studios
Weight Loss centers
Making Money in Health Care: You Don’t Need to be a Doctor Anymore!
Change always brings opportunity, and the healthcare industry is no different. Health care franchise opportunities will continue to flourish as entrepreneurs identify these trends and devise new and innovative ways to profit from this massive industry.
The US has an aging population with horrible health habits, a desire to live forever, and the spending power to pursue increasingly costly health care goals. Meanwhile, the current generation of consumers continues to expand the definition of health care to include a broad array of medical and non-medical products and services, from health food and organic food offerings, to sustainable gardening, to modern fitness and wellness centers, to specialized diet and nutrition instruction, to the myriad support services needed to manage billing, insurance, and other considerations in an increasingly complex system.
The bottom line is that an aging and unhealthy population is burdening the healthcare system, while a growing focus on lifestyle is expanding what “health care” itself means. The combination of these factors means increased demand, spending, and opportunity for health care product and service businesses large and small -- and countless opportunities for entrepreneurs ready to launch their venture in this industry.
Matt Sena is a writer and researcher, a co-founder, a former portfolio manager, a rider and a dad. He earned his MBA in Finance from Kellstadt Graduate School of Business while working at Goldman, Sachs & Co.