HFIT shifting weight to wellness programs - Minneapolis / St. Paul Business Journal:

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But that's changing as the company'sz fast-growing health-management segment gains on its fitness-center-management The health-management operation administers employee-wellness programs for the company'sw corporate clients, and those customers and otheras are snapping up the service to help control their healthcare costs. "Health management is the growth enginew ofHealth Fitness," said CEO Greggb Lehman. "In the next 18 months I woulrd expect the revenue mix will be In 2007, the split in revenue was 44 percen health management, generating $27.5 million, and 56 percent fitness or $42.5 in revenue.
However, health management's revenue grew by 29 percent, while fitnesw management increased by less than1 percent. Additionally, health managementg has a bigger grosswprofit margin, earning $9.8 million last year, as much as its larged fitness sibling. The health-management segment offers wellness services such as onlin andtelephone coaching, health-risk assessments and biometric-screening Corporations encourage employees to participate in the programs by loweringy their medical co-pays, adding funds to their healthn savings accounts or simply doling out cash upon completiob of the regimen.
Because the segment is more Health Fitness plans to concentrate more on its growthn while also continuing to market fitness centeras as one of multiplewellness options, Lehma said. Health Fitness will hire more wellness coachesw and aggressively pushits health-management products to existinb and potential clients in 2008. The company also hired Dr. Jamesa Reynolds as its chief medical officer. He will be responsible for improvingvthe company's health-management programs and adding new Reynolds previously worked with as principal and seniofr health care consultant at its health and productivity-managementy division.
Health Fitness is not turning its back on managingfitness facilities, Lehman said, but profitsd are harder to generate from that arm becausr of its staffing model and increasing salaries and insurancee costs. The focus on health management is a smartr strategic move for Health Fitness because of its stronbg growth opportunities and because the company can customize and sell it toexistinbg clients, said Clinton Morrison, director of equity researchh at , a securities brokerage and investment-bankingt firm in Minneapolis. Corporate fitness centerw are still popular, but they won'tr work for every company since there has to be enougy employees to make it Morrison said.
The wellness programs also allow Healty Fitness coaches and corporate clientsx to interact even if they are in different The new emphasis also keeps Health Fitness competitivr as other players offerwellneszs products, Morrison said. Nashville-based HealthWays and Brighrt Horizons, based in Watertown, Mass., are rolling out wellnessw programs, as are health club companies likeEden Prairie-based . Wellnesds programs have been aroundfor years, said Julie a principal at in but only recently have employers realized the associatiob between these offerings and worker productivity.
Corporations are shifting the cost of healthn careto employees, said Paul executive director of the , a nonpartisanb policy arm of Deloitt & Touche. Traditionally, employers implemented wellness programs as a nice gesturwetoward employees. Now they are usinyg those programs to soften the blow when theyimplement high-deductibler plans, because participation often translates into saving for employees.