If youre a group disability insurance producer, you know that the plans could be better.
Return-to-work outcomes have not improved much, and claim-management practices continue to come under growing scrutiny.
Meanwhile health care costs continue to increase at an alarming rate, and employees who are absent from work due to a disabling illness or injury account for about 60% of health care expenditures. Theres a clear link between medical insurance and disability insuranceand between health and productivity.
Group disability insurers continue to focus on determining whether or not an individual is disabled, and whether or not disability income should be provided. This approach often creates an adversarial relationship between the insurer and the insured and does little to address employers real needs.
The recently launched integrated health and disability programs are a step in the right direction, but the industry ought to go further and faster. Employers today need revolutionary change, not evolutionary change.
Instead of focusing on determining whether employees are eligible for disability benefits, disability insurers and administrators could become risk managers, working with the health care plan to coordinate early risk identification efforts, wellness services, case management services, rehabilitation services and more. Managing income benefits could be a secondary objective, with the primary objective being maximizing employees productivity.
The next generation of group disability programs should focus on improving employees physical and mental well-being, rather than on simply managing health problems that already have resulted in claims.
A successful next-generation health and productivity program should offer tools for:
–Identifying individuals with current or potential health risks.
–Reaching out to engage plan members and empower them to improve their own health.
–Creating individualized health improvement plans that come with “leverage points” for encouraging compliance.
–Measuring and tracking results individually and collectively.
In the long run, a successful, comprehensive health and productivity program should be able to cut disability costs more than 20%, employee health costs about 8-12% and dependent health costs about 6%.
Finding The Right People
Most of the time, about 80% to 85% of an employers employees probably consider themselves to be productive and “well.” But many of the employees who feel unwell are still at work and are “at risk” of incurring medical and disability claims. Conclusion: Disability insurers ought to help improve the wellness of all employees, not just the health of employees who happen to be off the job.
One way to identify employees who are “at risk” is “self-identification.” The employer asks employees to file claims or call designated toll-free numbers to initiate services. Self-identification promotes self-responsibility. The problem is that, by the time employees call to file a claim, they already have entered “the system” and started incurring costs. Encouraging employees to call before they seek costly care or file claims is better, but getting employees to call in advance takes extensive communication efforts.
Predictive modeling is another way many medical carriers are identifying at-risk employees. Predictive modeling uses past health and pharmacy claim data to predict medical usage over the next 6 to 18 months. Because this method identifies employees in the population who are already sick, it makes sense that ensuring they receive proper care management would help reduce health care costs. The problem with predictive modeling is that the data is generally at least 6 months old, and the employees identified are already in the medical or disability system. Conventional predictive modeling cant tell you which employees dont feel well today and are likely to become the users of the system tomorrow, so many opportunities to reach at-risk employees early are missed.
A third approach is to look at employees perceptions. Using tools such as health care surveys and assessments to identify employees who worry about their health and wellness can identify twice as many individuals who will end up needing services.
Members of most group disability plans have to file claims to get any help at all. This means employees must incur medical costs or, at the very least, label themselves as sick or disabled before seeking assistance.
A next-generation plan should strive to be more proactive, offering services before the advent of the first medical episode and the potential disability claim that follows. The plan can reach out to offer coaching, counseling and other services to employees and family members who are at risk.
Every employee and family member should be able to access services at any time, ensuring that assistance will be available for any issue or condition that may affect an employees health, well-being or ability to work.
Consider an example of an individual who suffers the loss of a close friend. The employee is dealing with overwhelming feelings of grief and, because of unspoken and unresolved bereavement issues, also has the beginnings of a substance abuse problem. What if the employer could offer a program that intervened before the depression and substance abuse became acute or apparent. In other words, before it resulted in a medical or disability claim?
Another example might be an employee who has a pre-existing condition and is ineligible for income replacement benefits. The disability insurer could provide case management services for the employee, even though income replacement benefits are not available.
Disability insurers also could design their programs to support compliance with health treatment programs. For example, medical providers cannot withhold medical treatment, nor would they want to. But, to help motivate the type of behavioral changes this new health and productivity model calls for, employers could use the disability plan to promote compliance. Disability policies could require employees to be under regular and appropriate care to be eligible for income benefits.
These are radically different concepts for group disability insurers, with significant implications across the organization. Medical providers may, in fact, be better positioned to provide these new disability programs as a natural extension to their core medical products.
In the end, employers need to look beyond traditional disability programs to a more holistic, coordinated program that delivers services early on in the health care continuum. Only by embracing a fundamentally different way to manage health and disability will employers have healthier, more productive employees and lower medical and lost time costs.
is the president of Integrated DisAbility Resources Inc., Bloomfield, Conn. He can be reached at [email protected].
Reproduced from National Underwriter Edition, May 7, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.