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Well-being enhancement company Healthways (HWAY - Analyst Report) recently entered into a partnership with not-for-profit healthcare company Regence binding through 2015. The three-year partnership will require Healthways to offer its SilverSneakers Fitness Program to more than 100,000 Regence Medicare Advantage PPO members in Oregon, Washington, Idaho and Utah.

The SilverSneakers Fitness Program is a well-regarded physical activity program to improve well-being of older citizens in the U.S. implying reduced costs associated with healthcare. It encourages positive changes in behavior by promoting a physical regimen. This will result in lower disease rates resulting in reduced medical expenditure for older adults.

The contract fee will garner incremental revenues for Healthways. Its second quarter revenues increased 0.4% year over year to $170.2 million, supported by the acknowledgement of performance-based fees.

The company inked 23 new, expanded or extended contracts in the most recent quarter. The count included nine fresh contracts, one expanded contract, two expanded and extended contracts and 11 extended contracts. The company also extended its SilverSneakers Fitness Program contract with WellPoint (WLP - Analyst Report).

Earlier, Healthways revealed agreements to provide its SilverSneakers Fitness Program to Florida Blue, UCare and Humana (HUM - Analyst Report).

The Healthways model encourages people to make favorable lifestyle changes that lead to enhanced well-being, reduced healthcare costs, improved performance and economic value. 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.

Healthways currently retains a long-term “Outperform” recommendation, supported by a short-term Zacks #2 Rank (Buy). The company 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 over 15,000 centers across the U.S. and is available to over nine million eligible enrollees through Medicare Supplement, Medicare Advantage plans and group retiree plans. Healthways competes with Express Scripts (ESRX - Analyst Report) among others.

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

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