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Benfield Business-Health Leadership

Volume 8, Number 2, 2009 Back to the Issue Contents
Chasm Lake at Base of Long's Peak

Chasm Lake at the Base of Long's Peak in Colorado


Influencing Senior Management—Part 1: Don't Let Your Execs Climb Mountains in Silly Shoes
by Chuck Reynolds: President, Employer Practice — contact

We arrived at our rustic cabin at the YMCA of the Rockies, and within minutes we were gathered around a map of Rocky Mountain National Park. At issue: what hike would we attempt during our weekend-long visit? We were reasonably fit as a family, but knew our lack of specific training and altitude would enforce limits on our ambitions. Still, we knew we would not be happy milling about a short, flat paved path with hundreds of other tourists, so we were looking for that ideal hike…challenging, but not over-the-top.

We settled on Chasm Lake, described as a strenuous hike, starting at the Long’s Peak Ranger Station (9,300 feet) and rising about 2,400 feet over a distance of 4.2 miles. The destination’s reward: a spectacular view of Long’s Peak from Chasm Lake.

As we made our way up the trail, I was thinking about the Business-Health Leadership model we introduced in our last Perspective. Specifically, I was thinking about the Engaging and Influencing Senior Management piece of the model, and was hoping to find an inspiring metaphor among the majesty of the mountains.

The breathtaking scenery and breathless climbing yielded an abundance of ideas for this Perspective. Regrettably, however, the images that really stuck in my head as I sat down to write were not of the mountains or lakes or vistas, but of the flip-flops, fashionable sandals and penny loafers I observed on the feet of upward-bound hikers as we returned back down the mountain…images of silly shoes.

In the summer of 2008, Benfield studied executive engagement and influence as part of a value-based benefits initiative led by Bill Bruning, Executive Director of the Mid America Coalition on Health Care in Kansas City. The research involved live interviews with four corporate executives in the Kansas City market, and while the number of interviews was small, the findings were corroborated by their internal consistency as well as their fit with conclusions reported by the Integrated Benefits Institute (IBI) regarding CFO perspectives on health and productivity. Furthermore, the finding traced along the same lines as a pattern of leadership we had reverse-engineered over time by observing leaders with successful track records in engaging their senior management—leaders like Jack Mahoney formerly with Pitney Bowes, Wayne Burton formerly with JP Morgan Chase (see interview in this issue), Chris McSwain at Whirlpool (featured in our next issue), and many others you’ll get to know in future issues.

There's a lot to say about engaging and influencing senior management, so this will be a two-part perspective. Part 1 will focus on what business-health leaders should do to position health as a business-relevant issue that executives view as worthy of attention and strategic investment. Part 2 will focus on what it takes for business-health leaders to earn the coveted ‘trusted advisor’ status among their company’s leadership.

With that, let’s get started. There are three things that business-health leaders must do to position health as a bona fide strategic issue among their senior management team.

  1. Develop A Deep Understanding of Industry and Corporate Context: Business-health leaders need to have a keen understanding of their company’s external and internal dynamics that form the context within which health must be positioned. Externally, business-health leaders should be able to provide clear answers to questions such as:
    • What business(es) is my company in?
    • Who are our main competitors in each key line of business, and how are we positioned against them? What is it that differentiates us from our competitors?
    • What is the impact of current domestic and global economic conditions on key parts of our business, what is our company doing right now in response, and what is our company’s outlook for the mid-term?
    • What are the critical demographic, social and political factors that affect our industry and its competitive environment?

Internally, things become a bit more complicated. The business-health leader needs to understand both: a) How is their company responding to the external forces and factors; and b) What is the internal landscape relative to competing and collaborating ideas about how to help the company prosper?

Relative to corporate strategy, business health leaders need to understand:

  • What is my company’s competitive strategy in each key line of business? That is, how is our company defining success in each line of business, and what are the vital few things we’re focused on as a company to achieve those successes?
  • What are the priority strategies the company is using to achieve its goals and shape its competitive approach? Are there specific methods or processes that are being put in place around quality, or service, or value or innovation? Does our company subscribe to Lean or Six Sigma? Is there an industry-specific standard of excellence that we’re focused on attaining?
  • What is the culture that senior management is aspiring to instill, and where is our company on that journey? Are we striving to break with tradition and to become more innovative and responsive company? Is the company focusing on sustainability via reductions in waste and focus on longer-range markets and customer relationships?
  • Finally, are there acute issues the company is focused on at this moment in time? Are their emergent issues absorbing executive focus and energy, such as capital constraints, volatile market conditions, merger and acquisition activities or new regulatory threats or opportunities?

Relative to the internal landscape of competing and collaborating ideas, business-health leaders need to understand the other ideas and people competing for attention and investment.

Return to the mountain scene for a moment. Imagine your senior executive team standing at the trail-head. They know where they want to lead the company, they’ve identified the path they want to take, and they have a good read on the threats, dangers and opportunities that may await them. You’re standing in a mob of peers and consultants around them, and you’re trying to convince them not to wear silly shoes…that unless they put on the sturdy boots of your health management strategy, they’ll have trouble getting traction with some of their objectives, or will hit a limit to how fast they can respond to emerging threats and opportunities.

But you're having trouble getting attention. The CIO is enamored with the really cool mobile communications device being pitched by the guys from IT. The CEO is off to the side with the PR and communications folks deciding what color the wind jackets should be. The CFO is checking the provisions to make sure there's enough food and water to make it to the next stage of the journey. get the idea. No matter how passionate you are and how “right” you think your ideas are for helping the company achieve its goals, your passions and ideas are competing with other people and other ideas for executive-level attention and investment.

  1. Understand How Your Executives Think about Human Capital: There are two simple, but essential questions here:
    • What—specifically—do your company’s senior executives see as the connection between the performance of the company’s people and the success of its business? Executives we interviewed talked about service, customer satisfaction, quality and innovation. They were able to speak beyond generalities, because these objectives were tied to specific performance metrics, like turnover, engagement and satisfaction, lost time and the cost of total compensation vs. benchmarks.
    • What tactics do your company's executives use to improve the performance of people/to increase the value of the company’s human capital? What we heard in our interviews was very consistent with findings reported by IBI in its CFO research. The tools executives naturally turn to in order to boost human capital performance are compensation, training and technology, all delivered in a culture that sends clear signals about what the company is trying to accomplish and how each employee matters.

      Business-health leaders will note that health is not on the list. And guess what: it doesn’t belong there. You can call me a blasphemer and wish upon all the stars in the sky that health will reign supreme, but it doesn’t, and your executives know that intuitively. To get people to perform, you need to make sure they know what their job is, train them to do it well, reward them when they do, and create a culture that is unambiguous in its alignment with business success.

      Does health matter? Yes, of course; just not as much as the things listed above when it comes to managing human capital. For evidence, read the last several blogs from Wendy Lynch at the Health as Human Capital Foundation.

Business-health executives need to understand how people drive business results for their company. They then need to understand which levers their executives prefer to pull in order to raise human capital performance, and what metrics are on their current human capital dashboard. With that context, health can be positioned as a strategic issue for executive attention and investment.

  1. Formulate and Communicate A Strategy for Managing Health That Fits The Current Context and Drives The Organization Toward Better Health and Health Care Value Over Time: The objective of understanding context is not to figure out how to create an unobtrusive health management strategy that perpetuates the status quo. Rather, it is to inform the development of a strategy to put health on the executive radar, and to garner appropriate levels of support and investment in a health management strategy over time.

    Of course, specific strategies will vary from company to company, but it is valuable to consider what executives put on their wish list when it comes to health strategy:
    • Can I Have a Strategy... Please!?! Executives we interviewed—speaking for themselves and for their peers—expressed a high level of frustration with what one labeled as “Rocking Chair HR Types” who only show their faces once a year to make excuses and beg for a larger budget to cover rising health care premiums. If there is no strategic plan at your company for managing health and improving health care value (reducing costs/increasing quality), it’s not because your executives don’t want one; it’s because you—or someone above you—has not provided one.
    • Don’t Be Naive: Executives expect their managers to know all the stuff outlined above. If a company is focused on Six Sigma, and there is no language or process reflecting Six Sigma in the health strategy, it will die on delivery. If a company has communicated a need to conserve capital due to the lending environment, a proposal that includes investment in on-site medical centers will be viewed as insensitive and stupid.
    • Tell Me a Story: Help your executives see the future—both as it will be if nothing changes, and as it could be if specific strategic actions are taken. Leave the PowerPoint slides behind and craft a compelling narrative. If you don’t write well, find someone who does. People love stories. Executives are people. Tell your executives a story.
    • Get the Numbers Right: A good story is important (really important), but they will be looking for numbers in the plot. The executives we interviewed enthusiastically encouraged business-health leaders to make full use of the finance department in developing assumptions, modeling outcomes and displaying realistic results of proposed scenarios. In fact, it baffles them that departments—and not just HR—don’t take the completely obvious step of working in partnership with finance more often.
    • Help Me Understand: The executives we interviewed admitted that they knew very little about health and health policy. Generally speaking, executives don’t pass through HR or benefits on the way to the C-Suite. More likely, they passed through operations, finance and/ or marketing. They know that stuff, and they eat it up, because it interests them. Health? Not so much.

      This is key, because in the absence of understanding, executives will not want to venture far beyond what consultants draw as the boundary lines of benchmark practices. To help move a company off the beaten path to innovative approaches to managing health, you need your executives to: a) Possess a baseline understanding of health, productivity, health care, health policy and even behavior change; and b) Trust you/trust the person delivering the information and the strategy. The issue of informing/educating is tightly wrapped in the issue of trust, so we’ll cover it in more detail in Part 2 of this series.

One of the interesting features of the recent health care debate has been the rising profile of large employers who are taking innovative and strategic approaches to managing the health and productivity of their human capital. Understanding that executives want to be strategic about all aspects of their business—including managing the health of human capital—I imagine executives reading yet another WSJ article about how a company is enjoying lower costs, improved employee satisfaction and a sustainable competitive position in part due to their innovative health management strategy. And I imagine them standing on a craggy trail in the midst of a steep climb. They look down at their flip-flop-clad feet and think: Who put me in these silly shoes?

Wayne Burton, MD

An Interview with Wayne Burton, MD

Out Front: A Leading Career in Health Management
by Scott Thompson: President, Health Care Practice — contact

Dr. Wayne Burton served as Corporate Medical Director for financial services firm JPMorgan Chase and its heritage organizations from 1982 to 2009.  During this time, he managed worksite occupational health services at 20 major locations in the U.S. and Canada, in-house integrated disability management for short-term disability (STD) and family medical leave act, and wellness and disease management (DM) programs.  Dr. Burton worked closely with the benefits department to design, implement and evaluate the outcomes of employee benefits that address health and productivity.  He has served on numerous corporate and professional boards and has published nearly 100 papers in peer reviewed professional journals.

Dr. Burton retired from his post at JPMorgan Chase in September 2009 in order to focus on academic applied research in the employer marketplace.  Before he did so, however, Scott Thompson, President of Health Care Practice at the Benfield Group, caught up with Dr. Burton to discuss the highlights of his career and the advice he wants to pass on to others interested in helping their organizations improve workforce health and productivity.

Health Management Milestones

Scott: You've made a mark in employee health by emphasizing the importance of data in guiding benefits decisions.  How did you get involved with data?

Dr. Burton: When I started at First National Bank of Chicago (First Chicago) in 1982, health and productivity management was in its infancy.  We were really trying to manage health care costs.  Back then, the only data health plans reported was how much a company spent on in-patient and out-patient care.  There were no pharmacy benefit plans.  It was not known exactly how we spent our money.

I joined a working group at the Midwest Business Group on Health, which asked one of the health plans the audacious question, "Where is our money going?" I got involved in data trying to answer that question.

Our health plan gave us a print out of First Chicago's health care claims listing a variety of ICD-9 codes and dollar amounts in no particular order.  The stack was nearly a foot tall.  I manually lumped the ICD-9 codes into major diagnostic categories and discovered the bank's number one cost was pregnancy.  Mental health was the number two cost.  These results were quite a revelation to the bank and user group.

Scott: What are some of the health management milestones you and your team have achieved?

Dr. Burton: We achieved the first milestone after realizing the tremendous cost and impact of depression and stress at First Chicago.  Mental health accounted for well over 10% of overall costs.  Instead of cutting benefits, senior management wanted my department to manage the costs.  With that directive, my benefits colleague Don Hoy and I put in place a number of very innovative and ultimately successful policies.

The benefit enhancements we enacted managed costs and, more importantly, the quality of care.  We had added mental health benefits and conducted utilization reviews to track use.  We made depression and stress education programs available to employees.  We also did something that was clearly risky at the time.  We paid for outpatient treatments, like drug and alcoholism programs and mental health daycare centers, for adults and kids.  There weren't very many around, but we found them and did it.  These treatments were more expensive per day, but patients were there a relatively short time.  They got back with their families more quickly and, for the most part, did very well.

Our second milestone was establishing an integrated data system at First Chicago in 1987. We spent two years looking at medical software and how to link medical claims, disability and health risk assessment (HRA) data.  It took a couple more months to develop the ROI.  The chief financial officer gave us his approval in about two minutes after we laid out our proposal.  He likened managing the health of the corporation to managing the bank's financial risks and told us to go for it.

Scott: In your opinion, what are the key steps for developing an effective approach to health management?

Dr. Burton: The first step is to have data.  But data for the entire corporation may or may not give you a clear picture of what is necessary for large groups of employees.  So it's helpful to be able to segment by health risks, medical conditions, worksites and demographics, including ethnicity.  Then it is important to know what's important to the management of the corporation and understand that priorities may vary for particular lines of business.

Scott: Can you give me an example?

Dr. Burton: Say you manage a credit card operation in a telephone call center staffed by young females.  What's important to you is going to be quite different than what's important to a manager at an investment bank because of the differences in demographics and workers' job duties.

Scott: What recommendations do you have for implementing a health management plan once you've gotten approval to go forward?

Dr. Burton: You need to get the buy-in of the appropriate stakeholders.  That means going beyond senior management.  Reach out to managers at a particular location, human resources and the communications department.  The communications folks are particularly important because they know how to get the message out to employees.

Health Management and Leadership Advice

Scott: What have you learned about making the case for health management that you would share with other corporate medical or benefits staff?

Dr. Burton: If you don't have data that sees the linkages between health, health benefits and expenditures in the broadest sense then you're missing the boat.  You really can't even begin the program if you're still looking at these areas in silos because you could make poor decisions.   (See the Benfield Minute [hyperlink] for an example of how integrating data helped First Chicago decrease depression related costs.)

Scott: How has data helped you through the years, particularly among all the mergers and acquisitions?

Dr. Burton: If it weren't for the data to show the benefit and the value of our policies, we would not have been able to continue our models with the various acquisitions and mergers.  When First Chicago and NBD merged, NBD's leadership came out on top.  The chairman came into my office to tell me they had eliminated the medical director position. I had the data to show him what my department had done.  He became a strong supporter over the years and really understood that our department's approach was beneficial to the employees and the firm's bottom line.

Just as important as using data to make your point, is leveraging the easy wins data can give you.

Before I came to First Chicago, STD costs were rising 20% to 30% per year.  I put an occupational health nurse in charge of managing disability benefits.  Disability costs were essentially flat the next five years, not because we were denying disability benefits, but because we were managing it better.

During the various mergers and acquisitions the STD costs of the other banks were invariably about 20% greater than ours.  I used "Ross Perot" style graphs to compare major diagnostic codes, show the new leadership that we had a track record and that our STD management could save millions of dollars.  Those kinds of early wins gave me the capital to take more risk, such as investing in prenatal education in 1987 and hiring a clinical psychologist in 1988 to run the EAP.

Scott: What other advice would you share?

Dr. Burton: It's very helpful to integrate a corporation's health functions under one umbrella.  You can make things happen if the EAP, benefits, occupational health nurses  and wellness are all in silos, but it's been much easier to have those functions closely linked and under the same umbrella.

Scott: Benfield has developed a leadership model (see figure) identifying the components of an effective business health leader.  What do you think of the model and is there any component that stands out as a key building block on which the other components rest?

Effective Business Health Leader

Benfield Minute: Foundational Health & Productivity Study — Mental Health Care

First Bank of Chicago, a JPMorgan Chase heritage company, restructured its mental health benefits in the 1980s. In the 1990s, the bank contracted with a PBM and implemented more robust pharmacy benefit coverage that improved access to newer SSRI anti-depressant medications. Additionally, the bank introduced an employee assistance program, health risk assessments, and corporate awareness and management training around mental health and short term disability.

Medical Executive Dr. Wayne Burton performed a groundbreaking financial and health and productivity analysis of the revised benefit. Dr. Burton's work established the value of an integrated database in evaluating the impact of new benefit designs. As seen below, pharmacy costs increased, but within two years overall costs had decreased because of a reduction in more expensive inpatient care.

Depression Management
Adapted from: Burton, W. Investing in the health of human capital to enhance performance and profits. Presented April 2002.

Worth Reading

This month's collection is focused on articles that can help you better understand, engage and influence senior management at your organization.

Business Outlook Survey

Source: CFO Magazine. October, 2009

Synopsis: It's the job of CFOs—indeed, of all executives—to keep a sharp eye on broader economic trends and environmental forces that translate into threats and opportunities for the business.  Business-health leaders don't need to be experts in these issues, but they do need to be aware of the issues’ business context.  This brief article reports on a survey of 657 U.S. finance executives who provided their perspectives on issues ranging from the general economic outlook to earnings to employment.  Of note, "health care costs" tied with "attracting and retaining qualified employees as fourth in a list of CFOs' top concerns about their own companies. Wow, what a perfect exhibition of the tight rope employers walk regarding the provision of competitive health benefits.

So What?  The Business Outlook Survey is a good primer of the types of issues your executives are thinking about.  If you don’t already read CFO Magazine, put it on your list.  Rarely will you need to do anything but skim it, but it will help you develop your senses about broader economic issues…and perhaps prepare you to carry on a conversation with the CFO at the annual holiday party!

Link: This link will take you to a free abstract of the article.

Can You Say What Your Strategy Is?

Source: Harvard Business Review.  April, 2008

Synopsis: This article opens with a challenge:  “Can you summarize your company’s strategy in 35 words or less?  If so, would your colleagues put it the same way?

Well...can you?

If not, this article may help bring clarity.  The authors (David J. Collins and Michael G. Rukstad) provide a framework and helpful instruction to guide development of a concise strategy statement.  They propose that a strategy statement should consist of three critical components:

  1. Objective: A definition of the ends that your strategy is designed to achieve, including a time frame for achieving it.
  2. Scope: The domain/part of the total landscape in which the business will operate.
  3. Advantage: Consists of two parts:  a) A value proposition that explains why customers should buy your products rather than alternatives; and  b) A description of how internal activities will be aligned to deliver the value proposition.

Clearly, the article is written for executives seeking to define a corporate or product/service strategy in a competitive market.  The translation to managing health as a largely internal function will require some work, but having to start by thinking of your strategy as a ‘business’ in competition with things that threaten health and productivity will be a useful struggle.

So What? Until you have a clear strategy, you cannot put the management of health on the executive radar as a strategic issue.  Health management is complicated, and articulating your strategy in a way that executives who know nothing (or know the WRONG things) about health care is hard work.  This article provides a framework that may discipline your thinking and process and lead you to the clarity your executives crave.

Link: This link will take you to a free abstract of the article.

Wordplay: Why most mission statements are dumb—and how to write one that isn't.

Source: Fast Company. November 2009

Synopsis: Like many Fast Company articles, this one is a fast read…only one page.  It may not have enough guidance to really help you re-write your strategic statements, but it may give you some needed perspective to take a critical view of what you’ve got.  Nancy Lublin, the author, offers a useful challenge to: "Take your wonky mission statement and rip it to shreds.  Then ponder your ambitions, and write and rewrite the thing until it reflects—in real, printable words and figures—the difference that you want to make."

So What? Health management is viewed largely as an HR function which—let’s be honest—already brings bile up into the throats of most execs.  Layering on a mission statement stacked with buzz-words held together by BS is a flashing invitation to the back of your executive’s mind.  The author’s challenge to take a fresh look is a good one to heed.

Link: This link will take you to a free abstract of the article.

On Scope

World Health Care Congress 5th Annual Health and Human Capital Congress: February 2-5, 2010; Washington, DC. This year's congress focuses on improving employee productivity and performance with worksite health and wellness programs.

Academy Health & Health Affairs National Health Policy Conference: February 8-9, 2010; Washington, DC. The purpose of this conference is to provide clarity on the critical health care issues and priorities for the upcoming year.

Integrated Benefits Institute & National Business Coalition on Health 2nd Annual Health & Productivity Forum: February 8-10, 2010; San Antonio, TX. The goal of this year’s forum is to foster objective discussion and evaluation of the latest practical approaches to investing in and promoting workforce health and productivity.

Florida Health Care Coalition 17th Annual National Conference: February 23-24, 2010; Orlando, FL. The focus of this year's conference is payment reform.