Summary: Peter Amato and
Steve Szydlowski, DHA, MBA, consulted on the integrative wellness
center that would be associated with the 313 acre Deep Lake sustainable
community and resort envisioned for rural Michigan and reported here in
December 2007. The two, founder and CEO, respectively, with Inner Harmony Group, faced significant challenges based on the Deep Lake location, population and weather. This Integrator double-interview guides you through their process in creating a combined integrative wellness center-spa strategy.
When Russ Valvo and Meg LaRou began planning their integrative healthcare center which would grace their planned community, Deep Lake, they brought in the Inner Harmony Group (IHG) to assist them with their business model. (See “Shifting the Heartland: Deep Lake’s Plan for a Sustainable, Integrated Resort Community and Clinic in Michigan,” December 13, 2007) The ambitious project is on a 313 acre parcel which will eventually combine a resort,
an integrative health center and a village of 137 homes. They presented IHG’s leadership team of Peter Amato and Steve Szydlowski, DHA, MBA, with a set of interesting challenges:
- Location The wellness community, resort and center are not located in a typical, hot destination resort zone.
Valvo and La Rou are seeking to reach a “mid-market” rather than the
wealthy who frequent Canyon Ranch and other similar resort.
How should one position an integrative facility? IHG, an Integrator sponsor,
was hired for their strategic thinking. Peter Amato, who founded IHG, is a pioneer
in integrative clinics whose work for over a decade in the Scranton,
Pennsylvania area, has prepared him for thinking about the Battle
Creek, Michigan, environment. Amato’s “Lessons for Running an
Integrative Clinic in the Black” were hard-won. (See “Peter Amato: Inner Harmony’s Winding Road Toward Health (and Profitability),” July 6, 2006) Szydlowski, besides being IHG’s CEO, holds a full-time faculty position at the University of Scranton
in the Department of Health Administration and Human Resources.
Szydlowski’s brass-tacks, no nonsense comments in two presentations at January 2008 Integrative Healthcare Symposium were well-received. Szydlowski had the lead on the IHG project for Deep Lake.
Integrator: What’s the central issue in the success of the Deep Lake center?
Amato: The hinge will be on the level, depth and quality of
integration of the center with the rest of the community. It’s all
about conscious community. That’s what will make this work.
Szydlowski: It’s the relationship with the other components.
Integrator: How will that be achieved?
Amato: We think leveraging will be a key. If this is to be a
real holistic community, the whole community will need to use the center.
This means the people, whether transient or living on site, whether using the hotel or coming to retreats and events or living in the condos and homes. This is an integral idea – a conscious community which walks the walk
and talks the talk. The hope is that everyone who comes into the
community will touch the wellness area, not just the people living
there but the visitors to the resort, people who come to seminars, and the hotel workers.
Szydlowski: We asked ourselves whether the center, free-standing
outside of Battle Creek, could sustain itself as in integrative model –
with significant insurance base – or as a straight cash model. The
answer was no, given the socioeconomic status in the region.
Integrator: What data did you use for this rule-out, to determine this?
Some came from MGMA (Medical Group Management Association) on what it
takes for a primary care clinic. Some was from our own experience. We
looked at the population that is within a 45 minute driving range.
That’s about as long as people will typically drive for basic medical
services. We looked at the lower than national average median income,
and the unemployment rate – which is higher than the national average. .
Integrator: So the natural, geographic market is not even median, but low mid-level.
Szydlowski: With our first Inner Harmony clinic we’re in rural Pennsylvania. It’s a factory town, a Blue Collar town and the population doesn’t much go for wellness. These are people who ask: “Does insurance pay for it?”
So then the thought was, will they come the 2-3 hours from Chicago or
Detroit. We concluded people wouldn’t be driving there just to use the clinic. So as a
free-standing, cash-paying model, it was clear it just wouldn’t work.
Integrator: Did you look at closer relationships with the local conventional medical community? You’ve done this in Scranton.
If we moved into developing many cross-referrals, we’d be moving into a
major medical model. This is not what Russ and Meg wanted. It was nixed
Integrator: Thus the focus on being more “integral,” as Peter calls it, with the community.
a person chooses to come to the middle of the woods in Michigan to a
sustainable community, they’re pretty plugged in already.
Their critical success factor for the campus is building the wellness
center and spa services into other components. A bulk of the base will
be people coming to the resort, or living there. They need to bundle
the services into the report prices and into annual fees in the
Integrator: Give an example.
those who come to the resort would have a comprehensive integrative
exam, or a massage or some combination of services as part of their
basic charges. This gets them into the spa center.
As a residential community, key wellness services can also be built
into fees. Communities do this with things like golf courses, charging
an annual or monthly dues for the added value. The community members
need to require that people participate.
Amato: The resident gets
called up and called in every 3 month or 6 months or so. They walk in or a golf cart is sent and
they’re brought to the center.
The whole focus is on aligning the margins with the mission of the Deep
Lake community. This was key for us in our thinking. Some of the
integrative wellness center costs may be built into housing prices.
Integrator: Talk about the services and staffing.
The Deep Lake strategy was not to have this be set up as a full
integrative model, with pharmacy. It’s a wellness center. The lead
service would be a holistic, comprehensive, integrative medicine
evaluation. The physician would also be very involved in all of the
teaching and education services. Deep Lake has always planned to have
an institute set up, and do a lot of seminars and workshops. The
integrative doctor would be lead on this.
So there will be a range of clinical and educational services chipping
in to funding the $150,000 plus salary for a full-time integrative
medicine medical doctor.
Amato: We considered a naturopathic physician. You can get them for half the price, at $60,000-$75,000. Despite the lower price, I think they generally add more in an integrative team-based wellness approach than a conventional MD.
Szydlowski: We debated the MD
versus ND. We decided ultimately that the person had to be a champion
in the community and across the country and this needed to be a holistic, integrative medical doctor.
Integrator: I would think an ND would be a challenge in Michigan, with no licensing for naturopathic doctors (ND). The
ND profession hasn’t gained the stature and respect there that it has in
some other jurisdictions.
Amato: On the concept of wellness center and spa, I don’t think anyone is yet doing what Meg and Russ are talking about here.
I have made it a point myself of going to spas all around the world
during the last 10 years. You don’t see wellness center and the spa
cross-serving and inter-connected. This is how this place can hit a
Integrator: Say more about this interconnection.
Amato: We can bring
a dimension of health and healing into the spa which is still fun. To
do this requires an educational process that can be co-marketed. For
instance, for those focusing on the bags under their eyes, we can bring
in Chinese medicine which relates these bags to the kidneys. There are
detoxification programs that can be very useful in skin care and beauty
and excellent for your health. There are also some technologies and
techniques along these lines that haven’t been introduced into the
Integrator: It will be a challenge for some to put spa and Michigan in the same sentence – especially in the winter.
Amato: I think the weather is going to be an issue. They want it to be year around.
Integrator: Perfect for mounting a holistic health and cross-country skiing fair.
We flexed the revenues up and down with the seasons. Staff will go up
and down. Predicting volume flows and staffing patterns will be key.
Revenues will be down mid-November through mid-April. So the model is highly
dependent on what happens in the other half a year.
Integrator: Many challenges, but ultimately do-able – I gather you think they can make this part of their sustainable community economically sustainable.
Szydlowski: They’ve got to align margins with mission and build the service costs into other components.
Amato: It’s about being integral and walking the walk. Education!
Education! Education! is my greatest hope for all concerned at Deep Lake.
Comment: A year ago, thanks to Integrator adviser Milt Hammerly, MD,
I had the opportunity to be involved in a fascinating and exciting
bit of consulting over a 4 month period involving a developer and a
health system. Our charge was to come up with an exciting,
integrative, East-meets-West concept for health in a large community
which, like Deep Lake (though larger), is planned to feature housing and a resort.
Our recommendation included creating a community health endowment
based on a margin on housing sales, plus some ongoing revenues based
on required community fees. The argument to the developer: US medicine
pays for disease and reaction. We need a dependable mechanism for
funding health and wellness. We even played around with a kind of
“local improvement district” concept such as neighbors use to tax
themselves to put in sewer systems and bury electrical wires. It was
exciting to think what one could do with a routine 1%-5% margin on the
cost of a few thousand houses.
While we found some models with pieces of what we envisioned, we found that this ambitious of an approach remains ground-breaking. The plan clearly required visionary, persevering
leadership from the developer in selling this new approach to house,
home and health to both builders and buyers. The developer would need
to be deeply hooked. The fellow with whom we were working didn’t have the commitment or public health vision to run with it.
The proposal Inner Harmony Group developed for Deep Lake appears to be
asking a similar question. Will Valvo and LaRou forge these links – even as
basic business models would like to see those 1%-5% margins invested
elsewhere, or pocketed? Success of the center would seem to hinge on this.
for inclusion in a future Your Comments Forum.