The term homecare refers to the provision of medical aids to patients either at home or in nursing facilities and senior citizens’ homes. The provision of these products is dependent on product- and patient-specific services. Thus, homecare services are not to be confused with those of outpatient care services which normally provide basic and treatment care. In Germany, there are currently around six million patients receiving homecare services, with wound treatment and compression therapy (decubitus prophylaxis) as well as enteral and parenteral nutrition representing the largest areas. Other areas within the homecare market include treatment of incontinence, ostomy, ventilation, tracheostoma and infusion therapy. Homecare supplies can be provided by pharmacies, medical supply stores, manufacturers of medical appliances, specialized medical retailers and prequalified homecare providers.
The homecare market is growing steadily
Since 2013, the German homecare market has been growing by around 2 percent which represents moderate growth. As a result, its market volume will increase from 2,458 million euros in 2013 to around 2,954 million euros in 2023. It is striking that the homecare sector exhibits significantly greater market growth than all other traditional supply sectors in the medical aids trade. In this context, wound care is one of the fastest-growing supply areas. In 2015, the wound care service area in the homecare market accounted for EUR 249 million, and five years later the estimated market volume was already EUR 347 million. By 2025, experts predict an increase by a further 140 million euros to 487 million euros. By contrast, the ostomy care sector is declining. In 2015, growth in the manufacturer market still amounted to 184 million euros; in 2020, it fell to 175 million. All relevant market participants report rising sales figures, but also stagnating to declining sales in this product segment. The reason for this are decreasing reimbursement rates and thus increasing price pressure on manufacturers of ostomy articles by the care providers in the German market. According to Summary Seven’s calculations, the ostomy market will decline by an average of more than 1.1 percent per year until 2023.
SHI expenditure in the reimbursement market
Expenditure by statutory health insurance for reimbursement of medical aids amounted to 9.3 billion euros in 2020, and by private health insurance to 1.1 billion euros. Out of the total volume of €10.4 billion, 2.9 billion euros can be attributed to the relatively young area of homecare provision while 3.1 billion euros account for traditional specialist providers. Reimbursement is handled between the provider and the health insurance companies whereby the services are tied to the medical aid and cannot be provided and billed separately. Apart from a few exceptions for incontinence aids, ostomy articles and aids for compression therapy, there is no nationwide price fixing.
Market and competitive consolidations continue
In terms of the competitive situation, it can be observed that nationwide homecare providers are growing at a much faster rate of around 5 percent CAGR) than regional homecare providers and pharmacies, which may even have to face revenue losses in the future. The strongest companies in the homecare market currently include GHD, PubliCare/KMT, Coloplast-Homecare, B. Braun Gesundheitsservice GmbH and Mediq. Another big player is Fresenius Kabi, which also has an international presence. This ratio has remained unchanged for several years which is why the homecare market can be regarded as consolidated. However, developments in the market system suggest that a shift in market shares and the competitive situation is likely to happen in the future.
Impact of start-ups on the market systematics
These developments include particularly the megatrends digitization (artificial intelligence, for example), big data and process optimization, which are increasingly being taken up by start-ups and implemented in the market in the form of new, disruptive business models. For example, many start-ups focus on making healthcare processes more efficient and digital to give nurses and care takers more time to spend with the patient. Similarly, manual processes performed by humans, such as call center support, can be reduced using chatbots, algorithms and the like. Therefore, companies with weak technological infrastructure and high staffing levels will be forced out of the market in the long term. However, established companies will be challenged equally by analyzing their workflows and processes in order to survive on the market.