The medical fitness club business continues to bulk up, with overall investment closing in on $1 billion, according to the latest analysis by the Association of Hospital Health and Fitness.
More than $800 million has been spent to date on health clubs affiliated with hospitals or other healthcare providers, based on data in the third edition of the Medical Fitness Centers Directory, published this month. That figure is double the $400 million that had been invested when the Evanston, Ill.-based association published its second edition in 1994.
"We are seeing pretty good growth across the U.S. and more growth in areas east of the Mississippi and South of the Mason-Dixon line where these centers haven't been as prevalent," says John Greene, the group's executive director. "These centers can fulfill the mission of their sponsoring institutions and be financially viable in a variety of communities."
While the growth in the number of medical fitness centers has leveled off, with about 350 in operation, they are becoming more established in their markets, boosting membership nearly 20% to 582,000 in 1996 compared with the previous year. The centers have posted annual membership growth rates of about 19% since 1992.
Members pay about $290 million annually in dues, the association says. While return on investment varies, its data show profit margins for centers are as high as 24% and typically average between 10% and 12%. Most not-for-profit centers only want a return of 2%, the association says.
The ownership of the centers has remained essentially the same. Only 7% of the facilities listed in the latest directory were owned by an organization other than a hospital compared with 6% in 1994.
The location of the centers runs the gamut. The most facilities, 38%, are off-campus satellite affiliates of a hospital; 28% are freestanding on a hospital campus; 14% are in a hospital; and 14% are part of a medical office building.