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Zero Trends: Health as a Serious
Economic Strategy
THE UNIVERSITY OF
MICHIGAN
HEALTH MANAGEMENT
RESEARCH CENTER
University of Michigan Health Management Research Center
University of Michigan Health Management Research Center
Ford UM-HMRC Corporate
Delphi
Kellogg Consortium Steelcase (H)
General Motors
US Steel
Progressive (H)
We Energies
JPMorgan Chase Crown Equipment
Delphi Automotive Affinity Health System
Southern Company SW MI Healthcare Coalition (H)
Navistar Corporation
University of Missouri *The consortium
Medical Mutual of Ohio members provide
health care insurance
Florida Power and Light
for over two million
St Luke’s Health System Americans. Data are
Allegiance Health System available from three to
Cuyahoga Community College 20 years.
United Auto Workers-General Motors Meet on First
Wisconsin Education Association Trust Wednesday of each
December in Ann Arbor
Australian Health Management Corporation
University of Michigan Health Management Research Center
Zero Trends: Health as a Serious
Economic Strategy
1. Building an Integrated, Sustainable Economic Strategy
(Next Generation Programs,
Champion Companies, Zero Trends) Six Hours
2. Complete Strategy/Champion Company Four Hours
3. Fundamental Strategy/Champion Company Two 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
University of Michigan Health Management Research Center
UM-HMRC
Ann Arbor
xX
CEO Forum
Jackson
New way to do Health Management
In the United States and Throughout the World
University of Michigan Health Management Research Center
Mission
Change the Conversation around
Health from a Healthcare Cost
Strategy
to
Health as a Serious Economic
Strategy
University of Michigan Health Management Research Center
Lifestyle Scale for Individuals and
Populations: Self-Leaders
High-Level Chronic Premature
Wellness, Feeling Sickness,
Signs &
Energy OK Death &
Symptoms
and Vitality Disability
Edington. Corporate Fitness and Recreation. 2:44, 1983
University of Michigan Health Management Research Center
University of Michigan Health Management Research Center
Estimated Health Risks
Health Risk Measure High Risk
Body Weight 41.8%
Stress 31.8%
Safety Belt Usage 28.6% From the UM-
Physical Activity 23.3% HMRC Medical
Blood Pressure 22.8% Economics Report
Life Satisfaction 22.4%
Smoking 14.4% Estimates based on
Perception of Health 13.7% the age-gender
Illness Days 10.9% distribution of a
Existing Medical Problem 9.2% specific corporate
Cholesterol 8.3% employee population
Alcohol 2.9%
Zero Risk 14.0%
OVERALL RISK LEVELS
Low Risk 55.3%
Medium Risk 27.7%
High Risk 17.0%
University of Michigan Health Management Research Center
Risk Transitions
(Natural Flow) High Risk 2,373 (50.6%)
(>4 risks)
Time 1 – Time 2 4,691 (10.8%)
1,961
Medium Risk (18.4%) 5,226 (12.1%)
(3 - 4 risks)
892
4,546 10,670 (24.6%) 1640 (35.0%) (3.2%)
(42.6%)
678
11,495 (26.5%) (14.4%)
5,309 (19.0%) 4,163 (39.0%)
27,951 (64.5%)
Average of three years Low Risk 26,591 (61.4%)
between measures (0 - 2 risks)
Modified from Edington, AJHP. 15(5):341-349, 2001
21,750 (77.8%)
University of Michigan Health Management Research Center
Estimated Health Problems
Self -Reported Health Problems
Allergies 33.2%
Back Pain 26.9%
Cholesterol 16.2% From the UM-
Heart Burn/Acid Reflux 15.2% HMRC Medical
Blood Pressure 14.5% Economics Report
Arthritis 14.5% Estimates based on
Depression 10.7% the age-gender
Migraine Headaches 9.4% distribution of a
Asthma 7.0% specific corporate
Chronic Pain 6.4% employee
Diabetes 3.8% population
Heart Problems 3.3%
Osteoporosis 1.8%
Bronchitis/Emphysema 1.7%
Cancer 1.3%
Past Stroke 0.7%
Zero Medical Conditions 31.9%
University of Michigan Health Management Research Center
Cost Transitions
(Natural Flow) High Cost 37,701 (55.7%)
($5000+)
Time 1 – Time 2 67,680 (19.0%)
26,288
Medium Cost (20.6%) 73,427 (20.6%)
($1000-$4999)
9,438
75,500 127,644 (35.8%) 23,043 (34.0%) (5.9%)
(59.1%)
6,936
130,785 (36.7%) (10.2%)
32,242 (20.0%) 25,856 (20.3%)
160,951 (45.2%)
N=356,275 Non-Medicare Trad/PPO 152,063 (42.7%)
Low Cost
(<$1000) 119,271 (74.1%)
Modified from Edington, AJHP. 15(5):341-349, 2001
University of Michigan Health Management Research Center
Total Medical and Pharmacy Costs
Paid by Quarter for Three Groups
The 20-80 rule is
always true but
terrifically flawed
as a strategy
Musich,Schultz, Burton, Edington. DM&HO. 12(5):299-326,2004
University of Michigan Health Management Research Center
Costs Associated with Risks
Medical Paid Amount x Age x Risk
Annual
Medical Costs $11,909 $11,965
$10,785
$7,991
$12,000
$5,710 $8,927
$5,114 $7,989
$9,000 $6,625 $8,110
$6,636
$4,620
$6,000 $3,353 $5,212
$2,565 $3,800
$5,756
$1,414
$2,944 $4,613 High
$3,000 $3,734
$2,740
Med Risk
$2,193
$1,776 Non-Participant
$0 Low
19-34 35-44 45-54 55-64 65-74 75+
Age Range
Edington. AJHP. 15(5):341-349, 2001
University of Michigan Health Management Research Center
The Economics of Health as Paid by
Companies
Total Value of Health
• Medical/Hospital
• Drug
Disease • Absence
• Disability
• Worker’s Comp
• Effective on Job
• Recruitment
• Retention
• Morale
University of Michigan Health Management Research Center
Summary for Section I
The flow of Risks is to High-Risk
The flow of Costs is to High-Cost
Costs follow Risks and Age
University of Michigan Health Management Research Center
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)
University of Michigan Health Management Research Center
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
University of Michigan Health Management Research Center
Distribution: Age, Costs, & Risk Status
% of Population and Costs (All Covered Lives) % High Risk (<2 risks)
$16,000 60%
$14,000
% High Risk from HRA
$12,000
Costs by Age Group 40%
$10,000
$8,000
$6,000
20%
$4,000
$2,000
$0 0%
<5 10- 19- 29- 39- 49- 59- 69- 79-
14 24 34 44 54 64 74 84
N=1.2M individuals in total UM-HMRC
population. N=300K in risk population
University of Michigan Health Management Research Center
Business Concept
Health Risks are Associated
With Disease and Costs
University of Michigan Health Management Research Center
Excess Self-Reported Major Diseases
Associated with Excess Risks
Percent with
Disease
100.0%
80.00%
80.0%
56.40%
60.0% 61.40%
25.30%
40.0% 32.00%
High
9.50%
20.0% Med Risk
3.00% 10.50% 18.60%
Low Risk
0.0%
Less than 45 45 to 64 Greater than
Musich, McDonald, Hirschland, Edington. Disease 65 Age Range
Management & Health Outcomes 10(4):251-258, 2002.
University of Michigan Health Management Research Center
Business Concept
Excess Costs follow Excess Risks
University of Michigan Health Management Research Center
Excess Medical Costs due to
Excess Risks
$5,520
$3,460
$3,039
$2,199
Edington, AJHP. 15(5):341-349, 2001
University of Michigan Health Management Research Center
Excess Pharmaceutical Costs due
to Excess Risks
$1,121
$750 $754
$567
$526
$443
$345
Burton, Chen, Conti, Schultz, Edington. JOEM. 45(8): 793-802. 2003
University of Michigan Health Management Research Center
Excess Disability Costs due to
Excess Risks
$1,248
$783
$666
$491
Wright, Beard, Edington. JOEM. 44(12):1126-1134, 2002
University of Michigan Health Management Research Center
Excess On-The-Job Loss due to
Excess Risks
14.7%
Burton, Chen, Conti, Schultz, Pransky, Edington. JOEM. 47(8):769-777. 2005
University of Michigan Health Management Research Center
Business Concept
Total Value of Health to an
Organization
University of Michigan Health Management Research Center
Association of Risk Levels with
Corporate Cost Measures
Outcome Low- Medium- High- Excess Cost
Measures Risk Risk Risk Percentage
Short-term
$ 120 $ 216 $ 333 41%
Disability
Worker’s $ 228 $ 244 $ 496 24%
Compensation
Absence $ 245 $ 341 $ 527 29%
Medical & $1,158 $1,487 $3,696 38%
Pharmacy
Total $1,751 $2,288 $5,052 36%
Wright, Beard, Edington. JOEM. 44(12):1126-1134, 2002
University of Michigan Health Management Research Center
The Economics of the Health Status as
Paid by Companies
Total Value of Health
• Medical/Hospital
Health • Drug
Disease • Absence
Risks • Disability
• Worker’s Comp
• Effective on Job
• Recruitment
• Retention
• Morale
University of Michigan Health Management Research Center
Business Concept
Change in Costs
follow
“Don’t Get Worse”
University of Michigan Health Management Research Center
Medical and Drug Cost (Paid)*
Slopes differ
P=0.0132
Impr slope=$117/yr
Nimpr slope=$614/yr
Improved=Same or lowered risks
University of Michigan Health Management Research Center
Distribution: Age, Costs, & Risk Status
% of Population and Costs (All Covered Lives) % High Risk (>2 risks)
N=1.2M individuals in total UM-HMRC
population. N=300K in risk population
University of Michigan Health Management Research Center
The Economics of Total Population
Engagement and Total Value of
Health
Total Value of Health
Medical/Hospital
Low or Health Drug
Disease Absence
No Risks Risks Disability
Worker’s Comp
increase Effective on Job
increase Recruitment
decrease Retention
Morale
Where is the Investment?
University of Michigan Health Management Research Center
Summary for Section II
Excess Costs are related to Excess Risks
Costs follow Engagement and Risks
Controlling Risks leads to Zero Trend
University of Michigan Health Management Research Center
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” …)
University of Michigan Health Management Research Center
Health Management Strategy
Sickness Management
--reduced errors
--coordinate services
Disease Management
Wellness Management --stay on protocol
--healthy stay healthy --don’t get worse
--don’t get worse
Where is the economic strategy?
University of Michigan Health Management Research Center
Integrate Health into the Culture
Healthier Better Gains for The
Person Employee Organization
1. Health Status
2. Life Expectancy
3. Disease Care Costs
Lifestyle 4. Health Care Costs
Change Company Culture 5. Productivity
Senior Leadership a. Absence
Operations Leadership b. Disability
Self-Leadership c. Worker’s
Compensation
Reward Positive Actions
d. Presenteeism
Health Quality Assurance
e. Quality Multiplier
Management
6. Recruitment/Retention
Programs
7. Company Visibility
1981, 1995, 2000, 2006 D.W. Edington 8. Social Responsibility
University of Michigan Health Management Research Center
SENIOR LEADERSHIP
Create the
Vision
•Commitment to
healthy culture
•Connect vision to
business strategy
•Engage leadership
in vision
University of Michigan Health Management Research Center
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
Management and Leadership of the Company
and Unions transition to the Cheerleaders
University of Michigan Health Management Research Center
OPERATIONS LEADERSHIP
Align Workplace
with Vision
•Engage everyone
•Brand health
management
strategies
•Integrate policies
into culture
2nd Fundamental Pillar
University of Michigan Health Management Research Center
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,…)
University of Michigan Health Management Research Center
SELF LEADERSHIP
Create
Winners
• Help employees
not get worse
• Help healthy
people stay healthy
• Provide
improvement and
maintenance
strategies
3rd Fundamental Pillar
University of Michigan Health Management Research Center
Individual Strategy for Engagement
Health Risk Appraisal
Plus
Biometrics Screening and Counseling
Plus
Contact a Health Advocate
Plus
Two Other Activities
University of Michigan Health Management Research Center
Population-Based Resources
Weight Management Business Specific Modules
Physical Activity Career development
Stress Management Communications
Safety Belt Use Financial Management
Smoking cessation Social/Information Networks
Nutrition Education
Disease Management Clinic or Medical Center
On-Line Information Ergonomics
Nurse Line
Newsletters Vision
Dental
Behavioral Health & EAP Hearing
Pharmacy Management Chiropractic
Complementary Care
Case Management Integrative Medicine
Absence Management Physical Therapy
Disability Management
University of Michigan Health Management Research Center
REWARD POSITIVE BEHAVIORS
Reinforce
Culture of Health
• Reward
champions
• Set incentives
for healthy
choices
• Reinforce at
every touch point
4th Fundamental Pillar
University of Michigan Health Management Research Center
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…)
University of Michigan Health Management Research Center
QUALITY ASSURANCE
Outcomes
Drive Strategy
•Integrate all
resources
•Measure progress
towards goals in the
first four Pillars
•Make it sustainable
5th Fundamental Pillar
University of Michigan Health Management Research Center
Four Levels of Company
Engagement
1. Do-Nothing
2. Level One (focus on high risk)
3. Level Two (Comprehensive)
4. Champion Company (add Culture)
University of Michigan Health Management Research Center
Program Rating: Engagement per Pillar
Engagement 3
Levels of the
2
Health
Management 1
Program 0
3-Champion
1 2 3 4 5
2-Comprehensive
1-Traditional
0-Do Nothing
Five Pillars of Health Management
1-Senior Leadership
2-Operations Leadership,
3-Self-Leadership,
4-Rewards for Positive Actions,
5-Quality Assurance
University of Michigan Health Management Research Center
3 Vision Healthy Engage Reward Progress
Program from System & all in Positive in all
Rating: Leaders Culture Culture Actions areas
per
2 Speech Risk- Reduce Incent Change
Pillar
from Reduction all Risks H-Risk in Risks,
Leader System ROI
Engagement
Levels of the 1 Inform Out- Reduce Incent Change
Health
Management
Leader source H-Risks H-Risk in Risks
Program
0 Do Do Do Do Do
Champion
Comprehensive Nothing Nothing Nothing Nothing Nothing
Traditional
1 2 3 4 5
Do Nothing
Five Pillars: Senior Leadership; Operations Leadership; Self-Leadership;
Rewards for Positive Actions; Quality Assurance
University of Michigan Health Management Research Center
Business Concept
Outcome Measures for a
Champion Company with the
Trend Management System
University of Michigan Health Management Research Center
Summary
University of Michigan Health Management Research Center
Sound Bites
1. The “Do Nothing” strategy is unsustainable.
2. Refocus the definition of health from “Absence of Disease to
High Level Vitality.”
3. “Total Population Management” is the effective healthcare
strategy and to capture the “Total Value of Health”
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.”
University of Michigan Health Management Research Center
What’s the Point?
University of Michigan Health Management Research Center
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
University of Michigan
1015 E. Huron St.
Ann Arbor MI 48104-1689
University of Michigan Health Management Research Center
