Health Management as a Serious Business Strategy

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Health Management as a Serious Business Strategy

Dee. W. Edington
THE UNIVERSITY OF MICHIGAN HEALTH MANAGEMENT
RESEARCH CENTER
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AGENDA
Health Management as a Serious Business Strategy
State of Washington



Wellness Coordinator Training
Olympia WA September 26, 2007 Introductory
Comments Do
Nothing Strategy 20
Business Case to Build the Strategy 20
Next Generation Programming, 20
Summary Slides available
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Introductory Comments
4
UM-HMRC Corporate Consortium

• Steelcase (H)
• Progressive (H)
• Crown Equipment
• Delphi Automotive
• Southern Company
• Foote Health System
• University of Missouri
• Medical Mutual of Ohio
• St Lukes Health System
• Cuyahoga Community College
• International Truck and Engine
• United Auto Workers-General Motors
• Wisconsin Education Association Trust
• Southwest Michigan Healthcare Coalition
• Australian Health Management Corporation

• Kellogg
• US Steel
• JPM Chase
• We Energies
• General Motors
• Affinity Health Plan
• Florida Power Light

The consortium members provide health care
insurance for over two million Americans. Data
are available from eight to 18 years. Meet on
First Wednesday of each December in Ann Arbor
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Key Thoughts
Objective Shareholder value from creative and
innovative products from healthy and productive
people
Strategy Next Generation Program to drive
Objective Partners health plans benefit
consultants primary care physicians
pharmaceutical companies health enhancement
companies

Outcomes to get to Zero Trend 90-95
participation and 75 to 85 low-risk
Keep the
healthy people healthy
Dont get worse
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Health Management a Serious Business Strategy

• Building an Integrated, Sustainable Business
  Strategy
• (Next Generation Programs,
  Champion Companies, Zero
  Trends) Six Hours
• Complete Strategy and Next Generation Four
  Hours
• Fundamental Strategy and Next Generation Two
  Hours
• Business Strategy and Next Generation 90
  minutes
• Short Business Strategy and Next Generation 75
  minutes
• Executive Summary 45 minutes
• Executive Summary of Executive Summary 20
  minutes

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Since September 1, 2003 49 Months
300 Invited Presentations
45,000 People 20,000
Companies To change the conversation around
heath
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Health Management in the Workplace
1. Health Status 2. Life Expectancy
3. Disease Care Costs 4. Health Care Costs 5.
Productivity a. Absence b. Disability
c. Workers Compensation d. Presenteeism
e. Quality Multiplier 6. Recruitment and
Retention 7. Company Visibility 8. Social
Responsibility
1981, 1995, 2000, 2006 D.W. Edington
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Moving the Paradigm From
The Cost of Healthcare (Treating disease)
To
The Total Value of Health (Managing health
status) To
Health is Free
(Healthcare Costs lt Total Benefits) By
Adopting the Quality Strategy
(Fix the Systems that Lead to the Defects)
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Washington DOH
X
UM-HMRC Ann Arbor
X
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(No Transcript)
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(No Transcript)
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Section I The Do-Nothing Strategy
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Business Case Know Your Population A Pre-Test
For Personal Health Status
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From The One-Minute Manager Balances Work and Life
The Professors Dozen
YES
NO
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From The One-Minute Manager Balances Work and Life
The Professors Dozen
YES
NO
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From The One-Minute Manager Balances Work and Life
The Professors Dozen
YES
NO
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Health Risks and Behaviors
OVERALL RISK LEVELS Low Risk 0 to 2 high
risks Medium Risk 3 to 4 high risk High Risk 5
or more high risks
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Estimated Health Problems
UM-HMRC Estimated Medical Economics Report
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Estimated Health Risks
OVERALL RISK LEVELS Low Risk 55.3
Medium Risk 27.7 High Risk
17.0
UM-HMRC Estimated Medical Economics Report
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Business Case The Natural Flow of Health Risks
and Behaviors and Health Care Costs
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Risk Transitions Time 1 Time 2
High Risk (gt4 risks)
Medium Risk (3 - 4 risks)
Average of three years between measures
Low Risk (0 - 2 risks)
Modified from Edington, AJHP. 15(5)341-349, 2001
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Cost Transitions Time 1 Time 2
N356,275 Non-Medicare Trad/PPO
Modified from Edington, AJHP. 15(5)341-349, 2001
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Total Medical and Pharmacy Costs Paid by Quarter
for Three Groups
Musich,Schultz, Burton, Edington. DMHO.
12(5)299-326,2004
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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
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Summary of the Do-Nothing Strategy
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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This is the Way Americans Have been Living their
Lives for 60 Years
Can You Afford the Economic Consequences of the
Do-Nothing Strategy?
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Section II Key Business Concepts To Build the
Business Case
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Business Concept Eliminate Silo
Thinking Consider the
Total Value of Health
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Relative Value of Health to the Organization
Total Value of Health
Medical Pharmacy
Workers Compensation
Presenteeism
Absenteeism
STD
LTD
Time-Away-from-Work
Edington, Burton. A Practical Approach to
Occupational and Environmental Medicine
(McCunney). 140-152. 2003
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Business Concept Excess Costs follow Excess Risks
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Excess Medical Costs due to Excess Risks
Edington, AJHP. 15(5)341-349, 2001
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Excess Pharmaceutical Costs due to Excess Risks
1,121
754
750
567
526
443
345
Burton, Chen, Conti, Schultz, Edington. JOEM.
45(8) 793-802. 2003
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Excess Disability Costs due to Excess Risks
Wright, Beard, Edington. JOEM. 44(12)1126-1134,
2002
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Excess On-The-Job Loss due to Excess Risks
14.7
Burton, Chen, Conti, Schultz, Pransky, Edington.
JOEM. 47(8)769-777. 2005
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Business Concept Total Value of Health to an
Organization
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Association of Risk Levels with Corporate Cost
Measures
Wright, Beard, Edington. JOEM. 44(12)1126-1134,
2002
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Business Concept Which Risks Travel Together?
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Likelihood of Association with Other Risks
Percentages show those at high risk for a
particular health measure who have at least four
other health risks. Population 16,879
LifeSteps active screened participants
Baunstein, Yi, Hirschland, McDonald, Edington.
Am. J. Health Behavior.25(4)407-417. 2001
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Business Concept Managed the Person Not the
Risk or Disease
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Intervention for Biometric Cluster (Metabolic
Syndrome)
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Clinical Identification of Metabolic Syndrome
Any three of the following
Defining Level
Risk Factor
gt40 in (gt102 cm) gt35 in (gt88 cm) ?150 mg/dL
lt40 mg/dL lt50 mg/dL ?130/85 mmHg ?110 mg/dL

• Waist Size
• Men
• Women
• 2. Triglycerides
• 3. HDL-C
• Men
• Women
• 4. Blood pressure
• 5. Fasting glucose

NCEP ATP III. JAMA. 20012852486.
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Development and Consequences of Metabolic Syndrome
Where do you want to intervene in the process?
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Intervention for Psychological Cluster
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Development and Consequences of Mental Health
Issues (DRAFT)
Where do you want to intervene in the process?
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Business Concept Change in Costs follow Dont
Get Worse
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Medical and Drug Cost (Paid)
Slopes differ P0.0132
Impr slope117/yr Nimpr slope614/yr
per employee , Improved374, Non-Improv103 HRA
in 2002 and 2004 ImprovedSame or lowered
risks Medical and Drug, not adjusted for
inflation
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Summary Business Case for Health Management
Excess Costs are related to Excess Risks
Costs follow Engagement and Risks
Controlling Risks leads to Zero Trend
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Section III Health Management Next Generation
Programming Champion Companies
Zero Trend
The Question is How can we do it?
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• Three Key Business Beliefs
• Individuals Can Maintain Low-Risk Health Status
  even as they Age
• A Health Plan and an Employer can Help its
  Members Maintain Low-Risk Health Status
• The Major Economic Benefit is in Paying Attention
  to Individuals with Low-Risk Health Status

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Business Concept Population Management
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Next Generation Health Management
Medical Care Management Opportunity
Condition Management Opportunity
Health Promotion Opportunity
Medical and Drug Costs only
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Business Concept
Necessary Partners to get to Next
Generation Programs

• Company (Private or Public or non-Profit)
• Management Union
• Health Plan
• Benefit Consultant
• Primary Care Physicians
• Pharmaceutical Company
• Health Enhancement Company

Health Systems???
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Business Concept Next Generation Programming for
Champion Companies to Achieve Zero Trend
Integration and Sustainability
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Next Generation Health Management Program
1. Vision from Senior Leadership 2.
Worksite Environment
4. Population Programs Website Low-Risk
Maintenance Know Your Numbers Physical
Activity Nutrition Awareness Wellness
Modules
3b. Individual Stratification
Coaching Sessions -unlimited
contacts Health Advocate Triage to
Resources Develop Self-Leaders
3a. Health Risk Appraisals
5. Incentives
6. Measurement
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Next Generation 1. Senior Leadership Vision
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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

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Next Generation 2. Environmental Strategies
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Environment Interventions

• Management and Leadership of the Company and
  Unions
• 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
• Other Benefit Design

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Next Generation Benefit Design to Promote
Consumerism

• Move from Entitlement to Consumer
• Incentives follow Actionable Behaviors
• Provide Transparency
• Appropriate Physicians
• Appropriate Health Systems
• Appropriate Pharmaceutical Solutions
• Promote Maintenance of Health Status

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Next Generation 3. Health Risk Appraisal
System
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Health Risk Appraisals

• Comprehensive and Lifestyle Oriented
• Tested for Reliability and Validity
• Evidence-Based
• Tailored Profile returned to Individual
• Recommendations connected to Local Resources
• Counseling

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Components of a HRA Participation
Health Risk Appraisals Plus Screening for
Biometrics and Counseling Plus Coaching for
Everyone
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Coaching Strategies for Individualized
Intervention
Contact from each individual (at least three
times) Unlimited contacts by level of
probability of being high cost within the next
two to three years
Pay attention to individualize engagement
Use variety of contacts (one on one, telephone
and web) for sustainable engagement
Use situational and whole person approach
Engage individual in positive actions. Ask but
dont tell. Use triage, health advocate
strategies, develop Self-Leaders and use all
available resources

Frequent evaluation of coach/client participation
and satisfaction
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Next Generation 5. Population Based Programs
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Population-Based Programs

• Population Programs Orientation
• Pedometers, know your numbers, no weight gain
• Human Resource Orientation
• People skills/Communications
• Health Communications
• Written materials, Online portal, etc
• Environmental Orientation
• Stairwells/Vending, Food Services, Other

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Wellness Resources for Individuals

• Wellness Modules
• High-Risk Reduction Ergonomics
• Smoking cessation Job Design
• Weight Loss Stress
  Management
• Physical Activity Business Specific Modules
• Many Others
• Special Promotions
• Communications
• Condition Management Career development
• Blood pressure
• Cholesterol
• Diseases
• Other

Not A Stand Alone Program
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Next Generation 6. Incentives
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Incentives

• Hats and T-Shirts
• Cash, debit cards
• (25 to 200)
• Premium Reductions/Premium Plan
• (600 to 2000)
• Benefit Options (Co-pays, Deductibles, HSA
  contributions, )

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Next Generation 7. Measurement, Evaluation
and Decision Support
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Scorecard

• Percent Participation 80 to 95
• Over a rolling three years
• HRA Three Coaching sessions Two other
  sessions
• Percent Low-Risk 70 to 85
• Percent of the eligible population
• Estimated Cost of Program 400
• Dollars per Eligible employee
• Excluding major incentive
• Estimated Savings 800
• Dollars per Eligible Employee

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Summary
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Sound Bites from the Presentation
1. The Do Nothing strategy is unsustainable.
2. Total Population Management is the effective
healthcare strategy and to capture the Total
Value of Health
3. We need to 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, Dont Get Worse and
Lets Create Winners, One Step at a Time.
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Key Thoughts
Objective Shareholder value from creative and
innovative products from healthy and productive
people
Strategy Next Generation Program to drive
Objective Partners health plans benefit
consultants primary care physicians
pharmaceutical companies health enhancement
companies

Outcomes to get to Zero Trend 90-95
participation and 75 to 85 low-risk
Keep the
healthy people healthy
Dont get worse
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Whats the Point?
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Thank you for your attention.
Please contact us if you have any questions.
Phone [phone] Fax (734) 763
2206 Email dwe_at_umich.edu Website
www.hmrc.umich.edu
Dee W. Edington, Ph.D. , Director
Health Management Research Center
University of Michigan
1027 E. Huron St.
Ann Arbor MI 48104-1688