Fine tune your fitness programs for ACO networks

The first quarter of 2014 is nearly over (and hopefully that is true of our winter!), so it’s a great time to assess if your strategies are on track to make your fitness or wellness business better this year. Fine-tuning your programs and communications tactics can better position your club as a part of the new healthcare delivery model. Although it is unclear how physicians and hospitals receiving bundled payments may pay for prevention and wellness services, it is clear that they will need to focus more attention on an individual’s complete health. Let’s start with who is actually in your club and how you can leverage these relationships strategically.

1. Connectors, Mavens and Salesmen
Malcolm Gladwell shares case studies on “How Little Things Can Make a Big Difference” in his 2000 book, The Tipping Point. We assigned this book to a group of fitness center managers, and asked them to formulate their own tipping points related to primary goals for their center’s business.

We especially wanted to increase awareness of chronic disease issues in the community, as we had purchased a series of ACSM exercise protocols that we believed create a key competitive advantage. But first we needed the team’s help in identifying connectors, mavens and salesmen among the membership to help spread our message–to create our own tipping point. Having your staff formulate a plan to identify such customers for key message delivery is an effective group exercise that can energize your current plan or be part of your planning process next year.

Our primary goal was to identify the Mavens, whom Gladwell describes as the “information specialists, or people we rely upon to connect us with new information.” These prime referrers want to solve other people’s problems. While probably not motivated by actual referral rewards, this group still needs nurturing. Our goal was to identify this type from members who had responded to a Loyalty Survey or who had been recognized in Leader Circle groups (based on weekly attendance). Ultimately, we wanted to discover and promote their personal improvement stories, and to develop talking points and incentives to spur them on to more referrals.

The other key groups in the Tipping Point concept are connectors and salesmen. Connectors typically make introductions in social circles because they have so many contacts in their network. Perhaps this valuable group is already active on your Facebook page. As you already know, salespeople are persuasive and charismatic, and you have them on staff.

You need all three groups working in concert to position your club for health care. But you also need “the stickiness factor,” as coined by Gladwell. That factor is the message. We’ll describe more on key consumer segments and specific messages in a later article.

2. Strategic Visioning
Change is rapidly occurring in the $2.7 trillion health care industry–especially in delivery. How will you be part of that change? When did you last take time to dream about your business, to dream with your key managers? Ask your core team members to explore their high point in working for your club, a time when they were operating at peak performance. Have them tell the story and describe the most important and helpful factors in the organization and the results. What can you learn from each other’s experience in how change occurs? Capture these details as you prepare for other changes that will be occurring in our industry. Start by asking what was it about the organization or team members that made a positive experience possible? What were the best qualities, skills or values that made it a high point? Write them down.

3. Asking Better Questions
Are you asking the right questions of your employees, your customers and yourself? The answers we get are often determined by the questions we ask. If we ask irrelevant questions, we get irrelevant answers. If we ask better questions—empowering questions—we get empowering answers. Marilee Adams, an executive coach, has developed a system of tools called Question Thinking that she outlines in her book Change Your Questions, Change Your Life. In a future article we will use these tools to dive into new member orientations and health and fitness assessments. Get started with your team with these questions: What could or should our competitive strategic advantage be? What do we have the ability to create right now? In mid-term? In the long-term?

4. Living the Vision
How has your business vision changed? In an annual all-staff meeting years ago, we used the FISH! Philosophy video, which describes how Pike’s Place Fish Market in Seattle became world-famous. I still relate to its simple idea of coming together as a team to live the vision. Successful teams are guided by three principles:

Be it: make the vision part of everything you do
Commit: make a commitment to bringing the vision into your place of work
Coach it: teach others about the importance of the vision, and have fun in doing it

Are you modeling a culture of wellness and fitness among your employees? If not, how do they feel about delivering health and wellness to your customers, other clients and possibly mavens in your community? An upcoming article will explore corporate wellness programs and their role in the new healthcare landscape.

5. Leaders Lead
Leaders focus on people and ask what and why. They develop and innovate. Are you ready to lead this next innovation? It’s going to require a longer-term perspective and resources to create change in your club and its position within the community. We’ll give you tips on how to get there.

Watch for our series for the Club Insider and excerpted here, Fitness Futures and Healthcare Delivery. We’ll cover:

Developing Healthcare Referrals: Sedentary, deconditioned and overweight. You can reach this market more effectively with lifestyle programs that can expand your ancillary revenues. But first you need to use the right message to get referrals from healthcare professionals in your market.

Your Club, Your Community: The healthcare environment is changing, and your role as a top fitness provider is a community asset. Have you identified community initiatives that can help you showcase your facility to residents and the health care community?

Going Corporate: Are you modeling a culture of wellness among your own employees? One of the best ways to develop a corporate wellness program is to practice what you preach.

Sticky Messages for Segments: Understanding who your customers are is one of the ways you’ve been successful in your business. Do you know what other customers you can reach in your market area? We do. With our Prizm analysis model for medical fitness center consumers, we’ve identified 10 top segments you can reach with lifestyle programs and targeted communications.

Measure and Evaluate. Assessing your programs is yet another way to communicate your results to your customers and potential customers. Plus, it makes smart business sense for those healthcare constituents you want to entice.

Use these ideas to start brainstorming on changes occurring in our industry. We welcome your thoughts and feedback. Sign up on our web site to get a list of analytical questions to help maximize your strategic competitive advantage.

Getting Your Money’s Worth: 10 Benefits Your Management Company Should Deliver

There’s a lot of misleading information when it comes to management companies and the results that you can expect for your medical fitness center business. Some over promise results without first assessing your business environment. Others may promote their recruiting ability, but then find it difficult to hire in the marketplace. Or perhaps the company is able to recruit personnel, but their corporate culture doesn’t focus on training, which in the high-turnover field of fitness leads to an even greater rate of turnover.

When it comes to evaluating existing services, your primary consideration should be whether you are getting your money’s worth. At MedFit Partners, we believe a valuable management company provides 10 major benefits:

1. Profitability. As an operating business, it is critical that net operating income consistently exceed financial expectations of comparable investments.
• Look at your medical fitness center as another stock in your portfolio: What long- term return do you expect to achieve?
• Are you generating cash returns of 10 percent or greater?

2. Revenue Maximization. To achieve superior financial results, productivity must be high for the many selling areas in your center. Programs, service mix and effective pricing strategies are important in achieving the performance you want. As membership numbers mature and stabilize, real dynamic growth over time must be found in other areas such as ancillary businesses.
• Picture your center as a department store: what kind of productivity are you getting from each space?
• Are you getting a minimum of 25 percent of gross revenues from fee-based programs, such as personal training, spa services, retail, parties and rentals?

3. Effective Expense Controls. Producing net operating income requires effective expense controls tied to business standards. Personnel costs, marketing/advertising and real estate are the top three expense areas. Your payroll, including management fees, should not exceed 45 percent of gross revenues. (Benefits for fitness management staff are typically half those of the hospital’s personnel.) For a mature center, marketing/advertising should be approximately 5 percent, while real estate varies depending on numerous factors.

• Can you consistently depend on proper budgeting and codifying of expenses, accurately reported on a regular and timely basis, to immediately pinpoint and address any potential problems?
• Are solutions presented for seasonal business cycles and readjusted for growth?

4. Dynamic Integrated Communication. For a consumer-based retail business, the competition for customers’ attention is daunting. Physicians within your organization and in the community are a key target audience.
• Do your communications and public relation strategies focus on creative, informative and professional promotions of your activities and services–as well as the medical fitness difference?
• Are there different messages for the different mediums as well as key consumer segments?
• How effectively and frequently do you communicate with physicians? Are they involved in programs at your facility? Do they recommend your programs and services to their patients?

5. Property Management. Skilled property managers and operators must have the experience to know what works within the physical environment and what doesn’t. The ability to participate early in the design/development stage can identify cost-effective solutions and provide checks and balance during both the design and the construction phases. Experienced operations managers have the ability to rectify existing design issues and recommend solutions during renovation and expansion planning.
• Does your management company provide a regular interior design review?
• Are purchases of equipment and replacements consistent with the design scheme?
• To maintain a state-of-the-art facility and consumer appeal, does your management company budget for regular renovation and updates?

6. Innovative Business Development. The definition of health care is broadening to include businesses once perceived as beyond the scope of traditional services. Spa and integrative medicine businesses are in high demand by consumers and are a logical business extension of wellness fulfillment, but they may not initially seem like a good fit.
• Does your management company have the knowledge and experience to successfully introduce integrative medical practices and clinically oriented spa services in the context of your organization’s culture?
• How do they win the support of established health care providers?
• How do they evaluate real estate for expansion or mixed use?

7. Productive Training. Wellness center personnel require continuous training to be effective at delivering service to members.
• Does your medical fitness team participate in regular group training on a broad spectrum of topics ranging from customer service standards to business practices?
• Are training tools provided to front-line managers for their daily interactions with their team, as well as department meetings?

8. Satisfying Solutions. Utilizing a management company to operate your medical fitness center follows standard business practice for not-for-profit entities, including hospitals, to contract with outside firms to manage non-core operations.
• Is your management company focused on creating a culture unique to your organization? Or is it applying cookie-cutter solutions?
• How do they work with health care leaders to provide clinical integration and employee programs consistent with the medical fitness service mix?

9. Measurement and Evaluation. Since “what gets measured gets done,” it is important that your management company measures what matters for your business.
• What performance indicators are important to your organization?
• Given that most not-for-profits monitor expenses, what adjustments are made for evaluating this retail business?
• Are results for your center in line with other like-sized, similar market projects?

10. Research and Development. Keeping abreast of the latest in consumer attitudes and spending trends in key business categories isn’t an end in itself. Applying this information to your center and testing new programs and services are critical in maintaining and attracting new members.
• Does your center consistently introduce new products and services geared to your market demands?
• Does your model support continuing education for key managers?

When your management company provides all 10 benefits, you know that your business partner is focused on you. Hands-on responsibility means implementing solutions before potential problems have the opportunity to blossom. The best client-focused management firms provide answers before you even think of the questions.

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.