ASEPNewsletter
Vol 1 No 12
August, 1998

ISSN 1097-9743

ERIC P. DURAK and ANTHONY J. PALMIERI, JR.

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Introduction

For the past 7 years, fitness and health programs have been interfacing with insurers and managed care organizations in terms of providing health and exercise services to the public under a health plan benefit. Recently, the concept of exercise and managed care benefits packages has expanded into capitation and subsidy packages. This article will explore the relationship between the utilization of exercise benefits for employees and health plan subscribers, and look at the economics of providing this type of package through managed care organizations, using existing facilities such as hospital wellness programs or health clubs as the conduit for providing such a service to the general public.

Background

The origins of subsidized health memberships started in the corporate world, where companies such as Tenneco, Ford Motor Company, and Steelcase have shown cost savings of up to 40% from the implementation of wellness and exercise programs (13). These programs were the genesis for the first subsidized health club memberships that were negotiated through the International Health and Racket Sports Clubs Association (IHRSA) in the late 1980s (5). The subsidies paved the way for employees to take advantage of health and fitness programs at a reduced cost or for free.

In the decade of the 1980s another trend, that is, the incorporation of health and fitness centers within hospitals began to grow (1,10). By 1991, the first year of the Association of Hospital Health and Fitness, there were approximately 150 hospital fitness centers. By 1997, there were over 500! Also, during the first decade of development, there was little start up capital for hospital fitness centers, and they rarely made profits in the first years. At the present, start up costs for many hospital based centers exceeds $5 million, and every center is profitable in its first year.

There are several trends happening currently that point to the fact that fitness is becoming a more powerful force within the managed care world (10-12). The following table highlights the level of participation between fitness and managed care over the last decade. The growth of this relationship may serve as impetus for individual health professionals and health club chains to create a health care business venture in their communities.

Date	Liaison	Ramifications
1965	Dr. Win Paris developed the first medical health club in Torrance, CA	Initial liaison between fitness and medicine
1983	Dr. Paris coins the phrase "fitness therapy"	No ramifications, as teh industry has not embrached the post rehab concept yet
1985	Julie Danielson created the After Care Fitness Manual movement in her Minnesota health club	The official beginning of the post-rehab fitness
1989	International Health and Rachet Sports Association signs the first insurers and HMOs to subsidize health club memberships	Growth in 5 states in the N.E. region, and over 12 states nation-wide
1992	PacifiCare's Senior Fit program developed in Southern California, Arizona, and Oregon	Providing free subsidized health club memberships to thousands of PacifiCare members over the age of 65 in 3 states
1994	Formation of the Arizona Fitness Network - 9 clubs using capitation services with HMOs	Development of capitation nework covering over 200,000 lives in fitness and health club setting
1995	Formation of Colorado Fitness Therapy Network - Providing preventive and post rehab to patients in a five state area	Developed standards of practice and provides computer-based outcomes for all physician-referred patients. Has contracts with over a dozen HMOs for preventive and rehab services
1996	First annual personalized Health Management Conference in San Diego, CA	First national conference dealing with fitness and managed care issues. Over 300 industry leaders in attendance
1997	Formation of National Fitness Therapy Association	Branch-off from Colorado F.T. Network, the NFTA will develop club-based post- rehab and contract with HMOs nation- wide
1997/98	Contracts between 24 Fitness Health Club and PacifiCare	Provide post-rehab in California-based health clubs, expanding nation-wide in 1998

Outcomes Management

In his Shattuck lecture, Paul Ellwood, MD defined outcomes management as a tool to improve the quality of health care (7). A more complete definition that is more applicable to clinical exercise physiology is as follows. Outcomes can be defined as the systematic change/improvement in the health status of persons, groups, or communities by implementation of a health and/or rehabilitation program and the measurement of that status by some or all of the following elements (4):

Physiological variables.................change in aerobic capacity, strength, ROM, body composition

Psychological variables................change in self-esteem, improved mood

Patient satisfaction.......................about program, therapy, practitioner

Cost containment.........................per session vs other treatment

Statistical procedures...................% improvement, statistical comparison

Based on what we now know about outcomes in general, the strength of exercise outcomes is the ability to record a positive change in health status directly related to exercise conditioning (2,9,12-17). The chart below details changes in physical function and quality of life that one should expect to see from the implementation of an exercise conditioning program for persons with the following diagnosed medical conditions:

Condition	Outcomes Measures	Expected Improvements
Diabetes	Self-glucose monitoring, A1c, body composition, general fitness	Improvements in acute and long term blood glucose, lipids, and waist/hip ration
Weight	Body weight/composition	1-1.5 lb weight loss per/week
Management	BMI, blood lipids, QOL survey	For the first 10 weeks. Improve lean body mass along with fat loss
Cancer	Pain rating scale, quality of life, overall body strength, and stress management	Improved pain-free movement, self-esteem, ADL's, range of movement, outlook on the future/survivability, strength and overall fitness
Hypertension	Systolic and diastolic blood pressure, body weight, lipid levels	Improved resting SBP and DBP, exercise SBP, body weight and exercise tolerance, and reduction in medications
Pulmonary Disease	Tidal volume, maximal, expiratory volume, spirometry, oximetry exercise time, intensity, chest inspiration	VO2 at rest and during exercise, breathing rate, O2 saturation
Osteoporosis	Strength, range of motion, DEXA scan, postural assessment	Improved bone density in the radius, lumbar, and femoral neck areas, overall improved strength, reduced kyphosis and/or scoliosis (if present)
Hyperlipidemia	Body weight, stress scale, cholesterol and lipid profile	Reduced body weight, blood pressure, lipid levels (increased HDL-cholesterol), stress management scores
HIV/AIDS	Immune function (natural killer cells, CD4, CD8 ratios, macrophages, lymphocytes), general strength and endurance	Improved immune function, better quality of life, maintained or increased body weight, increased muscle size and strength, improved appetite (8)
Orthopedic	Plum line/grid tests, BAPS board, ROM, muscle imbalances, general and muscle-specific strength	Improved posture, balance, coordination, specific strength increases, improvement in performance and ADLs, reduced pain

LEGEND: (ADL = activities for daily living; SBP = systolic blood pressure; DBP = diastolic blood pressure; HDL = high densisty lipoprotein; DEXA = duel energy X-ray apsorptiometry; QOL = quality of life)

Managed Care Fitness Contracting

Managed care contracting has mostly benefited the payors. The first round of contracting between Southern California health clubs and major HMOs didn’t benefit clubs at all. Under these capitation contracts, the clubs were paid a lump sum for any and all subscribers who were eligible for club participation. Once clubs realized that the more people who came, the more money they lost, the contracts came to an end.

However, in the latest round of negotiations some clubs (such as the Orchard Hill AC in Lancaster, MA) are getting capitation money based on the number of HMO subscribers who choose their health club. They therefore receive more money based on increased enrollment - not less. Members also must pay a discounted membership dues so the club won’t lose money when enrollment increases.

This trend of making capitation contracts work to the advantage of health clubs, and the concept of negotiating for subsidized contracts (paying for one HMO member’s health program at a time) will be very beneficial in terms of health clubs truly being a player in the managed care system.

Conclusions

The relationship between exercise and managed care is coming out of its infancy. The next phase in this evolution is to negotiate for not just health club memberships (which may only total $3-500 per year), but to also factor in the costs of clinical exercise services. These services may add an additional $3-1,000 to the costs of health care, but based on the research on costs savings, the cost benefits certainly outweigh the initial investments.

Exercise programming should also take a cue from the alternative medicine world, which is growing exponentially, and is contracting for a multitude of services in many states (6). As managed care organizations continue to struggle to maintain cost savings, and other provider groups surface in order to take advantage of regional economic conditions, it is important for those in clinical exercise to understand and be able to communicate the following elements to managed care:

• Professional status as an allied health care provider (certified, understand clinical exercise and outcomes, cost savings versus other types of rehab services).
• Can work within a referral network (other exercise professionals in your community who may work with overflow subscribers).
• Long term cost savings of exercise vs medicine. You will be in essence competing against other medical providers (3).

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If you can show outcomes (9,17), and price your services to be competitive, you will be in the running for contracts that go beyond a simple club membership (5). This is the true beginnings of a creation of an exercise health care profession.

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References

1. Abraham, A.S. Delagi, E.F. The contributions of physical activity to rehabilitation. Research Quarterly. 31;2:365-75, 1960.

2. Banja, J.D. Ethics, outcomes, and reimbursement. Rehab Management. 1994, Dec./Jan. pp. 61-65.

3. Borzo, G., McCormick, B., Somerville, J., Voelker, R. Pulling for a piece of the health care market. American Medical News. pp-3,9,47, April 19, 1993.

4. Durak, E.P., Shapiro, A.A. The Ins and Outs of Medical Insurance Billing: A Resource Guide for the Health and Fitness Profession. 2nd Edition. Medical Health and Fitness Publications, Santa Barbara, CA, 1996.

5. Durak, E.P. The bottom line: Outcomes and the future of rehabilitation. Physical and Occupational Therapy Today. 4;45:10-12, November 4, 1996.

6. Eisenberg, D.M. Kessler, R.C., Foster, C., Norlock, F.E., Calkins, D.R., Delbanco, T.L. Unconventional medicine in the United States. Prevalence, costs, and patterns of use. New England Journal of Medicine. 328;246-52, 1993.

7. Ellwood, P.A. The Shattuck Lecture - Outcomes Management. New England Journal of Medicine. 318:23:1549-56, 1988.

8. Fries, J.F., Green, L.W., Levine, S. Health promotion and the compression of morbidity. Lancet. 1989, March 4, pp. 481-83.

9. Jette, D.U., Downing, J. Health status of individuals entering a cardiac rehabilitation program measured by the medial outcomes study 36-item short form survey (SF-36). Physical Therapy. 74;6:521-27, 1994.

10. LaForge, R. Health reform and the future of fitness and health promotion. ACE Insider Newsletter. 1993, 3;3:1-4, Winter.

11. Nasibitt, J. The wellness re-dux. Trends Newsletter. pg. 1-4, October 13, 1994.

12. Pashkow, P. The application of outcomes to the clinical exercise physiologist. Presented at the American College of Sports Medicine Meeting, June, 1, 1996, Cincinnati, OH.

13. Pellitier, KR. A review and analysis of the health and cost effective outcome studies of comprehensive health promotion and disease prevention programs at the worksite: 1993-95 update. American Journal of Health Promotion. 10;5:380-88, 1996.

14. Reece, R. Keynote presentation at the annual Orthopedic Managed Care Conference, May 19, 1997, Washington, DC.

15. Schuck, C. Outpatient outcomes. Rehab Management. 1996, April/May, pp. 105-07.

16. Shephard, R.J., Corey, P., Renzland, P, et al. The impact of changes in fitness and lifestyle upon health care utilization. Canadian Journal of Public Health. 1983. 74:51- 54.

17. Ware, J.E. Sherbourne, C.D. The MOS 36-item short form health survey (SF 36). Medical Care. 1992, 30:473-83.

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ASEPNewsletter (August, 1998)
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