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The Value of Health and the Power of PreventionRon Loeppke, MD, FACOEM, FACPM
Vice Chairman, U.S. Preventive Medicine
Cost Crisis Driven by the Health Crisis:• Increased utilization (increasing Burden of Illness and Burden of Risk)• Epidemiologic trends (Age Wave “Silver Tsunami”) • Focus on the Health in Health Reform
Employers Asking for Integrated Population Health Solution:• Moving “upstream” = Prevention and Wellness focus• Whole Population/Whole Person Integrated Intervention Solution• Healthy Human Capital is the Business Value Proposition for better Health
Demand-side and Supply-side in Promoting a Culture of Health:• Aligning Incentives for Health among Consumers, Providers, Employers & Insurers• High Tech, High Touch Decision Support (Future of Wireless, Smart Phone Apps)• Promote a Culture of Health in Workplaces, Communities, States and Nation
Converging Trends and the Need for a Culture of Prevention
The Problem: The “Health Crisis” has led to the “Cost Crisis”
Increasing burden of illness and risk leading to increased healthcare costs and reduced U.S. productivity in global economy
Devastating impact of the Burden of Chronic Illness– 133 million Americans have one or more chronic health conditions– 75% of all health care spending is on those with one or more chronic illness– 27% of rise in healthcare costs associated with the increase in obesity rates
» The Waist Line impacts the Bottom Line
80% of Heart Disease and Diabetes as well as 40% of Cancer are Preventable– if Americans just stopped smoking, ate healthy and exercised
K.E. Thorpe, Health Affairs 24, no.6 (2005): 1436-1445; and K.E. Thorpe et al., Health Affairs 23, no. 6 (2004): 480-486.
Lifestyle 51%
Heredity 20%
Environment 19%
Health Services 10%
Health Behaviors: The Main Mortality Risk Factors in U.S.
Lifestyle
Heredity
Environment
Health Services
Mokdad AH, et.al. Actual Causes of death in the United States, 2000. JAMA. 2004; 291:1238-1245.
Personal Health Behaviors are the main Causes of Death
The Case for Workplace Wellness: Health and Productivity Improvement
The stakes could not be higher…
Employers depend on a healthy and productive workforce to compete in the global economy
Employers focusing on the link between the Health of their workforce and the Engagement, Energy, Resiliency and Performance of their workforce and the health of the company performance
Employer Corporate Health Strategies Must: Leverage the benefits of better health rather than merely
manage the costs of the health benefit
Copyright 2010 U.S. Preventive Medicine
Personal Health CostsMedical CarePharmaceutical costs
Productivity Costs
Presenteeism
OvertimeTurnover
Temporary StaffingAdministrative Costs
Replacement TrainingOff-Site Travel for Care
Customer DissatisfactionVariable Product Quality
Absenteeism
Short-term Disability Long-term Disability
The Bigger Problem: The Full Cost of Poor Health to Employers
Iceberg of Full Costs from Poor Health
Sources: Loeppke, R., et al., "Health and Productivity as a Business Strategy: A Multi-Employer Study", JOEM.2009; 51(4):411-428. and Edington DW, Burton WN. Health and Productivity. In McCunney RJ, Editor. A Practical Approach to Occupational and Environmental Medicine. 3rd edition. Philadelphia, PA. Lippincott, Williams and Wilkens; 2003: 40-152
70
%3
0 %
Top 10 Health Conditions by Med + Rx Costs
Other C
ancerB
ack/Neck Pain
Other C
hronic Pain
Coronary H
eart Disease
High C
holesterolA
rthritis
Depression
Hypertension
Diabetes
GER
D
$0$20,000$40,000$60,000$80,000
$100,000$120,000$140,000$160,000$180,000$200,000
DrugMedical
Loeppke, R., et al., "Health and Productivity as a Business Strategy: A Multi-Employer Study“. JOEM. 2009;51(4):411-428.
Per 1000 FTEs for Employers
Top 10 Health Conditions by Full Costs For Employers (Med + RX + Absenteeism + Presenteeism)
Costs/1000 FTEs
Depression
Obesity
Arthritis
Back/N
eck PainA
nxiety
GER
D
Allergy
Other C
ancerO
ther Chronic Pain
Hypertension
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
PresenteeismAbsenteeismDrugMedical
Loeppke, R., et al., "Health and Productivity as a Business Strategy: A Multi-Employer Study“. JOEM. 2009;51(4):411-428.
The Solution: Reduce the Burden of Risk And Illness
Shifting Costs
Actual Cost Decrease
Reducing the burden of health risks and illness leads to a healthier population and measurable TOTAL COST DECREASES.
Current system focus on the financial transactions of healthcare does not lower total costs — it tends to only shift them.
Why The Prevention Plan?
Proprietary and Confidential U.S. Preventive Medicine, Inc.
Health is an Action Verb
Copyright 2010 U.S. Preventive Medicine
U.S. Preventive Medicine
A Bundled
Clinical Model of Prevention
Primary, Secondary, & Tertiary Prevention
High-Tech, High-Touch Model
New Benefit | Comprehensive Solution
USPM Differentiators First Prevention Plan in the Industry:
– Evidence Based Clinical Model of Preventive Medicine (Best Science put into Practice)– Unique Proprietary Prevention Score (Combination of Assessment and Participation)– Independent and Portable for the Consumer
World Class Interactive Online Prevention Experience:– Comprehensive Engaging Platform (Youtube/iTunes/Personal Website/Virtual Coach)– Personalized and Tailored Experience based on risk factors/age/gender
Better Measurable Results:– Higher Participation/Engagement Rates– Greater Reduction of Health Risks (Journal of Population Health Management article)
Flexible and Customizable Solutions for any size Employer and Consumer:– Modular Pricing and Feature Sets across Prevention Continuum– Flexible Lab panels with automatic integration into Personal Health Record– Convenient Lab delivery options (onsite, at a LabCorp PSC, or at home finger stick)
Unparalleled International Advisory Board of Thought Leaders
USPM International Advisory BoardDee W. Edington, PhD DirectorUniversity of MichiganHealth Management Research Center
Wayne N. Burton, MDGlobal Corporate Medical Director American Express Corp
George K. Anderson, MD, MPHMajor General, USAF, MCThe Society of the Federal Health Agencies
Cyndy Nayer, MA, President / CEOCenter for Health Value Innovation
Chris McSwainDirector, Global BenefitsWhirlpool Corporation
Professor Sir Mansel Aylward CBChair, Public Health Wales and DirectorCentre for Research, Cardiff, Wales
Pamela A. Hymel, MD, MPH, FACOEMGlobal Medical DirectorDisney, Inc.
John J. (Jack) Mahoney, MD, MPHChief Medical OfficerCenter for Health Value Innovation Sandra Gibson Hassink, MD, DirectorThe Nemours Pediatric Obesity InitiativeDuPont Hospital M. Akram Khan, MD, PresidentThe Center for Preventive MedicineTM North Texas; Cardiac Center of Texas
Professor Jaspal S. Kooner, MD, Head of Clinical CardiologyEaling Hospital NHS Trust, London England
Ronald C. Kessler, PhD Department of Health Care PolicyHarvard Medical School
Ron Z. Goetzel, PhDInstitute for Health and ProductivitySchool of Public Health, Emory University
Catherine M. Baase, MDGlobal Director, Health Services The Dow Chemical Company
Mike CritelliRetired CEO and Executive ChairmanPitney Bowes
S. Jay Olshansky, PhDProfessor, School of Public Health The Population Research Center Sean Nicholson, PhD Associate ProfessorDepartment of Policy Analysis andManagement at Cornell University
Thomas Parry, PhDPresidentIntegrated Benefits Institute
Andrew WebberPresident & CEONational Business Coalition on Health
(NBCH)
*David B. Nash, MD, MBA, Dean and Professor Thomas Jefferson University School of Population Health
Prevention Score
Allows Employer to Align Incentives and Rewards Based on Health Proactivity
Helps Member Track Progress Toward Prevention Goals
ROI VOI Return on Investment Value of Investment
Beyond ROI to the Business Value of Health
Financial Indicators Financial Indicators/Net Savings
Participation Indicators
Preventive Screening Indicators
Health Risk Indicators
EBM Clinical Indicators
Utilization Indicators
Productivity Indicators
Shareholder Value
Loeppke R. “The Value of Health and the Power of Prevention”. Int J Workplace Health Manage. 2008; 1 (2) 95-108.
Measurable Impact of The Prevention Plan
Impact of The Prevention Plan on Employee Health Risk Reduction October, 2010 Issue: Population Health Management
Co-authored by:Ron Loeppke, MD, MPH, FACOEM, FACPMVice- Chairman of the Board, U.S. Preventive Medicine, Inc.
Dee Edington, PhDDirector of the Health Management Research Center at the University of Michigan Member of the U.S. Preventive Medicine International Advisory Board
Sami A. Bég MD, MPA, MPHAssociate Medical Director for U.S Preventive Medicine, Inc.
All information herein is confidential and not for distribution.Proprietary and Confidential
U.S. Preventive Medicine, Inc.
Effectiveness In Improving Health Risks Demonstrated
Baseline to Year One Health Risk Category Transitions for Cohort
Participating in The Prevention Plan
Proprietary and Confidential U.S. Preventive Medicine, Inc.
194
8092008
1,69720091,452
2008
Overall Health Risk Transition
Net Movement of Risk Levels in Cohort Baseline (2008) vs. Year 1 (2009)
7152009 345
2008
N=2,606
Low Moderate High
55.72%
13.24%7.44%
(p < 0.001)
31.04%27.44%(p < 0.001)
65.12%(p < 0.001)
Proprietary and Confidential U.S. Preventive Medicine, Inc.
Loeppke, R; Edington, D; Beg, S. Impact of The Prevention Plan on Employee Health Risk Reduction, Population Health Management. Vol 13, No. 5, 2010.
Health Risk Level Transitions USPM vs Natural Flow
Proprietary and Confidential U.S. Preventive Medicine, Inc.
Low Moderate High -
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1,452
809
345
1,320
834
452
1,697
715
194
Year 1 (Baseline)
Natural Flow (Expected)
USPM Yr 2 (TPP)
Loeppke, R; Edington, D; Beg, S. Impact of The Prevention Plan on Employee Health Risk Reduction, Population Health Management. Vol 13, No. 5, 2010.
Health Risk Transition among the Study Cohort
Copyright 2010 U.S. Preventive Medicine
Loeppke, R; Edington, D; Beg, S. “Impact of The Prevention Plan on Employee Health Risk Reduction.” Population Health Management. 2010 13 (5): 275-284
Key Individual Risk Reduction Cohorts
# Reporting High risk
# Reporting High Risk
# Decrease in High Risk
% Decrease in High Risk
p ValueStat Sig
2008(Baseline)
2009(1 Yr on TPP)
Blood Pressure 395 226 -169 -42.78% < 0.001Fasting Blood Sugar 469 323 -146 -31.13% < 0.001
Stress 413 310 -103 -24.94% < 0.001Perception of Health 351 265 -86 -24.50% < 0.001
Alcohol 347 263 -84 -24.21% < 0.001Cholesterol 322 249 -73 -22.67% < 0.001
Physical Activity 475 387 -88 -18.53% < 0.001Absenteeism > 3 Days 393 335 -59 -14.76% < 0.05
Fatty Diet 1733 1477 -256 -14.77% < 0.001
Loeppke, R; Edington, D; Beg, S. Impact of The Prevention Plan on Employee Health Risk Reduction, Population Health Management. Vol 13, No. 5, 2010.
Cost
s In
crea
sed
Cost
s Re
duce
d
Reduce Costs by Reducing Health Risks
Source: Edington, Zero Trends, 2009 and Edington, AJHP. 15(5):341-349, 2001.
$800
$400
$200
$0
<$200>
<$400>
<$800>
-3 -2 -1 0 1 2 3
Risks Reduced Risks Increased
$215 Average Savings(per Risk Reduced per person per year)
-2 or more
-10
12 or more
% of Productivity
Change
Improve Workforce Productivity by Reducing Health Risk
6%
4%
2%
0%
-2%
# of Health Risk Changes
Source: Burton, W. et. al. The Association of Health Risk Change and Presenteeism Change. JOEM. Volume 48, Number 3, March 2006, pp 252-263.
$950 Average Productivity Savings(per Risk Reduced per person per year)
Wellness Works and Prevention Pays
Average ROI
$3.27 + $2.73 Med/Rx Absenteeism
Savings Savings
$6.00 saved for every $1.00 invested
In Comprehensive Wellness
Baicker K, Cutler D, Song Z. Workplace Wellness Programs Can Generate Savings. Health Aff (Millwood). 2010; 29(2).
The Business Value of Better Health and Productivity
Market cap value impact from regaining 1 Day of productivity per year per FTE
Example: 58,000 employees, current 8 Days per FTE of health-related productivity loss
Ron Loeppke MD Proprietary and ConfidentialLoeppke R. “The Value of Health and the Power of Prevention”. Int J Workplace Health Manage. 2008; 1(2)95-108.
1 Day per FTE of Regained Productivity = $18.8M EBITDA impact
13x (EBITDA Multiple)
$244.4M estimated market cap increase
÷ 292M shares
$0.84 in additional per share value
Employer Health & Productivity InitiativesDemonstrate Superior Financial Performance*
Employers with Highly Effective Health & Productivity Improvement Programs:
Yielded 20% More Revenue per Employee
Demonstrated a 16.1% Higher Market Value
Delivered 57% Higher Shareholder Returns
*National Business Group on Health/Watson Wyatt “Staying at Work Report” 2007/2008 from Survey of 355 Large Employers
Prevention…is the Ultimate Solution
“An Unhealthy America” 2007 study by Rich Devol, et.al. The Milken Institute.Nonprofit, nonpartisan and publicly- supported economic think tank
could have an economic impact of $1 trillion annually…
Tertiary Prevention (earlier EBM condition mgmt)
Primary Prevention (wellness, health promotion)
Secondary Prevention (earlier detection/diagnosis)
Milken Study Finds:
Historic Paradigm Shift
MONUMENTAL TRANSITION FROM “SICK” CARE SYSTEM TO TRUE “HEALTH” CARE SYSTEM
Copyright 2010 U.S. Preventive Medicine
www.uspreventivemedicine.com
www.moregoodyears.com
www.thepreventionplan.com
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