For health insurers, healthy plan members are cheap plan members; that's where Healthways comes in. The health services company provides disease management and wellness programs to managed care companies, self-insured employers, governments, and hospitals, with the ultimate goals of improving members' health and lowering health care costs. Its disease management programs help members manage chronic illnesses like diabetes and emphysema, making sure they keep up with treatment plans and maintain healthy behaviors. Healthways' wellness offerings, including its SilverSneakers program for seniors, encourage fitness and other positive lifestyle choices.
Healthways operates in all 50 US states, as well as Washington, DC and Puerto Rico, through about a dozen service centers. Additionally it administers health improvement programs and services in Brazil, France, and Australia and is seeking to grow its overseas operations, especially in Asia, Africa, and Europe.
The company provides services to some 40 million people around the globe. In its core market in North America, Healthworks relies primarily on contracts with health plans for the majority of its income, which typically last three to five years. It also contracts with governments, employers, pharmacy benefit managers, and hospitals. The company provides analytical and data management tools to allow clients to access and evaluate their members' health information; therefore, it must invest heavily in its IT resources, including outsourcing agreements with the likes of HP Enterprise Services.
Healthways attracts customers by using convenience as a marketing point, offering a myriad of ways for members to take part in its programs including via phone, mobile devices, mail, online, through face-to-face interactions, and by visiting care centers. In addition to its wellness and disease management programs, the company helps clients identify at-risk members (those who may soon need medical attention) and provides access to a contracted network of fitness centers and alternative medicine providers.
Though the company has grown its services over the years due to the demand for consumer engagement in the health insurance industry, Healthways' bottom line is vulnerable to shifts in customer contract levels. For instance, the firm took a hit when its biggest customer, health insurer CIGNA (accounting for more than 15% of sales), announced plans to wind down its contract during 2012. As a result, Healthways took a $182 impairment charge in 2011, causing net income to fall into the red that year. Overall revenues also dropped by about 4% to $689 million in 2011 due to other contract losses during the year (somewhat offset by new contract gains), as well as due to increased program reimbursements the previous year from the Centers for Medicare and Medicaid Services (CMS).
Since healthy people require expensive medical services less often, Healthways' strategy consists of finding new ways to control health care costs by improving members' well-being. For instance, it pursues partnerships with other health care companies, such as pharmacy benefits managers or medical providers, which often open up new distribution channels for its products and allow it to create new products and services for niche clients. For instance, through a partnership with Johns Hopkins Medicine, Healthways launched a weight management program based on clinical research conducted at the Johns Hopkins hospitals. The company is also adding custom programs for targeted markets, such as its Senior Care Management (SCM) program which identifies and manages the care of high-risk Medicare Advantage members; the SCM program can be integrated with the SilverSneakers fitness program.
In 2012 Healthways formed a joint venture with consumer research firm Gallup to develop a new portolio of well-being assessment tools. The venture will provide products that give care providers, patients, employers, and other customers access to predictive health monitoring tools.
Healthways also occasionally pursues acquisitions as a means of growth. For instance, in 2011 it acquired Navvis, a provider of change management and consulting services for health care systems, in a $29 million deal. The purchase allowed Healthways to enhance its involvement in cost-control initiatives at the provider level by offering clinical integration, leadership training, and partnering strategy services to medical systems working to adapt to health reform measures. In 2012 acquired Philadelphia based Ascentia Health Care Solutions to bring on its health management technology. Ascentia's products are developed by and for physicians and helps to measure quality of care instead of just volume of care. Also known as Physician-Directed Population Health (PDPH) capabilities, such products are increasingly in demand. – less