1. HPCareer.net ---Health Promotion Live
Health Management as a Serious
Business Strategy
Achieving Zero Cost
Trends and A Best
Company to Work for
THE UNIVERSITY OF MICHIGAN
HEALTH MANAGEMENT
RESEARCH CENTER
Dee W. Edington

2. What if you worked for the best
company you could imagine.
A company that was a high
performing company and a best
company to work for.
What words would you use to
describe the workplace and how
would you describe the workforce?

3. 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?

4. UM-HMRC Corporate Consortium
 Ford Steelcase (H)
 Delphi Progressive (H)
 Kellogg JPMorgan Chase (H)
 We Energies Affinity Health System (H)
 General Motors SW MI Healthcare Coalition (H)
 Crown Equipment
 Delphi Automotive
*The consortium
 Southern Company
members provide
 University of Missouri health care insurance
 Medical Mutual of Ohio for over two million
 Florida Power and Light individuals. Data are
 St Luke’s Health System available from three to
 St Joseph Health System 20 years.
 Allegiance Health System Meets on First
 Cuyahoga Community College Wednesday of each
 United Auto Workers-General Motors December in Ann Arbor.
 American Construction Benefits Group
Wisconsin Education Association Trust
 Australian Health Management Corporation

5. HPCareer.net ---Health Promotion Live
Health as a Serious Business and Economic
Strategy
February 25, 2011
Natural Flow of a Population High Risks and High Costs
Health as a Serious Business and
Business Case
Economic Strategy
Change the Economic Assumptions from Treating
Mission Disease to the 21st Century Assumptions about
Creating and Maintaining Healthy Populations
Engage Champion Companies in Systematic, Systemic
Solution and Sustainable Five Pillars which Promote a Healthy
and High Performing Workplace and Workforce

6. 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” …)

7. Estimated Health Risks
Health Risk Measure High Risk
Body Weight 41.8%
Stress 31.8% From the UM-HMRC Medical
Safety Belt Usage 28.6% Economics Report
Physical Activity 23.3%
Estimates based on the age-
Blood Pressure 22.8%
gender distribution of a specific
Life Satisfaction 22.4% corporate employee population
Smoking 14.4%
Perception of Health 13.7%
Illness Days 10.9% OVERALL RISK LEVELS
Existing Medical Problem 9.2% Low Risk 0-2 risks
Cholesterol 8.3% Medium Risk 3-4 risks
Alcohol 2.9% High Risk 5 or more
Zero Risk 14.0%

8. Risk Transitions
(Natural Flow) High Risk 2,373 (50.6%)
Time 1 – Time 2 (>4 risks)
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)
21,750 (77.8%)
Modified from Edington, AJHP. 15(5):341-349, 2001

9. Total Medical and Pharmacy Costs
Paid by Quarter for Three Groups
9000
Serious Cost The 20-80 rule is
8000 Medium Cost always true but
7000
Low Cost terrifically flawed
as a strategy
6000
5000
4000
3000
2000
1000
0
Q_12 Q_10 Q_8 Q_6 Q_4 Q_2 Q0 Q2 Q4 Q6 Q8 Q10 Q12
Musich,Schultz, Burton, Edington. DM&HO. 12(5):299-326,2004

10. Costs Associated with Risks
Medical Paid Amount x Age x Risk
Annual Medical $11,909 $11,965
Costs $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
$2,944 $5,756 High
$3,000 $1,414 $4,613
$3,734 Med Risk
$2,193 $2,740 Non-Participant
$1,776
$0 Low
19-34 35-44 45-54 55-64 65-74 75+
Age Range
Edington. AJHP. 15(5):341-349, 2001

11. 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)

12. Excess Diseases Associated with Excess
Risks (Heart, Diabetes, Cancer,
Bronchitis, Emphysema
Percent with
Disease
100.0% 80.00%
80.0%
56.40%
61.40%
60.0%
25.30%
40.0% 32.00%
High
20.0% 9.50%
18.60%
Med Risk
3.00% 10.50%
0.0% Low Risk
Less than 45 45 to 64 Greater than
65
Age Range
Musich, McDonald, Hirschland, Edington. Disease
Management & Health Outcomes 10(4):251-258, 2002.

13. Excess Medical Costs due to
Excess Risks
$6,000
$5,520
Excess Costs
$5,000
Base Cost
$4,000 $3,321
$3,460
$3,039
$3,000 $1,261
$840
$2,199
$2,000
$1,000
$0
Low Risk (0-2 HRA Non- Medium Risk (3- High Risk (5+
Risks) Participant 4 Risks) Risks)
Edington, AJHP. 15(5):341-349, 2001

14. 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

15. Change in Costs follow Change in Risks
Cost increased
$600
$400
$200
$0
Cost reduced
-$200
-$400
-$600
3 2 1 0 1 2 3
Risks Reduced Risks Increased
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: $192; Cost per risk avoided: $621 Retirees>65: Cost per risk
reduced: $214; Cost per risk avoided: $264
Updated from Edington, AJHP. 15(5):341-349, 2001.

16. Medical and Drug Cost (Paid)*
$4,000
Slopes differ
P=0.0132
$3,500
$3,000
Paid
Non-Impr
Improved
$2,500
$2,000
Impr slope=$117/yr
Nimpr slope=$614/yr
$1,500
2001 2002 2003 2004
Year
Improved=Same or lowered risks

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

18. The Economics of Total Population
Engagement and Total Value of Health
Total Value of Health
Medical/Hospital
Drug
Low or Health
Disease Absence
No Risks Risks
Disability
Worker’s Comp
increase Effective on Job
increase Recruitment
decrease Retention
Morale
Where does cost turn into
an investment?

19. Health and Wellness Programs
Healthier Better Gains for The
Person Employee Organization
1. Health Status
2. Life Expectancy
3. Disease Care Costs
Lifestyle 4. Health Care Costs
Change 5. Productivity
a. Absence
b. Disability
c. Worker’s
Compensation
d. Presenteeism
Health
e. Quality Multiplier
Management
6. Recruitment/Retention
Programs
7. Company Visibility
1981, 1995, 2000, 2006, 2008 D.W. Edington
8. Social Responsibility

20. 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?

21. 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

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

23. … to a Transformation from the Tired Old
20th Century Assumptions About Disease to
the New 21st Century Assumptions About
Healthy and High Performing Populations
From Health as the Absence of Disease to
Disease as the Absence of Health
From the Cost of Disease to
the Total Investment and Value of Health
From Individual Participation to
Total Population Engagement
From Behavior Change to
Integration of Health into the Culture

24. 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” …)

25. 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

26. Integrate Health into Core Business
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
and Environment a. Absence
Senior Leadership b. Disability
Operations Leadership c. Worker’s
Compensation
Self-Leadership
Wellness Reward Positive Actions d. Presenteeism
e. Quality Multiplier
Programs Quality Assurance
6. Recruitment/Retention
7. Company Visibility
1981, 1995, 2000, 2006, 2008 D.W. Edington
8. Social Responsibility

27. Characteristic of a Champion
Company
Systematic Strategies
Make the Solutions Systemic
Make it Sustainable

28. 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”

29. Create the Vision Pillar 1:
Senior Leadership
Link to Company Mission:
Our mission is to create Shareholder value.
We get value from creative and innovative products.
We get products from healthy and productive people.
Create the Vision:
Manage health as a strategic competency in order to
achieve:
 Improved Workforce Health & Performance
 Zero Trend in Annual Sick Care Expenditure Increases
A Vision is the over-riding principle that
guides the organization
©2010: Health Transformation Group, LLC
Not for Distribution
29

30. 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”

31. Population Health Benefit Strategy
Sickness Management
--reduce errors
--coordinate services
Disease Management
Health Management --stay on protocol
--healthy stay healthy --don’t get worse
--don’t get worse
Where is the economic strategy?

32. Integrate all of the outsourced
partners
Integrate all of the internal
resources
Coordinate all of the resources
towards a healthy and high
performing environment and culture
(follow the safety and quality
strategies)

33. Promote Self Leadership
Create Winners
•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’

34. Self-Leadership and High Performance
• Environment •Purpose-Values-Mission-Vision • Consumerism
and culture • Engagement
•Personal •Resilience •Optimism
Control
Self-leadership
•Confidence •Self- •Vitality/
/ Self- esteem Vigor
efficacy •Social
•Knowledge Support
•Health Literacy –Colleagues
•Low-Risk Health Status
•Negotiation Skills –Community
–Family
Other possible *constructs: Change, Vision, Trust, Thrive,
Enthusiasm, Ethics, Energy, Spirituality, Creativity, …
©2010: Edington Associates

35. 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

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

37. 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…)

38. 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”

39. High Level Indicators for
Each Pillar
Pillar 1: Pillar 2: Pillar 3: Pillar 4: Pillar 5:
Senior Leadership Operations Leadership Self-leadership Recognition Quality Assurance
Senior Leader Operations Employee Self- Reinforcement Risk and Cost Trend
Engagement Index Engagement Index Leadership Index Index Index
Indicator of overall Indicates degree to Indicator of the Indicates degree In early stages,
effectiveness of which desired employee to which whether approach is
senior leaders components are in engagement level: recognition is on track to impact cost
(vision, resources, place (policy, Making progress offered at every and risk trends and
active participant, culture, and towards self- possible touch approach is “bending
communications, environment leadership actions point. the trend” for risks
support, etc…) alignments. towards a healthy and costs.
workforce. Is the company on the
way towards a Best
Company to work for.
©2010: Health Transformation Group, LLC

40. Summary

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

42. New Tools for the Transformation
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

43. Characteristic of a Champion
Company
Systematic Strategies
Make the Solutions Systemic
Make it Sustainable

44. 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