AvMed Extends HWAY SilverSneakers

Well-being enhancement company Healthways ( HWAY - Analyst Report ) recently revealed that AvMed Health Plans has extended, by a couple of years through 2014, its offering of Healthways SilverSneakers Fitness Program. SilverSneakers may be accessed by over 31,000 AvMed Medicare Advantage enrollees in Miami-Dade and Broward counties.

The SilverSneakers Fitness Program encourages older people to regularly exercise, thereby yielding reduced healthcare expenses and enhanced well being. The program promotes positive changes in behavior by meshing social encounters with its fitness regimen. It was founded in 1993 and caters to over nine million eligible enrollees through 15,000 fitness facilities.

The payback from the SilverSneakers program may be gleaned from the SilverSneakers Fitness Program 2011 AvMed Annual Member Survey. The results indicate that AvMed SilverSneakers enrollees reported better health than the national cohort. In addition, they were less likely to report chronic illnesses, such as hypertension and diabetes.

For more than 40 years, AvMed Health Plans has been a provider of health coverage in Florida. It offers a variety of products and plans for individuals and employers in several counties. AvMed has granted its eligible enrollees access to SilverSneakers since 2010.

The Healthways model encourages people to make favorable lifestyle changes that lead to enhanced well-being, reduced healthcare costs, improved performance and economic value for customers. The company has invested in technology platforms that provide scalable support with large populations. It has tie-ups with a large proportion of U.S. health plans and counts many millions of lives in its customer base.

Due to its unique scalable business model, Healthways shares may present a long-term investment opportunity, although it faces many challenges in the short term.

Healthways is the leader in a strategically critical and rapidly evolving part of the health care services market. Its fitness program (SilverSneakers) for seniors is available at 14,000 centers across the U.S. and caters to several million eligible enrollees. Healthways competes with Express Scripts ( ESRX - Analyst Report ) among others.

We currently have a Neutral recommendation on Healthways. The stock retains a Zacks #3 Rank, which translates into a short-term Hold rating.