This article is part of Club Industry's report, "America's Obesity Crisis and the Fitness Industry's Role in Resolving It." The report can be downloaded for free by going here.
Healthcare coverage began in this country in the 1920s when hospitals began to offer services to individuals on a pre-paid basis. This led to the first Blue Cross & Blue Shield organization in the 1930s. During President Franklin D. Roosevelt’s administration, the foundation of our present-day health insurance industry was created with social security. It was drastically expanded through employer-based insurance during World War II, not because of care management but because of wage control. Since World War II, healthcare has been purchased by employers on behalf of their employees and their families. This did not change until the Affordable Care Act of 2010 (ACA), but employers still remain the largest consumers of health insurance premiums second only to their employees. Year over year, employees bear more of the cost of their healthcare coverage.
To clarify, all healthcare costs are covered by employers with participation costs from their employees, not from insurance companies or healthcare systems. So, as an industry, why do we attempt to primarily forge business relationships (even at a community level) with those that are in the business of insuring or taking care of the sick? The true consumer of preventative care (lifestyle and pre-illness) are employers and their employees, yet we continue to feel the only products that they are interested in purchasing are capitated memberships, fitness programming or fitness challenges, such as a corporate wellness offering.
The question we need to ask ourselves is this: Do we wish to evolve as an industry to offer services that employers are already paying for and are reimbursable through their healthcare insurance plan which are relevant to medical providers through outcome-based services? Health clubs are clearly the best environment to offer these services, yet we have not staffed or built the practice management required to service this massive market opportunity — until now. These services are called corporate and community wellness services, which include health risk assessments, nutrition education, fitness and nutrition planning, behavior modification and stress management. Early detection and the remediation of poor health risks through enrollments, assessments, program interventions, and maintenance programs that offer proper fitness, nutrition, and sustained lifestyle change have a far more significant growth opportunity for all of us versus fighting over the 20 percent of the population we serve today. If we adjust and focus, we all have a significant opportunity to grow a new profit center under a practice management model, but it’s the operator that understands and services the community that will succeed as a community and corporate wellness provider.
Since the ACA, employers have been educated on preventative care benefits within their health insurance plans. They can use these benefits without a co-pay and are looking for ways to offer outcome-based programs and services (programs that provide data to show improved health risk factors) to their covered populations to improve health and wellbeing. Employers are willing to offer incentives for sustained results since the only way they can control their costs is through a healthier population and reduced insurance claims. They are hungry to offer outcome-based programs within the communities where their employees live, work and play, yet they are constrained to hire only the services of traditional corporate wellness providers, brokers, insurance companies and medical facilities, but none of these can offer the integrated community solution our industry can. In reality, the best place to offer these services is within a social, supportive, convenient and fun environment such as a fitness center. This has created a colossal opportunity for health clubs that can evolve to offer such services. What better way to grow your business than to leverage your existing investments and establish a community and corporate wellness practice? By adding new staff such as assessors, health coaches, wellness coaches and registered dietitians, you have the foundation to deliver services that are reimbursable through health insurance, and to offer a true business-to-business and a community direct-to-consumer wellness offering that targets the other 80 percent of the population we don’t serve today. The practice management model is monetized through employer contributions, employee health savings accounts, health insurance reimbursements and cash services that generate significant new revenues and margins for the operator who is willing to evolve. This opportunity is available today and is already a reality for many facilities that have established a practice within our industry. I challenge each independent fitness owner/operator or franchisee wanting to differentiate your facility and staff to evolve and grow your business through a practice management solution. Begin your journey by validating the needs within your own community by talking with local employers and evaluate how your facility can be used to augment better health and wellbeing.
Michael Benton is the president and CEO of GENAVIX Inc., a lifestyle preventative care company. GENAVIX offers HealthyCARE, a turnkey lifestyle preventative care practice solution for the fitness industry (www.healthycare.com). For more information about GENAVIX, email [email protected].