Wellness Service Lines Boost Hospital Revenue

Joe Cantlupe, for HealthLeaders Media , August 18, 2010
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“Wellness is good business. It improves health and generates other business for the hospital in the community,” says Steven K. Jones, president and CEO of Robert Wood Johnson University Hospital in New Brunswick, NJ, which has coordinated plans with the city to develop a downtown supermarket, fitness facility, and aquatic complex to be named Wellness Plaza.

Success Key No. 1: Team up with a city
Jones says he believes the 600-staffed-bed academic medical center, which serves as the principal hospital of the University of Medicine and Dentistry of New Jersey’s Robert Wood Johnson Medical School, has found a way not only to make its wellness service line a moneymaker for the hospital, but
also to enrich its patient base and community relations.

After five years of working with the city officials, plans are under way for the $114 million Wellness Plaza in the city’s downtown, with the goal being to encourage healthy eating and exercise under the guidance of the hospital’s medical staff, and to obtain income through membership fees. “We thought, ‘Let us combine the physical use of the gym, the education from our medical staff’—it’s good business to promote health, and it’s a unique angle,” Jones says. The  facility is set to open in 2012.

“It is too early to provide specific details regarding revenue projections for the center,” Jones says. “Generally speaking, the revenue will come from membership fees. Because we are located in an extremely competitive marketplace, we anticipate making the necessary investments to allow our center to remain at a high level.”

A unique element of the plan is the relationship between the fitness program and the medical staff, he says. “Anybody can go to a gym, but this has a medical wellness program attached,” Jones says. 
“What we have done is track our best health objectives with our business objectives,” Jones says. The 12-story, 625,000-square-foot building will include loft-style residential units. “We definitely think working with the city of New Brunswick is an innovation.”

Other hospitals associated with Robert Wood Johnson University Hospital have experience operating successful fitness and wellness centers in two other New Jersey cities, Rahway and Hamilton, officials say. Those facilities include community membership for regular fitness and personal training, as well as rehabilitation and clinical health programs run by the hospitals. Those plans, however, are not associated with a city government.

Success Key No. 2: Make wellness a brand
A few years ago, the tiny Mendocino Coast Hospital in Fort Bragg, CA, had a simple wellness program that offered exercises and some stress reduction classes, among other offerings. But it was not attracting a broad group of people, and it wasn’t delivering much business for the 25-bed acute care hospital, says CEO Raymond T. Hino.

Then the hospital hired an outside expert—a former hospital CEO—to help coordinate its service line. The decision resulted in a complete performance turnaround, Hino says. “We had been really scratching the surface in wellness. We were kind of floundering a bit and needed to kick-start the program.”

One of the elements of the hospital’s Culture of Health was created in 2006 to bring together schools, healthcare leaders, and organizations to create a healthy community and to focus beyond just “illness and rescue care,” Hino says.

The hospital offered weight management, fitness, smoking cessation, stress management, and healthy lifestyle services, especially for people at risk. As it attracted business with expanded wellness programs, the hospital evaluated its work through its Mendocino Coast District Hospital pilot program dashboard.

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