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Integrative Clinics and Wellness: Inner Harmony's Amato and Szydlowski on the Deep Lake Strategy PDF Print E-mail
Written by John Weeks   

Integrative Clinics and Wellness: Inner Harmony's Amato and Szydlowski on the Deep Lake Strategy

Summary: Peter Amato and Steve Szydlowski, DHA, MBA, consulted on the integrative wellness center that would be associated with the 313 acre Deep Lake sustainable community and resort envisioned for rural Michigan and reported here in December 2007. The two, founder and CEO, respectively, with Inner Harmony Group, faced significant challenges based on the Deep Lake location, population and weather. This Integrator double-interview guides you through their process in creating a combined integrative wellness center-spa strategy.
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integrative wellness center, sustainable community, spa, resort
Deep Lake - site of the planned resort and community in which the integrative center will be located
When Russ Valvo and Meg LaRou began planning their integrative healthcare center which would grace their planned community, Deep Lake, they brought in the Inner Harmony Group (IHG) to assist them with their business model.
(See "Shifting the Heartland: Deep Lake's Plan for a Sustainable, Integrated Resort Community and Clinic in Michigan," December 13, 2007) The ambitious project is on a 313 acre parcel which will eventually combine a resort, an integrative health center and a village of 137 homes. They presented IHG's leadership team of Peter Amato and Steve Szydlowski, DHA, MBA, with a set of interesting challenges:

  • Location  The wellness community, resort and center are not located in a typical, hot destination resort zone.

  • Clientele  Valvo and La Rou are seeking to reach a "mid-market" rather than the wealthy who frequent Canyon Ranch and other similar resort.

How should one position an integrative facility? IHG, an Integrator sponsor, was hired for their strategic thinking. Peter Amato, who founded IHG, is a pioneer in integrative clinics whose work for over a decade in the Scranton, Pennsylvania area, has prepared him for thinking about the Battle Creek, Michigan, environment. Amato's "Lessons for Running an Integrative Clinic in the Black" were hard-won.
(See "Peter Amato: Inner Harmony's Winding Road Toward Health (and Profitability)," July 6, 2006) Szydlowski, besides being IHG's CEO, holds a full-time faculty position at the University of Scranton in the Department of Health Administration and Human Resources. Szydlowski's brass-tacks, no nonsense comments in two presentations at January 2008 Integrative Healthcare Symposium were well-received. Szydlowski had the lead on the IHG project for Deep Lake.

Integrator:  What's the central issue in the success of the Deep Lake center?

Amato: The hinge will be on the level, depth and quality of integration of the center with the rest of the community. It's all about conscious community. That's what will make this work.

Szydlowski: It's the relationship with the other components.

Integrator: How will that be achieved?

Inner Harmony Grooup, wellness, integative clinic, consulting
Peter Amato, Inner Harmony Group founder
: We think leveraging will be a key. If this is to be a real holistic community, the whole community will need to use the center. This means the people, whether transient or living on site, whether using the hotel or
coming to retreats and events or living in the condos and homes. This is an integral idea - a conscious community which walks the walk and talks the talk. The hope is that everyone who comes into the community will touch the wellness area, not just the people living there but the visitors to the resort, people who come to seminars, and the hotel workers.

Szydlowski: We asked ourselves whether the center, free-standing outside of Battle Creek, could sustain itself as in integrative model - with significant insurance base - or as a straight cash model. The answer was no, given the socioeconomic status in the region.

Integrator: What data did you use for this rule-out, to determine this?

Szydlowski: Some came from MGMA (Medical Group Management Association) on what it takes for a primary care clinic. Some was from our own experience. We looked at the population that is within a 45 minute driving range. That's about as long as people will typically drive for basic medical services. We looked at the lower than national average median income, and the unemployment rate - which is higher than the national average. .

Integrator: So the natural, geographic market is not even median, but low mid-level.

Szydlowski: With our first Inner Harmony clinic we're in rural Pennsylvania. It's a factory town, a Blue Collar town and the population doesn't much go for wellness. These are people who ask: "Does insurance pay for it?" So then the thought was, will they come the 2-3 hours from Chicago or Detroit. We concluded people wouldn't be driving there just to use the clinic. So as a free-standing, cash-paying model, it was clear it just wouldn't work.

Integrator: Did you look at closer relationships with the local conventional medical community? You've done this in Scranton.

Inner Harmony Group, integrative medicine clinic, consulting, business of CAM
Steve Szydlowski, DHA, MBA
: If we moved into developing many cross-referrals, we'd be moving into a major medical model. This is not what Russ and Meg wanted. It was nixed out.

Integrator: Thus the focus on being more "integral," as Peter calls it, with the community.

Amato: If a person chooses to come to the middle of the woods in Michigan to a sustainable community, they're pretty plugged in already.

Szydlowski: Their critical success factor for the campus is building the wellness center and spa services into other components. A bulk of the base will be people coming to the resort, or living there. They need to bundle the services into the report prices and into annual fees in the community.

Integrator: Give an example.

Amato All those who come to the resort would have a comprehensive integrative exam, or a massage or some combination of services as part of their basic charges.  This gets them into the spa center.

Szydlowski: As a residential community, key wellness services can also be built into fees. Communities do this with things like golf courses, charging an annual or monthly dues for the added value. The community members need to require that people participate.

Amato: The resident gets called up and called in every 3 month or 6 months or so. They walk in or a golf cart is sent and they're brought to the center.

Szydlowski: The whole focus is on aligning the margins with the mission of the Deep Lake community. This was key for us in our thinking. Some of the integrative wellness center costs may be built into housing prices.

Integrator: Talk about the services and staffing.

Szydlowski: The Deep Lake strategy was not to have this be set up as a full integrative model, with pharmacy. It's a wellness center. The lead service would be a holistic, comprehensive, integrative medicine evaluation. The physician would also be very involved in all of the teaching and education services. Deep Lake has always planned to have an institute set up, and do a lot of seminars and workshops. The integrative doctor would be lead on this.

Integrator: So there will be a range of clinical and educational services chipping in to funding the $150,000 plus salary for a full-time integrative medicine medical doctor.

Amato: We considered a naturopathic physician. You can get them for half the price, at $60,000-$75,000. Despite the lower price, I think they generally add more in an integrative team-based wellness approach than a conventional MD.

Szydlowski: We debated the MD versus ND. We decided ultimately that the person had to be a champion in the community and across the country and this needed to be a holistic, integrative medical doctor.

Integrator: I would think an ND would be a challenge in Michigan, with no licensing for naturopathic doctors (ND). The ND profession hasn't gained the stature and respect there that it has in some other jurisdictions.

Integrative clinic consulting, business of integration
Consultants to Deep Lake on their strategic plan
On the concept of wellness center and spa, I don't think anyone is yet doing what Meg and Russ are talking about here. I have made it a point myself of going to spas all around the world during the last 10 years. You don't see wellness center and the spa cross-serving and inter-connected. This is how this place can hit a home run.

Integrator: Say more about this interconnection.

:  We can bring a dimension of health and healing into the spa which is still fun. To do this requires an educational process that can be co-marketed. For instance, for those focusing on the bags under their eyes, we can bring in Chinese medicine which relates these bags to the kidneys. There are detoxification programs that can be very useful in skin care and beauty and excellent for your health. There are also some technologies and techniques along these lines that haven't been introduced into the United States.

Integrator: It will be a challenge for some to put spa and Michigan in the same sentence - especially in the winter.

Amato: I think the weather is going to be an issue. They want it to be year around. 

Integrator: Perfect for mounting a holistic health and cross-country skiing fair.

Szydlowski:  We flexed the revenues up and down with the seasons. Staff will go up and down. Predicting volume flows and staffing patterns will be key. Revenues will be down mid-November through mid-April. So the model is highly dependent on what happens in the other half a year.

Integrator: Many challenges, but ultimately do-able -  I gather you think they can make this part of their sustainable community economically sustainable.

Szydlowski:  They've got to align margins with mission and build the service costs into other components.

Amato: It's about being integral and walking the walk. Education! Education! Education! is my greatest hope for all concerned at Deep Lake.

Comment:  A year ago, thanks to Integrator adviser Milt Hammerly, MD, I had the opportunity to be involved in a fascinating and exciting bit of consulting over a 4 month period involving a developer and a health system. Our charge was to come up with an exciting, integrative, East-meets-West concept for health in a large community which, like Deep Lake (though larger), is planned to feature housing and a resort.

Our recommendation included creating a community health endowment based on a margin on housing sales, plus some ongoing revenues based on required community fees. The argument to the developer: US medicine pays for disease and reaction. We need a dependable mechanism for funding health and wellness. We even played around with a kind of "local improvement district" concept such as neighbors use to tax themselves to put in sewer systems and bury electrical wires. It was exciting to think what one could do with a routine 1%-5% margin on the cost of a few thousand houses.

While we found some models with pieces of what we envisioned,
we found that this ambitious of an approach remains ground-breaking. The plan clearly required visionary, persevering leadership from the developer in selling this new approach to house, home and health to both builders and buyers. The developer would need to be deeply hooked. The fellow with whom we were working didn't have the commitment or public health vision to run with it.

The proposal Inner Harmony Group developed for Deep Lake appears to be asking a similar question. Will Valvo and LaRou forge these links - even as basic business models would like to see those 1%-5% margins invested elsewhere, or pocketed? Success of the center would seem to hinge on this.

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