Intro: The Disability Management Employer Coalition's focus on disability and absence best practices has spurred data analysis and metrics to help employers fully integrate their workers compensation, disability and absence management programs, says Marcia Carruthers, DMEC's CEO/president.

In the early years, pulling together an “integrated” disability program meant implementing a bit of “sneaker net” and opening a spreadsheet, especially for self-insured employers.

The task of assembling data usually involved walking down a hall or up a flight of stairs to gain access to the source of health, disability, workers compensation or benefits claim information.

I speak, of course, of the dinosaur days of pre-Family and Medical Leave Act and Health Insurance Portability and Accountability Act privacy concerns. The trouble was, not many employers were analyzing data or establishing metrics or measuring programs successfully. That is where the Disability Management Employer Coalition and our focus on disability and absence best practices spurred on the practice.

One early member and innovator was Legacy Health System under the leadership of Terri Rhodes, DMEC's new education manager and respected industry consultant/expert. Legacy Health used the lost workday metrics from its self-funded workers compensation program to develop metrics for the integrated disability and absence programs. Using lost work days as a metric created the impetus for measuring productivity and was one of the early key indices used by Legacy to measure the success of the transitional work program.

Fast-forward to the early 21st century, when employer interest in data integration and benchmarking began to increase. DMEC noticed this turn of events in terms of the attendance at conference sessions that involved discussion of data analysis. In the late 1990s, breakout sessions were sparse and interest slim; then we began to see overflow situations and member demands for more programming. We began hearing things like, “Tell us how to calculate ROI” or “Do I need to externally benchmark my program?” or “How can I get my vendors to give me the information I need in a format that is usable?” Their voices were clear — their contribution to the bottom line and making the business case was imperative. The process had stepped to a higher level of sophistication.

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Loyd Hudson, manager of integrated disability at American Electric Power, uses benefit costs as a percentage of payroll to measure his disability management program. “Using this measurement allows you to take your disability costs and divide it by payroll for the same time periods and look at trending over time.” This formula allows an equal comparison of different-sized organizations; and when using payroll instead of head count, you can factor in wage increases over long periods of time. This formula works for workers compensation, long-term disability, sick leave and short-term disability measurement.

As an early adopter for data and metrics, Mr. Hudson used data from his workers compensation and disability programs to design a best practice for managing disabilities and behavioral health conditions. He reduced absences, increased restricted duty usage, managed nonoccupational absences, and saved his company millions in benefit costs.

Employers are not totally up to speed even now, with a number of challenges getting in the way. Our recent Employer Leave Management Survey observed that setting baseline metrics that can be tracked against over time is one best practice to establish benchmarks from the very beginning. Using an employer's own data tracked over a three-year period establishes that baseline.

Obtaining the information employers needed to document success, observe trends and predict future liabilities is still in its infancy. In many organizations, this is very difficult to obtain because human resources information systems, payroll systems, and risk and disability management departments do not house data in a similar format. Also, because of privacy laws, employers are reluctant to use Social Security numbers to identify employees, leading to difficulties in matching data by employee. When new systems are set up, there is little, if any, discussion among the various departments and generally data reporting becomes a low priority.

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An example of this comes from the Southern California Edison experience, under the leadership of Deborah Jacobs. As SCE expanded its absence management program, it was able to bring in multiple sources of data by creating interfaces with their workers compensation, disability and leave vendors. When the company updated to a new HR/time and pay system, although interfaces were rebuilt, metrics and reporting requirements were low on the company's system implementation priorities, and SCE lost many of the reporting and program metrics. Having to act quickly, SCE worked to develop new interfaces to its disability and leave vendor that included critical HR/time and pay data fields so they were able to get reporting from their vendor until metrics and reporting could be implemented in the new internal system.

Predictive modeling — the use of regression analysis to make future projections out of a historical data set — is starting to move the needle on getting to the front end of integration. It is helping to put health, wellness and productivity into the equation by concentrating on prevention rather than damage control, putting the emphasis on the positive rather than the negative.

In spite of a variety of consultants and data warehouse options for large employers, metrics aren't just for the big boys. Small employers also can be successful integrating their program statistics internally. Eugene Water & Electric Board has only 550 employees, yet HR disability program coordinator Sherry Schumacher was able to quantify the often-elusive incidental sick leave as part of her coordinated health and prevention programs, including return to work opportunities for workers compensation and nonoccupational cases.

She relates two foundational suggestions for an integrated program: “You will want to ensure you have management support and the data/metric reporting that will be critical to measuring program success.”

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Vendors are cooperating in the data-sharing process, spurred on by employer demand for access and integration. Aetna Inc. recently announced that it will team up with Broadspire Services Inc., ESIS Inc. and Gallagher Bassett Services Inc. to integrate workers compensation claims filing. This process is expected to provide more efficient claims data sharing between workers compensation, disability and absence management programs and to offer employers more choices in integrating their programs.

The future of integration will depend on the careful analysis and use of data. It will be incumbent upon all vendor partners, external and internal, to contribute to this needed source of information. It will be part and parcel of the breakdown of the silos and a loosening of the hold on previously and closely held information. We will all benefit from this next step in defining and growing the now 20-year journey of full integration for all.

Marcia Carruthers is CEO/president at the Disability Management Employer Coalition. She can be reached at 800-789-3632, ext. 108, or ceo@dmec.org.