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

3. 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

4. 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 minutes
Executive Summary of Executive Summary 30 minutes

5. 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

6. 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

7. 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

8. 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” …)

9. 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 %
Medium Risk %
High Risk %

10. 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): , 2001

11. 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

12. 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): , 2001

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

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): , 2001

15. 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

16. 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

17. 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)

19. 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

20. 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

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

22. 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): , 2002.

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

24. 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)

25. Excess Costs follow Excess Risks
Business Concept
Excess Costs follow Excess Risks

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

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

28. 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): , 2002

29. Risks Travel in Clusters

30. 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): , 2001

31. Intervention for Biometric Cluster
(Metabolic Syndrome)

32. 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.

33. 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?

34. 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

35. Change in Costs
follow
“Don’t Get Worse”

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

37. 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

38. 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?

39. 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

40. 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” …)

41. 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?

42. 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

43. 1st Fundamental Pillar SENIOR LEADERSHIP Create the Vision
Commitment to healthy culture
Connect vision to business strategy
Engage leadership in vision
1st Fundamental Pillar

44. 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

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

46. 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,…)

47. 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

48. 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

49. Individual Strategy for Engagement
Health Risk Appraisal
Plus
Biometrics Screening and Counseling
Contact a Health Advocate
Two Other Activities

50. 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

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

52. 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…)

53. 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

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

55. Healthy System & Culture Reward Positive Actions3
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

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

57. Measurement Scorecard
Percent Engagement: % to 95%
HRA + Screening/counseling + Coaching + Two other sessions
Percent Low-Risk: % 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

58. Summary

59. 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

60. 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.”

61. 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)

62. 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

63. What’s the Point?

64. Thank you for your attention.
Please contact us if you have any questions.
Phone: (734) 763 – 2462
Fax: (734) 763 – 2206
Website:
Dee W. Edington, Ph.D. , Director Health Management Research Center University of Michigan E. Huron St Ann Arbor MI