TivityHealthSpringyFeetPowerpoint.pptxTivity Health SpringyFeet
Ansje Gershkoff Project Manager
Tivity Health Inc.
MBA 705 10/25/2020
Rationale
By aligning services our new product service SpringyFeet would allow members to get significant discounts which would include podiatry services, shoe fittings, and ancillary services like foot massage and reflexology which is an unmet niche in the industry.
Tivity Health SpringyFeet Implementation Plan
Tivity Health Inc. enables members to “advance long-lasting health and vitality especially among aging populations
Headquartered in Franklin TN its services include three major programs SilverSneakers, PrimeFitness, and WholeHealth Living to meet a global need of health and nutrition wellness in the workplace and beyond.
SpringyFeet byTivity Health Inc. will fill a gap in podiatry care for the Medicare members of SilverSneakers
SilverSneakers®
Empowering active aging
America’s leading community fitness program designed for older adults, SilverSneakers® promotes vital physical and social activity through 15,000 facilities nationwide.
Enrollment Eligibility
Members of SilverSneakers
Member of Medicare or MedicareAdvantage plan
By aligning services our new product service SpringyFeet would allow members to get significant discounts which would include podiatry services, shoe fittings, and ancillary services like foot massage and reflexology which is an unmet niche in the industry.
Enrollment
The Key milestones will be reviewed as part of the review process of the three major elements of the project at 1 month, 3 months, and 6 months. By the third month 3 of the project, the plan is to have member enrollment figures at 250,000 over 6 geographic regions.
Opportunity
For Medicare recipients there is a problem with foot services which are covered as “routine foot care is excluded from coverage in the absence of localized injury or symptoms involving the foot” (Center for Medicare Services, 2019). By creating the program SpringyFeet Tivity Health's solution addresses the problem of accessibility and affordability to podiatry services by providing an alternative resource. This solution is unique because it provides a combination of podiatry, shoe fitting, and foot massage therapy for an affordable price to members of the SilverSneakers program.
Market
Tivity uses market research and analysis tools such as SWOT and PEST as part of its strategic mitigation plan.
For SpringyFeet the market analysis reveals that there is a need for this product service.
The market size is that “more than 135 million Americans are eligible for programs through SilverSneakers” (Tivity Health, 2019). Each of these members can also enroll in SpringyFeet.
Competition
The company is acutely aware of key competitors such as “Stay Well Management”, and “Health Solutions” and has analysts who follow healthcare trends, and also the competition to maintain an advantage in the industry.
A potential obstacle for SpringyFeet is that what often seems like a great idea can easily go flat if frequent feed-back from consumers is not obtained.
For Tivity Health and the new service product line SpringyFeet it is important to continually readjust and recalculate a company’s strategy based on surveys and sales data.
Innovation
Tivity has strong capabilities in developing and managing networks of fitness centers and complementary and alternative practitioners.
It manages its specialty health benefit programs through its three main networks: SilverSneakers, Prime Fitness, and WholeHealth Living.
Tivity Health Inc. ABCD Strategy
The business strategy Tivity Heath Inc. uses is called its ABCD strategy. This "A-B-C-D" strategy is designed to...
Add new members in our three existing networks - SilverSneakers, Prime Fitness, and WholeHealth Living
Build engagement among current members
Collaborate with partners to add new products and services that will leverage the value of our brand
Deepen relationships with partners and instructors within their national network. Tivity Health 2019
Physical and Technological Resources
Tivity Health already has as existing partners through SilverSneakers, Prime Fitness, and WholeHealth Living. The opportunity exists for SpringyFeet to expand as they “collaborate with partners to add new products and services that will leverage the value of the brand” (Tivity Health, 2019).
Implementation Schedule
SpringyFeet will have an effective “hierarchical listing of what must be done during the project” (Stevenson, 2018). Tivity Health will use the optimization of processes to map out processes for SilverSneakers/SpringyFeet. We will displan a SpringyFeet Work Breakdown Planning Chart).
This plan will outline what needs to be done by month 1, month 3, and month 6 incremental timeline. Insurance and Podiatry Support is the second element of the implementation schedule and will involve developing new partnerships with health insurers, and other government healthcare-related businesses.
Project Review Processes
The Key milestones will be reviewed as part of the review process of the three major elements of the project at 1 month, 3 months, and 6 months. By the third month 3 of the project, the plan is to have member enrollment figures at 250,000 over 6 geographic regions.
All 16,000 locations that are available to SilverSneakers have the SpringyFeet Program available to their members. This will be a deliverable with a timeline of the 18th month of the project. By month 7 a 50% increase in capacity and enrollment should be attainable
Key Roles, Responsibilities, Qualifications
We will need to define the roles and responsibilities of the team members of the cross-functional implementation team. The role I will play is as the Project manager. I will plan to lead the overall project and create a schedule with key persons assigned to teams to identify the critical path to success.
| Springy Feet Implementation Team | ||||||||||
| Contingency Coverage | ||||||||||
| Project Manager | Ansje Gershkoff | Alternate | Tommy Lewis | |||||||
| Marketing and Strategy | Tommy Lewis | Alternate | Ansje Gershkoff | |||||||
| Product Service Design | Adam Holland | Alternate | Bonnie Sharito | |||||||
| Insurance and Podiatry Support | Bonnie Sharito | Alternate | Adam Holland |
Contingency Plans
| Contingency Plan | ||||||
| Marketing and Strategy | Meet weekly with the Project manager | |||||
| Tasklist to each team member | ||||||
| Product Service Design | Meet weekly with the Project manager | |||||
| Tasklist to each team member | ||||||
| Insurance and Podiatry Support | ||||||
| Meet weekly with the Project manager | ||||||
| Tasklist to each team member | ||||||
| List of insurers and Podiatry groups | ||||||
| List of foot service vendors |
Financial Analysis: Projected Costs
Projected costs of running SpringyFeet are total Fixed costs of 525,000. Since SpringyFeet is a service product and there are millions of eligible members for the program, Tivity Health Inc. expects a short period of under six months before break-even of launching the program
SilverSneakers “has gained revenues increased by 9.8% t $153.0 million compared to revenues of 139.4 million for the fourth quarter of 2019” (Tivity Health 2020). This figure is expected to continue going up in 2020 with a breakeven point at month three as SpringyFeet is rolled out to SilverSneakers members.
| SilverSneakers SpringyFeet Fixed and Variable Costs | ||||||||
| Fixed Costs | Variable Costs | |||||||
| Property and Equipment | 30+E4:E230000 | materials | 40,000 | |||||
| Computer Expenses | 100,000 | maintenance | 20,000 | |||||
| Furniture and Office | 125,000 | credit card fees | 35,000 | |||||
| Rent | 36,000 | marketing costs | 50,000 | |||||
| Salaries | 135,000 | posters and supplies 30,000 | ||||||
| Insurance | 9,000 | |||||||
| Utilities | 48,000 | |||||||
| telephone | 9,000 | |||||||
| Internet | 3,500 | |||||||
| buildings | 60,000 | |||||||
| total fixed costs | 525,500 | Total variable costs | 145,000 |
| Tivity Health Inc. | Financial Projections | |||||||||||
| SpringyFeet | in thousands of dollars | |||||||||||
| Value in Millions of dollars | Actual Performance | Financial Projections | ||||||||||
| month 1 | Month 3 | Break Even | ||||||||||
| Years | 2020 | 2020 | 2020 | 2021 | 2022 | |||||||
| Revenue | 15,480 | 15,137 | 15,654 | 15828.15 | 16008.17 | |||||||
| Cost of Revenue | 9,890 | 10,155 | 10042.33 | 10194.65 | 10042.33 | |||||||
| Operating Expenses | 4,662 | 4,868 | 4937.93 | 5010.95 | 5010.95 | |||||||
| Operating Income | 1,296 | 1,400 | 1416.1 | 1432.2 | 1448.485 | |||||||
| Net Income | 437 | 564 | 569.0255 | 575.5115 | 582.0553 | |||||||
| (initial investment 500,000) |
Financial Analysis: Revenue Streams
A member will pay a straight fee of $48 annually which will waive additional copay for the members themselves. As a contracted vendor a podiatrist can bill for services under the affordable care act and receive a portion of income for services through the SpringyFeet program
Tivity Health Inc. which has financial strength as it reports Total revenues in the first quarter of 2020 of “$337.7 million increased $123.6 million, or approximately 58%, compared to the first quarter of 2019 driven by a full quarter of Nutrition segment revenues, representing an increase of $120.4 million, and an increase in Healthcare segment revenues of $3.2 million” (Tivity Health, 2020).
For outside funding sources, they partner with CareFirst which is a not for profit non- stock health services company
SpringyFeet over three years with $250,000 enabled at startup, and $375,000 in year 2 (2021) and year 3 (2022). These funds will be used to establish a new contract with vendors and a portion of the funds will assist members who are of low income with affordability options as part of Tivity Health’s “movement to transform rural aging and affordability initiative” (Tivity Health, 2019).
Financial Analysis: Net Present Value
The funding plan for SpringyFeet includes two sources of capital, current cash assets, and capitalization funds such as those obtained through CareFirst.
Net present value “expresses in current value the sum of all future cash flows of an investment proposal: (Stevenson, 2018).
SpringyFeet’s assumptions include a three-year average return of 15% with consideration of an inflation rate of 1.3%. This yields an attractive ROI to investors.
Analysis Parts
Tivity Health will use Hybrid forecasting through our credible finance consultants to use a combination of knowledge based forcasting combined with data and analytics to enhance the credibility and accuracy of our forecast for SpringyFeet
21
Projections: if 500,000 members sign up for SpringyFeet in the first month at $48/year (since millions are eligible for SilverSneakers as members, then total sales
500,000 members X$48. $24,000,000. Less variable costs, 24,000-145,000= 23,855,000, less fixed costs=23,329,500. projected sales of an increase of 10% per month are predicted with our demand forecast based on SilverSneakers member #s
Enrollment Forecast
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| Actual Performance | Financial Projections | |||||
| month 1 | Month 3 | Break Even | ||||
| 2020 | 2020 | 2020 | 2021 | 2022 | ||
| 15,480 | 15,137 | 15,654 | 15828.15 | 16008.17 | ||
| 9,890 | 10,155 | 10042.33 | 10194.65 | 10042.33 | ||
| 4,662 | 4,868 | 4937.93 | 5010.95 | 5010.95 | ||
| 1,296 | 1,400 | 1416.1 | 1432.2 | 1448.485 | ||
| 437 | 564 | 569.0255 | 575.5115 | 582.0553 | ||
| (initial investment 500,000) |
Finance Assumptions: The company reports revenues in the first quarter of 2020 of “$337.7 million increased $123.6 million, or approximately 58%, compared to the first quarter of 2019 driven by a full quarter of Nutrition segment revenues, representing an increase of $120.4 million, and an increase in Healthcare segment revenues of $3.2 million” (Tivity Health, 2020).
Tivity Health Inc. will distribute to SpringyFeet one million dollars over three years with $250,000 enabled at startup $375,000 in the second year, and $375,000 in the third year. Capital contributions such as these will increase SpringyFeet’s startup equity.
SpringyFeet will present the assumption of a breakeven point for investors between months three to four of the project start-up due to high member enrollment of eligible SilverSneakers members enrollment and sales projections of 500,00 new members in the first three months, an increase in member enrollment of 10% per month, and an expected ROI of 15% in the first year of the program. (See Appendix A for the SpringyFeet demand forecast). As enrollment increases, profitability will continue to increase as SpringyFeet has low overhead as a service product that utilizes many shared resources throughout Tivity Health Inc’s corporate structure.
Summary
Legal and Ethical Environment
Because Tivity Health provides services to Medicare and MedicareAdvantage members they are subject to various federal laws and regulations. These include laws such as the federal False Claims Act and other billing and reimbursement requirements from Medicare-related to fraud and abuse. Consideration of legal issues is an important part of the production process for SpringyFeet. The company realizes there is a significant risk of a cyber breach and can vary from privacy security and hackers of computer systems, to breach of security laws from HIPAA (Health Insurance Portability and Accountability Act). Additionally, there is the risk of injury lawsuits and other legal issues that may result in vendor contract issues. Organizations must pay special attention to their potential liability due to damages or injuries resulting from either faulty design or poor workmanship.
Stakeholder and Customer Diversity
Tivity has the opportunity to expand its stakeholder base and has continuous opportunity to develop new partnerships with health insurers, government health programs, and businesses. SpringyFeet will work with Medicare and MedicareAdvantage plans and thousands of gyms and podiatry groups around the country as it expands the program.
As an example of stakeholder diversity, Tivity Health Inc. extended an existing partnership through 2022 under which “ Humana will offer SilverSneakers to Humana’s Medicare Advantage individual and group members”(Financeyahoo, 2018).
Corporate Social Responsibility
SpringyFeet will implement a charity care plan in giving back to society through a partnership with eVillages and the rural aging initiatives that Tivity Health has in place. Tivity Health’s goal is to “make life easier for individuals, at all stages of life. Whether that is through providing access to affordable fitness and social engagement programs and nutritious foods, addressing the social isolation and loneliness crisis, or pushing up our sleeves to rebuild homes in weather-ravaged parts of our nation” (Tivity Health, 2020).
Conclusion
SpringyFeet is a new opportunity for Tivity Health Inc. which will align with the company’s abilities and willingness to develop, organize, and grow the business and extend to develop opportunities toward health promotion.
The impact is to enable healthy aging both in the workplace, and the community by offering streamlined podiatry services.
The implementation plan of SpringyFeet will be a successful program when evaluating all these factors and will allow membership enhancement of podiatry services to the healthcare options for millions of Medicare and MedicareAdvantage members. This will enable SpringyFeet to allow members to “lead their best lives” and take care of their feet affordably and with superior quality. (Tivity Health, 2019).
References
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Stevenson, W. J. (2018). Operations Management. New York: McGraw-Hill Education.
Tivity Health. (2020). Tivity Health, Inc.-Corporate Governance-Management-Biography.
https://investors.tivityhealth.com/corporate-governance/management/
Biography/default.aspx?Itemld=6994c2e-41c5-ac84-914c4169144c
Stevenson, W. J. (2018). Operations Management. New York: McGraw-Hill Education.
Tivity Health. (2019). 2019 annual report. Retrieved from: http://annualreports.com
/Company/tivity-health-inc
