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Health Management as a Serious Economic Strategy: The Critical Role of the Healthy and High Performing Workplace and Work Force. Health as a Serious Economic Strategy THE UNIVERSITY OF MICHIGAN HEALTH MANAGEMENT RESEARCH CENTER Dee W. Edington. Business and Community Problem

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slide1

Health Management as a Serious Economic Strategy: The Critical Role of the Healthy and High Performing Workplace and Work Force

Health as a Serious Economic Strategy

THE UNIVERSITY OF MICHIGAN

HEALTH MANAGEMENT RESEARCH CENTER

Dee W. Edington

slide2

Business and Community Problem

Currently, most costs associated with workplace and workforce performance are growing at a rate faster than is sustainable

How are we going to be successful in this increasingly competitive world without a healthy and high performing workplace and workforce?

How can we turn costs into an investment?

slide3

UM-HMRC Corporate Consortium

  • Ford
  • Delphi
  • Kellogg
  • US Steel
  • We Energies
  • JPMorgan Chase
  • Delphi Automotive
  • Southern Company
  • Navistar Corporation
  • University of Missouri
  • Medical Mutual of Ohio
  • Florida Power and Light
  • St Luke’s Health System
  • Allegiance Health System
  • Cuyahoga Community College
  • United Auto Workers-General Motors
  • Wisconsin Education Association Trust
  • Australian Health Management Corporation
  • Steelcase (H)
  • General Motors
  • Progressive (H)
  • Crown Equipment
  • Affinity Health System
  • SW MI Healthcare Coalition (H)

*The consortium members provide health care insurance for over two million individuals. Data are available from three to 20 years.

Meets on First Wednesday of each December in Ann Arbor.

slide5

New way to do Health Management

In the United States and Throughout the World

UM-HMRC Ann Arbor

X

New Ulm

X

slide6

Zero Trends: Health as a Serious Economic Strategy

  • Building a Sustainable Business and Economic Strategy
  • Workshop: Champion Companies, Zero Trends Eight Hours
  • Complete Strategy/Champion Company Four Hours
  • Fundamental Strategy/Champion Company Two Hours
  • Business Strategy/Champion Company 90 minutes
  • Short Business Strategy/Champion Company 75 minutes
  • Executive Summary of Zero Trends 45 minutes
  • Executive Summary of Executive Summary 30 minutes
slide7

Heart of New Ulm

Population Health Management as a Serious Economic Strategy:

November 10, 2009

Mission

Change the Strategy for Health and Disability from a Health Strategy to an Economic Strategy

Natural Flow of a Population

15

High Risks and High Costs

Business Case

10

Health as an Economic Strategy

Solutions

25

Five Pillars to Support a Culture of Health

All slides are available

slide8

Section I

The Current Healthcare Strategy

Natural Flow

Wait for Sickness and then Treat

(…in Quality terms this strategy translates into “wait for defects and then fix the defects” …)

slide9

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

From the UM-HMRC Medical Economics Report

Estimates based on the age-gender distribution of a specific corporate employee population

OVERALL RISK LEVELS

Low Risk 0-2 risks

Medium Risk 3-4 risks

High Risk 5 or more

slide10

Risk Transitions (Natural Flow)

Time 1–Time 2

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%)

High Risk

(>4 risks)

Medium Risk

(3 - 4 risks)

Low Risk

(0 - 2 risks)

Average of three years between measures

Modified from Edington, AJHP. 15(5):341-349, 2001

slide11

Costs Associated with Risks

Medical Paid Amount x Age x Risk

AnnualMedicalCosts

High

Med Risk

Non-Participant

Low

AgeRange

Edington. AJHP. 15(5):341-349, 2001

slide12

The Economics of Health Status

  • Total Value of Health
  • Medical/Hospital
  • Drug
  • Absence
  • Disability
  • Worker’s Comp
  • Effective on Job
  • Recruitment
  • Retention
  • Morale

Disease

slide13

Learnings from Section I

The flow of Risks is to High-Risk

The flow of Costs is to High-Cost

Costs follow Risks and Age

slide14

The world we have made as a result of the

level of thinking we have done thus far

creates problems we cannot solve

at the same level of thinking

at which we created them.

- Albert Einstein

slide15

Section II

Build the Business Case for the Health as a Serious Economic Strategy

Engage the Total Population to get to the Total Value of Health

Complex Systems (Synergy & Emergence) versus Reductionism (Etiology)

slide16

Business Concept

Health Risks are Associated

With Disease and Costs

slide17

Excess Diseases Associated with Excess Risks (Heart, Diabetes, Cancer, Bronchitis, Emphysema

Percent with Disease

High

Med Risk

Low Risk

Age Range

Musich, McDonald, Hirschland, Edington. Disease Management & Health Outcomes 10(4):251-258, 2002.

slide18

Business Concept

Excess Costs follow Excess Risks

slide19

Excess Medical Costs due to Excess Risks

$5,520

$3,460

$3,039

$2,199

Edington, AJHP. 15(5):341-349, 2001

slide20

Association of Risk Levels with Corporate Cost Measures

Wright, Beard, Edington. JOEM. 44(12):1126-1134, 2002

slide21

Business Concept

Change in Costs

follow

Change in Risks

slide22

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.

slide23

Business Concept

Change in Costs

Follow Engagement

yearly average disability absence days by participation

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

slide25

Business Concept

Eliminate “Silo” Thinking

Consider theTotal Value of Health

total value of health
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

slide27

The Economics of Health Status

  • Total Value of Health
  • Medical/Hospital
  • Drug
  • Absence
  • Disability
  • Worker’s Comp
  • Effective on Job
  • Recruitment
  • Retention
  • Morale

Health

Risks

Disease

slide28

The world we have made as a result of the

level of thinking we have done thus far

creates problems we cannot solve

at the same level of thinking

at which we created them.

- Albert Einstein

medical and drug cost paid
Medical and Drug Cost (Paid)*

Slopes differ

P=0.0132

Impr slope=$117/yr

Nimpr slope=$614/yr

Improved=Same or lowered risks

slide30

Zero Trends

follow

“Don’t Get Worse” and “Help the Healthy People Stay Healthy”

slide31

The Economics of Total Population Engagement and Total Value of Health

Total Value of Health

Medical/Hospital

Drug

Absence

Disability

Worker’s Comp

Effective on Job

Recruitment

Retention

Morale

Low or

No Risks

Health

Risks

Disease

increase

increase

decrease

Where is the Investment?

slide32

Learningsfor Section II

Excess Costs are related to Excess Risks

Costs follow Engagement and Risks

Controlling Risks leads to Zero Trend

slide33

Section III

The Evidence-Based Solution:

Integrate Health into the Culture

(…in Quality terms this strategy translates into “…fix the systems that lead to the defects” …)

slide34

Business and Community Problem

Currently, most costs associated with workplace and workforce performance are growing at a rate faster than is sustainable

How are we going to be successful in this increasingly competitive world without a healthy and high performing workplace and workforce?

How can we turn costs into an investment?

slide35

Vision for Zero Trends

Zero Trends was written to be a transformational approach to the way organizations ensure a continuous healthy and high performing workplace and workforce

slide36

Integrate Health into Core Business

Healthier

Person

Better

Employee

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 Compensation

d. Presenteeism

e. Quality Multiplier

6. Recruitment/Retention

7. Company Visibility

8. Social Responsibility

Lifestyle Change

Company Culture and Environment SeniorLeadership Operations Leadership Self-Leadership Reward Positive Actions Quality Assurance

Health Management Programs

1981, 1995, 2000, 2006, 2008 D.W. Edington

senior leadership
Senior Leadership
  • Create the Vision
      • Commitment to healthy culture
      • Connect vision to business strategy
      • Engage all leadership in vision

“Establish the business value of a healthy and high performing organization and workplace as a world-wide competitive advantage”

operational leadership
OperationalLeadership
  • Align Workplace with the Vision
          • Brand health management strategies
          • Integrate policies into health culture
          • Engage everyone

“You can’t put a changed person back into the same environment and expect the change to hold”

slide41

Population Health Management Strategy

Sickness Management --reduce errors --coordinate services

Disease Management --stay on protocol --don’t get worse

Health Management --healthy stay healthy --don’t get worse

Where is the economic strategy?

environment interventions
Mission and Values Aligned with a Healthy and Productive Culture

Policies and Procedures Aligned with Healthy and Productive Culture

Environment Interventions
  • Vending Machines
  • Job Design
  • Cafeteria
  • Flexible Working Hours
  • Stairwells
  • Smoking Policies
  • Benefit Design Aligned with a Healthy and Productive Culture
  • Management and Employees prepared to integrate health into the company culture (small group meetings, shared vision, expectations,…)
create an integrated and sustainable approach

Health Advocate

  • Provide Direction
  • Get the Care You Need
  • Coaching & Outreach

Health Plan Design

Environmental Design

  • Behavioral Health
  • Work/Family
  • Work Life Plus
  • Disease Management
  • High Acuity (identified high cost disease)
  • Low Acuity (identified lower cost disease; lifestyle behavior focus)
  • Health Portal
  • Stay healthy
  • Health information
  • Make informed choices

Total Health & ProductivityManagement

  • Health Risk Assessment
  • Assess and track health behaviors
  • Maintain health
  • Address health risks

Case Management

  • STD, LTD
  • Workers’ Compensation
  • Scattered Absence
  • Fitness Centers
  • Low risk maintenance
  • High risk reduction

Absence Management

  • Wellness Programs
  • Active expansion
  • Retiree communications/awareness program
  • On-site Medical, H&S
  • Diabetes education pilot
  • Injury and medical management
  • Occupational Health and Safety
Create an Integrated and Sustainable Approach

Long Term Strategy—Short Term Solutions

slide44

Operational Leadership: Align workplace with vision

Operations management support Sr. Leadership vision

Management health champions identified

Create employee wellness committees with manager participation

Health presentations included during Safety meetings

Include health as a performance indicator at line management level

Employee wellness coordinators appointed at each site

Integrated approach to health and well-being

Robust branding and marketing & communication strategy

slide45

SelfLeadership

  • Create Winners
      • Help employees not get worse
      • Help healthy people stay healthy
      • Provide improvement and maintenance strategies

“Create winners, one step at a time and the first step is don’t get worse’

slide46

Individual Strategy for Engagement

Health Risk Appraisal

Biometrics Screening and Counseling

Contact a Health Advocate

Two Other Activities

population based resources
Weight Management Business Specific Modules

Physical Activity Career development

Stress Management Communications

Safety Belt Use Financial Management

Smoking cessation Social/Information Networks

Nutrition Education

Disease Management Clinic or Medical Center

On-Line Information Ergonomics

Nurse Line

Newsletters Vision

Dental

Behavioral Health & EAP Hearing

Pharmacy Management Chiropractic

Complementary Care

Case Management Integrative Medicine

Absence Management Physical Therapy

Disability Management

Population-Based Resources
slide48

Self Leadership: Create Winners

  • Employees have access to health resources before, during, and after work hours
  • Environment supports culture of health

- Food services, Fitness center, Health centers,

- Health Promotion, EAP, Other

  • Provide wellness programs to address all levels of a health continuum: Healthy -At Risk-Chronic-Catastrophic
  • Health coaches
  • Decision support tools
  • Employees, dependents, and retirees are eligible to participate

Alignworkplace with vision

slide49

Reward Actions

  • Reinforce the Culture of Health
      • Reward champions
      • Set incentives for healthy choices
      • Reinforce at every touch point

“What is rewarded is what is sustained”

positive re enforcement
Culture reminders (Managers, Leaders,…)

Cash, debit cards ($25 to $200)

Benefit Design (HSA contributions)

Hats and T-Shirts

Population programs

Surprise events

Decorate stairwells

Special cafeteria/vending offerings

Organizational rewards (Departments…)

Positive Re-Enforcement
slide51

Reward Positive Actions to Reinforce a culture of health

Incentives tied to medical plan designed: Premium reduction HRA completion Non tobacco user incentive Incentive tied to results

Reduced or no co pays for preventative services and adherence of certain drug classes

Wellness rebates for participation in Physical Activity; Weight management Tobacco cessation programs

Greater subsidy of healthy foods in our cafeterias, lower costs to employees

Recognition of employees that improve their health through positive lifestyle changes

quality assurance
Quality Assurance
  • Outcomes Drive the Strategies
  • Integrate all resources
  • Measure outcomes
  • Make it sustainable

“Metrics to measure progress towards the vision, culture, self-leaders, actions, economic outcomes”

measurement scorecard
Percent Engagement:85% to95%

HRA + Screening/counseling + Coaching + Two other sessions

Percent Low-Risk:75% to 85%

Percent of Total Eligible

Measurement Scorecard

Proof of Concept

Change in Risk Levels beats the Natural Flow

Change in Cost Levels beats the Natural Flow

Year over Year Trends Approach Zero Percent

Improved/no change Separate from Not Improved

slide54

Measurement Outcomes drive strategy

Create a clear vision

Change in risk status

Health improvement

Cost of the programs

Engagement

Employee satisfaction

Partner performance

Integration of all resources (company and community)

Leadership scorecard (specific to each company)

All economic indicators (individual and company)

slide55

Business Case

  • Indicators of Sustainability
      • Company Engagement
      • Individual Engagement
slide56

Engagement Level of the Organization

Program Rating

Champion

Comprehensive

Traditional

Do Nothing

Rewards for Positive Actions

Five Pillars

Senior Leadership

OperationsLeadership

Self-Leadership

Quality Assurance

slide57

Engagement of Individuals (employees and spouses)

Health Risk Appraisal

Biometrics Screening and Counseling

Contact a Health Advocate

Two Other Activities

slide58

Business Case

  • Indicators of Sustainability
      • 3. Environmental Support
      • 4. Perception of the Culture
slide59

Supportive Environment and Culture

Very Supportive

B

Supportive Environment

From

Survey

M

A

Not Supportive

Not supportive Median Very supportive

Perception of the Culture from Survey

slide61

Total Population Engagement ,Total Value

Disease and Risk Management

Environment and Culture

Risk Reduction

Medical Care Management

Beyond Wellness

Low or No Risks

Health Risks

Disease

Employer Costs

Medical

Drug

Absence

Disability

Worker’s Comp

Effective on Job

Recruitment

Retention

Morale

Productivity

Absence

Disability

Worker’s Comp

Effective on Job

Health Care Costs

Well +3 +2 +1

0 1 2 3 4 5 6 7 Sick-Disease

Wellness Rating

Number of Health Risks

slide62

Lifestyle Scale for Individuals and Populations: Self-Leaders

High-Level Wellness, Energy and Vitality

PrematureSickness, Death & Disability

ChronicSigns &Symptoms

Feeling OK

Edington. Corporate Fitness and Recreation. 2:44, 1983, Modified 2009

slide63

Sound Bites

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.”

slide64

Thank you for your attention.

Please contact us if you have any questions.

Phone: (734) 763 – 2462

Fax: (734) 763 – 2206

Email: [email protected]

[email protected]

Website: www.hmrc.umich.edu

Dee W. Edington, Ph.D. , Director Health Management Research Center University of Michigan 1015 E. Huron Street Ann Arbor MI 48104-1689

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