An Overview of SilverSneakers

TL;DR - SilverSneakers has built a really solid brand for seniors and is the “killer app” for many MA plans. Seniors will sign up for - and switch plans - based on which ones have SilverSneakers as a benefit. In a world where plans are competing like crazy for members, plans will turn to a partner like SilverSneakers that can drive membership, although they start to worry if a significant portion of the membership is signing up for the SilverSneakers brand versus the insurance product. There are some other efforts cropping up building supplemental benefit offerings similar to SilverSneakers, although growth has been a challenge during the pandemic.

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Thanks to Kevin Wang and Andrew Rosenthal for volunteering to share their wisdom on the SilverSneakers program and getting this topic conversation off the ground!

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Some Background Research on SilverSneakers

• Kevin Wang did some very helpful background research into Tivity, the publicly-traded parent company to SilverSneakers, for this call. Background is available here: https://docs.google.com/document/d/1CBZjA7PCsnbtr7zBhFBdp6XOz7cvUs5SL4jNUaFhB8A/edit?usp=sharing‍
• SilverSneakers has 14.5 million eligible members through MA / MedSupp plans. It has an arrangement with nearly 16,000 physical locations for seniors to access fitness classes. It’s main customer base is UHG, Humana, and BCBS, which each contribute more than 10% of revenue and about 40% in aggregate. 
• About 3/4 of revenue tied to SilverSneakers comes from people visiting gyms - payors pay SilverSneakers, which then pays the gyms. About 1/4 of revenue comes from a PMPM style fee. So Tivity is strongly incentivized to get people to go to the gym. 
• Despite this, anecdotally it appears engagement rates are very low, somewhere around 5% using gyms. UnitedHealth data in 2018 similarly showed over 90% of members never stepped foot in a gym. Link. Note, many of the bigger payors still perceive it as incredibly valuable even if members don't access the offering - back the brand halo and perception of the offering.. 
• Today, it’s hard for individuals to sign up for Medicare Advantage plans via medicare.gov in a way they think about the world. If you want to figure out what plans have your primary care provider in-network, it’s not exactly easy for them to figure it out. This is where brokers can help. And for people selecting plans, it’s providers and pharmacy that matter most when selecting a plan, and then access to SilverSneakers is behind that. So brokers love to help support customers in selling plans with it as a benefit. 
  

SilverSneakers as the “Killer App” for MA

• SilverSneakers was referred to as the “killer app” during Andrew Rosenthal’s work with a Medicare Advantage brokerage. From his experience, it’s the key reason why people are moving from Medicare Fee for Service into Medicare Advantage. The idea of a free gym membership drove people to switch plan offerings, and it was one of the few benefits that was accessible to any plan member on day one, and it’s tied to the idea of the member staying healthy. Everything else requires you to be sick / a prescription - i.e. meal delivery after getting discharged from the hospital, etc. 
• Others are attempting to challenge Tivity providing MA members with access to local gyms. More recently startups have been emerging providing access to local clubs beyond gym memberships - i.e. chess clubs, running clubs, etc. It sounds as though some of those other offerings have struggled during the pandemic - they’re newer things that seniors aren’t as used to and so shied away from. But long term these sorts of memberships may continue to take off as supplemental benefits.
  

What Brand are MA Members Signing up For? 

• One of the questions payors will inevitably think about is whether SilverSneaker’s brand is getting too big and if members are only signing up for a plan for their SilverSneakers access. So as a big payor, you get very nervous if a quarter of your membership is signing up specifically to get access to a benefit offered by a different company with a well-known brand.
• People will go to SilverSneakers website trying to activate their membership only to realize their Medicare Advantage plan doesn’t have access to SilverSneakers, and they will switch plans at the next enrollment cycle in order to gain access to SilverSneakers. 
• It seems this scenario played out when UHG / Optum tried to develop its own version of SilverSneakers, called Renew Active, internally and attempted to move away from SilverSneakers back in 2018. They eventually moved back to SilverSneakers in 2019 after finding that members were leaving UHG for other plans to regain access to SilverSneakers. Link.
  

How do payors look at ROI?

• If you’re trying to figure out how SilverSneakers and others are providing ROI to payors based on medical cost savings, you’re likely going to be looking for a long time. Payors aren’t looking at SilverSneakers to prove out ROI based on medical savings, even though programs may try to demonstrate cost savings, as SilverSneaker has. Link Payors look at this as a marketing play. It’s all about customer acquisition for Medicare Advantage plans. Particularly in this world where member acquisition and retention is becoming increasingly challenging, having a partner like SilverSneakers that can drive membership is a significant advantage for a payor.
• You’ll also see plans care about these benefits from a quality perspective. Member satisfaction plays a huge role in STARS scores, and the folks who sign up for gym memberships may be a small overall percentage of membership but they generally are a loud / vocal portion of membership so not having these programs can hurt that. 
• Nobody was aware of any plans doing any sort of risk-sharing agreements with SilverSneakers or similar products in the market. 
  

How does SilverSneakers advertise?

• One of the beautiful things about the SilverSneakers model is that they have payors advertising on their behalf and spending $1 billion dollars each Open Enrollment period. That’s a nice free advertising channel for SilverSneakers. 
  

What are newer carriers doing?

• Anecdotally, it seems like the startup Medicare Advantage plans have been moving away from SIlverSneakers. But this is the big question with these newer plans - can they actually drive meaningful market share? 
  

What are other offerings in the space?

• Bold (https://agebold.com/) is a good example of a company in this space, offering a new exercise model for seniors 
• There are companies providing seniors with access to memberships for things outside of fitness, i.e. chess clubs. 
• A few years back Prehype incubated something in this space looking at helping seniors identify their “third act” in life and find meaningful ways to spend the next 30 years of life. It was gaining some early traction with payors but then stalled after the presidential election. It seems like the opportunity is still there though. 
• Apple Watch partnerships made a big splash with some Medicare Advantage payors over the last few years, but despite that it doesn’t seem to have taken off in a similar way as SilverSneakers. It’s not clear why not, but it isn’t like individuals have been calling Medicare brokerages asking where they can get their Apple Watches. 
  

How do other supplemental benefits compare? 

• In general supplemental benefits should not be overlooked by plans. Fitness is a great benefit for actuaries because it’s easily priced, and dental / vision / hearing are also supplemental benefits that bring people into Medicare Advantage. Plans offering more supplemental benefits drive more growth. Link.
• It’s worth keeping in mind that during the competitive bidding process, health plans have a chance to revise their rates in August. It’s important that supplemental benefits are flexible to be adjusted in August so that plans have flexibility in their bid. This is part of why OTC cards are super intriguing for plans. Beneficiaries like them (I get money to spend on my eyedrops!) and it’s easy for the plan to adjust the amount. It’s not clear how easy it is to adjust the fitness benefits up or down in the bid process, but it’d be helpful if possible.