Medical Fitness Centers

Key Industry Trends and

Critical Success Factors
 National Fitness Industry Trends
  Obesity is the #1 health issue for all ages
  Over 50 and under 18 age groups are
fastest growing membership segments
¾ Boomers are not content with aging
¾ Families are participating together
  More women are joining health clubs than
men
  Personal assistance/training is desired
  Express workout and women’s centers are
proliferating
 National Fitness Industry Trends
  Non-dues revenues are increasing
  Complementary retail services are
increasing
  Medically-oriented programming is
increasing
  Health club memberships are affordable
  Technology is a necessity for management
tools and member satisfaction
  Fitness industry has been recession-
resistant
Health Club Industry
Growth In Membership
45.0
41.3 41.3
39.4
40.0
36.3
32.8 33.8
35.0
M em bers in M illions

30.6
29.5
30.0 28.3
26.2
24.1
25.0

20.0

15.0

10.0

5.0

-
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Source: IHRSA, 2006

Medical Fitness Industry
Growth In Membership
4,500,000
4,000,000
4,000,000

3,500,000
3,046,750
Number of Members

3,000,000

2,500,000

1,915,118
2,000,000

1,500,000
1,015,367
1,000,000
655,614

500,000 377,965
147,564

-
1985 1990 1996 1999 2003 2006 2010 Proj

Source: Medical Fitness Association, 2006

Medical Fitness Industry
Growth In Number of Centers
1,400

1,200 1,150

1,000
Number of Centers

875

800 715

600 550

400
274
208
200
79

-
1985 1990 1996 1999 2003 2006 2010 Proj

Source: Medical Fitness Association, 2006

 Why Medical Fitness

  Contribute positively to image of hospital

  Demonstrate preventive health philosophy
  Provide safer, less intimidating fitness option
  Provide “step down” programs for patients
  Provide a “cash basis” retail service
  Create new sources of profitable revenues
  Build long term relationships with consumers
¾ Greater market share
¾ Greater share of customer
 Top Clinical Services
In Medical Fitness Centers
  Weight Management
  Cardiac Rehab – Phase III/IV
  Physical Therapy
  Pulmonary Rehab
  Sports Medicine Rehab
  Cardiac Rehab – Phase II
  Occupational Medicine
  Work Hardening
Source: Medical Fitness Association, 2006
 Typical Non-dues Services
In Medical Fitness Centers
  Personal Training
  Massage
  Pro Shop
  Health Education
  Nutritional Counseling
  Childcare
  Kids Programs
  Food Service
  Spa Services
Source: Medical Fitness Association, 2006
 Critical Success Factors

  Commitment “at the top” of the organization

  Planning before proceeding
  Location, location, location
  Right-sizing, pricing and financing of facility
(design, construction, equipment)
  Programming to fit market demographics
and needs
  Differentiation with integration of clinical
programs
 Critical Success Factors

  Appropriate price points (dues & services)

  Long term commitment to marketing
¾ Meet pre-sale and first year sales goals
  Recruit/train/retain quality professional
staff
  Unwavering commitment to outstanding
customer service
  Measure and manage accordingly
  Communicate, communicate,
communicate
 Other Critical Considerations

  Physician champion
  “Preventive Health” service line
  Ability to take on major project (financially,
administratively)
  Prioritization of capital
  Willingness to partner on project
  Competitive pressures
  Local “politics” (i.e., YMCA, City Parks &
Rec)
  Profit – Nonprofit issue
Our Contact Information

Meritage Healthcare Strategies, LLC

2602 McKinney Ave. Suite 240
Dallas, Texas 75204-2529
214/823-2927 Phone
214/823-7472 Fax
devans@meritagestrategies.com
jsewing@meritagestrategies.com
wcook@meritagestrategies.com
cmatthews@meritagestrategies.com
www.meritagestrategies.com