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ATLANTA-In a fantasy world where risk managers imagine themselves, employee benefits and workers compensation have been integrated into "workers' benefits."
There is accessible and affordable care in this place, and claims management is a marvel of efficiency. Of course, there are cost savings, and hosts of happy employees churn out widgets with no complaint of how their concerns are handled.
Just a dream?
Not completely, said Andrea Trimble Hart, director-insurance and risk management at The Pillsbury Co. in Minneapolis. After reading from the Lewis Carroll poem "Jabberwocky," she told attendees at a session held during the annual conference of the Risk & Insurance Management Society Inc. last week in Atlanta that they may be able to put themselves in the fairy tale land of integrated benefits.
"Administering group health and workers comp programs and group disability separately can lead to information distortion, lack of coordination, inefficiency and opportunism," which doesn't make for a happy ending, she remarked.
Integrated benefit programs, like so-called 24-hour plans, generally combine benefit payment and claims handling of occupational and non-occupational injuries.
To take her audience to a mythical place, Ms. Hart suggested they first imagine their companies were going through the annual planning process. "And there are some significant cost increases. You learn that benefit costs are higher than last year and workers comp costs are up 25%. This is the scary part."
In that imaginary land, the risk manager would be able to easily identify the causes for rising costs.
"Some of these include absenteeism," Ms. Hart pointed out. "Five percent of your workforce is absent at any one time.*.*.litigation is higher than the norm and too many workers compensation cases are litigated. Several of the employees are getting workers comp and disability benefits."
All, of course, are real-world problems for many risk management and employee benefit departments.
The happy part of the story is that by developing a system that integrates management and administration of workers comp and employee benefits, employers could see changes they may have only dreamed of before.
"Your company when seen through the looking glass," Ms. Hart said, "might appear like this:
"There is a single phone number for your injured employees to call whether they got hurt at home or on the job or they aren't sure."
The 800 number also allows electronic transmission of claims reports. There is a single form for any type claim.
"Claims adjudication is performed by the same person regardless of whether the injury is occupational or not," Ms. Hart noted. "There is an invisible transfer of denied workers comp claims to the health benefits payer for swift payment," she added, eliminating confusion for the employee who is less likely to seek an attorney because of a denied claim.
Comparable reporting procedures for both workers comp and health insurance claims eases the administrative burden for employees and supervisors alike," Ms. Hart said. "A single case manager provides a consistent approach to case management and some would go as far as to call it care management, as all types of medical care are administered similarly."
Physicians are able to apply sports medicine techniques to ensure the fastest recovery time. There is a reasonable use of specialists and physicians act as partners striving for wellness and the expedient return of employees to work, regardless of the source of injury.
Bill review and utilization review are applied equally to all types of claims to spot overcharges and excessive treatment.
A single database is in place to help spot "double-dipping" by employees who want to collect workers comp and disability payments.
"Quite a fairy tale, you might say," Ms. Hart told her audience, acknowledging that some might be thinking, "when pigs fly this will happen in my organization."
And in fact, she said, her own company does not integrate its workers comp and employee benefit programs.
Ms. Hart warned that while some companies may be able to implement some of the aspects of an integrated plan, others may find it is not for them.
"Not every corporation will benefit from integration. Some aspects of an integrated plan may suit your organizations, others may be impossible to implement. You should be interested in taking your organization to the best place it is capable of going," she said.
For example, light-duty programs might be difficult for some manufacturers, she said, depending on their production procedures or whether collective bargaining agreements with unions are in place regarding light-duty programs. "Larger employers generally can create light-duty jobs more easily than smaller employers," she said.
In addition, large employers have greater costs related to injuries and therefore have the potential to save more than smaller companies. Large self-insured employers generally can use some of the aspects of integrated benefit programs because they "have both the control and the flexibility to integrate the programs that best meet their needs," Ms. Hart said.
There are advantages for small employers that want to use techniques of integrated benefit programs, according to another panelist at the session.
"Dozens of our clients have had between six and 30 employees at a site," said Dr. Ford Brewer, medical director for Meridian Occupational Healthcare Associates Inc., a Nashville, Tenn.-based operator of worksite medical units.
Those clients have used different methods to take advantage of worksite medical services to treat occupational and non-occupational injuries, he explained.
Sharing the onsite medical service with other employers is one way small companies can realize savings, Dr. Brewer explained. "A lot of our sites are in New York, so you can have a significant advantage there." A stock exchange, for example, is a site where dozens of employers have workers in the same place who can access the medical unit.
Dr. Brewer pointed out how his company's services have helped employers realize significant savings.
A heavy manufacturer client with more than 5,000 employees used Meridian's disability management services to help bring down workers comp costs. Soon after the client began realizing annual savings of around $2 million from the program, it began to explore whether the same could be done for non-workers comp injuries.
After implementing the techniques to non-occupational injuries, savings on that side of the ledger eventually totaled $2.5 million per year.
Those who try to implement programs likely will run into some internal barriers, Pillsbury's Ms. Hart cautioned. "Beware, the Jabberwock takes on many guises."
A "false sense of security" can be an internal barrier, she said, "a we've-always-done-it-this-way mentality, or worse-insurance is a cost of doing business" as an excuse. "Plus, the distrust, fear, hostility, territoriality and history that may exist" between employee benefit departments and risk managers can impede implementation of programs, she noted.
Overcoming some of the barriers "might require a mighty sword," Ms. Hart advised. "But think about this: Make the issue an organizational challenge," pointing out that the entire company wins because of cost-savings and other benefits from an integrated program, she suggested.
"Begin resolving tension by developing knowledge and trust, which starts with communication. Bring groups together to identify commonalities, whether they be goals or problems. Identify that on which you can first agree then begin to attack the more contentious issues slowly to ensure that everyone continues to support your action steps," she advised.
There also are legislative and regulatory barriers in the way of developing some types of integrated programs, Ms. Hart pointed out.
"There are 11 states with enabling legislation, mostly for what are known as 24-hour coverage products," she said. "In many states, regulations have not been established or rules on how to manage some of these programs. So in many places, a lack of regulations is still a barrier in bringing these programs together."
The session moderator was Millicent Workman, corporate risk manager at Mueller Industries Inc. in Nashville, Tenn. The program was coordinated by Catherine D. Bennett, account executive and consultant with Cost Control Concepts Inc. in Madison, Tenn.