The Power of the Group: Expanding From B2B to B2C With an Ecommerce Marketplace
Statistics about the aging of Americans will give anyone grey hair: 10,000 Baby Boomers turn 65 every day. By 2060, those 65 and older are projected to make up nearly one-quarter of the population. The number of people 85 years and older is expected to nearly double by 2035 (from 6.4 million to 11.8 million) and nearly triple by 2060 (to 19 million people) ...
Implications abound for the U.S. workforce, economy and health system. Regarding the latter, an AARP survey found that 76% of adults age 50 and over want to stay in their homes and communities as they age. The U.S. “home care provider” market, measured by revenue, totaled $96 billion in 2021, according to IBISWorld, and is expected to grow to $225 billion by 2024. Plus, COVID demonstrated how effectively telehealth incorporates virtual medical visits into home care, a trend expected to grow.
Those last statistics about the home care market are deceiving. It is difficult to find financial data that includes not just the home health industry - agencies, providers, products - but also spending by individuals on home health needs and supplies.
Aging in place is expensive. According to Paying for Senior Care, typical monthly spending on adult diapers and other incontinence supplies runs between $80 to $300 a month. Diabetic supplies vary with the type of diabetes but most seniors spend between $280 to $500 a month. Ostomy supply spending averages between $75 to $125 a month. Then you have walkers, grab bars, nutrition supplements, etc. Traditional Medicare does not cover many home health supplies, such as incontinence supplies.
We should also add the significant financial costs for the millions of Americans supporting and providing care to family members in the home. Currently, 53 million family members provide most of the care that vulnerable seniors and people with disabilities require — without being paid and often at significant personal cost. According to AARP, family caregivers on average spend approximately $7,400 out of pocket on that care and many miss work, work fewer hours, or leave the workforce entirely to provide care.
Beyond finances, physical, social and psychological costs can be significant for older adults aging at home and for those caring for them.
Pressing Need Prompts Leap From B2B to B2C
Recently, Pandion Optimization Alliance launched a direct-to-consumer venture to help older adults and the disabled living at home and their caregivers. To understand why Pandion advanced from B2B (business to business) and added B2C (business to consumer), it helps to review a bit of history. History also illustrates why we are uniquely positioned to effectively stand up this marketplace and why we are passionate about the initiative.
Group purchasing organizations (GPOs) originated in the hospital industry in 1910 when the Hospital Bureau of New York in New York City formed to get better deals on laundry services.
In 1925, hospital administrators in the greater Rochester region banded together to aggregate purchasing power and formed the Rochester Regional Hospital Association Joint Venture Corporation, now Pandion Optimization Alliance.
There were only 10 healthcare GPOs in existence until the 1960s when, with the advent of Medicare and Medicaid, the number increased to 40 by 1974 and now there are a few hundred, although the industry is consolidating. Also, healthcare GPOs now work with many other industries and other industries have their own GPOs. Thousands of businesses benefit from market leverage and extraordinary expertise provided by GPOs to members
Consumers have been shut out of this advantage until recently. Ecommerce has brought them a bit of group purchasing power. While they cannot band together to demand better prices, they can access and compare sellers online, easily shop for better deals, and learn about products, performance and quality from fellow consumers.
But it is not that simple for the growing number of people shopping for medical supplies and equipment, especially since healthcare supplies can be complex, highly specific, and expensive.
Pandion has almost a century of knowledge and expertise about healthcare supplies and equipment, manufacturers and manufacturing, supply chain and sourcing, and distribution and delivery. In addition to negotiating best prices, Pandion’s GPO mission has always been to research and find best-in-class products for the hospital and other business members we serve. We have cultivated meaningful relationships with vendors and business throughout the healthcare supply space to ensure we can deliver on that mission.
Competence and Customer Service
It occurred to me about 18 months ago that we should put that leverage and expertise to work for home-bound consumers and their caregivers. Last September, we launched Pandion Direct, an ecommerce enterprise with the same mission -- to provide seniors, the disabled, caregivers, and all consumers access to best-in-class, fully vetted health and personal care products from our longstanding vendor and supplier partners through easy online ordering.
Our goal is to share the vast knowledge we have in this area while providing outstanding customer service to those who may be stressed by healthcare or caregiver challenges. We offer the same features of many ecommerce sites (subscribe and save, two-day delivery, free delivery with $49 purchase, no-hassle returns), but add a customer care team focused on delivering above and beyond customer expectations.
Apparently, consumers welcome this approach. We have seen significant growth month over month since we launched the Pandion Direct marketplace. It demonstrates there is a real need for personalized customer service in this area and that people appreciate that an experienced, informed human, as opposed to an automated system, takes the time to discuss their healthcare needs, review products and options, and help them select what works best for them.
It is unfortunate that America’s healthcare system is so tremendously deficient when it comes to elder care: all options are excessively expensive, low pay for long-term care workers, lack of support for home care … We know America is greying quickly and, with no significant policy change on the horizon, many more Americans will be aging at home with the tremendous stress and strain that creates for them and their caregivers. Pandion hopes to help ease their burden just a little bit with Pandion Direct.