Silver Sneakers Snubs South Beach Seniors





Crunch Fitness Members Left in Lurch

Thanksgiving Day 2015

By David Arthur Walters


Shareholders can thank Healthways Silver Sneakers for dropping Crunch Fitness, the only affordable, full-service health club on South Beach, from its list of gyms available to Medicare Advantage insureds, and for attempting to deceive the hapless seniors into believing a comparable benefit would be conveniently provided.

Crunch Fitness South Beach participants were notified of the change by an undated propaganda letter shortly before Thanksgiving Day, less than two weeks before the end of the annual Medicare Advantage enrollment period.

The propaganda implied that Crunch is at fault for “no longer participating in the program,” and invited dumped seniors to enroll somewhere else “as we seek another location that will be convenient to you.” Crunch Fitness did not respond by deadline to requests for an explanation.

For seniors, many of whom are economically challenged, and who may not have a car, “somewhere else” means transportation expenses of about $5 a day, more than an hour’s drive or two hours a day on the county’s pathetic bus system.

And there will be no comparable, convenient location in South Beach as long as the tradition of pushing seniors and the working poor off the beach continues, to make way for luxury developments in accord with the political-economic program that Mayor Philip Levine, a wealthy developer, rightly called “relentless for progress” when soliciting funds from developers for a political action committee lauding him.

Crunch Fitness South Beach is the low-priced gym in South Miami Beach, at $87 per month after raising its fee this year by $3. A confidential source within the organization said it would probably gladly accept $40 from Silver Sneakers for seniors as a public service.

The only alternative full service gym on South Beach, Equinox Fitness, charges more than double Crunch’s monthly fee. Given the nature of its business, it is high improbable that Equinox would reach out with affordable fees to economically challenged persons.

David Barton’s upscale club folded on the second bankruptcy. Gold’s became South Beach Active, then folded. The problem is exorbitant real estate values fueled by surplus capital relentlessly seeking profits, cheap and often laundered money, and morally if not criminally corrupt politicians. The result has been to push working class people and retired seniors on low fixed incomes off the beach.

A Healthways propagandist refused to disclose the nature of the disagreement with Crunch because that sort of information is “proprietary.”

The proprietors certainly are not its Silver Sneakers members, who have no rights whatsoever, and must accept whatever intermediary their insurance company selects for them.

Indeed, Healthways, calling itself a “well being” management company, serves the interest of insurance companies, employers, and governments, an interest obviously superior to the well being of the ultimate consumers: the insureds, employees, and taxpayers who are not even referred to as customers in the corporate literature posted on the Internet.

And the main interest of the organization appears to be superior even to the interests of shareholders; that is, the interests of its highly paid executives. The firm, with $742 million in revenue in fiscal 2014, laid out $4.4 million dollars in the third quarter this year to get rid of its former president and CEO, and then laid 68,531 shares, today valued at $872,000, of restricted stock (HWAY) on its new president and CEO as a supposed incentive. Hedrick Smith’s national bestseller (Who Stole the American Dream?) contradicts the notion that stock incentives actually produce stellar results, except to executives. It is more than likely that public relations propaganda about expectations for the company under new management as well as the general market hype will at one time or another elevate the successor’s stock holdings regardless of his personal performance.

This badly managed health care management company has lost tens of millions of dollars, and expects twenty-five more millions to be lost in the fourth quarter for restructuring charges intended to align the interests of management with the shareholders’ interests in profits. Operations will be “decentralized” despite its current blindness to local consumer needs. Costs will be “rationalized” in order to “lower health related costs,” which probably explains why Silver Sneaker “members” with Crunch Fitness are getting the shaft on South Beach.

The total loss will exceed its retained earnings, as it gives away shares to officers pursuant to the fallacy that, by tying their interest to that of shareholders, they will have an incentive to improve performance. Will they ever learn? Well, executives have learned to line their pockets at shareholder expense despite earnings performance. Share values rise and fall with expectations. The herd has a short memory.

By the way, the third quarter loss did not include a $20 million investment loss in a joint venture with Gallup, with which Healthways partnered for 25 years in an endeavor to track and manipulate human behavior. They created the so-called Well-Being Index in 2012. The public is randomly polled with 10 questions appertaining to 5 elements, physical health being the last element on the list published on the Internet.

Physical health is the main reason people join fitness centers. Regular exercise in full-service fitness clubs reduces health care expenses. Badly managed health care management is bound to add to the cost of health care. It very well may be that private health care management intermediaries like Healthways, whose interests are aligned more with executives and shareholders than with the health of the ultimate beneficiaries, actually cost more than they are expected to save.

The choice of a convenient fitness center should be left to the consumer. The consumer should be issued the insurance company’s electronic voucher for a flat amount, determined by the average rate charged in the locality for that type of facility, to be applied to the chosen club’s monthly charge. The difference, if any, would be paid by the fitness center member. Fitness centers would be certified by an independent nonprofit entity.

In the interim, Crunch Fitness, a brand that harkens back to the good old days, would profit in several ways by offering a special senior rate to locals. The potential local market for that service is about $160,000 per month in additional revenue at $40 per senior. Seniors generally attend during off hours.

# #

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s