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Employers fear wasteful coverage overlap from array of benefits programs

Employers fear wasteful coverage overlap from array of benefits programs

Large employers face substantial challenges in trying to determine whether they are paying for wasteful coverage overlaps among an array of benefit programs intended to keep employees healthy and productive, observers say.

Employers are concerned because the numerous companies providing their workers with everything from health plans, employee assistance programs, disability management services, wellness offerings and workers comp claims administration could be doing more harm than good in some cases by conveying conflicting, uncoordinated advice.

Think of an employee suffering from a physical disability and depression who receives conflicting messages from a disability insurer's nurse case manager and an EAP's nurse case manager, said Thomas Parry, president of the San Francisco-based Integrated Benefits Institute. The conflicting messages could make the employee's life harder, not easier, and hamper their return to work, he said.

“It's not only an issue of coordination, but also an issue of making sure the vendors are delivering a consistent message to employees,” Mr. Parry said. “After all, that is what it's all about — getting employees the right care, the right help, the right information, the right programs. And if you have two vendors that are delivering different information, sometimes in conflict, then it is worse. You are wasting money and your employees are confused and frustrated.”

Issues surrounding benefits management integration are becoming more important to employers as upper management increasingly demands to know not just how much money the company is spending, but how much value it derives from programs that aim to keep employees productive and on the job, Mr. Parry said.


Employers seeking to manage these issues remain in the minority, said John C. Garner, principal at benefits consultant Garner Consulting in Pasadena, Calif. But it is a growing minority, driven by the realization that absenteeism and presenteeism often cost corporations more than they spend on health benefits for employees, excluding dependents, he added.

Yet employers striving to develop what is known as a “total health and productivity strategy” face challenges in integrating the delivery of benefits to make sure they are not wasting money on overlapping services, leaving holes in the care employees need and not providing conflicting information to workers, sources said.

Culling meaningful information from a mountain of data from each provider is the most significant challenge to determine whether a program is helping keep employees healthy and productive, said Daniel Shaughnessy, director of disability and wellness programs for Textron Inc., a diversified Providence, R.I.-based company that makes aircraft, automotive, lawn care and other equipment.

Outside providers' “data dumps” make it tough to determine whether there is a return on investment for the dollars spent, how many employees are using a specific program, whether those programs have helped employees and, if not, why not, Mr. Shaughnessy said.

“You can look at reports that are over 100 pages long and they don't tell me anything,” he said.

The problem is further complicated because some providers, such as health plans, are so large that each has business units or subgroups providing disease management, prescription drug plan management, wellness and other programs.


“There are all these different groups and some are within the same company and some are from different companies and they all overlay each other or impact each other,” Mr. Shaughnessy said.

Like Textron, other large employers also are examining how to bring their providers together to reduce absences, increase productivity and reduce their total health care spending, said Kimberly Mashburn-Lee, vice president of strategic client solutions at Pacific Resources Benefits Advisors L.L.C. in Chicago.

But that requires providers to share data and work together to help employees more easily navigate the maze of benefit offerings, Ms. Mashburn-Lee said.

“Otherwise, how are you going to come alongside your employee and assist him if you have a case manager at your disability company, a case manager at your leave management company and a case manager at your health insurer; and how does an employee know how to navigate all of that?” Ms. Mashburn-Lee asked rhetorically.

A challenge for providers is that each may have different data capabilities or data standards that can complicate information sharing with an employer, said Karen English, a partner at Spring Consulting Group Inc. in Boston.

Employers can overcome the challenge by contracting for data warehouse services, which would increase their costs. But the more benefit programs an employer offers, the more help they may need in integrating them, Ms. English said.

“The broader an employer's program becomes, the more they need (to evaluate them) because they need to see how these programs are working separately and working together so they can decide how they are going to continue to evolve them,” Ms. English said.

With limited budgets, employers may want to learn, for example, which among several disease management programs they offer most effectively improve return-to-work outcomes or eliminate absences and disability recurrences from occupational and nonoccupational illnesses and injuries, she said.

“Really, trying to figure out what is working is the key,” Ms. English said.