Absence Management

Integration, Evolved

As employer needs and challenges have grown more complex, integrated absence and disability management may provide an answer.
By: | July 27, 2017 • 8 min read

Despite the significant buzz surrounding the concept of integrated disability management when it emerged, it never became quite the industry standard that many expected. Two decades later, however, employers are finding new reasons to take an interest.

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“Back in the mid ’90s, IDM emerged as a hot topic, but the focus at that point was on creating a single organizational unit to manage both occupational and non-occupational disabilities,” explained Tom Parry, president emeritus and co-founder of the Integrated Benefits Institute (IBI).

“And as you might imagine, the people in those separate units didn’t like the idea of someone winning and someone losing.”

People worried, perhaps justifiably, that bringing together occupational and non-occupational programs would mean consolidation, and that jobs would be eliminated, said Parry. So there was tremendous pushback against establishing one organizational unit.

And while those separate organizational units are still in place, a great many other things have changed. Employers, particularly large ones, have achieved a high level of claims sophistication. Newer claims technologies and analytics are allowing them insight into their data at a level never before imagined, prompting employers to leverage that data to find opportunities to improve absence and disability management across programs “rather than trying to break down walls between them,” said Parry.

Tom Parry, president emeritus and co-founder, Integrated Benefits Institute

“I think that we’ve realized that sharing information, creating integrated databases, and really looking at and using data as a way to identify real issues is really what’s driving this process,” he said.

As opposed to only viewing data within silos, integrating information allows employers to see commonalities across programs that might not otherwise be obvious, and also can help identify opportunities to share practices and resources for the benefit of all programs.

“If you can benchmark the [individual programs] by diagnosis,” said Parry, “then you can start to look across programs and see — does the workers’ comp side do a better job with back injuries, for example? What kinds of diagnoses are prominent in both systems? and how can I bring a strategy in medical management and return to work that really focuses on those as the first step?”

Protecting Productivity

The economic and labor landscapes have changed as well. Companies are operating leaner, and upheavals in numerous industries have created talent shortages. Now, more than ever, employers are grasping how each absence takes a toll on the company, even beyond the obvious.

Matt Sears, executive vice president of employee benefits at EPIC, related a story about a meeting with a CFO of a large national retailer. Sears was in the process of translating the company’s lost days into dollars and cents when the CFO asked him to focus on the number of lost days again.

“I think that we’ve realized that sharing information, creating integrated databases, and really looking at and using data as a way to identify real issues is really what’s driving this process.” — Tom Parry, president emeritus and co-founder, Integrated Benefits Institute

“That’s more important to me,” the CFO said to Sears. “We deliver to our customers, so if I have people who are missing days that means we’re missing delivery deadlines. That’s going to reduce sales for us and ruin our reputation — I’m more interested in how many of those days you can solve.”

“A lot of employers are starting to recognize that the Holy Grail isn’t claims costs,” said Sears. “The Holy Grail is productivity gains.”

That’s also why employers are shaking off the old thinking that non-occupational injuries should be treated with a hands-off approach, said Parry. He said there’s a growing focus on utilizing return-to-work programs for short-term disability, and looking for opportunities to improve medical care and shorten disability durations.

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Global return-to-work programs often make sense as a way to introduce the elements of an integrated absence management platform, said Tom Ryan, market research leader with Marsh’s Workers’ Compensation Center of Excellence. Global programs are “agnostic with respect to whether it’s workers’ comp or non-occupational or disability related. It really looks at just the individual, their work capabilities, and the time frame for when they can return to modified duty.”

It’s a win-win for employers and employees, said Ryan, and it’s also one of the easier ways to get buy in from stakeholders, he said. “Nobody wants to say that they don’t want to bring people back to work — that doesn’t make good business sense.”

Regulatory Jungle

Experts said one of the most significant drivers of renewed interest in an integrated platform is the unruly tangle of absence and disability laws that employers are required to keep track of and comply with. There are hundreds of federal, state and municipal law related to job absence, including FMLA and a plethora of new paid leave laws to sort through.

Employers operating nationwide have their work cut out for them trying to stay in compliance.

And it’s all too easy to make a misstep, said Kelly Dieppa, vice president, Disability & Absence and Affinity Services Operations Head for Broadspire.

“How these new state leave laws intersect with comp claims and with short term disability … [employers] just don’t understand it,” she said.

Matt Sears, executive vice president of employee benefits, EPIC

“Those days are gone, of feeling like they have control over everything and they really understand everything; it’s scary to employers. We’re in such a litigious culture and it gets worse and worse. They want to make sure they’re covered.

“I think from a compliance standpoint it’s only going to get worse for employers — it’s not going to get better, that’s for sure.”

Dieppa said that when employers are using a more integrated leave administration platform and using a consistent approach across occupational and non-occupational programs, it puts them in a much better place from a compliance standpoint.

“You’re treating everyone through the same lens, applying the same method of screening and eligibility across the board. So even if it’s work related, you know right up front if they’re [also] eligible for a state leave law of some kind. Whereas in a traditional work-related situation, you’re just dealing with that workers’ comp claim itself — you’re not layering anything else in at the initial injury.”

Crunching the Numbers

The data piece of the puzzle is light years ahead of where it was at the inception of IDM, but it’s still labor intensive, said EPIC’s Sears.

“Depending upon the client’s level of sophistication and organization and access to all of that data it’s difficult for them to pull that together,” he said. In some situations, an employer might have every leave program administered by a different entity.

“There’s no magic box; there’s no single data tool,” he said.

“We pull data from IBI to use it for benchmarking comparisons,” he explained, but to do a proper analysis across programs, “somebody has to just roll up their sleeves, spread everything out on a conference table and start going through looking for the patterns,” he said.

The key for brokers and other vendors is to focus that data, said IBI’s Parry.

“The danger in that is the employer starts being inundated with reports. It really puts the onus on the supplier partner, whether it’s a broker or the company selling IDM, to really focus attention in reporting on things that matter, not just give the employer every possible exhibit that can come out of that integrated database.

“We have to really focus on what really matters, what’s actionable. What are the three things the employer should do, rather than giving them a 200-page report of every single exhibit that system can generate.”

Making the Case

Parry cautioned that integrating data takes time and money, which means making the business case for it. Nobody’s integrating data just for the sake of doing it, he said.

“You want to integrate data to have better results.” And that’s what the C-suite needs to hear.

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“If I’m going to the CFO and saying hey give me $100,000 to integrate our data, the CFO’s going to say. ‘OK, what are we going to get for that?’ You’ve got the have an answer for that.”

The pragmatic strategy, said Parry, is to “benchmark your individual programs, look for opportunities, and take some steps. Then go to the CFO and say, ‘Here’s what we’ve done with siloed data. If we integrate data, we can focus on individuals and really drive a much higher penetration of strategy and outcomes than we ever have before.

“I think that’s a strategy that can really work for employers.”

So while the old concept of building a single organizational unit for absence and disability management may be off the table, IDM is still a significant platform for helping employers improve productivity, increase efficiencies, and decrease risk exposures.

“We can build a stronger program together than we can apart,” said Pam Bogner, DMEC education programs manager. “We can increase the efficiencies for both the employer and the employee. We can have what the employer needs to minimize their risk exposure — whether that’s financially, legally, or otherwise — together versus separately.

“If we all respect each other, if we all listen to each other and work together, we can accomplish more. And it’s going to bring better quality to the employer, to the employees and decrease risk exposure from all perspectives.” &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]

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