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Health Insurer WellPoint Investing About $50 million In Two Four Seasons Hotel Projects;
Sees Luxury Health Spa Component as an Opportunity to
 Make Money and Improve Wellness
By Daniel Lee, The Indianapolis Star
Knight Ridder/Tribune Business News

Mar. 15, 2006 - WellPoint Inc., which built its multibillion-dollar business selling health insurance, is diving into the luxury hotel and spa scene.

The Indianapolis-based insurer is investing about $50 million into two new high-end resorts designed to pamper guests and promote wellness.

It's comprehensive care, for those who can afford it.

WellPoint, the nation's largest health-benefits company, is joining Dole Food Company Inc. and Four Seasons Hotels and Resorts in the $300 million-plus projects. The first center, dubbed the California Wellbeing Institute, is slated to open this summer in Westlake Village, Calif., next to Dole's headquarters and nestled into the sprawling wealth of Southern California. A second resort is planned for Hawaii.

Indeed, the new resorts will be a far cry from the crowded waiting rooms and cramped exam rooms of the traditional doctor's office.

Those coming to the 270-room, five-star hotel will stay in rooms with floor-to-ceiling windows and marble bathrooms.

They can meet with a personal health coach, refuel their bodies at the juice bar and stroll amid gardens and waterfalls as they recover from cosmetic surgery.

Visitors also can meet with physicians, getting comprehensive "executive" physicals to evaluate their overall health. They can hop from a hydrotherapy pool into an MRI scanner. Patients will be pampered in 28 spa-treatment rooms and luxury suites.

WellPoint Chief Financial Officer David Colby said the company's stake in the luxury centers is a chance to promote wellness and disease prevention. He added that WellPoint expects the resorts to be a profitable venture.

"Looking at the health-care marketplace and given our mission and definitely our goal of promoting healthy living and well-being, this is certainly very consistent of our goals," he said.

Some, however, see such health spas as indicative of growing inequities within the nation's health-care system.

"We're sort of developing a two- or three-tiered pricing in the United States," said Dr. Gary Ayres, an internist with Fishers Internal Medicine. "That's frustrating because from a primary-care standpoint we want everyone to be treated equally and fairly."

The new high-end medical spas come at a time when health-care costs are surging, swelling the ranks of the uninsured and placing financial strains on Americans and their employers.

The WellPoint-backed resorts, though, are part of a growing national trend to offer wealthy clientele a blend of holistic and traditional health care, packaged together in posh surroundings. For instance, a couple could book a four-night stay at the Canyon Ranch resort in Tucson, Ariz., for $3,080 per person, a rate that includes health and spa services.

The trend also has hit locally. The recently opened for-profit Clarian North Medical Center in Carmel includes OLOGY, a "medically-based" spa, where visitors can pay $85 for a one-hour Balinese Body Ritual, where the customer is covered in a mixture of ground coconut hulls and organic coconut oil to exfoliate dead skin.

Rates for the California Wellness Institute have not been released yet, according to the resort.

Colby said most of the services will not be "exceedingly expensive" for people with some disposable income and the motivation to improve their wellness. He added that most of the center's services would not be covered by health insurance. WellPoint, besides being an investor, will also manage many health and wellness services at the facility.

The California center, which also includes a conference center, would not specifically be used to entertain potential customers, according to Colby. But he said, "We may do certain meeting there so that the participants have access to the services, just like anyone."

At least one health industry expert was surprised WellPoint would be investing in such a center.

"Insurance companies often are discouraging things like people going in and getting MRIs whenever they want to," said Paul Ginsburg, president of the Center for Studying Health System Change, a research group based in Washington, D.C. "With the need to improve wellness throughout society, maybe a company like WellPoint thinks it's going to learn a lot about wellness through this."

Ginsburg added that the WellPoint-backed health spa underscores a larger economic shift in the United States. "I think it's probably inevitable that people with a lot of money are going to be getting better care not only than uninsured people but than the bulk of the population," he said.

Ayres, the Fishers internist, sees WellPoint's stake in medical spas as a potential conflict of interest. He said he often has to battle with insurance companies including WellPoint's Anthem Blue Cross and Blue Shield to convince them that screenings are medically necessary and should be covered.

"We have to fight to get a colonoscopy done, or we have to fight to get an MRI done," Ayres said.

For WellPoint, "the conflict of interest is you run your business this way and then on the other hand, in another arm of the company, you invest in a venture that is sort of like no holds barred, like whatever the patient wants the patient gets," he said. "That's a double standard."

Others say it's all about business when it comes to for-profit health benefits companies. "They're not charities, they're businesses," said Stephen Simpson, analyst with the financial Web site Motley Fool.

He said it makes sense to target wealthy consumers willing to spend extra on their health. "These people are going to be paying full freight and then some for the care they're going to be getting."

The $50 million stake represents a small investment for a company that rang up $45 billion in revenues last year.

But WellPoint's Colby still sees the firm's foray into luxury health spas as an opportunity to make money and improve wellness.

"We want to keep people healthy," he said. "Well-being is good in our business."


Here's a sampling of pampering for sale at the five-star, 270-room hotel and spa in Westlake Village, Calif.:

-- 28 spa treatment rooms and luxury spa suites offering holistic therapies.

-- A Well-being Index to assess each guest's health and wellness -- a process that includes body measurements and self-reporting combined with medical and personal care.

-- A "personal health coach" to help guests explore possible "self-improvement programs and vacations," as well as suggest life changes to promote happiness, health and longevity.

-- Spa treatments, including hydrotherapy pools and steam rooms.

-- Physicians on the premises to offer MRI, CT and other body-scanning equipment, along with other medical staff such as dietitians and chiropractors.

Sources: California Wellbeing Institute, and WellPoint


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