Risk Insider: David Theron Smith

Integrated Disability Management: Time to Move On

By: | August 7, 2014

David Theron Smith is divisional VP, risk management for Charlotte, N.C.-based Family Dollar Stores, and President of Family Dollar Insurance, Inc. Smith was a 2010 Risk & Insurance Risk Innovator of the Year as well as a Liberty Mutual Responsibility Leader. He can be reached at [email protected]

Workers’ compensation and health care professionals have discussed Integrated Disability Management (IDM) for years while some companies failed trying to implement IDM and others succeeded.

Advocates define a successful IDM program as one that, “manages, coordinates, reduces lost time at work, while avoiding duplication of compensation payments and oversight resources, resulting in reduced expense, benefit and productivity costs.”

Excited by the concept, we buy in, launch into action … and like a flare shot over a ship in distress, the IDM initiative then gracefully fades away …

As a result of the failures rather than successes, IDM has a poor reputation. It’s time to re-imagine this concept, revisit the approach.

Driven by Affordable Care Act (ACA) mandates, dialogue concerning health care quality has accelerated. New program opportunities present themselves.

Health care management and wellness are increasingly cultural with a 24/7 approach. Necessity will drive increased overlap of medical management with the best cost containment tools already applied in health benefits and workers compensation.

Under the ACA mandate, corporate benefits departments face increased scrutiny. Human resource and risk management teams must develop strategic plans and approaches re-examining traditional corporate health care initiatives.

The old IDM concept as an effective absence management tool has never effectively taken off for three main reasons.

  • Companies have a culture of departmental silos. Although similar, Human Resources and Risk Management objectives fall victim to territorialism.
  • The IDM concept — although logical and with merit, segmented process coordination and ownership results in confusion and inefficiencies.
  • As a result of IDM’s absence management focus, medical management becomes secondary. The reverse must occur. Aggressive medical management is the key to absentee outcomes. Currently IDM execution is backwards.

A recent study by Aon revealed that 2 percent of organizations surveyed included Risk Management in the renewal process for all corporate insured risk benefits (life, disability, accident, medical).

Herein, is the opportunity — a merger of the best practices and experience of human resources and risk management. Health care & disability management are critical management components in both human resources as practiced in health insurance STD, LTD administration and in workers’ compensation under Risk Management.

We must re-brand IDM, integrate practitioners and focus on total workplace health care.

  • Focus on quality medical management should be primary. As consistently demonstrated in effective WC programs, strategic health care management drives disability outcomes.
  • Integration of the risk management and benefits departments would result in talent efficiencies while cost containment tools would drive increased expense control, accelerated wellness, improving corporate productivity.
  • A unified, integrated approach would provide consistent, centralized occupational and non-occupational health care management coupled with wellness support for employees.

There is a growing health consciousness in American society. Increased employee and consumer sophistication will result challenging and demanding accelerated, high quality outcomes based health care like never before.

The risk management community has the experience, skills and creativity to meet this challenge. It is important to recognize this opportunity to reach across the aisles, demonstrate leadership in the development of integrated health care, disability and wellness management.

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The R&I Editorial Team can be reached at [email protected]