Effective Absence Management - Your key to a healthy business Rising Healthcare Costs & the Price of Poor “Solutions” After holding relatively steady for about five years, healthcare costs are rising sharply. With an aging work force (did you know that in about five years, the U.S. population will be older than the current population of Florida, the nation's chief “retirement state”?) coupled with a tight labor market makes keeping workers on the job a crucial (yet frequently overlooked) business element for employers. As many insurers and employers are quickly becoming aware, disability benefits run to about 6% of a company's payroll, while overtime and replacement workers account for nearly 6% more.* Further, a Watson Wyatt and Washington Business Group on Health survey of 100 companies with more than 1,000 employees found that annual costs for lost time average about $5,000 per employee. Employers therefore are under increasing pressure to address their disability issues. But short-sighted and poorly conceived “solutions” aimed at holding the line on healthcare costs often lead to the very result the employer is trying to avoid. For example, an employer who decides to skimp on medical services (that would otherwise keep workers well) finds the ultimate result is increased disability costs. Aside from the avoiding the pitfalls that routinely accompany absence “mismanagement,” the insurer faces high hurdles in marketing and implementing an effective absence management plan. Planning an employee's return to work involves the disabled worker, physicians, supervisors and managers – forces that often are outside the insurance company's sphere of influence. *Watson Wyatt Worldwide study The Challenges of Effective Absence Management One major stumbling block for employers in controlling workplace disability is the hesitancy to act in a proactive, aggressive manner internally to coordinate their health and disability programs. We routinely see employers hiring different insurers/agencies to manage each one of their disability programs. In other cases, managerial inflexibility is an issue, where supervisors will not allow a disabled worker to return to a less physically demanding or alternate job, even on a temporary basis, opting instead to demand that the worker be restored to complete health before he/she returns to work. Another concern is the cooperation of healthcare providers. To address this key issue, Hoover continually works toward marketing an integrated health/absence management program to its potential clients. Consider that while health benefits cover medical treatment costs, disability insurance pays the employee's wages, while short-term disability policies typically pay most of a worker's regular wages (which drops to 50-60% when an absence exceeds, say, six months). Typically, even when we see these services being integrated in any manner for our potential clients, they are being performed by disability insurance providers who are simply hooked up in a healthcare company arrangement, representing a mere shadow of truly coordinated services. When services are fully integrated and coordinated, however, physicians are most likely to be cooperative because, among other benefits, it helps them evaluate patient status. Early I.D. is a Key to Effective Absence Management One key to controlling the cost of workplace absence is identifying potential absences early in the process – for example, long before an employee goes off the job for elective surgery. When a worker is approved for surgery through one of our program's insurers, a Nurse Case Coordinator is notified immediately. With approval from the worker, the NCC talks to the worker's physician and supervisor to form a rehabilitation and return-to-work schedule. In essence, our absence management program applies to workers on disability the same strategies managed care companies use to maintain or restore the health of the individual (such as in avoiding pregnancy/delivery complications or the more serious complications of diabetes), redirected toward getting people back to work. In this sense, an individual's disability is managed via a program in which the “patient” is followed not only to the end of the injury/disease (as would a healthcare provider), but all the way back to work. Choose a Proven Absence Management Firm As employers look for ways to cut rising disability costs, Hoover continues to develop and tailor absence management strategies to get employees back to work from disability status in the shortest time possible. While our absence management program is customized to address the specific needs and business philosophies of our clients, in every case it combines elements of managed healthcare with those of disability insurance lines. In so doing, we have been able to reduce our customers' disability costs by as much as 20%, primarily by reducing their disabled workers' return-to-work time. ...SAVING MONEY THROUGH IDM... Rising disability costs can be controlled if disability programs (like long- and short-term disability and workers' compensation) are managed in their entirety . Studies indicate employers can realize a 15% reduction in lost-time claims through IDM, and companies that integrate their disability programs incur a direct disability cost of 2.7% of payroll -- about half the cost for those that do not integrate. The bottom line? Proactive employers, insurers and healthcare providers know that integrated disability management is the most effective way to lower the human, social and financial cost of disability. Although all well-managed companies have disability management programs in place, despite the clear benefits of IDM, most companies continue to manage the processes separately. Hoover specializes in the provision of integrated disability management services. Call us today at 1-800-692-7294... |