2. Union Coalition Delegates Conference Zero Trends: Health as a Serious Economic Strategy Leadership: A Transformational Approach to Health UNIVERSITY OF MICHIGAN HEALTH MANAGEMENT RESEARCH CENTER Dee W. Edington

3. Think about what it would be like if you worked in the best performing organization you could imagine and the best place to work. What words would you use to describe the workplace and how would you describe the workforce?

4. Business Problem Currently, most costs associated with workplace and workforce performance are growing at an unsustainable rate 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?

5. Consortium UM-HMRC Corporate Consortium Ford Delphi Kellogg We Energies General Motors Crown Equipment Delphi Automotive Southern Company University of Missouri Medical Mutual of Ohio Florida Power and Light St Luke’s Health System St Joseph Health System Allegiance Health System Cuyahoga Community College United Auto Workers-General Motors American Construction Benefits Group Australian Health Management Corporation Steelcase (H) Progressive (H) JPMorgan Chase (H) Affinity Health System (H) SW MI Healthcare Coalition (H) Wisconsin Education Association Trust (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. Union Coalition Delegates Conference Zero Trends: Health as a Serious Business and Economic Strategy March 25, 2011 Mission Change the Economic Assumptions from Treating Disease to the 21 st Century Assumptions about Creating and Maintaining Healthy Populations Natural Flow of a Population High Risks and High Costs Business Case Health as a Serious Business and Economic Strategy Solution Engage Champion Companies in Systematic, Systemic and Sustainable Five Pillars which Promote a Healthy and High Performing Workplace and Workforce

7. Section I The Current Healthcare Strategy Natural Flow Wait for Disease and then Treat (…in Quality terms this strategy translates into “wait for defects and then fix the defects” …)

8. 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

9. 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

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

11. 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

12. Section I: Four Learning Concepts 1.The flow of Risks is to High-Risks 2.The flow of Costs it to High-Costs 3.Without early identification, the High Cost Spike is not Modifiable 4.Costs follow Risks and Age

13. Section II Build the Business Case for the Health as a Serious Economic Strategy (200+ Publications) Engage the Total Population to get to the Total Value of Health Complex Systems (Synergy & Emergence) versus Reductionism (Etiology)

14. 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.

15. Percentage of Employees with a Disability Claim by Risk Status* HRA Participants 1998-2000 HRA WC Claims STD Claims Absence Record Disability Claim Low Risk 0-2 Risks (N=685) 25.4% 23.4% 49.9% 61.3% Medium Risk 3-4 Risks (N=520) 30.2% 30.8% 63.1% 72.5% High Risk 5+ Risks (N=366) 38.0% 46.7% 69.7% 81.7% Non- Participants (N=4,649) 30.2% 29.6% 41.0% 64.4% Wright, Beard, Edington. JOEM. 44(12):1126-1134, 2002 *Over three years 1998-2000

16. Excess Disability Costs due to Excess Risks $491 $666 $783 $1,248 Wright, Beard, Edington. JOEM. 44(12):1126-1134, 2002

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

18. Excess Pharmaceutical Costs due to Excess Risks $345 $443 $526 $567 $750 $754 $1,121 Burton, Chen, Conti, Schultz, Edington. JOEM. 45(8): 793-802. 2003

19. Excess On-The-Job Loss due to Excess Risks Burton, Chen, Conti, Schultz, Pransky, Edington. JOEM. 47(8):769-777. 2005 14.7%

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

21. 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

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

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

24. 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 does cost turn into an investment? increase decrease

25. Section II: Four Learning Concepts 1. Excess Risks lead to Excess Costs 2. Risks Travel in Clusters 3. Change in Risks lead to Change in Costs 4. Controlling Risks leads to Zero Trends

26. Health and Wellness ProgramsHealthierPerson 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

27. In December of 2006 we celebrated the first 30 years of our work: the Business Case was solid, although not yet perfect. Congratulations! However, nothing has changed in the population No more people doing physical activity No fewer people weighing less No fewer people with diabetes Why the disconnect between the business case and the intervention outcomes?

28. A short Health & Performance Quiz If you continue to wait for defects and then try to fix the defects: Will you ever solve the fundamental problems? If you put a changed person back into the same environment: Will the change be sustainable? Is it better to keep a good customer or find a new one? Is the action you reward, the action that is sustained?

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. Where do we go next? TO A NEW LEVEL OF THINKING

31. … to a Transformation from the Tired Old 20 th Century Assumptions About Disease to the New 21 st Century Assumptions About Healthy and High Performing Populations 1. From health as the absence of disease to health as vitality and energy 2. From only caring for the sick to enabling healthy people to stay healthy 3. From the cost of healthcare to the total value of health 4. From individual participation to population engagement 5. From behavior change to a Culture of Health

32. Section III The Evidence-Based Solution: Zero Trends Integrate Health into the Environment and the Culture (…in Quality terms this strategy translates into “…fix the systems that lead to the defects” …)

33. 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 Based upon 175 Research Publications

34. 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

35. LAYING THE GROUNDWORK FOR TRANSFORMATIONAL CHANGE

36. What is the value to you of a healthy and high performing champion workplace and workforce? To your organization? To your community?

37. Characteristic of a Transformational Champion Organization Systematic Strategies Make the Solutions Systemic Make it Sustainable

38. Transformation Where are you? Pillar 5 Quality Assurance Champion Comprehensive Traditional Do Nothing Senior Leadership Operational Leadership Self- Leadership Recognize Positive Actions Quality Assurance

39. Senior Leadership Create the Vision Commitment to healthy culture Connect vision to business strategy Engage all leadership in vision “Establish the value of a healthy and high performing organization and workplace as a world-wide competitive advantage”

40. People are inspired by the purpose of the effort People feel that their values and ideas are incorporated into what the organization is trying to achieve People can easily communicate the direction of the effort People recognize that both individual and organizational needs are being addressed People see how their day-to-day activities can support the overall goals of the effort Create the Vision A Vision Must be Woven into Everything & Repeatedly Promoted! Pillar 1: Senior Leadership

41. Example Vision - Intel

42. Operations 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”

43. The Transformation needs New Tools Next Generation Health Risk Assessments Corporate Culture and Environmental Audit and Gap Analyses Where do Employees go after Work? Community and Home From Best Practices to Next Practices

44. A socially and structurally-constructed set of core attributes reflecting the prevailing values, underlying assumptions, expectations and definitions that members of a work organization collectively maintain. The sum of these characteristics effect the way members think, feel, and behave related to matters of personal and group health. What is a Culture of Health Pillar 2: Operations Leadership

45. Promote Self Leadership Create Winners “Champions” 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’

46. Self-Leadership and High Performance PersonalPersonalControl OptimismOptimism Self-leadership ResilienceResilience Confidence / Self- efficacyConfidence / Self- efficacy Self- esteemSelf- esteem KnowledgeKnowledge Health LiteracyHealth Literacy Negotiation SkillsNegotiation Skills Vitality/Vitality/Vigor ConsumerismConsumerism EngagementEngagement Social SupportSocial Support – Colleagues – Community – Family Environment and cultureEnvironment and culture Other possible *constructs: Change, Vision, Trust, Thrive, Enthusiasm, Ethics, Energy, Spirituality, Creativity, … Low-Risk Health Status Purpose-Values-Mission-Vision

47. Strategies Focused on Individuals Lifestyle/behavior change programs (e.g., programs to help employees stop smoking or abusing drugs, lose weight, or better manage stress) Health and safety training (e.g., training employees on general workplace safety practices and those that apply to their specific jobs) Clinical and preventive services (e.g., screenings and immunizations for employees and their families) Source: UCI Health Promotion Center, Workplace Health Promotion, Information and Resource Kit. http://www.seweb.uci.edu/users/dstokols/hpc.html Pillar 3: Self-leadership

48. Weight Management Physical Activity Stress Management Communications Safety Belt Use Smoking Cessation Nutrition Education On-Line Information Nurse Line Newsletters Behavioral Health & EAP Pharmacy Management Case Management Absence Management Disability Management Business Specific Modules Career Development Communications Financial Management Social/Information Networks Clinic or Medical Center On-Line Information Ergonomics Vision Dental Hearing Chiropractic Complementary Care Integrative Medicine Physical Therapy Population Based Resources Pillar 3: Self-leadership

49. Recognize Positive Actions Reinforce the Culture of Health Recognize champions Set recognition for healthy choices Reinforce at every touch point “What is rewarded is what is sustained”

50. Incentives Tied to Medical Plan Design: Premium reduction HRA completion HRA credits to offset deductibles Reduced co pays for preventative services Reduced co pays for Rx adherence of certain drug classes Non tobacco user incentive Incentives Tied to Behaviors and Results: Wellness rebates for participation in physical activity; weight management; tobacco cessation programs Greater subsidy of healthy foods in cafes, lower costs to employees Recognition of employees that improve their health through positive lifestyle changes Encourage Desired Behaviors Pillar 4: Recognize Action

51. Tangible Incentives Cash Merchandise Vacation days Avoidance of costs (such as health care premiums or deductibles) Intangible Incentives Extrinsic: Recognition Group competition Acceptance and approval of peers Intrinsic: Personal challenges A sense of accomplishment A sense of belonging Incentives can be tangible or intangible The Science and Art of Motivating Healthy Behaviors, by Barry Hall, BENEFITS QUARTERLY, Second Quarter 2008. http://www.buckconsultants.com/buckconsultants/portals/0/documents/publications/published_articles/2008/Articles_Hall_B enefits_Quarterly_Q2_08.pdf Recognize Positive Action Pillar 4: Recognize Action Can be the tipping point that moves someone from inaction to action

52. 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”

53. Onsite / Near-site Medical Fitness Center Behavioral Health Case Managemen t Absence Management Employer Data Health Plan Design Disease Managemen t Health Assessment Health Portal Data Integration: Core of Quality Management Consolidated Data and and Relational Outcomes Reporting and Relational Outcomes Reporting Data Warehouse HealthAdvocacy Wellness/ Risk Reduction Program Compensation Compensation Employer/ Job type Employer/ Job type Performance Performance Safety/Risk Management Safety/Risk Management Risk information Risk information Health Outcomes Health Outcomes Web Metrics Web Metrics Program Participation Program Participation Risk information Risk information Behavior Change Behavior Change Health Outcomes Health Outcomes Medical Service utilization data Medical Service utilization data Performance Performance Safety/Risk Management Safety/Risk Management Program engagement data Program engagement data Data on use of Center Data on use of Center Exercise freq./ duration Exercise freq./ duration Data on plan coverage, copay levels, etc. Data on plan coverage, copay levels, etc. Absenteeism information Absenteeism information Mental health service utilization data Mental health service utilization data Program Engagement data Program Engagement data Adjunct risk and health behavior data Adjunct risk and health behavior data Pillar 5: Quality Assurance

54. Evaluate Outcomes Were there changes in Psychosocial Outcomes? Did health behaviors improve? Did health and clinical outcomes improve? Were there changes in worker productivity ? What types of organizational outcomes were seen? Was there a positive return on investment? 53 Program Outcomes Psychosocial (Examples) Self-efficacy Resilience Quality of Life Behavior Change (Examples) Healthy Diet Regular Exercise Smoking Cessation Stress Reduction Health Indicators (Examples) Health Status Clinical Indicators Performance Absence Disability Worker’s Comp Presenteeism Organization Level Impact Recruitment/ Retention Company Visibility Social Responsibility Financial Service Utilization Expected Cost Trend Demonstrated Cost Trend Measure and understand change in outcomes that drive health and cost trends… Outline an outcomes framework and system of measurement to determine the ongoing effectiveness of the program and the organization’s financial gains Quality Assurance Evaluate Outcomes Pillar 5: Quality Assurance

55. Summary

56. Characteristic of a Transformational Champion Organization Systematic Strategies Make the Solutions Systemic Make it Sustainable

57. Overall Business Strategy What is your vision? Pillar 2: Operations Leadership Vision from Leaders Healthy System & Culture Champion Everyone a Self- Leader Recognize Positive Actions Progress in All Areas Comprehensive Traditional Do Nothing Speech from Leader Reduction in Risks Reduce Health Risks Reward Achievement Change in Risk & Sick Costs Inform Leader Programs Targeting Risks Health Risk Awareness Change in Risks Status Quo Senior Leadership Operational Leadership Self- Leadership Recognize Positive Actions Quality Assurance Status Quo Reward Enrollment

58. What’s the Point

59. 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 School of Kinesiology University of Michigan 1015 E. Huron Street Ann Arbor MI 48104-1689