Zero Trends: Health as a Serious Economic Strategy THE UNIVERSITY OF MICHIGAN HEALTH MANAGEMENT RESEARCH CENTER

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 Americans. Data are available from three to 20 years. Meet on First Wednesday of each December in Ann Arbor

Zero Trends: Health as a Serious Economic Strategy Building an Integrated, Sustainable Economic Strategy (Next Generation Programs, Champion Companies, Zero Trends) Six 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

New way to do Health Management UM-HMRC Ann Arbor X New way to do Health Management In the United States and Throughout the World

Change the Conversation around Health from a Healthcare Cost Strategy Mission Change the Conversation around Health from a Healthcare Cost Strategy to Health as a Serious Economic Strategy

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 Culture Change

The Current Healthcare Strategy Wait for Sickness and then Treat 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” …)

Estimated Health Risks 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% 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 55.3% Medium Risk 27.7% High Risk 17.0%

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

Estimated Health Problems 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% 10.7% 9.4% 7.0% 6.4% 3.8% 3.3% 1.8% 1.7% 1.3% 0.7% 31.9% From the UM-HMRC Medical Economics Report Estimates based on the age-gender distribution of a specific corporate employee population

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

Total Medical and Pharmacy Costs Paid by Quarter for Three Groups The 20-80 rule is always true but terrifically flawed as a strategy Musich,Schultz, Burton, Edington. DM&HO. 12(5):299-326,2004

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

The Economics of Health as Paid by Companies Total Value of Health Medical/Hospital Drug Absence Disability Worker’s Comp Effective on Job Recruitment Retention Morale Disease

Summary for Section I The flow of Risks is to High-Risk The flow of Costs is to High-Cost Costs follow Risks and Age

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

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

Distribution: Age, Costs, & Risk Status % of Population and Costs (All Covered Lives) % High Risk (>2 risks) N=1.2M individuals in total UM-HMRC population. N=300K in risk population

Health Risks are Associated Business Concept Health Risks are Associated With Disease and Costs

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.

Eliminate “Silo” Thinking Consider the Total Value of Health Business Concept Eliminate “Silo” Thinking Consider the Total Value of Health

Total Value of Health Medical & Pharmacy Presenteeism Worker’s Compensation We have now quantitated Direct vs Indirect costs . Presenteeism costs represent approximately ¾ of the pie and the vast majority Of costs to the corporation. Presenteeism LTD STD Absenteeism Time-Away-from-Work Edington, Burton. A Practical Approach to Occupational and Environmental Medicine (McCunney). 140-152. 2003

Excess Costs follow Excess Risks Business Concept Excess Costs follow Excess Risks

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

Total Value of Health to an Organization Business Concept Total Value of Health to an Organization

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

Risks Travel in Clusters

Cluster Analysis Health Measure Smoking Alcohol Physical activity 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% 21% 0% 0 % 25 % 19 % 10 % 16% 3% 19% 22% 38% 81% 61% 27% 33% 9% 2% 12% 27% 5% 26% 31% 23% 20% 22% 24% 28% 73% 76% 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% 0.6 26.5% 48.9% 24.7% 3.6 18.9% 35.9% 45.2% 4.4 Baunstein, Yi, Hirschland, McDonald, Edington. Am. J. Health Behavior. 25(4):407-417, 2001

Intervention for Biometric Cluster (Metabolic Syndrome)

Clinical Identification of Metabolic Syndrome Any 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 4. Blood pressure 5. Fasting glucose NCEP ATP III. JAMA. 2001;285:2486.

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

The Economics of the Health Status as Paid by Companies Total Value of Health Medical/Hospital Drug Absence Disability Worker’s Comp Effective on Job Recruitment Retention Morale Health Risks Disease

Change in Costs follow “Don’t Get Worse”

Medical and Drug Cost (Paid)* Slopes differ P=0.0132 Impr slope=$117/yr Nimpr slope=$614/yr Improved=Same or lowered risks

Distribution: Age, Costs, & Risk Status % of Population and Costs (All Covered Lives) % High Risk (>2 risks) N=1.2M individuals in total UM-HMRC population. N=300K in risk population

The Economics of Total Population Engagement and Total Value of Health Medical/Hospital Drug Absence Disability Worker’s Comp Effective on Job Recruitment Retention Morale Health Risks Low or No Risks Disease increase increase decrease Where is the Investment?

Excess Costs are related to Excess Risks Summary for Section II Excess Costs are related to Excess Risks Costs follow Engagement and Risks Controlling Risks leads to Zero Trend

The Evidence-Based Solution: Integrate Health into the Culture 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” …)

Health Management Strategy Sickness Management --reduced errors --coordinate services Disease Management --stay on protocol --don’t get worse Wellness Management --healthy stay healthy --don’t get worse Where is the economic strategy?

Integrate Health into the Culture 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 Senior Leadership Operations Leadership Self-Leadership Reward Positive Actions Quality Assurance Health Management Programs 1981, 1995, 2000, 2006 D.W. Edington

1st Fundamental Pillar SENIOR LEADERSHIP Create the Vision Commitment to healthy culture Connect vision to business strategy Engage leadership in vision 1st Fundamental Pillar

Vision from the Senior Leadership 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

OPERATIONS LEADERSHIP Align Workplace with Vision Engage everyone Brand health management strategies Integrate policies into culture 2nd Fundamental Pillar

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,…)

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 Total Health & Productivity Management 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 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 Long Term Strategy—Short Term Solutions On-site Medical, H&S Diabetes education pilot Injury and medical management Occupational Health and Safety

3rd Fundamental Pillar SELF LEADERSHIP Create Winners Help employees not get worse Help healthy people stay healthy Provide improvement and maintenance strategies 3rd Fundamental Pillar

Individual Strategy for Engagement Health Risk Appraisal Plus 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

REWARD POSITIVE BEHAVIORS Reward champions Set incentives for healthy choices Reinforce at every touch point Reinforce Culture of Health 4th Fundamental Pillar

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…)

Outcomes Drive Strategy QUALITY ASSURANCE Outcomes Drive Strategy Integrate all resources Measure progress towards goals in the first four Pillars Make it sustainable 5th Fundamental Pillar

Four Levels of Company Engagement Do-Nothing Traditional (focus on high risk) Comprehensive (more programs) Champion Company (Five Pillars)

Healthy System & Culture Reward Positive Actions 3 Vision from Leaders Healthy System & Culture Engage all in Culture Reward Positive Actions Progress in all areas 2 Speech from Leader Risk ReductionSystem Reduce all Risks Incent H-Risk Change in Risks, ROI 1 Inform Leader Out-source Reduce H-Risks Change in Risks Do Nothing 4 5 Program Rating: per Pillar Engagement Levels of the Health Management Program Champion Comprehensive Traditional Do Nothing Five Pillars: Senior Leadership; Operations Leadership; Self-Leadership; Rewards for Positive Actions; Quality Assurance

Champion Company with the Trend Management System Business Concept Outcome Measures for a Champion Company with the Trend Management System

Measurement Scorecard Percent Engagement: 85% to 95% HRA + Screening/counseling + Coaching + Two other sessions Percent Low-Risk: 75% to 85% Percent of Total Eligible 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

Summary

Lifestyle Scale for Individuals and Populations: Self-Leaders High-Level Wellness, Energy and Vitality Premature Sickness, Death & Disability Chronic Signs & Symptoms Feeling OK Edington. Corporate Fitness and Recreation. 2:44, 1983, Modified 2009

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.”

Expand the Health Status Strategy The Challenge Expand the Health Status Strategy from a singular focus on Sickness and Precursors to Disease to include a focus on Wellness and Precursors to Health (from a 97 to 3 resource allocation ratio to a 80 to 20 ratio)

Implications for Public Policy What can Americans Do? Federal Government: provide incentives for companies to improve the health component of their products State Governments: provide incentives for companies and communities to move to towards healthy cultures Local Communities: form coalitions of stakeholders to create a community culture of health Employers: install the five fundamental pillars of health management to move to a champion company Individuals: stop getting worse as a first step to becoming a self-leader

What’s the Point?

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 1015 E. Huron St. Ann Arbor MI 48104-1689