Making Healthcare Referrals Profitable

While medical referrals offer potential new member and revenue opportunities, you need to approach building provider relationships strategically.

By now, we all understand the emerging connection between healthcare and exercise. Through commercial health insurance companies—Aetna, Blue Cross Blue Shield, Kaiser Permanente, Medicare-sponsored programs, and almost every provider—nearly every covered person has access to either a discounted or fully covered gym membership.

While that’s been true for a while now, recent events have shifted that value proposition. Gallup survey data from December 2023 notes that key physical health metrics have notably worsened since before the pandemic, including obesity, diabetes, and eating habits. The percent­age of U.S. adults classified as obese has reached an estimated 38.4%, up 6 percentage points since 2019 and just shy of the record high of 39.9% measured in 2022. A new high of 13.6% of respondents have been diagnosed by a medical professional with diabetes, up 1.1 points since 2019.

A renewed emphasis on personal health has made building strategic partnerships between physicians and other providers and clubs a larger priority as more Americans face greater chronic and acute health conditions.

In addition to being able to address a range of patients’ assessment, exercise, and nutrition program­ming needs, “establishing strong referral partnerships is a key strategy for accessing new members that might not otherwise come to a fitness center,” says Cassandra Stish, chief customer officer at Welld Health. “There are decades of data indicating that a medical referral into a structured program often leads to members that stay engaged longer—up to six months longer, on average.”

As attractive as the opportunity is, it’s not always easy to act on it. In this two-part piece, we’ll break down—and offer solutions to—meeting the core challenges: developing those relationships and navigating the healthcare reimbursement system.

Health Care Referrals

It Starts With Strategy

Outreach to providers is a logical way to begin. Contact information for local physicians, hospitals, physical therapists, and others isn’t hard to find. But you need direction before any contact ever takes place.

"Attack it the way you would attack any challenge. You need to have a strategy," says Grace McNamara, BSc, MPH, EMBA, CEO at EXI, a technology platform that automates data-backed personalized exercise programs. “Firstly, I don’t think all clubs have a health­care partnership strategy yet. But if a club wants to increase membership by attracting more non-typical gym members, then they need to have a clear strategy that outlines what they have to offer, how they ensure safety for a specific population, and what health outcomes they expect to support.”

That strategy, says Stish, is really about the way you position your facility in the context of the details described below (read sidebar, “How to Develop a Successful Club-to-Clinic Outreach Strategy,” to learn more).

“Begin with a market assessment—know who you’re reaching out to so that you can align your message with the provider’s patient population, their focus on preventative care, and their alignment with your own mission and values,” she notes. “In terms of operational planning, put a person in charge of outreach and creating those relationships, including establishing regular meetings, sharing success stories and testimonials, providing updates on program offerings, and other issues.”

Another key part of your strategic direction includes offering proof points.

"It’s a way of positioning your strategic value proposition as a combination of evidence and storytelling," McNamara explains. “Use your data to create an impact story that clearly communicates the value of your exercise and fitness programs to healthcare providers. This can include empha­sizing the positive impact of exercise on overall health, disease prevention, and management of chronic conditions.”

Clubs can also provide evidence-based research and statistics on the benefits of exercise, such as improved cardiovascular health, weight management, and mental wellbeing. Beyond that, include data specific to the benefits members have gained from your facility.

Stish echoes the need to help referring clinicians understand the impact and value of fitness programming at your club.

“Offer educational materials and resources to healthcare providers that help them under­stand the specific exercise and fitness programs you offer,” she says. “This can include brochures, pamphlets, and online resources that explain your programs’ structure, benefits, and success stories. You can also provide on-site training sessions or workshops for healthcare providers to learn more about the programs and how to refer patients.”

Take that idea one step further and demonstrate your value by offering lectures as well as short-term targeted and affordable programs that can be referred into by a doctor, advises Kevin McHugh, regional vice president at Genesis Health Clubs, which has over 70 locations across the Midwest, Southeast, and Mid-Atlantic regions of the U.S.

“Invite healthcare providers and their staffs to your club to try the programs, so that they can experi­ence them for themselves and talk to patients about their personal results,” he adds.

While you’re putting together your list of potential partners, don’t forget to look within.

“One of the best opportunities you have is to approach physicians and other healthcare providers who are currently members and obvious fitness advocates,” McHugh asserts. “These providers have seen your programs in action and know the difference they can make for those living with chronic diseases.”

Beyond supporting the benefits of programming to healthcare providers, you can offer incentives for referral.

“Consider offering special incentives like no contract-signing fee or reduced cost membership if their patients enroll in a program,” says Stish. “This brings added benefit to the patients and by extension to the healthcare providers. By creating a mutually beneficial partnership, health clubs can encourage healthcare providers to promote their exercise and fitness programs to their patients actively.”

While incentives make sense in appealing to providers, one perk to steer clear of is guest passes.

“The medical community is not interested in free memberships or guest passes, because guest passes with no interaction almost always leads to an individual getting lost and convincing themselves that a fitness center is not their solution,” relates McHugh.


Think Beyond Traditional Populations

One other issue operators might want to consider is the type of member they serve, especially if they want to expand their base. And that goes beyond the large sedentary population in this country.

“Operators need to come to logical and rational understandings that the benefits they offer are applicable to a less mobile population that is wheelchair-bound,” states Hal Hargrave, president and CEO of the Perfect Step exercise-based therapy centers. “The less physically abled community is even in more dire need of exercise and fitness to stay healthy, reduce sec­ondary complications, increase their quality of life, and get back to mental fortitude that leads to meaning and purpose.”

Hargrave has worked with healthcare providers to provide data to support his case.

“We recently went through an internal col­laborative study facilitated by Kaiser Permanente that evaluated how our program affects our clients,” he says. “We were able to increase their quality of life and reduce their secondary health complications, resulting in lower rehospitalization rates.”

The study validated the effectiveness of chronic care programs and how they can serve the paralysis community beyond just general health and fitness measures, including restoration of physical function, reduction of secondary health complica­tions, and a better quality of life.

“That’s the kind of information health­care providers should salivate at, as it means that programming could make their clients healthier individuals with fewer hospital and medical-based needs,” he says.

“The popular saying that ‘exercise is medicine’ is a great slogan, but clubs that want to build their medical referrals need to demonstrate how they are making this saying come to life in their operations.”

Kevin McHugh

Genesis Health Clubs

Anticipate Challenges

As much as the match between clubs and healthcare providers makes rational sense, you’ll find resistance to your efforts.

“The first challenge is credibility and trust,” says Stish. “Healthcare providers may be hesitant to refer their patients to health clubs due to concerns about the qualifications of fitness professionals, the safety or validity of the exercise programs, and concerns that patients will be exposed to an intense sales pitch.”

Part of that issue can be handled in the way you educate potential partners about your facility.

“But you also have to position yourself as a partner in health,” she says. “Let healthcare providers know that you plan to work collaboratively with them to develop personalized care plans for their patients that include exercise and fitness programs. Demonstrate how your programs can complement medical treat­ments and therapies, how you can support patients in achieving their health goals, and, most importantly, how you’ll work to consistently track results to offer proof points ongoing.”

Another common problem is communication barriers. Misunderstandings or lack of communication can hinder effective collaboration and the development of a beneficial relationship, while also reducing trust and the number of referrals.

The solution might be as simple as scaling the language barrier.

“In this case, fitness professionals should speak the same language as healthcare practitioners,” McNamara says. “We need to think about what’s important and standard in healthcare.”

Verifiable health outcomes are what these providers are seeking.

“Everything is evidence-based, the safety of the person is paramount, and health improvements arethe desired outcomes that everyone wants to see. Fitness professionals can better emphasize ‘physical activity first, health outcomes second.’ They go hand-in-hand, but more stories need to be told from the health perspective.

“It’s abundantly clear what health metrics relate to a condition and the cost of chronic conditions to employers, health plans, payors, etc. We know physical activity can drive significant impact so let’s increase the number of stories being told that include the health improvement data from baseline to six, 12, and 24 months out. Think health outcomes, evidence, case studies, and peer-reviewed publications.”

Finally, says McHugh, don’t make any assumptions.

"There is a huge misconception that physicians or hospitals are looking for clubs to come in and discuss their offerings,” he states. “Clubs need to earn the right to be in the conversation around medical fitness and chronic disease-related programs. The popular saying that ‘exercise is medicine’ is a great slogan, but clubs that want to build their medical referrals need to demonstrate how they are making this saying come to life in their operations."

Man Outside

How to Develop a Successful Club-to-Clinic Outreach Strategy

Cassandra Stish, chief customer officer at Welld Health offers the following keys to building relationships with medical professionals.

Determine the responsible person. Every initiative needs a champion. Decide who will be in charge of creating and managing relationships with referral partners. Ideally, this person will have some understanding of what clinicians need, how they work, and the fundamentals of the healthcare landscape where the club is located.

Build your outreach "recipe." Develop a plan for the type and number of touchpoints to be made with referral partners. This could include a combination of emails, phone calls, in-person meetings, or informa­tional materials.

Gauge frequency of contact. Determine how often the outreach team will contact or interact with each person in the network. This could be through emails, phone calls, or in-person meetings.

Stay flexible. Be prepared to tweak the outreach strategy based on the results. If certain methods are not yielding the desired outcomes, be open to adjusting the approach.

Develop a clear value proposition. Communicate the value of the programs and services offered to referral partners. Highlight the staff and facility credentials, experience, and strategic approach to the community being served with insight and intention. Will the health center offer condition-specific programs, or is the offering designed to support general fitness and activity?

Produce partner-focused online content. Create online content that is tailored to the needs and interests of referral partners. This could include a professional services website, social media presence, blog posts, and profiles on professional online networks like LinkedIn. The messaging here should be focused on what referral partners need to know or share with their patients.

Feature member testimonials. Include testimonials from participants who have benefited from the programs offered at the health club. This helps build trust and credibility with referral partners.

Establish a presence. Join provider groups or think tanks focusing on access and prevention in community settings. This can help health clubs build relationships and establish a presence in the healthcare community.

Track progress. Implement a secure system to track the progress of your outreach efforts. This can help you measure the effectiveness of your strategy and make adjustments as needed. Note: Tracking health outcomes requires having a data security plan in place for collecting, storing, and reporting Protected Health Information.

Continuous improvement. Continuously evaluate and improve the outreach strategy based on feedback and results. Stay updated on industry trends and best practices to ensure the strategy remains effective.

This article originally appeared in the June 2024 issue of Club Business International. View the full digital version of the issue online.

Jon Feld

Jon Feld is a contributor to