Delivering Prevention and Wellness under ACA

The Affordable Care Act moves into high gear Oct 1. with the ability for the uninsured to enroll in federal and state health insurance exchanges. For the first time, a one-stop competitive marketplace for health insurance will exist. No longer will pre-existing conditions be a reason for denial of coverage, and lifetime caps on benefits will be a thing of the past. Government subsidies will reduce the premium costs for many.

The 2010 Census estimates there are 48 million uninsured, which is 15 percent of the population. Interestingly, this number is roughly the same number that IHRSA estimates as being healthclub members (50 million). I have to wonder how many uninsured are using their healthcare dollars for membership fees.

With the Act’s emphasis on prevention and wellness, it will be interesting to see what impact it will have on the health and fitness industry and especially, medical fitness centers. I believe it could be huge and that is the reason that clubs, medical facilities, and Ys should be taking the lead in promoting and educating the public and their members about their state’s enrollment process. I would even go so far, as to suggest we offer a free month’s membership incentive to anyone who enrolls in a health-insurance exchange and who provides appropriate documentation as to eligibility. Also, the health and fitness industry should be using its marketing clout to run public service announcements in the local media. Many states have decided not to participate providing a need for greater local activism.

In my opinion, these new enrollees will be a game changer for our industry. For many with chronic health issues, there will be a new emphasis on managing their health. We should be part of the new delivery mechanism of insurers, physicians and health systems. With so many new consumers in the system, communicating and managing health for many will create new opportunities and a new sub-industry. The health and fitness industry must be part of “getting the message out” if its 30,000-plus locations are to have a place at the table.


Healthiest Employer, W Pa Designation

Are you living your mission? If you’re in the wellness center management business, and not extending those services to your employees, are you really in the wellness business? One of our clients, Cameron Wellness Center, recently was named one of the Pittsburgh Business Times’ 2013 Healthiest Employers of Western Pennsylvania and the category winner for companies with 100-499 employees. The employee wellness program we designed, ACE, has been refined over many years, but has always included core components such as a complimentary membership, discounts on wellness services and incentives to complete the program.

This award is quite an achievement for our company, as it fit hand-in-glove with our customer philosophy: be happy, be fit and live well. During the last few years, we incorporated a Know Your Numbers campaign for biometrics that emphasized a primary care physician visit and an annual walking challenge. We started with manual tracking for points and activities, but recently added an online platform through UPMC MyHealth, the group’s healthcare provider. Working with UPMC, we offered the best of our existing ACE program combined with online tools and tracking.

By modeling for employees what is offered through the Center, we encourage our employees to take an integrated, holistic approach to their health. They can take advantage of all the tools on site to help them meet their personal goals. The benefits of membership include a complimentary lifestyle consultation with an exercise physiologist and a personal training session, exercise equipment group orientations and a nutritional consultation with a registered dietitian. Memberships are complimentary to full-time staff, and at a significant discount to part-time employees.

In this marketplace, a complimentary membership also has been an incredibly useful tool in recruiting hard-to-fill positions. It also becomes a successful cross-referral tool as team members from various departments become acquainted with the core services of the Wellness Center.

Prevention and Accountable Care Organizations

In 2012, Medicare is scheduled to implement physician payment reforms to enhance primary care and encourage the formation of Accountable Care Organizations that will manage sizable groups of Medicare beneficiaries’ lives. These ACOs will also include hospitals with fees based upon a formula of cost reductions and quality care results. This will be quite a change from the traditional fee-for-service payment model. Once Medicare gets this ball rolling, the private insurance companies will quickly do the same.

Prevention including annual medical exams, screenings and other diagnostic tests are expected to become routine for everyone in these ACOs by 2014. What is unclear is the role of fitness, nutrition and wellness services in this business model and who is best able to provide these services and at what cost. While physicians clearly understand the benefits of fitness, nutrition and wellness services to improve their patient lives and reduce their demands on the system, current legislation fails to specify a role for this important aspect of wellbeing in the new healthcare business model.

Consumers value what they pay for and clearly the explosion of the health and fitness industry over the last two decades speaks for itself. What has not happened is the focus on improving community health through a wide-scale effort including all the major stakeholders: schools, businesses, healthcare and public institutions. If society is really going to reduce our soaring healthcare costs while improving health, prevention in all forms must be the front-line defense.

For most of my professional career, I have been involved with shaping a new direction for healthcare, which includes medical fitness and wellness as part of hospital services. During those decades, I have experienced the consolidation of healthcare through hospital mergers, physician acquisition and the rapid expansion into convenient ambulatory care centers. The medical fitness industry has continued to grow during this period.

However, for the next generation of medical fitness services to be embraced, these services will need to be:

  • Covered by private health insurance and Medicare/Medicaid
  • Premium reduction and tax incentives for companies that incorporate these programs into their benefit programs

In addition, there will need to be financial incentives for building ACOs and for the physicians and hospitals that participate. Today’s model is one of reimbursement for disease – not financial reward for health. Without a well-planned transition, it will be initially too costly to make this transition.


I believe that every ACO will need a network of medically affiliated fitness and wellness centers with certified and trained teams delivering the latest in exercise and nutrition science in environments that also combine rehabilitation and conditioning services. These centers will have to have a complicated business model based upon a capitated annual rate as well as market-driven ancillary businesses. They will be a lot different from the current landscape of small, local fitness clubs and the Ys based upon their complex staff mix, policies and processes, integrated communications strategies and branding. They will

Ten Good Reasons Why Your Community needs a MedFit Wellness Center

1. Provide a channel to an enormous market of health-seeking Baby Boomers.
• By 2005, 1 out of 2 American adults will be over the age of 55.
• Four out of 10 in that group are willing to pay out-of-pocket to maintain their health and physical vibrancy.

2. Expand the visibility, scope and outreach of outpatient programs and affiliated physicians.
• Medical fitness center members represent a huge market of potential users of additional health-related services.
• Locating outpatient programs and physicians on-site provides natural and easy access to these services as required.

3. Provide a new source of operating income.
• Well-managed medical fitness centers consistently generate 15% or more of new net operating income for the general operating fund of the hospital.
• Typically, the money is used to further expand preventive initiatives in the community.

4. Utilize philanthropic donations to create a unique community asset.
• Although a medical fitness center consists of bricks and mortar, it is energetically human in scope and services.
• It offers a satisfying philanthropic opportunity to people interested in vigorous initiatives in community health.

5. Provide a mechanism to enter the integrative medicine marketplace.
• A medical fitness center provides an extension of the wellness continuum and can reflect or extend your institution’s philosophy.
• The center offers a natural, comfortable environment for introducing the professional services of integrative medicine practitioners and also can easily encompass licensed MD medical techniques.

6. Provide a more compassionate reality to your wellness mission.
• Typically, hospitals focus on wellness programming to improve community health, but frequently lack a centralized facility in which to provide these services.
• A fitness center offers a bright, inviting, health-focused environment in which to pursue wellness-related activities.

7. Financially underwrite satellite ambulatory care campus real estate.
• Virtually all healthcare providers struggle with how to operate effective outreach programs to expand and solidify their base.
• Fitness centers produce income to support the development of other synergistic real estate projects, such as senior housing and physician offices.

8. Definitively differentiate your organization from the competition.
• Only 500-600 local hospitals and healthcare systems across the country offer the advantage of medical fitness centers.
• Developing and building a center speaks volumes about your commitment to improving community health.

9. Expand social entrepreneurship role into other community health ventures.
• A successful fitness center project strengthens and enhances entrepreneurial interest and skills at the sponsoring institution.
• An enthusiastic entrepreneurial attitude plays an extremely valuable role in terms of future business growth, even in healthcare.

10. Create healthier patients for the future.
• Medical fitness centers help keep people healthier as they age.
• When these people eventually utilize healthcare services, they generally will require shorter hospital stays and have better outcomes, improving hospital cost-effectiveness.

Selecting a Medical Fitness or Wellness Facility Feasibility Consultant

With the medical fitness industry approaching its 40th anniversary and a reported 1,100 facilities (there are more than 12,000+ commercial clubs), it’s important to understand the role of consultants in project development, operations and marketing. The primary benefits often associated with hiring a consultant are objectivity, experience and effectiveness in understanding and translating client needs into workable solutions that can achieve results. Consultants also should have a record of saying “This might not work.” The consultant’s track record in correctly analyzing key market factors and then translating that information into facility demand estimates is critical in determining optimum solutions.

Besides the consultant’s proprietary analytical approach and ability to work with a client, other important selection criteria are the diversity of the team, communications and training skills, references and what I simply call, fit. Fit relates to the personality and style of the team and its initial client interactions. A great consulting engagement is when the client values the team and its work as an extension of his or her own office.

What other attributes should the consultant bring? Confidentiality and guaranteed client satisfaction are two big ones as well as having controllable conflicting interests. This is much harder today across all industries as businesses have grown and diversified or gone out of business. With many consultants coming from the management, architectural and construction industries, it some times becomes difficult to control conflicts without full disclosure and strong client involvement during the engagement process. Real world solutions and a transparent process are keys to bridging some of these controllable conflicts.

Your responsibility as a client is to do your homework before engaging the consultant. Define the scope of the engagement and the desired outcomes. Contact clients who implemented suggestions and find out the success and failures so that you know what to avoid and determine the ability of the consultant to stay within budget and to deliver the project on time. Ultimately it’s your responsibility to manage the consultant engagement so that the work product meets the scope of services outlined at the beginning of the contract.

Just because you’ve hired a consultant does not mean you can distance yourself from the project. Stay involved with the consultant or assign a point person from your staff so that the final results are customized to your needs, and not a retread of the consultant’s past work.

Chronic Care Management

Check out this company. Recently in the Science Section of The New York Times, an article on chronic care management got my attention because of this company, Health Quality Partners, and the success they’ve had in lowering Medicare patients’ healthcare costs. (The rest of the article wasn’t too optimistic.) Medical Fitness Centers ought to be doing this, if they’re not already. We have a similar approach that we’ve used with some of our clients.

Tribal Wellness Centers

During the last 20 years Native American tribal organizations have benefited from their sovereign nation status developing new businesses that have improved their local economy and members’ well-being. Although tribal gaming has been a major economic development tool, these organizations have also reinvested gaming profits in other social, education and health-related projects. Some have built wellness centers, which are providing medical, fitness and recreational services.

While much of this development has been in lower-populated reservations in the west and upper mid-west, many newer tribal gaming operations are moving into more competitive locations in and around major metro markets. Following the Las Vegas casino model of mixed-use properties, these new tribal destinations are smaller inclusive resorts with entertainment, accommodations, services and gaming. Some even have day spa services, but none have the branded lifestyle/wellness franchise of the Canyon Ranch at the Palazzo in Las Vegas.

Newer tribal developments in more dense metro and vacation-oriented locations have the markets for a brand of medically integrated wellness centers similar to those that our company has created for community hospitals during the last 20 years. These new centers would be a more sophisticated hybrid providing a comprehensive range of healthy living products and services, including medical care, family counseling, education, lifestyle coaching, fitness spaces and nutritional services. Customers would be expected to frequent the wellness center several times during their resort visit, leaving with at-home maintenance programs. The larger numbers of regular users living within 10-15 miles would be attracted to the quality of services, information and facilities provided at affordable rates.

These new wellness center facilities would be owned by the tribal organizations, and leased to a contractor for management, operations and communications. Facility size would vary based upon expected demand and programs, but would range between 50-70,000 SF, and cost from $15M to $20M. Facility revenues would be a blend of membership and fee-for-service charges with tiers based on the incomes of tribal and non-tribal customers. The federal Indian Health Services program may support medical and preventive services provided to tribal members.

We believe that enhanced programming, services and structured interventions at reservation-based wellness centers may improve some of the health indicators for tribal members, but not all. The primary business goals are to capitalize on new destinations to diversify customer’s experience as well as to provide a much-needed service for health-conscious adults living nearby. Native American healing arts has a favorable marketing perception based upon a sense of spirituality and application of homeopathic remedies, some of which have become a key component of today’s alternative medicine. All of these unique aspects would be carefully incorporated into a new brand of medically integrated wellness and healing arts centers for tribal gaming developments.

Based on our experience with hospital-owned Wellness Centers and their host communities, these unique facilities are perceived as real assets providing much needed beneficial services. As gaming faces concerted opposition at all levels, the public relations benefit of providing enhanced wellness services to the public may become a pivotal advantage. It would also provide a source of positive cash flow for the sponsoring tribal organization and employment opportunities for younger post-college workers.

Benefits of Community College Wellness Facilities

In this recessionary climate, new university recreation/athletic facilities will need to depend upon a broader mix of customers beyond students and faculty and embrace the wellness needs of local residents to be economically prudent.

Additionally, the opportunity to provide a facility for corporate wellness programs would benefit a university’s staff and local employers. Students would also be exposed to the lifestyle needs of sound nutrition and regular exercise as part of daily healthful living.

Planned and executed according to our feasibility and business planning process, the center should be self-sustaining and produce a positive cash flow that can benefit other outreach initiatives. The public relations and health cost savings are unique attributes of this concept.

MedFit’s wellness center business model is based upon serving people of all ages and especially those having chronic conditions. These customers are self-referred and self-pay, which is highly desirable for recreational facilities of all types.

Re-developing Vacant Big Box Retail Facilities

Big Box store

Your community has a unique hidden asset, which needs immediate attention. That unique resource is that closed, bland-looking big box retailer or possibly strip center, sitting in front of acres of parking on the main highway of town. Conveniently located to access its 10-mile market area and an instantly recognized location by consumers; these hidden resources are being redeveloped into a range of healthcare uses from medical malls to wellness centers. After redevelopment, they often spur new growth nearby.

What also is of interest is the ability to create a new ambulatory care setting at a lower cost than for a comparable new “Greenfield” type project. In most situations, both acquisition and renovation costs are substantially less, and financing is typically available from the owner or through other economic development programs especially for a new community amenity that our business model provides.

We worked with Altoona Hospital in Altoona, Pa., on the feasibility for this type of project. The Station Mall is an excellent example of the redevelopment of a 1970s shopping center into a new business of medical offices and potentially, a health and wellness center.

Today’s healthcare executives need to simultaneously expand and execute less costly approaches in a consumer-driven healthcare environment with convenient locations and a mix of physician, clinical and wellness services. If your organization has the vision to perceive of these resources as an opportunity, then we can create a program and a facility that works for you.