DISABILITY MANAGEMENT INTEGRATION GROWING

SANTA MONICA, Calif.-Integrated disability management is gradually becoming a reality as employers and insurers find ways to overcome obstacles to combining programs.

Even defining a program may be an obstacle for some, because program components vary, according to panelists at the recent Business Insurance Fifth Annual Workers Compensation Conference.

For office furniture manufacturer Steelcase Inc., establishing an integrated disability management program meant merging the administrative functions handling workers comp and short-term, long-term and permanent and total disability, said Edward Keeter, a company rehabilitation counselor and disability coordinator.

The Grand Rapids, Mich.-based company, which began its program seven months ago, now assigns those functions to one department. In addition, it has consolidated its claims with a single third-party administrator.

Steelcase has yet to integrate health care providers into its new system, though it intends to, Mr. Keeter said. Consequently, workers injured on the job are directed to one set of providers, while those injured at home may visit other health care providers.

An important component of an integrated disability program is that the accident or injury trigger standardized administrative services, regardless of whether it was occupation-related or not, said Elizabeth Lindner, executive vp in charge of the Claims Services Group, part of the Kemper Insurance Cos. in Long Grove, Ill.

In addition, "the focus has to be on getting employees back to health and then to work," she said.

An employer's workers comp and employee benefit services should share the same goal of prompt return to work, which may include transitional work until an employee is well enough to return full time, she said.

Unified data collection also will help integrate the programs, Ms. Lindner said. She recommended that injury data be kept by a common injury code, regardless of whether its cause was occupation-related.

"Integrated disability management is a step toward total health management" and should be viewed as a process, not a product, said Jenny Emery, principal and practice leader for total health and disability management with the Towers Perrin consulting firm in Weatogue, Conn.

While such an approach seems simple, it hadn't been undertaken until relatively recently, said Charles J. Amis, vp-corporate markets practice leader with Provident Companies Inc. in Chattanooga, Tenn. It has taken time to break down barriers, including organizational and institutional ones stemming from the separate way workers comp and disability coverages have been viewed by insurers, regulators and employers, he said. Provident's subsidiaries provide life insurance-related coverages as well as disability benefits.

A small but growing number of companies are looking at developing integrated programs, panelists said.

About 20% of large employers are managing disability and trying to integrate it with workers comp, said Towers Perrin's Ms. Emery. In addition, a few pilot programs are testing some aspect of the integration concept. "The snowball is starting to roll," she said.

More than a dozen Kemper clients have coordinated programs now, Ms. Lindner said.

Even simple programs can pay dividends for employers that may not be ready to implement a full-scale program, she said.

For example, just having a common telephone number employees can call to reach case managers when they are going to be off work a number of days can save a company 10% in short-term and long-term disability costs by allowing early oversight of those cases, she said.

Mr. Keeter said Steelcase's 7-month-old program is too new to have reliable cost savings data. However, integrated administration already has demonstrated benefits, including the need for fewer claims handlers and less floor space. In addition, workers' claims-related complaints have substantially declined, Mr. Keeter said.

Savings from integrated management should come both from aggressive management of workers comp as well as the "more tactful" approach used on the employee benefits side to encourage workers to seek care and return to the job, he added.

Promoters of integration need to be realistic about the promises they make and the savings they predict, Ms. Emery warned.

In all programs, employer involvement is the most critical component, several panelists said.

Kathryn J. McIntyre, publisher and editorial director of BI, moderated the session.