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Health Management as a Serious Business Strategy

Health Management as a Serious Business Strategy. THE UNIVERSITY OF MICHIGAN HEALTH MANAGEMENT RESEARCH CENTER. The Secret to Zero Trends Michigan PHA Annual Meeting September 18, 2008 The Mission: Regaining Vitality in Americans and America

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Health Management as a Serious Business Strategy

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  1. Health Management as a Serious Business Strategy THE UNIVERSITY OF MICHIGAN HEALTH MANAGEMENT RESEARCH CENTER

  2. The Secret to Zero Trends Michigan PHAAnnual Meeting September 18, 2008 The Mission: Regaining Vitality in Americans and America Failed Healthcare Strategy: Wait for Sickness: Treat 20 Proposed Zero Trend Strategy: Manage Health Status 20 The Solution: Integrate Health into Company Culture 20 Slides available

  3. Lifestyle Scale for Individuals and Populations: Self-Leaders PrematureSickness, Death & Disability High-Level Wellness, Energy and Vitality ChronicSigns &Symptoms Feeling OK Edington. Corporate Fitness and Recreation. 2:44, 1983

  4. To Change the Conversation From Health as the Absence of Disease to Health as Vitality and Energy From the Cost of Health Care to the Total Value of Health From Individual Participation to Population Engagement From Behavior Change to Integration of Health into the Culture

  5. Self -Reported Allergies Back Pain Cholesterol Heart Burn/Acid Reflux Blood Pressure Arthritis Depression Migraine Headaches Asthma Chronic Pain Diabetes Heart Problems Osteoporosis Bronchitis/Emphysema Cancer Past Stroke Zero Medical Conditions Health Problems 33.2% 26.9% 16.2% 15.2% 14.5% 14.5% 10.7% 9.4% 7.0% 6.4% 3.8% 3.3% 1.8% 1.7% 1.3% 0.7% 31.9% Estimated Health Problems UM-HMRC Estimated Medical Economics Report

  6. 2,373 (50.6%) 4,691 (10.8%) 1,961 (18.4%) 5,226 (12.1%) 892 (3.2%) 4,546 (42.6%) 10,670 (24.6%) 1640 (35.0%) 678 (14.4%) 11,495 (26.5%) 5,309 (19.0%) 4,163 (39.0%) 27,951 (64.5%) 26,591 (61.4%) 21,750 (77.8%) Risk Transitions Time 1 – Time 2 High Risk (>4 risks) Medium Risk (3 - 4 risks) Average of three years between measures Low Risk (0 - 2 risks) Modified from Edington, AJHP. 15(5):341-349, 2001

  7. 37,701 (55.7%) High Cost ($5000+) 67,680 (19.0%) 26,288 (20.6%) 73,427 (20.6%) Medium Cost ($1000-$4999) 9,438 (5.9%) 75,500 (59.1%) 127,644 (35.8%) 23,043 (34.0%) 6,936 (10.2%) 130,785 (36.7%) 32,242 (20.0%) 25,856 (20.3%) 160,951 (45.2%) 152,063 (42.7%) Low Cost (<$1000) 119,271 (74.1%) Cost Transitions Time 1 – Time 2 N=356,275 Non-Medicare Trad/PPO Modified from Edington, AJHP. 15(5):341-349, 2001

  8. Total Medical and Pharmacy Costs Paid by Quarter for Three Groups Musich,Schultz, Burton, Edington. DM&HO. 12(5):299-326,2004

  9. Summary of the Do-Nothing Strategy The flow of Risks is to High-Risk The flow of Costs is to High-Cost Costs follow Risks and Age

  10. Section II The Health Status Strategy: The Emerging Focus

  11. Health Risk Measure Body Weight Stress Safety Belt Usage Physical Activity Blood Pressure Life Satisfaction Smoking Perception of Health Illness Days Existing Medical Problem Cholesterol Alcohol Zero Risk High Risk 41.8% 31.8% 28.6% 23.3% 22.8% 22.4% 14.4% 13.7% 10.9% 9.2% 8.3% 2.9% 14.0% Estimated Health Risks OVERALL RISK LEVELS Low Risk 55.3% Medium Risk 27.7% High Risk 17.0% UM-HMRC Estimated Medical Economics Report

  12. Excess Self-Reported Major Diseases Associated with Excess Risks Percent with Disease High Med Risk Low Risk Age Range Musich, McDonald, Hirschland, Edington. Disease Management & Health Outcomes 10(4):251-258, 2002.

  13. Distribution: Age, Costs, & Risk Status % of Population and Costs (All Covered Lives) % High Risk N=1.2M individuals in total population. N=300K in risk population

  14. Costs Associated with Risks Medical Paid Amount x Age x Risk Annual Medical Costs High Med Risk Non-Participant Low Age Range Edington. AJHP. 15(5):341-349, 2001

  15. Company Paid: Medical/Pharmacy, Age and Risk Groups Modified from Edington. AJHP. 15(5):341-349, 2001

  16. The Economics of the Medical System and Health Status as Paid by Companies • Total Value of Health • Sickness • Drug • Absence • Disability • Worker’s Comp • Effective on Job • Recruitment • Retention • Morale Health Risks Disease Where is the Investment?

  17. Excess Medical Costs due to Excess Risks $5,520 $3,460 $3,039 $2,199 Edington, AJHP. 15(5):341-349, 2001

  18. Association of Risk Levels with Corporate Cost Measures Wright, Beard, Edington. JOEM. 44(12):1126-1134, 2002

  19. Cluster Analysis Overall Risks Low risk (0-2 risks) Medium risk (3-4 risks) High risk (5+ risks) Average Number of risks 50.2% 35.7% 14.1% 2.8 97.6% 2.4% 0 0.6 26.5% 48.9% 24.7% 3.6 18.9% 35.9% 45.2% 4.4 Cluster 1: Risk taking (N=6688) Cluster 2: Low Risk (N=3164) Cluster 3: Biometrics (N=3100) Cluster 4: Psychological (N=3927) Health Measure Smoking Alcohol Physical activity Safety belt usage Body mass index Systolic blood pressure Diastolic blood pressure Cholesterol HDL cholesterol Self-perceived health Life satisfaction Stress Illness days 31% 10% 28% 36% 27% 9% 5% 19% 34% 13% 4% 9% 21% 0% 0% 0 % 0 % 25 % 0 % 0 % 19 % 10 % 0 % 0 % 0 % 0 % 16% 3% 19% 22% 38% 81% 61% 27% 33% 9% 2% 2% 12% 27% 5% 26% 31% 27% 23% 20% 22% 24% 28% 73% 76% 26% Baunstein, Yi, Hirschland, McDonald, Edington. Am. J. Health Behavior. 25(4):407-417, 2001

  20. Clinical Identification of Metabolic SyndromeAny three of the following: Risk Factor Defining Level >40 in (>102 cm) >35 in (>88 cm) 150 mg/dL <40 mg/dL <50 mg/dL 130/85 mmHg 110 mg/dL • Waist Size • Men • Women • 2. Triglycerides • 3. HDL-C • Men • Women • 4. Blood pressure • 5. Fasting glucose NCEP ATP III. JAMA. 2001;285:2486.

  21. Risks: • Waist Circumference • Hypertension • Glucose Intolerance • Triglycerides • HDL Cholesterol Pre-Metabolic Syndrome Metabolic Syndrome Retinopathy Neuropathy Nephropathy Heart Disease Diabetes • Costs to Individual: • Quality of Life • Morbidity • Mortality • Costs to Employers: • Health care costs • Productivity costs Development and Consequences of Metabolic Syndrome Where do you want to intervene in the process?

  22. Risks: • Perception of Health • Life Satisfaction • Job Satisfaction • Stress • Job Related • Non-Job Related • Illness Days Pre-Mental Health Issues Mental Health Syndrome Serious Mental Health Diagnoses Job Issues Family Issues • Costs to Individual: • Quality of Life • Morbidity • Mortality • Costs to Employers: • Health care costs • Productivity costs Development and Consequences of Mental Health Issues (DRAFT) Where do you want to intervene in the process?

  23. Relative Value of Health to the Organization: Total Value of Health Medical & Pharmacy Worker’s Compensation Presenteeism LTD STD Absenteeism Time-Away-from-Work Edington, Burton. A Practical Approach to Occupational and Environmental Medicine (McCunney). 140-152. 2003

  24. Change in Costs follow Change in Risks Cost increased Cost reduced Risks Reduced Risks Increased Overall: Cost per risk reduced: $215; Cost per risk avoided: $304 Actives: Cost per risk reduced: $231; Cost per risk avoided: $320 Retirees<65: Cost per risk reduced: $192; Cost per risk avoided: $621 Retirees>65: Cost per risk reduced: $214; Cost per risk avoided: $264 Updated from Edington, AJHP. 15(5):341-349, 2001.

  25. Cost Savings Associated with Program Involvement from 1985 to 1995 Annual Increase = 12.6% Annual Increase = 4.2% Zero or One HRA (N=804) Two or More HRAs (N=522) Programming Year

  26. The average annual increase in absence days (1995 – 2000): Participants: 2.4 Non-Participants: 3.6 1.2 Work Days Participant Year $200 Work Day $623,040 Year X X 2,596 participants = Yearly Average Disability Absence Days by Participation Pre-Program Program Years Schultz, Musich, McDonald, Hirschland,Edington. JOEM 44(8):776-780, 2002

  27. Medical and Drug Cost (Paid)* Slopes differ P=0.0132 Impr slope=$117/yr Nimpr slope=$614/yr *per employee , Improved=374, Non-Improv=103 HRA in 2002 and 2004 Improved=Same or lowered risks *Medical and Drug, not adjusted for inflation

  28. Distribution: Age, Costs, & Risk Status % of Population and Costs (All Covered Lives) % High Risk N=1.2M individuals in total population. N=300K in risk population

  29. Summary Business Case for Health Management Excess Costs are related to Excess Risks Costs follow Engagement and Risks Controlling Risks leads to Zero Trend

  30. Section III The Solution: Integration of a Health Focus into the Culture of the Organization

  31. Healthier People Productive Employees Gains for The Organization 1. Health Status 2. Life Expectancy 3. Disease Care Costs 4. Health Care Costs 5. Productivity a. Absence b. Disability c.Worker’s Comp. d. Presenteeism e. Quality Measure 6. Retention 7. Company Visibility 8. Social Responsibility Integrating Health Status into the Culture of the Company Leadership Vision Environmental Issues Individual Strategies Population Strategies Incentives Measurement 1981, 1995, 2000, 2006, 2008 D.W. Edington

  32. Total Population Management Sickness & Care Management Opportunity Condition Management Opportunity Wellness Opportunity Medical and Drug Costs only

  33. Clear Vision within Leadership Vision Connected with Company Strategy Vision Shared with Employees Accountability and Responsibility Assigned to Operations Leadership Management and Leadership of the Company and Unions transition to the Cheerleaders Vision from the Senior Leadership

  34. Mission and Values Aligned with a Healthy and Productive Culture Policies and Procedures Aligned with Healthy and Productive Culture Vending Machines Job Design Cafeteria Flexible Working Hours Stairwells Smoking Policies Benefit Design Aligned with a Healthy and Productive Culture Management and Employees prepared for a Culture of health (small group meetings, shared vision, expectations, Environment Interventions

  35. Components of HRA Engagement Health Risk Appraisal Plus Biometrics Screening and Counseling Plus Contact the Health Advisor Plus Two Other Activities

  36. Health Advocacy/Advisor for Individual Interventions Each individual contact a Coach Use variety of contacts (one on one, telephone and web) for sustainable engagement and unlimited contacts Pay attention to Level of probability of being high cost (ranked order) Cluster cohort (risk profile) Prioritized risks (ranked order of risks for most impact) Use situational and whole person approach Engage individual in positive actions. Ask but don’t tell. Use triage, health advocate and advisor strategies to develop Self-Leaders and use all available resources

  37. Observed Program Attrition Rates Percent reduction in next bar 35% 22% 52% 55% 36% Lynch, Chen, Edington. JOEM. 48:447-454, 2006

  38. Intervention: High Risk Strategy Vision from leadership, preparation (why, what, purpose) for HRA High premium reimbursement, better plan,… Everyone contact a coach Coaching style and content for everyone Unlimited contacts (inbound/Outbound) Target: rectangular engagement pattern

  39. Create a “Winners” Health Strategy The First Six-Months: “Don’t Get Worse.” Health Status Winner’s Strategy The Failed Strategy Body Weight Don’t Gain Weight Reduce Weight to 25 BMI Physical Activity Walk 500 steps/day Walk 10,000 steps/day Blood Pressure Know Your Numbers Control Your Numbers Cholesterol Know Your Numbers Control Your Numbers The Second Six-Months: “Raise the Bar in Small Intervals”

  40. Weight Management Behavioral Health & EAP Physical Activity Business Specific Modules Stress Management Communications Safety Belt Use Career development Smoking cessation Clinic or Medical Center Ergonomics Condition Management Nutrition Education Financial Management Social Support Programs for Populations and Individuals

  41. Influence of Incentives • No incentive • Passive incentive • Small item incentive • Cash incentive • Benefit Plan • Benefit Plan plus cost reduction • Combination of Benefits and Cash

  42. Annual Incentive Benefit Options (Co-pays, Deductibles, HSA contributions, … ) Premium Reductions/Premium Plan ($600 to $2000) Throughout the Year Hats and T-Shirts Cash, debit cards ($25 to $200) Incentives

  43. Percent Participation:80% to95% Over a rolling three years HRA + Three Coaching sessions + Two other sessions Percent Low-Risk:70% to 85% Percent of the eligible population Estimated Cost of Program:$400 Dollars per Eligible employee Estimated Savings:$800 Dollars per Eligible Employee Scorecard

  44. Learning Points 1. The “Do Nothing” strategy is unsustainable. 2. Refocus the definition of health from “Absence of Disease to High Level Vitality.” 3. “Total Population Management” is the effective healthcare strategy and to capture the “Total Value of Health” 4. The business case for Health Management indicates that the critical strategy is to “Keep the Healthy People Healthy” (“keep the low-risk people low-risk”). 5. The first step is, “Don’t Get Worse” and then “Let’s Create Winners, One Step at a Time.”

  45. Thank you for your attention. Please contact us if you have any questions. Phone: (734) 763 – 2462 Fax: (734) 763 – 2206 Email: dwe@umich.edu Website: www.hmrc.umich.edu Dee W. Edington, Ph.D. , Director Health Management Research Center University of Michigan 1027 E. Huron St. Ann Arbor MI 48104-1688

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