2. 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

3. 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?

4. Consortium 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.

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

7. Building a Sustainable Business and Economic Strategy 1.Workshop: Champion Companies, Zero TrendsEight Hours 2.Complete Strategy/Champion Company Four Hours 3.Fundamental Strategy/Champion CompanyTwo 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

8. 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 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

9. 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” …)

10. 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% 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

11. 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

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

13. Total Value of Health Medical/Hospital Drug Absence Disability Worker’s Comp Effective on Job Recruitment Retention Morale Disease The Economics of Health Status

14. 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

15. 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

16. 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)

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

18. 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.

19. Business Concept Excess Costs follow Excess Risks

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

21. Outcome Measures Low- Risk Medium- Risk High- Risk Excess Cost Percentage Short-term Disability $ 120$ 216$ 33341% Worker’s Compensation $ 228$ 244$ 49624% Absence$ 245$ 341$ 52729% Medical & Pharmacy $1,158$1,487$3,69638% Total$1,751$2,288$5,05236% Association of Risk Levels with Corporate Cost Measures Wright, Beard, Edington. JOEM. 44(12):1126-1134, 2002

22. Business Concept Change in Costs follow Change in Risks

23. Change in Costs follow Change in Risks Cost reduced Cost increased Risks ReducedRisks 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: $214; Cost per risk avoided: $264

24. Business Concept Change in Costs Follow Engagement

25. Yearly Average Disability Absence Days by Participation Pre-ProgramProgram Years $200 Work Day X 1.2 Work Days Participant Year X2,596 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

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

27. Total Value of Health PresenteeismAbsenteeismSTDLTD Medical & Pharmacy Edington, Burton. A Practical Approach to Occupational and Environmental Medicine (McCunney). 140-152. 2003 Worker’s Compensation Time-Away-from-Work

28. Total Value of Health Medical/Hospital Drug Absence Disability Worker’s Comp Effective on Job Recruitment Retention Morale Disease Health Risks The Economics of Health Status

29. 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

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

31. Zero Trends follow “Don’t Get Worse” and “Help the Healthy People Stay Healthy”

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

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

34. 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” …)

35. 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?

36. 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

37. Integrate Health into Core BusinessHealthierPerson 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 1981, 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

38. Five Pillars of a Population Health Management System

39. Five Fundamental Pillars Senior Leadership Operational Leadership Self Leadership Rewards Quality Assurance

40. 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”

41. 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”

42. 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?

43. 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,…)

44. 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 Design Environmental 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

45. 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

46. 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’

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

48. Population-Based Resources Weight Management Business Specific Modules Physical Activity Career development Stress Management Communications Safety Belt Use Financial Management Smoking cessationSocial/Information Networks Nutrition Education Disease Management Clinic or Medical Center On-Line InformationErgonomics Nurse Line NewslettersVision Dental Behavioral Health & EAPHearing Pharmacy ManagementChiropractic Complementary Care Case ManagementIntegrative Medicine Absence ManagementPhysical Therapy Disability Management

49. 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

50. 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”

51. 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…)

52. 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

53. 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”

54. 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

55. 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)

56. Business Case Indicators of Sustainability 1.Company Engagement 2.Individual Engagement

57. 3Vision from Leaders Healthy System & Culture Engage all in Culture Reward Positive Actions Progress in all areas 2Speech from Leader Risk Reduction Reduce all Risks Incent H- Risk Change in Risks, ROI 1Inform Leader Out-sourceReduce H-Risks Incent H- Risk Change in Risks 0Do Nothing 12345 Engagement Level of the Organization Program Rating Do Nothing Champion Comprehensive Traditional Senior Leadership Operations Leadership Self- Leadership Rewards for Positive Actions Quality Assurance Five Pillars

58. Health Risk Appraisal Engagement of Individuals (employees and spouses) Biometrics Screening and Counseling Contact a Health Advocate Two Other Activities

59. Business Case Indicators of Sustainability 3. Environmental Support 4. Perception of the Culture

60. Perception of the Culture from Survey Not supportiveMedian Very supportive Supportive Environment From Survey Very Supportive Not Supportive Supportive Environment and Culture M A B

61. Summary

62. 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 Productivity 1.Absence 2.Disability 3.Worker’s Comp 4.Effective on Job

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

64. 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.

65. 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 feifeiw@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