Achieving Tangible Results with Corporate Fitness

The landscape of corporate fitness is changing. Make sure you can navigate and anticipate what the future will bring.

When it comes to the benefits of corporate memberships and related health, fitness, and wellness programs, the discourse has remained fairly constant for the past 30 years.

By now, the notion that these efforts yield tremendous value for both the employer and the employee is regarded as a given. It’s been confirmed by countless studies, which, while inevitably reaching the same positive conclusion, acknowledge some inconsistencies in results and lingering questions regarding best practices.

A Review of the U.S. Workplace Wellness Market, a paper produced in 2012 by the U.S. Departments of Labor and of Health and Human Services, reported that 92% of companies with 200 or more employees were offering workplace wellness programs in 2009. The goals pursued most frequently were increased physical activity (addressed by 63% of the firms), smoking cessation (60%), and weight loss (53%).

However, despite general acceptance of the merits of corporate programs and their widespread availability, active participation in them seems limited. One study put the number at about 20% in 2010.

This, of course, represents a major missed opportunity for businesses, individuals, communities, and the nation as a whole.

Recently, however, the dialogue and the landscape have begun to change in significant ways. The topic of health and healthcare costs is more prominent than ever. Employers and employees, alike, are well informed about health-related issues, and their expectations— both corporate and personal—have risen. Industry professionals on both the club and supplier sides have developed innovative, and, in some cases, ground- breaking new programs and products. Technology is having an incalculable impact. And the insurance environment has been transformed, in part, by the Affordable Care Act (ACA) of 2010.

Today, the three words that encapsulate the changes are accountability, outcomes, and documentation.

This brave new world of corporate fitness has also affected the type of programs being offered, pricing, levels of competition and participation, and the quality of individual results.

Impact of the ACA

The 2012 Review of the U.S. Workplace Wellness Market was part of a study of wellness programs that was required by the ACA, a federal statute designed to improve the quality, affordability, and accessibility of health insurance. It was enacted in January of 2014.

In an attempt to reduce costs, the ACA established new incentives and built on existing wellness program policies to promote corporate wellness initiatives, whether offered at the worksite or in clubs. In doing so, it also acknowledged that clubs are a legitimate and valuable part of the healthcare continuum.

“What the ACA has done is to bring a level of account- ability to corporate fitness and wellness programs,” says Allison Flatley, industry consultant and former chief strategy officer at Corporate Fitness Works (CFW), a wellness and fitness program provider based in St. Petersburg, FL. CFW currently serves some 165 client sites.

With respect to the new incentives, the ACA clearly defines two specific types of health-contingent programs—“activity-only” and “outcome-based” programs.

In “activity-only,” employees are rewarded for taking part in a particular activity. They might, for instance, be required to walk for 30 minutes three days a week, adhere to a particular diet, or complete an exercise plan. These programs don’t require participants to hit a numerical goal, such as a given weight, body mass index (BMI), or blood pressure measurement; they require only that they engage in the specified activity.

However, in the case of “outcome-based” programs, employees are rewarded for achieving or maintaining a particular health goal, e.g., not smoking, or achieving a BMI of 28 or less, and this is where the benefits kick in. When employees succeed in attaining their objective, up to 30% of the premiums paid under the employer’s healthcare plan can be recouped; and for smoking cessation programs, the reward ratchets up to 50% of the total.

“As a result, the ACA has worked to change the nature of the programming,” explains Flatley. “Providing a membership based solely on usage doesn’t necessarily qualify as an outcome-based program. And, in order to qualify for premium reductions, companies have to prove that outcomes—such as reduced BMI, weight, blood pressure, or cholesterol—are being met. ... So clubs have had to move beyond just selling memberships to create true, outcome-based corporate fitness offerings.”

Documenting Outcomes

The new emphasis on outcomes means that club operators must be able to document results—by, in part, gathering all of the requisite data. It also means working with insurers in a different way.

Midtown Health, a corporate fitness center management and wellness firm, and a division of TCA Holdings, LLC, is a leader in the field. It manages 22 centers for such clients as Kraft-Heinz, General Motors, Underwriters Laboratory, and McDonald’s world headquarters. And the company, based in Chicago, tracks everything from participation to out- comes, including biometrics, well-being scores, and health improvements.

We track these outcomes and present them in aggregate formats for insurers,” says Debra Siena, the president of Midtown Health. “That’s the biggest change we’ve seen over the past few years. Today, we’re communicating directly with insurers, so that employers don’t have to get involved from a HIPAA (Health Insurance Portability and Accountability Act of 1996) compliance perspective.”

“Providers—including employers and clubs—now have a stronger reason to focus on prevention, fitness, wellness, and, of course, outcomes,” Bill McBride observes of ACA’s impact. McBride is the cofounder, president, and CEO of Active Wellness, a Sausalito, CA–based company that, in addition to owning and operating seven clubs, also manages 60 fitness sites in corporate, commercial, residential, community center, and medical fitness center spaces. “Now, corporate clients aren’t the only ones with a true financial risk in terms of employees’ health.”

“The ACA has worked to change the nature of the programming. Providing a membership based solely on usage doesn’t necessarily qualify as an outcome-based program...So clubs have had to move beyond just selling memberships to create true, outcome-based corporate fitness offerings.”

Allison Flatley, Industry Consultant

Reconfigured Pricing

More sophisticated programs, increased data-gathering, and increasing accountability—all have affected the way that corporate programs are priced. In the past, the typical pricing model involved discounted fees for participation, but, Siena points out, that’s changing.

Midtown Health, she reports, is actively moving away from discounting ... and toward enriching the corporate membership with extra health and well-being value. “In fact, we’re now charging what the membership dues are for the facilities in TCA’s portfolio of Midtown Athletic Club; those range from about $60 to $180 per month,” she says. “Rather than a corporate membership automatically connoting a lower fee, we’re working with corporate HR departments to add value to the membership, which increases the companies’ health and well-being benefits.”

Midtown Health’s menu of offerings now encompasses a wide range of options, including, among others, onsite screenings, onsite “lunch-and-learns,” health fairs, phone coaching, team-building events, inter-company competitions, and wellness programs directly tied to the company’s employee benefits.

“It’s less about discounting fees,” Siena suggests, “and more about making the club a truly valued extension of the corporate client’s wellness program.”

More clubs are also educating themselves about the financial implications of healthcare, notes Flatley.

“Those that want to target corporations, and to be a viable option for them, are investing in—or allocating their existing resources toward—services that are reimbursable. ... Their largest single investment might involve determining exactly what a HIPAA-compliant wellness program entails and, then, developing one. The second-largest might well be staff training focusing on skills development in well- ness, coaching, and preventive medicine.”

Program proliferation

While a corporate membership might, at one time, simply have meant an all-access pass to a club, today, employees can choose from a lengthy list of possibilities. In addition to the type of services that Midtown Health proffers, there are also boot camps, personal training, mind-body classes, and remote online access to classes.

Asked how the ACA has affected corporate wellness in terms of new offerings, Flatley ticks off a long and comprehensive list: telemedicine; on-site clinics; active meeting rooms; standing work stations; employee challenges involving wearables; Web-based social media for blogs and videos; and healthy stairways, bike share programs, and smoke-free campuses.

“We have several clients who are subsidizing group personal training as a path to greater health benefits,” says Flatley. “Group personal training participants are highly engaged, and it’s much easier to track their progress with data. And because the pricing tends to be below market value—as compared to standard personal training—it’s more accessible, and, thus, more popular.”

“What’s become increasingly popular is large group training,” notes Trina Gray, the owner of the Bay Athletic Club (BAC), in Alpena, MI. “We’ve found that it bolsters camaraderie, builds in accountability among participants, and is a great use of our trainers’ time and talents.”

In terms of new areas of interest, McBride notes that a growing number of corporate programs are supporting lifestyle change. “We’re doing more in terms of health coaching, monitored weight-loss programs, and access to medical wellness services,” he says.

Surveying the current, if still evolving, state of corporate programs, McBride identifies three elements that, he’s convinced, are essential to success: engagement via programs that employees will embrace and enjoy; physical, psychological, and social results for participants; and measurable outcomes for employers.

“The corporate wellness world has changed,” he says. “Clubs now have the opportunity to become a part of the healthcare continuum. ... or they can watch from the sidelines.”

Patricia Amend

Patricia Amend is the Executive Editor for Club Business International.