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Benfield Business-Health Leadership

Volume 9, Number 1, 2010 Back to the Issue Contents

Perspective

Developing an Information-Based, Value-Driven Health Management Strategy: Learning from Duke vs. Butler
by Chuck Reynolds: President, Employer Practice — contact chuckr@benfield.com

I imagine there's a personality test out there that involves giving someone a copy of USA Today and then observing the order in which he or she reads the sections. If there is such a test, I'm a GBPR—Green (Business), Blue (News), Purple (Life), Red (Sports). I'm not sure what that says about me, except that I'm really not that interested in news about sports...that is, until that glorious season known as March Madness.

I LOVE watching the NCAA Tournament. In addition to providing heaping helpings of action, drama and human interest, most games—especially the tight ones—are living laboratories churning out lessons in organizational development and strategy. In the crucible that is any tournament game, you see complete stories of strategy, management, and human capital productivity and health unfold and adapt to the fluctuating dynamics of customer demand (fans), competitive pressure, regulation (referees) and unexpected crises (players lost to injury or fouls)...all in less than two hours! And, at the end of it, there is a winner and a loser. No wonder I look forward to March!

This year's tournament did not disappoint, featuring tight games and big upsets that shredded most peoples' bracket, and culminating in a match-up between first-seed Duke and a surprise fifth-seed Butler. Taking nothing from the skill level of the players, it's safe to say that both teams made their way to the final game by relying on more than pure athletic prowess. Rather, you could say they won with their heads and hearts; or, if you prefer, with strategy and the discretionary effort of their human capital talent.

The topic of this Perspective—Developing an Information-Based, Value-Driven Health Strategy—is a HUGE subject that would take at least one textbook to cover completely. Don't worry, I don't intend to write a textbook. Rather, my intent is to share a few essential lessons we've learned from effective business-health leaders about how they develop health strategy for their organizations. It turns out, Duke and Butler provide meaningful examples to help drive home these key points.

  1. Value-Driven—Mindful of Vision/Focused on Goals: You can bet that at the very first practice at the beginning of the 2009/2010 basketball season, coaches for Duke and Butler focused their teams on a vision of winning the NCAA title. And, you can also bet that they worked through the season to promote and reinforce a belief that the vision was within reach. At the same time, come game day, one of a coach's greatest challenges is to keep his or her team from thinking beyond the moment. The goal at hand is victory, and losing focus on that goal leads to failure.

    Effective business-health leaders have similar challenges. They need to provide a larger context for investments in employee heatlh and productivity—that is, a vision. At the same time, they need to focus their teams on specific goals that are necessary to accomplish that vision. The vision needs to answer the big-V question: "What is the Value we are trying to get out of investments in the health of our human capital?" Goals must answer the little-v question: "What is the value of this particular tactic or set of tactics?"

    As with college coaches, business-health leaders need to balance vision and goals. Vision without meaningful goals = mush. Goals apart from vision = tactical fibrillation...a lot of movement, but little production.

    Chris McSwain, featured in this edition of BBHL as well as our previous one, sets a great example of how to strike the balance. To make sure his vision was clear, consistent and readily translatable, Chris wrote a 43-page white paper to spell it out. Chris is exacting about his goals and makes sure his internal team and vendor partners are focused on achieving them. The white paper (which Chris can summarize with or without slides in a meeting room, by teleconference or during a proverbial elevator ride) is essential, because it provides his team and his vendors with clarity and confidence about the purpose of what they're doing.

  2. Information-Based: Data, Integrated Data and Game Film The coaching staffs and analysts for Duke and Butler work with a lot of information. Of course, they have statistics galore, but that's just data. That data translates into information when it is integrated. It's good to know that the opponent's point guard is their lead scorer. OK, that sort of helps. It's better to know that he scores 23% fewer points when faced with a zone defense that prevents him from penetrating to the hoop. However, when opposing teams play a zone, the other guard tends to double his average score, because he's left open for more 3-point shots.

    This sort of information is great, but it really comes to life when paired with game film. Seeing how an opponent has responded to different teams and game situations provides a gold mine of additional information and feeds intuitive insights about what will or won't work on game day.

    The information base used by effective business-health leaders is similar in many ways. They gather data from multiple sources and integrate/analyze it for information and insight, and then watch their own version of 'game film' to understand how to beat key opponents, whether those opponents look like low medication adherence, tobacco use or overuse of low-value medical providers. Let's break these down a bit:

    • Data is the least sexy of these three points, and as such, less-effective managers of health and health benefits don't give data the attention it needs. For analysis to have any meaning, it must be based on fresh, high quality data. Employers pay vendors to gather, warehouse and integrate data, but employers cannot back out of the responsibility to properly structure agreements around the timely provision of quality data, and to enforce accountability to those agreements.

    • Integration of data is not easy, and many vendors have highly sophisticated programs that enable elaborate modeling. But, data integration is not the same as data analysis.

    • Data analysis, or as some say, interrogating data until it gives up its secrets, is the process that sanctifies the effort and expense of getting and integrating data to begin with. Further, because analysis begins at some level with hypothesis, it is essential that companies use analysts who are aware of and philosophically aligned to the company's vision.

      Here's an example. Give the same integrated data set to two analysts. One analyst, who believes that health and productivity costs are driven primarily by disease prevalence and severity will produce a report identifying priority diseases and recommending prevention and disease management interventions. The other analyst, who believes that costs are driven not only by health, but also by things like workforce policies and environmental factors will produce a report that will go beyond naming high-cost conditions. It will also identify issues like recently-changed workers' compensation policies and the impact of recent layoffs as cost drivers to consider. The strategies that these two analysts recommend are likely to be very, very different, and that's why alignment matters.

      Effective business-health leaders know how important it is to have an excellent and philosophically-aligned analyst interrogating the data. They may use the consultants that come with the data integration vendor's package, or they may hire a researcher/epidemiologist to make sure they have complete alignment between analysis, strategy, goals and vision.

    • Business-health leaders' game film is the benchmarking reports they receive from benefits consultants regarding benefit and program strategies among industry or best-practice peers. However, those reports are not sufficient.

      Business-health leaders are well-networked with other leaders, and they make a point to engage with them at conferences, advisory board meetings and through formal and informal social networks. A core attribute of effective business-health leaders is humility, and that propels them to be constantly on the hunt for ideas and insights from other leaders. The exchange of information and ideas is their ‘game film,' and enables leaders to both avoid repeating others' mistakes and to innovate new, more effective strategies.

  3. Strategy—A Strong but Flexible Game Plan Teams like Duke and Butler don't pour through stats and review hours of game film for pure enjoyment; they do it to formulate their game plan. They go into games knowing the defense they will use, the offensive plays that are most likely to have success, how they'll try to establish their preferred pace of play, and a host of other details. Then the game starts, and they watch. Well, they don't just watch, they observe, and record stats, and have people reviewing replays to see what went right or wrong. They see what's working, and they do more of it. They see what could work, and they try it. They see what's not working, and they adjust. The team is a living organism, adjusting second-by-second and play-by-play to a host of variables...all while the opponent does the same thing.

    Effective business-health leaders operate in much the same way. They develop strategies, but they don't just unleash them and let them run. They measure, evaluate and adjust. And, if the strategy represents a significant innovation, they will likely pilot the concept to evaluate it's impact and work out the kinks. Some managers, like some coaches, essentially sit back and watch games unfold, while others—the leaders—are on their feet, observing, thinking and helping their team adjust to the unexpected.

    Developing a value driven, information-based health strategy...it's no slam dunk, but for effective business-health leaders, it's an essential part of their game.

    Now, excuse me. I need to go read the paper...G, B and P only for another 11 months, and then bring on the R.

Chris McSwain

An Interview with Chris McSwain

Building a Total Health & Productivity Platform: Chris McSwain on His Work at Whirlpool Corporation
by Scott Thompson: President, Health Care Practice — contact scottt@benfield.com

Chris McSwain is Director of Global Benefits at Whirlpool Corporation, a global manufacturer and marketer of major home appliances, with 67,000 employees and nearly 65 manufacturing and technology centers around the globe. He joined Whirlpool in December 2007.

In his previous position as director of Compensation and Benefits at SCANA Corporation, Chris led the energy-based holding company through a total health and productivity transformation. His work building an onsite resource center, implementing value-based benefit design and creating a mobile medical unit for employees is featured in a previous Benfield Business Health Leadership interview.

This second installment of Scott Thompson's interview with Chris focuses on his work launching total health and productivity initiatives at Whirlpool Corporation.

Scott: You and your team launched many successful health and productivity initiatives at SCANA. What brought you to Whirlpool?

Chris: I began to search for a new position when my boss at SCANA encouraged me to take the next step in my career. What ultimately brought me to Whirlpool was the tremendous opportunity to see if the total health and productivity initiatives my team accomplished at SCANA could be implemented on a larger scale at Whirlpool.

Scott: What does your position as director of Global Benefits at Whirlpool entail?

Chris: The Global Benefits team supports the strategy, design and development of benefits for U.S. actives and retirees in addition to global benefits. We also oversee health and wellness initiatives, which include health centers and clinical programs. Another area of responsibility is integrated absence management, which includes worker's compensation, short- and long-term disability, and family medical leave. We also mange retirement and Medical Management, which includes the patient centered medical home, Communities of Health and provider networks initiatives.

Scott: It can be a challenge to find your "sea legs" at a new company, especially when you come in as a change agent. What were your first steps at Whirlpool?

Chris: The first step was to spend one-on-one time with the existing Global Benefit team to get to know the members, listen to them and understand what they were passionate about doing. The purpose was to build what Global Benefits would do around the team members' strengths and personal drivers. The meetings allowed us to begin building relationships and helped me get a handle on the team members' current job responsibilities and challenges. On top of that, in my first month, I hired two people to support both health and wellness and a new area called Medical Management. Ultimately, the way we have structured the team has helped drive success.

The broader "on boarding process" included getting to know Whirlpool by visiting some of our plants, each one of which has its own culture and benefits concerns. To better understand governance, I met with my colleagues to learn who makes decisions, how those decisions are made and who had what authority.

Scott: What were some of the early challenges you faced when you started at Whirlpool?

Chris: Because I started at Whirlpool in the middle of the benefits planning for 2008, I reached out to get the input of others as quickly as possible. I found that Global Benefits spent a great deal of time addressing problems from legacy issues. We would not be able to accomplish the strategies I had been hired to implement until we "fixed the core." As a result, concurrent to 2008 benefit planning and development, we assembled a cross-functional team to resolve the legacy issues as rapidly as possible. Due to the team's efforts we have been able to advance our work to add value for Whirlpool in some new and exciting ways.

Scott: How did you go about explaining what you wanted to accomplish and garnering support?

Chris: Six months after coming to Whirlpool, I wrote a five year plan for the Global Benefits team. Other departments didn't quite understand the plan, which introduced a lot of unfamiliar terms. My boss suggested I write a white paper to further explain the strategies.

In order to describe how the benefits function supports a broader view of people as human capital, the paper included a section for each component of the Global Benefits team as well as a section for my boss. I asked each of my team members to add their thoughts so the paper communicated our vision, not just my own.

Because the people at Whirlpool did not know me well, I realized they might be hesitant to buy into the strategies outlined in the white paper. To provide credibility I asked the lead principal of Whirlpool Corporation's long time benefits consultant company to do a peer review. The consultant's report confirmed that the strategies in the white paper were the right ones to drive the results we wanted in the future.

The finished 43-page white paper has been instrumental in outlining a future state for each component of Global Benefits and what that component can do for Whirlpool. The white paper also helped key leaders understand how everything the Global Benefits team planned to do connected back to the company's business goals, values and culture.

Scott: Who besides the Global Benefits team had access to the white paper?

Chris: Internally, the chairman and CEO and senior vice president of Human Resources read the white paper. Externally, we provided the document only to our true vendor partners. As a matter of fact, when we were completing our health plan RFP, each health plan CEO wanted a copy of the white paper, but we only gave copies to the vendors that received our business.

Scott: What are some of the initiatives you've launched at Whirlpool?

Chris: We've done some really phenomenal things at Whirlpool. All the initiatives have the goal of creating a culture of health while managing employee, retiree and dependent health. The objective is to maintain the health of the healthy and improve the health of the unhealthy as quickly as possible. Time is not our friend. But despite the worst economic period in our company's history, the Global Benefits team has essentially completed the five year plan outlined in the white paper in two years.

Many of the initiatives we've launched have focused on increasing the value of the investments Whirlpool makes in its people through benefits. Increasing that value also increases the company's ROI. Our strategy focuses on the employee experience at all key touch points. For instance, at all major Whirlpool divisions we now have a new vendor providing on-site health coaches, the PBM providing on-site pharmacists and the EAP vendor providing on-site counselors.

We also simplified the health plan offerings and introduced account features with incentives, disincentives and compliance features to drive desired consumer behaviors and higher levels of personal accountability. For instance, we implemented a value-based benefit design to support diabetes and created a custom formulary that allows patients to receive many medications for cost-driving chronic conditions without co-pays. We also set up incentives for patients to choose minimally invasive procedures over other options. We did this in addition to changing health plan vendors and adding the HPQ-Select productivity assessment to our health risk assessment.

We rebranded several offerings to better resonate with employees. For instance, the EAP benefit became Life Directions and has a greater emphasis on work/life balance. Similarly, we branded the wellness programs as HealthWorks. We streamlined our disability options by moving from 63 plans to three. Then with a new vendor, we refocused the disability plans to emphasize regaining health instead of returning to work.

We also created a new function of our team called Medical Management, which is really the R&D within Global Benefits. We have an innovation pipeline of ideas and work extensively with our pharma partners. For instance, we've launched a patient-centered medical home pilot with 42 local physician practices around a major Whirlpool location in Ohio. We also are working with organizations around Benton Harbor, Michigan and a special team within a major health plan on an initiative called Communities of Health to build a healthier and stronger community. And because the global benefits area is an emerging area of investment for Whirlpool, we recently inventoried all the benefit programs and completed a multinational pooling analysis to further define the global benefits governance model and wellness strategies.

Scott: Retirees' health benefits can be a significant cost for companies like Whirlpool. What steps have you taken to manage those costs and benefits?

Chris: Our retirement strategy has focused on encouraging better retiree decision making through improved communications with specific segments. To increase value for our post-65 retirees, we moved to a more defined contribution strategy and implemented a new vendor to assist retirees with product selection. Whirlpool is transitioning pre-65 retirees to plan designs more closely aligned with the plans for active employees to improve the transition from active to retiree status.

Scott: What would you say is your greatest accomplishment at Whirlpool so far?

Chris: In only about two years, the Global Benefit team has created some leading edge and even market-defining products and services. Our chairman has approved initiatives that should keep our company's costs flat for five years and save a significant amount in health care costs.

Another personal accomplishment was developing two models that encapsulate much of our future focus and strategies at Whirlpool. One is a human capital model that shows the connections between employees' and an employer's investments in health, wealth and performance. We're using the other model to determine how Whirlpool can accelerate the development of a culture of health among our workforce and their families.

That being said, I'd say the greatest accomplishment is that my team is making decisions without me. I'm very proud of them for the way they care about our people and how each believes in the impact their areas of responsibility will have in making a difference at Whirlpool. I am really pleased that the team gets together regularly to discuss needs and issues from across Global Benefits. They'll then come to me with ideas to enhance and improve what we do. I get great joy from learning from everyone around me and seeing how what we do makes a difference at Whirlpool.

Scott: A company Whirlpool's size has many vendors. With your focus on integration, what are you doing to manage your vendors?

Chris: We include our expectations in the RFPs and hold vendors to those expectations in the contract terms and conditions. For instance, we establish performance guarantees with vendors and a significant part of their pay is at risk if they don't meet those guarantees.

We try to take the vendors into an employers' mindset to show them what we really need their services to do. Whirlpool recently hosted a benefits supplier summit to drive innovation and integration among our vendors. We're having success with supplier collaboration. For instance, our PBM, care management and EAP vendors are working with our TPA and the benefits team to define integrated service delivery as well as the metrics and processes for integrating information from some of our on-site investments.

Scott: What are some of the lessons learned in previous positions that you are practicing at Whirlpool?

Chris: At Whirlpool, like other companies, we're moving fast and have high expectations to meet every day. Sometimes we move so fast that we don't set aside the time to get the range of perspectives that we should. That said, through my boss's example and support, I have spent more time seeking input from other parts of the broader HR team and our operations areas. Based on past and current experiences, I have come to learn this does not slow us down, but actually allows us to go faster because we know support for our projects exists.

At Whirlpool, I've also continued to focus on data quality and information management. All our measurement strategies, allocation of resources and decision making for the future depend on good data.

Scott: How do you measure the results of your initiatives?

Chris: The data warehouse is the key to Whirlpool's success in measuring initiatives. The first phase went live in late 2009 after the Benefits Analytics team worked with our data warehouse vendor and corporate medical director to establish the measurement strategies covering all the areas of investment. We have started and will continue to show how areas like safety, workers' compensation, disability and health are related. Communicating and sharing this information helps the HR team and other departments stayed focused, respected and aligned.

When we started building our measurement strategy, we interviewed each member of the Global Benefits team about what was most important to measure. We combined the responses to build divisional, corporate and executive scorecards. Since then our data strategy continues to evolve as we move forward in developing an integrated total health and productivity platform and a human capital mentality.

Scott: Making benefits changes can be a challenge. First you must convince senior management that changes are a good idea. Then you have to convince employees of the same thing. How does Whirlpool implement benefits changes?

Chris: Whirlpool uses a range of change management tools and techniques. It's a multi-step process that reaches out to all levels and departments of the company. We created a change management team with representatives of all Whirlpool Corporation's teams and most of its divisions. Before rolling out new benefits at the start of 2010, each team representative met with their customer groups to hear employees' thoughts on what we planned to do. We also held focus groups with employees to see if our communication materials were clear and understandable. With the feedback from those sessions, we finalized the benefit designs and identified deployment issues. We worked closely with our vendors at this stage to make sure all parties' expectations and services aligned.

As we started the new benefits rollout, we made sure to keep the key people informed. We presented the business case, new strategies, programs and changes to the U.S. manufacturing divisional vice presidents. A day-long briefing with the HR directors used a video to explain how the incentives and plan designs would work. And we also held one-on-one meetings with top executives to explain the changes in person.

To keep track of the rollout, the change management team held weekly meetings and consulted color-coded charts that tracked sites' change readiness level. We created a toolbox of benefits communications that the HR team and vendors could access quickly if employees, their families or retirees had questions.

We made ourselves as available as possible during the rollout. For instance, the health plan, absence management vendor, HR director and members of the benefits team were all present for meetings with employees and employees' spouses. We sent numerous communications to homes, work stations and publicized the changes on the company's intranet.

The team also directed our communication efforts outside traditional venues. For instance, we set up a booth with our new vendor in a local mall to solicit enrollment in the new retiree plans. Team members and the health plan also held physician and provider summits in each of Whirlpool's major locations to help the medical community serving our beneficiaries understand the new benefit plans and features.

Scott: Are there any takeaways you've learned from your time at Whirlpool?

Chris: When I think about all we've done, I'd say there are four broad takeaways:

  • The critical success factors for successful total health and productivity initiatives are: a clear vision, a great team, strategic communications and change management.
  • One of HR's core competencies must be supplier management. Partnering with the right vendors and aligning internal and external silos accelerates return on investment.
  • Employers must relentlessly drive attention to the member experience and take a holistic view of all health, wealth and performance. Investing early in quality data management and measurement strategies pays big dividends, because then you don't waste time chasing bad data.
  • Even large employers with dispersed employees and complex vendor relationships can rapidly achieve large amounts of change successfully.

Scott: Chris, thanks for taking the time to speak with Benfield about Whirlpool's total health and productivity initiatives. In just two years, the initiatives are already showing impressive results. We're looking forward to hearing about where your team and Whirlpool will go from here. I hope that you'll sit down with Benfield again soon for an update in a future issue of Benfield Business Health Leadership.

Benfield Minute

Employers are increasingly using integrated data in their benefits decision making. Each year Benfield's Employer Market Intelligence Research Panel* answers questions about the use of data in benefits analysis and decision making. As health care has become an increasing portion of the bottom line, more employers use integrated data to identify and address cost drivers.

Since 2007 many employers have shifted from periodic, ad-hoc integration, or not using integrated data, to regular use of integrated data. The proportion of employers that are regularly using integrated data for planning, measurement, and management of benefit programs increased significantly from 39% in 2007 to about half of respondents in 2009 and 2010.

Employer Integration of Health Care Data, 2010

*The Employer Market Intelligence Research Panel is comprised of HR, benefits or corporate medical executives at self- or fully-insured employers with 5,000 or more employees and executives at employer-affiliated organizations.

Worth Reading

This month's collection of articles focuses on capturing and analyzing information relevant to employers' health strategies.

Establishing a Workforce Intelligence Center of Excellence

Source:PricewaterhouseCoopers Saratoga

Synopsis:Employees are often an employer's largest investment, but many organizations maintain surprisingly little information about their workforces; sometimes not knowing how many people the company employs or costs per employee. This lack of information leaves employers guessing about what to do on important workforce-related decisions. To end the guessing game, this report recommends employers commit to and build a workforce center of excellence to be a single source to own, govern and analyze the workforce's impact on their businesses.

So What? Taking concrete steps to capture and analyze productivity, performance and health data can yield many positive outcomes, two of which are particularly relevant to Benfield Business-Health Leadership readers. By leveraging human capital data, HR, benefits and medical professionals can help executives better understand the key strengths and weaknesses of their organization and its workforce. Using such data can also establish the strategic importance of human capital management issues and decisions.

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

Measuring Success in Creating a "Culture of Health"

Source:Journal of Occupational and Environmental Medicine

Synopsis:This journal article describes how a large employer developed an electronic survey to measure employees' perceptions of company health improvement initiatives. The survey asked employees to answer questions about their work environment, attitudes and behavior. The major survey finding was that employees were aware of and understood the company's health initiatives.

So What?Often, articles on how to collect and analyze data focus on the value of integrated data. The reality is that not all organizations have access to integrated data. This article is a reminder that there are many ways to collect useful data and that not all the options require an expensive long-term undertaking.

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

Data to Dollars: Supporting Top Management with Next-Generation Executive Information Systems

Source:McKinsey Quarterly

Synopsis: McKinsey uses a case study to underscore data's critical role in guiding executives' decisions. The problem is that many of the information systems used to gather data aren't designed to collect the most useful information to executives. The case study reviews the common weaknesses of such information systems and outlines steps on how to build more useful tools to collect data.

So What?Though this article is written for CIOs, it's applicable to HR and benefits professionals and anyone trying to communicate more effectively with executives or other departments. It drives home the importance of investing in information systems and using metrics that are relevant to an organization as a whole, lessons that translate easily to the need for integrated health and human capital data. After all, data is only useful if it can be interpreted. If an information system is convoluted and doesn't measure what's really of value, the data is of little use.

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

Two Leading Researchers Discuss the Value of Oddball Data

Source:Harvard Business Review

Synopsis:In this brief interview, a scientist recounts how his "garbage-can approach" to autism research helped develop new understandings of the condition. The scientist's method is to concentrate on the "throw-away" data that is often overlooked for more conventional data. He says that this method of analysis can add nuance and context to more common quantitative measures

So What?The article reminds readers not to overlook potentially useful data and over rely on conventional metrics. Shaking up your analytical approach may yield richer results by increasing understanding of the issues your organization faces.

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

On Scope

American Occupational Health Conference: May 2-5, 2010; Orlando, FL AOHC is designed for physicians who specialize in or have an interest in occupational and environmental medicine as well as for non-physicians who are involved in the field. AOHC offers a variety of educational activities for participants new to OEM as well as for the experienced professional.

Midwest Business Group on Health Annual Conference: May 5-7, 2010; Chicago, IL The theme of this year's conference is "A Health Benefits Odyssey." The meeting will focus on health benefits and health care trends and the key challenges faced by the purchaser community. The topics that will be covered include employer options in the new health benefits environment and the impact of reform on the delivery of health care.

Employers Health 11th Annual Employer Symposium: May 19, 2010; New Canton, OH The theme of this year's symposium is "The Changing Picture of Health Care Benefits." The symposium will focus on how employers can build an organizational strategy that will develop, grow and protect a culture of health. Some of the topics that will be covered are building community collaborations around health and implementing innovative benefit models.