Getting Smart with Lost Time...Getting Smart with Lost Time: Integrating Workers Comp & Disability...
Transcript of Getting Smart with Lost Time...Getting Smart with Lost Time: Integrating Workers Comp & Disability...
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Getting Smart with Lost Time: Integrating Workers Comp & Disability
Karin Landry, Managing Partner, Spring Consulting GroupKevin Confetti, Deputy Chief Risk Officer, University of California
Fredrik Finnman, Head of Group Risk Management, Sandvik Group
March 11, 2019
Not a New Concept!
• Varying degrees
• Different paths
• Mix of resources
• Always evolving Leave
Workers’ Comp
Disability
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Why Do It?
Opportunities for Optimization
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◼ Definitions◼ RTW policies◼ Compliance◼ Program links
◼ Intake◼ Notification and
communication◼ Automatic triggers◼ Case management◼ Documentation
◼ Fully insured◼ Self insured◼ Hybrid◼ Captive◼ Claim and expense
patterns
◼ System platform(s)◼ Tracking◼ Access by managers
and employees◼ Electronic data exchange◼ Integrated reporting◼ Metrics
Plan & Policy Design
Process & Procedures
Technology & Reporting
Funding & Financials
Management
The End Goal: Target Efforts to Population Needs
Productivity/Presenteeism
Health/Wellness
Keep these employees healthy and productive
Get these employees healthy and productive (modeling, outreach, EAP,
wellness, education)
Enable these employees to live with illness
HealthyHealthy
with Risk Factors
Minor Illness
IllnessMajor Illness
Stable but Chronic
Unstable, Chronic
Catastrophic
Productive Present/ Absent Absent
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Implications for Stakeholders
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Employees
Managers
Corporate
• Fewer points of contact• Clearer process to follow• Faster turnaround times
• Improved information access• Increased self-service options• Decreased confusion
• Reduced time spent1
• Easier process to explain• Clarity of role in process
• Increased visibility of EE status• Meaningful tracking & reporting• Anytime/anywhere access
• Improved compliance2
• Easier administration• Better experience
• Reduced costs3
• Actionable trends & benchmarks• Higher employee engagement
1 It takes 2.5 hours to manage a single FMLA claim (SHRM)2 The average verdict for wrongful termination is $335,000 and it costs employers an average $78,000 to defend an FMLA
lawsuit (US Dept of Labor Wage and HR)3 Employers savings range from 0.25% to 1.00% of payroll; 5% to 25% of direct program costs; 10% to 35% lower STD durations;
average 6% increase in RTW rates; and overall ROI from 3:1 to 15:1 (Spring, IBI, Industry Benchmarks)
Levels of Savings Achieved
10%
11%
9%
15%
13%
12%
12%
5%
6%
6%
7%
21%
20%
23%
21%
20%
18%
18%
19%
17%
21%
18%
26%
25%
23%
26%
27%
25%
25%
26%
26%
24%
25%
20%
19%
18%
14%
15%
22%
16%
17%
18%
20%
17%
13%
12%
10%
12%
10%
9%
12%
20%
19%
13%
13%
10%
13%
17%
12%
14%
15%
17%
13%
14%
16%
20%
Reduce direct costs of group healthor medical
Reduce lost time for disability orworkers' compensation
Decrease claim incidence rates
Reduce internal staff/FTE count*
Reduce direct costs of disability orworkers' compensation
Decrease overall absenteeism
Decrease gaps in employee care
Increase employee satisfaction
Increase employee engagement
Increase return to work rates
Increase employee healh outcomes
None (0%) 1% to 5% 6% to 10% 11% to 15% More than 15% Don't know/unable to measure
Employer levels of savings or
improvement are significantly
higher than in 2016 with the top five metrics being
increased employee
satisfaction; reduced direct
costs; increased employee
engagement; increased RTW
rates and decreased claim
incident rates
Any Savings
81%
76%
74%
73%
73%
73%
72%
82%
80%
78%
73%
Source: Spring Consulting Group’s Integrated Disability, Absence and Health Management Employer Survey, 2018.
Continual Touchpoints Involved
Return to Work(Restore Productivity)
Stay at Work(Preserve Productivity)
Full Capacity
Lost Time
Wo
rk S
tatu
s
Full Capacity
Sick/Vacation/PTO
FML/Other LOA
Medical BenefitsMedical & Disability or Workers’ Comp Medical Benefits
HPM Programs
Leav
e an
d B
en
efit
Usa
ge
Successful programs not only impact lost time, but keep employees at work and/or prevent them from going out in the first place
Sources: Spring Consulting Group, Unum Health and Productivity Connections, An Employer’s Guide to Managing Lost Time9
• Many stakeholders involved
• All play varying roles
• HR/Benefits and RM have different perspectives
• Who takes the lead depends on the company, the coverages and the case
HR/Benefits
Risk Mgmt
Occ Health
Adm Vendors
Safety
Legal/Labor
EE Relations
EAP/Wellness
Interaction Required
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Most Common Approach is Phased• Programs are implemented in a phased manner, with priorities for services varying by workforce type,
size, culture, buying sophistication and product awareness.
Health and Productivity
Management
Total Absence Management
Integrated Disability
Management
Disability Management
“HPM”
All IDM components plus…
▪ Links prevention, health, disease, and behavioral management
▪ Allows for strategic planning and HR as business partner
“TAM”
All DM and IDM components plus…
▪ Expands to other time-off programs such as sick, PTO, vacation, to really any reason an employee is away from work
▪ Supports workforce planning and budget activities
“IDM”
▪ Disability and/or WC, with FML as baseline
▪ Single intake process
▪ Common case management, RTW and SAW
▪ Other LOA included
▪ HPM program referral
▪ Integrated▪ Data▪ Tracking▪ Reporting
“DM”
▪ STD, LTD with same vendor
▪ Telephonic intake
▪ RTW and SAW
▪ Comprehensive reporting
Case Study #1: Healthcare OrganizationThis client is currently insuring both of their retained long term disability (LTD) and workers’ compensation (WC) risks in their captive
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0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
LTD WC Total LTD WC Total LTD WC Total
Loss
es
in $
Mil
lio
ns
Combined Program Experience Last 3 Policy Years
Paid Loss To-Date Unpaid Claim Estimate
2015 2016 2017
There is an observed reduction in the volatility between policy year
totals compared to LTD and WC on a stand alone basis
Case Study #1: Healthcare Organization
• Benefits of this integrated LTD and WC insurance program include:• Observed stability in results due to the effect of diversification
• Negative correlations between LTD and WC in recent years have created additional stability in year-to-year total loss experience
• Risk management of individual claims is greatly enhanced
• A return to work program was implemented and paid for by the captive• The goal of placing more than 75% of employees with a work capacity to a transitional duty
role within 5 days of their release to work date was far exceeded
• Top workers’ comp claim cost drivers within the last 3 years were strains and slips/falls
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Case Study #1: Healthcare OrganizationAnticipated Cost Savings
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Client
Client Client RM)
Client Client RM)
Client Client RM)
Client WC claims Client RM)
Industry
Benchmark Costs
as % of Payroll
Client Costs as a %
of Payroll
Estimated Mid-
Range Savings
Disability 2.00% $14,910,197 $2,236,529
Workers' Compensation 1.50% $11,182,647 $1,677,397
Unplanned Absence 1.90% $14,164,687 $1,416,469
Vacation 6.00% $44,730,590 --
Total Direct Costs 11.40% $84,988,120 $3,093,866
Indirect Costs (1 X Direct) 11.40% $84,988,120 $3,093,866
Total Direct and Indirect Costs 22.80% $169,976,241 $6,187,732
Overall Return on Investment (ROI) Expected to Range from
3:1 to 5:1 depending on
detailed program aspects
implemented
Case Study #2: U.S. Manufacturing Company• The company engaged Spring to conduct an analysis of the overall
health of the client’s workers’ compensation program
• This entailed reviewing the frequency of claim incidence/loss and the severity of loss by division
• It also involved the following activities:• Collecting triangulation of incurred losses for medical and indemnity and
corresponding payroll by policy period, division and operation unit• Analyzing data by division and operating unit to identify frequency and
severity trends and ultimately the top operating units that warranted further focus
• Identifying outliers or additional information, and agreeing upon how operating unites could be prioritized for next phase of analysis
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Case Study #2: U.S. Manufacturing Company• Higher claim frequency rates were observed in the two divisions that
had the worst claims experience
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$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (6mos)
Ult
imat
e Lo
ss R
ate
Policy Year
The Americas Entrance Systems HID Hospitality
The blue and orange lines
toward the top indicate Spring’s
focus
Case Study #2: U.S. Manufacturing Company
• Summary of Findings• The division with the highest observed frequency of loss accounted for 75%+
of total losses in policy years 2015-17
• The division with the next highest observed frequency of loss incident had a 60% increase in loss rate since 2015
• The client’s overall workers’ compensation experience was counter to industry trends
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Next Steps
• Collaborate with team to: 1) understand the overall return to work policy, claim reporting and management process and protocol documentation and team organization structure and roles that can be shared 2) interventions that have been made to date and future changes that may be underway
• Collect available and further detailed data for the up to 3 operating units of focus to include parameters such as employee DOB, Job Title, Supervisor Name, Diagnosis, Claim Duration, Modified Duty Dates, FMLA and/or ADA Concurrency
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Case Study #2: U.S. Manufacturing Company
• Complete up to 3 site visits to get a sense of how policy, process and protocols are deployed
• Organize, analyze and selectively benchmark the detailed data against market and industry norms on Return to Work, considering the impact of client policies, processes, protocols and team structure
• Summarize findings to identify potential patterns and trends, perceived root causes and recommendations
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Case Study #2: U.S. Manufacturing Company
Although WC is the initial focus, findings will be leveraged for disability to identify further
opportunities for improvement
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Best Practice Area Minimum Mid-Range High Performers
Cost Savings5 – 7% program costs savings or
.25% of payroll ($2.7M for Client)
10 – 11% program costs savings or .50% of payroll
($5.5M for Client)
19%+ of program cost savings or 1% of payroll
($10.9M for Client)
Strategic Vision & Commitment
Committed resources, coordinated design
Committed resources; integrated design Committed SME resources; expanded design
Ownership & Accountability
Separate stakeholder management Absence Manager (or team) accountable Absence Manager accountable for outcomes
Comprehensive Technology
Efficient and centralized Advanced and centralized Advanced, centralized and concurrent
Consistent Communication, Education & Experience
Separate telephonic with letter and email follow up
Centralized (one call) with immediate notification (email, letter follow up)
Centralized (one call) and expanded with coordinated email and letters; follow up via text, auto calls
Supervisor training on absence protocols
Ongoing supervisor and manager training; linked to performance
Ongoing and just in time (videos, links, chat) supervisor and manger training; EE instructions
Coordinated RTW, SAW & Compliance
Transitional/modified WC RTW Formal WC/STD/LTD RTW Formal WC/STD/LTD RTW and ADA Accommodations
Program
Internal counsel familiar with absence regulations
Expert external/vendor legal counsel to turn to on an ad hoc basis
Combination internal and external legal counsel with real time interpretation
Supportive Metrics & Analysis
Data separate by stakeholder area but reviewed for overlap and trends
Integrated data and reports and metrics for benchmarking
Enhanced absence metrics, internal & external benchmarking, population view
Case Study #2: U.S. Manufacturing CompanyAnticipated Outcomes
Questions?
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Get in Touch
Karin LandryManaging PartnerSpring Consulting Group
Kevin ConfettiDeputy Chief Risk OfficerUniversity of [email protected]
Fredrik FinnmanHead of Group Risk ManagementSandvik Group+46 8 456 [email protected]
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