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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UM-HMRC Corporate Consortium

• Bank One
• Progressive
• We Energies
• General Motors
• Crown Equipment
• Foote Health System
• Medical Mutual of Ohio
• St Lukes Health System
• Cuyahoga Community College
• Blue Cross Blue Shield Rhode Island
• United Auto Workers-General Motors
• Wisconsin Education Association Trust
• Southwest Michigan Healthcare Coalition
• Australian Health Management Corporation

• Kellogg
• Gulf Power
• Delphi Automotive
• Florida Power Light
• Affinity Health System

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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X
Virginia Business Coalition
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• Agenda
• Health Management as a Serious Business Strategy
• Virginia Coalition June 8, 2006
• Introductory Comments
• Do-Nothing Strategy
• Key Beliefs
• Build the Business Case Business Concepts
• How Do We Do It?
• Summary
• Slides available via e-mail attachment

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Introductory Comments
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Why are You Here?
Health Management as a Business Strategy Along
the way, someone moved the cheese
Health or Economics?
Healthy People or Productive People?
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Moving the Paradigm From
The Cost of Healthcare (Treating disease)
To
The Total Value of Healthcare (Managing health
status) To
Health is Free
(Healthcare Costs lt Total Benefits) Adopt the
Quality Strategy Fix the Systems
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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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Section I The Do-Nothing Strategy
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The Natural Flow of Health Risks and Behaviors
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Lifestyle Scale for Individuals or for any
Population
High-LevelWellness/MaximumPerformance
ChronicSigns Symptoms
Premature Death/Disability
Feeling OK
Edington. Corporate Fitness and Recreation. 244,
1983
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Risk Transitions Time 1 Time 2
High Risk (gt4 risks)
Medium Risk (3 - 4 risks)
Low Risk (0 - 2 risks)
Mean of three years between measures
Modified from Edington, AJHP. 15(5)341-349, 2001
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The Natural Flow of Health Care Costs
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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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Are We Willing to Accept the Consequences of the
Do-Nothing Strategy?
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Section II Key Beliefs if One is to Invest in
Health Management as a Serious Business Strategy
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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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Section III Key Business Concepts To Build the
Business Case for Successful Health and
Productivity Management Programs
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Business Concept The Risks-Costs-Disease Relations
hip
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Costs Associated with Risks Medical Paid Amount x
Age x Risk
High Risk
Medium Risk
Low Risk
Edington. AJHP. 15(5)341-349, 2001
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Business Concept Relationships of Risks and
Disease with
Total Value of Health
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Relative Costs of Poor Health Total Value
of Health
Direct Costs Medical Pharmacy
Indirect Costs
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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Same Risk and Behavior Factors Drive All the
Outcome Measures
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Medical/Drug Cost Comparison by Risk Status
plt.05.
Yen, Witting, Edington. AJHP. 646-54, 1991
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Total Disability Cost by Risk Status 1998-2000
Mean Annual Costs
Wright, Beard, Edington. JOEM. 44(12)1126-1134,
2002
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Estimated Loss of Productivity by Risk Status
Burton, Chen, Conti, Schultz, Pransky, Edington.
JOEM. 47(8)769-777. 2005
plt.05, plt.01
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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 Medical Costs due to Excess Risks
11,917
10,524
9,086
7,741
6,324
5,097
3,932
2807
N30,841
N47,768
N45,514
N33,266
N21,356
N13,077
N7,344
N6,049
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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
36 of Absence, STD, Workers Comp
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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Section IV How To 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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Where are the Opportunities for Population Health
Management?
Medical Care Management Opportunity
Disease Management Opportunity
Health Promotion Opportunity
Medical and Drug Costs only
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Population Health Management as a Serious
Corporate Strategy

• Driven from the top through leadership
  performance objectives and healthy work
  environment objectives
• Driven by employee participation in health risk
  assessments to identify areas critical to
  decreasing vitality in the family and at work.
  Resources made available in low-risk maintenance
  and risk reduction opportunities, with incentives
• Measurement of key indicators
• 80 participation over any three-year period
• 70 low-risk

Members or Employees
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Health Management as a Serious Business Strategy
Four Levels of Interventions
Worksite Environment Values and
Beliefs Workplace Policies Benefit Design
Population Website Health Policies Special
Promotions Employee Assistance Risk Reduction
Activities Low-Risk Maintenance Know Your
Numbers Physical Activity Nutrition
Awareness Medical Facility
Individual (Stratification by
Individual) Coaching Sessions
Low-Risk Maintenance Disease
Management High-Risk
Reduction Health Advocate Triage to
Resources
Health Risk Appraisals
Incentives
Measurement
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Business Concept Stratification of the
Population for Intervention
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Stratification In the Health Promotion Opportunity
Health Promotion Opportunity
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Individualized Cycle for Benefits
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Predictability to be at High Cost
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Business Concept Risks Travel in Clusters
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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 Risks Travel in Clusters
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Cluster Analysis
Cluster 1 Risk taking (N6688)
Cluster 2 Low Risk (N3164)
Cluster 3 Biometrics (N3100)
Cluster 4 Psychological (N3927)
Health Measure
Smoking Alcohol Physical activity Safety belt
usage Body mass index Systolic blood
pressure Diastolic blood pressure Cholesterol H
DL cholesterol Self-perceived health Life
satisfaction Stress Illness days
31 10 28 36 27 9 5 19 34 13 4 9 21
0 0 0 0 25 0 0 19 10 0 0 0
0
16 3 19 22 38 81 61 27 33 9 2 2 12
27 5 26 31 27 23 20 22 24 28 73 76 26
Baunstein, Yi, Hirschland, McDonald, Edington.
Am. J. Health Behavior. 25(4)407-417, 2001
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Business Concept Intervention for By Clusters
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Business Concept Intervention for 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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Business Concept 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 Effective Coaching
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Strategy for Individual Intervention

• Contact made with each individual

2. Contact by decreasing level of probability of
being high cost and engage individual in positive
actions
3. Coach to pay attention to cluster,
prioritized risks and available resources. Use
triage and health advocate approaches
4. Provide variety of contact tools (one on one,
telephone and web for increased participation and
engagement
5. Ask but dont tell and use whole person
approach
6. Frequent evaluation of coach/client
participation and customer satisfaction for
optimal outcomes. Provide unlimited contacts
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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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Business Concept Bend the Trend
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Financial Services Medical Costs
Slope 150/yr 00-01 255 01-02 118
02-03 82
per employee
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Section V Summary
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Health Management as a Serious Human Resource and
Economic Strategy
1. Risk and Disease Identification Know your
target population
2. Success Scorecard

a. Participation 80

b. Population at Low Risk 70
3. Effective strategies Total Population
Management
a.
Environmental Policies, Procedures, Benefits
Aligned
b. Individual Low-Risk
Maintenance, Risk Reduction, Triage c.
Population Engagement
d. Other
Incentives and Measurement
4. General concept for outcome measures
Benefits follow 3
5. Outcome measures Effective Programs Equal
Benefits
Overall Strategy Manage the Person, not the risk
or the disease.
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Thank you for your attention.
Please contact us if you have any questions.
Phone [phone] Fax (734) 763
2206 Email hmrc_at_umich.edu Website
www.umich.edu/hmrc
Dee W. Edington, Ph.D. , Director
Health Management Research Center
University of Michigan
1027 E. Huron St.
Ann Arbor MI 48104-1688