health management as a serious economic strategy: the critical role of the healthy and high...
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Health Management as a Serious Economic Strategy: The Critical Role of the Healthy and High Performing Workplace and
Work ForceHealth as a
Serious Economic Strategy
THE UNIVERSITY OF MICHIGAN
HEALTH MANAGEMENT RESEARCH CENTER
Dee W. Edington
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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?
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UM-HMRC Corporate ConsortiumFordDelphiKelloggUS SteelWe Energies JPMorgan Chase Delphi Automotive Southern CompanyNavistar Corporation University of MissouriMedical Mutual of OhioFlorida Power and LightSt Luke’s Health System Allegiance Health SystemCuyahoga Community College United Auto Workers-General Motors
Wisconsin Education Association TrustAustralian 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.
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New way to do Health ManagementIn the United States and Throughout the World
X
UM-HMRC Ann Arbor
XNew Ulm
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Building a Sustainable Business and Economic Strategy
1. Workshop: Champion Companies, Zero Trends Eight Hours
2. Complete Strategy/Champion Company Four Hours
3. Fundamental Strategy/Champion Company Two Hours
4. Business Strategy/Champion Company 90 minutes
5. Short Business Strategy/Champion Company 75 minutes
6. Executive Summary of Zero Trends 45 minutes
7. Executive Summary of Executive Summary 30 minutes
Zero Trends: Health as a Serious Economic Strategy
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Heart of New UlmPopulation 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 High Risks and High Costs
Business Case Health as an Economic Strategy
Solutions Five Pillars to Support a Culture of Health
10
25
15
All slides are available
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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” …)
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Estimated Health Risks
Health Risk Measure
Body WeightStress Safety Belt UsagePhysical ActivityBlood PressureLife SatisfactionSmoking Perception of Health Illness DaysExisting Medical ProblemCholesterolAlcoholZero 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%
OVERALL RISK LEVELS Low Risk 0-2 risks Medium Risk 3-4 risks High Risk 5 or more
From the UM-HMRC Medical Economics Report
Estimates based on the age-gender distribution of a specific corporate employee population
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1640 (35.0%)
4,163 (39.0%)
678(14.4%)
Risk Transitions (Natural Flow)Time 1 – Time 2
High Risk(>4 risks)
Low Risk(0 - 2 risks)
Medium Risk(3 - 4 risks)
2,373 (50.6%)
21,750 (77.8%)
4,546(42.6%)
10,670 (24.6%)
4,691 (10.8%)
27,951 (64.5%)
11,495 (26.5%)
5,226 (12.1%)
26,591 (61.4%)
892(3.2%)
1,961 (18.4%)
5,309 (19.0%)
Modified from Edington, AJHP. 15(5):341-349, 2001
Average of three years between measures
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Low
19-34 35-44 45-54 55-64 65-74 75+$0
$3,000
$6,000
$9,000
$12,000
$1,776 $2,193 $2,740
$3,734 $4,613
$5,756
$1,414
$2,944
$3,800
$5,212
$6,636
$8,110
$2,565
$3,353
$4,620
$6,625
$7,989
$8,927
$5,114 $5,710
$7,991
$10,785
$11,909 $11,965
Costs Associated with RisksMedical Paid Amount x Age x Risk
Annual Medical Costs
Med Risk
Age Range
High
Non-Participant
Edington. AJHP. 15(5):341-349, 2001
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Total Value of Health
• Medical/Hospital• Drug• Absence• Disability • Worker’s Comp• Effective on Job• Recruitment• Retention• Morale
Disease
The Economics of Health Status
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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
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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
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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
HealthComplex Systems (Synergy & Emergence)
versus Reductionism (Etiology)
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Business Concept
Health Risks are Associated
With Disease and Costs
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Less than 45 45 to 64 Greater than 650.0%
20.0%
40.0%
60.0%
80.0%
100.0%
3.00% 10.50%18.60%9.50%
32.00%
61.40%
25.30%
56.40%
80.00%
Low Risk
Excess Diseases Associated with Excess Risks (Heart, Diabetes, Cancer, Bronchitis, Emphysema
Percent with Disease
Med Risk
Age Range
High
Musich, McDonald, Hirschland, Edington. Disease Management & Health Outcomes 10(4):251-258, 2002.
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Business Concept
Excess Costs follow Excess Risks
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Low Risk (0-2 Risks)
HRA Non-Par-ticipant
Medium Risk (3-4 Risks)
High Risk (5+ Risks)
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$840 $1,261
$3,321
Excess Costs
Base Cost
Excess Medical Costs due to Excess Risks
$2,199
$3,039$3,460
$5,520
Edington, AJHP. 15(5):341-349, 2001
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Outcome Measures
Low-Risk
Medium-Risk
High-Risk
Excess Cost Percentage
Short-term Disability $ 120 $ 216 $ 333 41%
Worker’s Compensation
$ 228 $ 244 $ 496 24%
Absence $ 245 $ 341 $ 527 29%
Medical & Pharmacy
$1,158 $1,487 $3,696 38%
Total $1,751 $2,288 $5,052 36%
Association of Risk Levels with Corporate Cost Measures
Wright, Beard, Edington. JOEM. 44(12):1126-1134, 2002
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Business Concept
Change in Costs
follow
Change in Risks
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Change in Costs follow Change in Risks
-$600
-$400
-$200
$0
$200
$400
$600
3 2 1 0 1 2 3Co
st
red
uc
edC
os
t in
cre
ase
d
Risks Reduced Risks Increased
Updated from Edington, AJHP. 15(5):341-349, 2001.
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
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Business Concept
Change in Costs
Follow Engagement
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Yearly Average Disability Absence Days by Participation
Pre-Program
Program Years
$200Work Day
X1.2 Work Days
ParticipantYear
X 2,596 participants =$623,040
Year
The average annual increase in absence days (1995 – 2000):
Participants: 2.4
Non-Participants: 3.6
Schultz, Musich, McDonald,Hirschland,Edington.JOEM 44(8):776-780, 2002
6.6 6.98.7
14.1
6.6
17.215.7
23.321.2
17.6
12
8.8
0
5
10
15
20
25
95 96 97 98 99 0
ParticipantNon-Participant
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Business Concept
Eliminate “Silo” ThinkingConsider the Total Value of Health
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Total Value of Health
Presenteeism AbsenteeismSTDLTD
Medical & Pharmacy
Edington, Burton. A Practical Approach to Occupational and Environmental Medicine (McCunney). 140-152. 2003
Worker’s Compensation
Time-Away-from-Work
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Total Value of Health• Medical/Hospital• Drug• Absence• Disability • Worker’s Comp• Effective on Job• Recruitment• Retention• Morale
Disease
HealthRisks
The Economics of Health Status
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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
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Medical and Drug Cost (Paid)*
2001 2002 2003 2004$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
Non-Impr
Improved
Year
Pai
d
Improved=Same or lowered risks
Slopes differ
P=0.0132
Impr slope=$117/yr
Nimpr slope=$614/yr
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Zero Trendsfollow
“Don’t Get Worse” and
“Help the Healthy People Stay Healthy”
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Total Value of Health Medical/Hospital Drug Absence Disability Worker’s Comp Effective on Job Recruitment Retention Morale
Disease
HealthRisks
The Economics of Total Population Engagement and Total Value of
Health
Low orNo Risks
Where is the Investment?
increase
increase
decrease
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Learnings for Section II
Excess Costs are related to Excess Risks
Costs follow Engagement and Risks
Controlling Risks leads to Zero Trend
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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” …)
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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?
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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
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Integrate Health into Core BusinessHealthier
PersonBetter
EmployeeGains for TheOrganization
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 Responsibility1981, 1995, 2000, 2006, 2008 D.W. Edington
Lifestyle Change
Health Management Programs
Company Culture and Environment Senior Leadership Operations Leadership Self-Leadership Reward Positive Actions Quality Assurance
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Five Pillars of a Population Health Management System
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Five Fundamental Pillars
Senior Leadership
Operational Leadership
Self Leadership
RewardsQuality
Assurance
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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”
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Operational Leadership
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”
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Population Health Management Strategy
Health Management --healthy stay healthy --don’t get worse
Disease Management --stay on protocol --don’t get worse
Sickness Management --reduce errors --coordinate services
Where is the economic strategy?
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Environment Interventions 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 to integrate health into the company culture (small group meetings, shared vision, expectations,…)
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Total Health &
Productivity Management
Create an Integrated and Sustainable Approach
On-site Medical, H&S•Diabetes education pilot• Injury and medical management•Occupational Health and Safety
Health Advocate• Provide Direction• Get the Care You Need• Coaching & Outreach
Health Plan DesignEnvironmental Design
Behavioral Health• Work/Family• Work Life Plus
Health Portal•Stay healthy•Health information• Make informed choices
Health Risk Assessment • Assess and track health behaviors• Maintain health• Address health risks
Fitness Centers•Low risk maintenance•High risk reduction
Wellness Programs•Active expansion•Retiree communications/awareness program
Disease Management•High Acuity (identified high cost disease)
•Low Acuity (identified lower cost disease; lifestyle behavior focus)
Case Management
• STD, LTD• Workers’ Compensation• Scattered Absence
Absence Management
Long Term Strategy—Short Term Solutions
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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
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Self Leadership
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’
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Health Risk Appraisal
Individual Strategy for Engagement
Biometrics Screening and Counseling
Contact a Health Advocate
Two Other Activities
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Population-Based ResourcesWeight Management Business Specific ModulesPhysical Activity Career developmentStress Management CommunicationsSafety Belt Use Financial ManagementSmoking cessation Social/Information NetworksNutrition Education Disease Management Clinic or Medical CenterOn-Line Information ErgonomicsNurse LineNewsletters Vision
Dental
Behavioral Health & EAP HearingPharmacy Management Chiropractic
Complementary Care
Case Management Integrative Medicine
Absence Management Physical TherapyDisability Management
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Self Leadership: Create Winners
Align workplace with vision
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
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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”
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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…)
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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
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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”
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Measurement Scorecard
Percent Engagement: 85% to 95%HRA + Screening/counseling + Coaching + Two other sessions
Percent Low-Risk: 75% to 85% Percent of Total EligibleProof 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
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Measurement Outcomes drive strategyCreate 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)
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Business Case
Indicators of Sustainability
1. Company Engagement
2. Individual Engagement
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3 Vision from
Leaders
Healthy System & Culture
Engage all in Culture
Reward Positive Actions
Progress in all areas
2 Speech from
Leader
Risk Reduction
Reduce all Risks
Incent H-Risk
Change in Risks, ROI
1 Inform Leader
Out-source Reduce H-Risks
Incent H-Risk
Change in Risks
0 Do Nothing
Do Nothing
Do Nothing
Do Nothing
Do Nothing
1 2 3 4 5
Engagement Level of the OrganizationProgram Rating
Do Nothing
Champion
Comprehensive
Traditional
Senior Leadership
Operations Leadership
Self-Leadership
Rewards for Positive
Actions
Quality Assurance
Five Pillars
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Health Risk Appraisal
Engagement of Individuals (employees and spouses)
Biometrics Screening and Counseling
Contact a Health Advocate
Two Other Activities
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Business Case
Indicators of Sustainability
3. Environmental Support
4. Perception of the Culture
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Perception of the Culture from Survey
Not supportive Median Very supportive
Supportive Environment
From Survey
Very Supportive
Not Supportive
Supportive Environment and Culture
M
A
B
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Summary
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Employer Costs Medical Drug Absence Disability Worker’s Comp Effective on Job Recruitment Retention Morale
Disease
Total Population Engagement ,Total Value
Health Risks
Low or No Risks
Beyond Wellness
Medical Care Management
Disease and Risk
Management
Risk Reduction
Environment and Culture
Health Care Costs
Number of Health RisksWellness Rating
0 1 2 3 4 5 6 7 Sick-DiseaseWell +3 +2 +1
Productivity1. Absence 2. Disability 3. Worker’s Comp 4. Effective on Job
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Lifestyle Scale for Individuals and Populations: Self-Leaders
ChronicSigns &
SymptomsFeeling OK
PrematureSickness, Death & Disability
High-Level Wellness, Energy and Vitality
Edington. Corporate Fitness and Recreation. 2:44, 1983, Modified 2009
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Sound Bites
3. “Total Population Management” is the effective healthcare strategy and to capture the “Total Value of Health.”
2. Refocus the definition of health from “Absence of Disease to High Level Vitality.”
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.”
1. The “Do Nothing” strategy is unsustainable.
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Thank you for your attention.Please contact us if you have any questions.
Phone: (734) 763 – 2462Fax: (734) 763 – 2206
Email: [email protected]@umich.edu
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