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Health Management as a Serious Business Strategy

Health Management as a Serious Business Strategy. THE UNIVERSITY OF MICHIGAN HEALTH MANAGEMENT RESEARCH CENTER. UM-HMRC Corporate Consortium. Steelcase (H) Progressive (H) Crown Equipment Delphi Automotive Southern Company Foote Health System University of Missouri

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Health Management as a Serious Business Strategy

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  1. Health Management as a Serious Business Strategy THE UNIVERSITY OF MICHIGAN HEALTH MANAGEMENT RESEARCH CENTER

  2. 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 Luke’s 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

  3. 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

  4. The Secret to Zero Trends Health Management as a Serious Economic and Business Strategy September 17, 2008 The Mission: Regaining Vitality in Americans and America Healthcare Strategy: Wait for Sickness, then Treat 30 Zero Trend Strategy: Manage Health Status 30 The Solution: Integrate Health into Company Culture 30 Slides available

  5. Mission: Regaining Vitality in Corporations

  6. Lifestyle Scale for Individuals and Populations: Self-Leaders PrematureSickness, Death & Disability High-Level Wellness, Energy and Vitality ChronicSigns &Symptoms Feeling OK Edington. Corporate Fitness and Recreation. 2:44, 1983

  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 Integration of Health into the Culture

  8. Key Thoughts Objective: Our mission is to create Shareholder value. We get value from creative and innovative products. We get products from healthy and productive people Strategy: Integrate Health into theCulture to drive Objective Partners: health plans; benefit consultants; primary care physicians; pharmaceutical companies; health enhancement companies Outcomes to get to Zero Trend: 90%-95% engagement and 75% to 85% low-risk Keep the healthy people healthy Don’t get worse

  9. Two Corporate Recommendations from this Presentations Help the Healthy People Stay Healthy Just Don’t Get Worse

  10. Section I The Sickness Strategy: The Failed Focus

  11. 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

  12. 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% 14.5% 10.7% 9.4% 7.0% 6.4% 3.8% 3.3% 1.8% 1.7% 1.3% 0.7% 31.9% Estimated Health Problems UM-HMRC Estimated Medical Economics Report

  13. 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% Estimated Health Risks OVERALL RISK LEVELS Low Risk 55.3% Medium Risk 27.7% High Risk 17.0% UM-HMRC Estimated Medical Economics Report

  14. 2,373 (50.6%) 4,691 (10.8%) 1,961 (18.4%) 5,226 (12.1%) 892 (3.2%) 4,546 (42.6%) 10,670 (24.6%) 1640 (35.0%) 678 (14.4%) 11,495 (26.5%) 5,309 (19.0%) 4,163 (39.0%) 27,951 (64.5%) 26,591 (61.4%) 21,750 (77.8%) Risk Transitions Time 1 – Time 2 High Risk (>4 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

  15. Total Medical and Pharmacy Costs Paid by Quarter for Three Groups Musich,Schultz, Burton, Edington. DM&HO. 12(5):299-326,2004

  16. 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

  17. 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

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

  19. Section II The Health Status Strategy: The Emerging Focus

  20. Business Concept Relationships of Risks and Disease with Total Value of Health

  21. Consequences of Poor Health: Total Value of Health Direct Costs: Medical & Pharmacy Indirect Costs: Worker’s Compensation Presenteeism LTD STD Absenteeism Time-Away-from-Work Edington, Burton. A Practical Approach to Occupational and Environmental Medicine (McCunney). 140-152. 2003

  22. Same Risk and Behavior Factors Drive All the Outcome Measures

  23. Business Concept Relationships of Risks and Disease with Measures of Productivity (Time away from work)

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

  25. Total Disability Cost by Risk Status 1998-2000 Mean Annual Costs Wright, Beard, Edington. JOEM. 44(12):1126-1134, 2002

  26. Business Concept Relationships of Risks and Disease with Measures of Productivity (Presenteeism)

  27. Health Risks and Behaviors X hours Lost Burton,Conti,Chen,Schultz,Edington. JOEM.41,863-877, 1999.

  28. Estimated Loss of Productivity by Risk Status Burton, Chen, Conti, Schultz, Pransky, Edington. JOEM. 47(8):769-777. 2005 *p<.05, **p<.01

  29. Business Concept Relationships of Risks and Disease with Measures of Medical and Drug

  30. Medical/Drug Cost Comparison by Risk Status *p<.05. Yen, Witting, Edington. AJHP. 6:46-54, 1991

  31. Business Concept Excess Costs follow Excess Risks

  32. Excess Disability Costs due to Excess Risks $1,248 $783 $666 $491 36% of Absence, STD, Worker’s Comp Wright, Beard, Edington. JOEM. 44(12):1126-1134, 2002

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

  34. 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

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

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

  37. 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 Where is the Investment?

  38. Business Concept Change in Costs Follow Change in Risks

  39. Business Concept Change in Costs Follow Engagement

  40. Business Concept Change in Costs follow “Don’t Get Worse”

  41. Medical and Drug Cost (Paid)* Slopes differ P=0.0132 Impr slope=$117/yr Nimpr slope=$614/yr *per employee , Improved=374, Non-Improv=103 HRA in 2002 and 2004 Improved=Same or lowered risks *Medical and Drug, not adjusted for inflation

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

  43. The Economics of Total Population Engagement and Total Value of Health 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?

  44. Summary Business Case for Health Management Excess Costs are related to Excess Risks Costs follow Engagement and Risks Controlling Risks leads to Zero Trend

  45. Section III The Solution: Integration of a Health Focus into the Culture of the Organization

  46. Total Population Management Sickness & Care Management Opportunity Condition Management Opportunity Wellness Opportunity Medical and Drug Costs only

  47. Healthier People Productive Employees 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 Comp. d. Presenteeism e. Quality Measure 6. Retention 7. Company Visibility 8. Social Responsibility Integrating Health Status into the Culture of the Company Leadership Vision Environmental Issues Individual Strategies Population Strategies Incentives Measurement 1981, 1995, 2000, 2006, 2008 D.W. Edington

  48. 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 Vision from the Senior Leadership

  49. 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 for a Culture of health (small group meetings, shared vision, expectations, Environment Interventions

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