Top 10 Disruptors of 2020 for the Workers’ Comp Industry, Identified by 602 Stakeholders
For the past three years, Healthesystems has surveyed professionals across the workers’ compensation spectrum to get a sense of their greatest perceived challenges. Normally, those professionals are recruited from the Risk & Insurance booth at the National Workers’ Compensation and Disability Conference & Expo. This year, the survey was disseminated entirely online, for reasons we understand all too well.
Indeed, the ongoing COVID-19 pandemic has impacted the survey’s results as much as its format.
This year, respondents were asked to rank the top 10 disruptors that have had the most significant impact on their organization in 2020. You can probably guess what took the top spot, but the responses also reveal longer-term, systemic challenges within the industry that will continue to disrupt operations until solutions are developed or fine-tuned.
Here’s a look at the top 10 disruptors identified by 602 industry stakeholders and what they could mean for workers’ comp going forward.
Unsurprisingly, 73% of respondents ranked the pandemic as their top disruptor, and COVID-19 has had several disruptive effects on the industry.
As with many industries, the sudden shift to remote work strained IT infrastructure and made communication more fragmented, at least in the short term. In workers’ comp, where communication with multiple entities across the already fragmented health care system is vital, care management became more challenging.
In fact, in the early days of the pandemic ensuring adequate care for injured workers was more difficult as providers struggled to determine how to serve patients both safely and effectively.
These challenges were compounded by some injured workers’ inability or hesitance to keep medical appointments due to the risk of exposure to the virus.
Though claims decreased sharply amid the retreat to home offices (makeshift or otherwise) and the rise in unemployment, industry leaders worry the drop could be disguising lingering injuries that will materialize as a surge of new claims once jobs return and workplaces are slowly repopulated.
As the points below will describe, the pandemic has also exacerbated other top disruptors that were presenting challenges well before the first case of COVID was confirmed.
2) Psychosocial Factors
Psychosocial factors refer to the social and environmental conditions that affect an individual’s psychological wellbeing.
Over the past several years, workers’ comp organizations have moved toward a more holistic, biopsychosocial approach to care that acknowledges the significant impact these factors have on recovery. About 46% of respondents pointed to psychosocial factors as an early warning sign of a complex claim.
“It is well established that anxiety and depression are leading drivers of medical costs, workplace absences and loss of productivity. Coupled with the fear of job loss, actual lay-offs, financial insecurity, social isolation and decreased access to health care, the likelihood of injury and illness increases for those who are still working, particularly non-remote workers,” said Dr. Robert Goldberg, Chief Medical Officer, Healthesystems.
Understanding these factors, though, doesn’t necessarily mean that claims professionals can do much about them.
Addressing psychosocial risk factors remains an uphill battle, and the pandemic has only added headwind to that trek. For that reason, 27% of respondents ranked psychosocial factors as a top disruptor.
Fewer personal interactions outside the home may have injured workers feeling isolated and lonely, or prevent them from getting the hands-on assistance they need. Conversely, the same circumstances could trap others in unsafe or unstable home environments.
In either case, the stress of the situation is sure to complicate recovery, and the extent of the problem may not be immediately clear to case managers.
3) Mental/Behavioral Health
Last year, respondents ranked mental health exposures as their fourth most significant challenge. This year, 26% identified mental and behavioral health issues as a disruptor, signaling that the industry is still grappling with how best to handle mental and behavioral health in the context of a workers’ compensation claim.
Mental health encompasses one’s emotional and psychological state, while behavioral health includes actions or behaviors that impact that state, such as substance abuse.
Similar to psychosocial factors, there are no clear guidelines or standards for workers’ comp claims professionals to follow in addressing mental and behavioral issues that exacerbate physical injury, aside from opting for medications without addictive properties.
And, as with psychosocial factors, the social isolation and access to care issues caused by COVID-19 have made the situation worse for many.
“We are seeing marked increases in treatment for anxiety and depression, suicide attempts and substance abuse in response to the stresses and isolation caused by the pandemic,” said Dr. Goldberg.
Going forward, claims organizations may need to develop more definitive guidelines and best practices to fully and consistently address the psychological, behavioral and social aspects of injury and recovery, minimizing their disruptive effect.
4) Access to Care
The pandemic has also complicated access to care.
In the spring, strict lockdowns meant services like primary care, physical therapy, dentistry, lab and diagnostic centers were closed. Non-critical surgeries were canceled with no rescheduled date. And the idea of visiting the emergency room of a hospital filling with COVID-19 patients was not worth the risk for many.
Most injured workers had no choice but to wait it out, which can negatively impact recovery not only due to delayed treatment but also increased stress.
“Unless telemedicine services are aggressively utilized by physicians and supported by payers, it is inevitable that timely initial treatment of non-emergency injuries will occur leading to higher overall medical costs, indemnity and duration of care,” said Dr. Goldberg.
Delays also result in higher costs. According to a study by the, Workers’ Compensation Insurance Rating Bureau of California, medical and indemnity costs were significantly higher for claims that experienced treatment delays of 30 days or more due to the pandemic.
For example, claims with low back sprains cost on average $4,323 with early treatment. Claims with delayed treatment cost $15,274.
Though in-person care has become available again in most parts of the country, case managers will still have to navigate the safety protocols adopted by individual providers — and whether the risks associated with visiting a medical facility are worth the benefits.
That’s why this year, 22% of respondents ranked access to care as a key disruptor.
Telehealth itself is nothing new, but the rapid shift to virtual platforms amid the pandemic — spurred by limited access to traditional care — was the first real test of systems’ quality and reliability.
“One silver lining to the pandemic is the marked acceleration of the adoption of telemedicine by physicians and payers in workers’ comp and commercial health insurance. This trend bodes well for the future as primary care and specialty care access should be enhanced for workers, especially those who have limited access now,” said Dr. Goldberg.
About 22% of survey respondents identified this shift as a top disruptor for 2020. When asked about ways their organization adapted to the COVID-19 crisis, 58% cited an increased use of telemedicine, 30% pointed to use of tele-rehab services for physical medicine, and 17% mentioned virtual behavioral health therapy.
In most cases, these platforms passed the test.
While not an ideal solution for every injured worker or every injury, many patients have reported satisfaction with the quality of their virtual visits — including physician follow-ups and physical therapy — and enjoyed the flexibility afforded by taking appointments at home.
There are still regulatory questions around provider licensure, debate about reimbursement levels, and concerns over security and privacy.
But the pandemic may just have been the catalyst needed to spark more discussion and action around these issues. Having proven their worth, telehealth platforms are here to stay, and this is one disruptive force with potential to improve outcomes over the long term.
6) Interoperability Between Disparate Systems
Digitization and automation of manual processes yields efficiency gains and higher quality case management by freeing up adjusters to focus on meaningful decision-making, not administrative tasks.
In 2019, survey respondents foresaw the growing relevance of advanced platforms, identifying claims processing and workflow automation tools among technologies likely to significantly impact the industry in the next three to five years.
Challenges arise, however, in getting these systems to work together. Interoperability between disparate systems was seen as a disruptor by 17% of respondents in 2020, and 29% believe improving interoperability will be among the most important new technological advances over the next few years.
“Connecting all stakeholders along the workers’ compensation patient journey, at the right time and through the best channels, is key to improved health outcomes and patient satisfaction,” said Kristine Kennedy, SVP, Product Strategy and Innovation at Healthesystems.
“Establishing data and communication standards that make this possible is long overdue for our industry. We saw the interoperability challenge tackled in the pharmacy arena of health care with the help of NCPDP standards during the late 1970s into the early 1980s. They proved that interoperability between seemingly disparate systems is achievable, and we can also accomplish this in the workers’ compensation and health care environments,” she continued.
“We have seen significant advancements in technology over the past decades and the forthcoming CMS 2021 technical mandates will help push us toward more seamless integrations.”
Systems that talk to each other more seamlessly could yield improved communication and coordination of care, while saving a few headaches. Interoperability is certainly something stakeholders would like to become less disruptive in the near future.
7) Mobile Technology
A little more than half (53%) of respondents said their COVID-19 response plan included transitioning to a remote workforce. Mobile technology has become critical to keep operations running smoothly in this environment. Many industry leaders suspect that working from home will persist even after the pandemic has subsided, as employees appreciate the flexibility and lack of commute.
If VPNs and virtual meetings are central to the future of work, then workers’ comp organizations may have to increase investment in their IT infrastructure to ensure systems can support operational demands indefinitely.
That prospect may be why 16% of respondents identified mobile technology as a disruptor. For others, mobile technologies may be seen as an increasingly important solution, having been identified as the second most important technology of the next 3-5 years, right behind telehealth.
Mobile technologies can be used not only to connect workers to their employers, they also connect workers’ comp stakeholders to one another, including — and most importantly — enhancing communications about and directly with patients.
“Over 96% of Americans have a mobile phone and that has changed how we communicate, so I’m not surprised that it’s an important issue,” said Kennedy. “Health care is complicated and even more so for workers’ comp injuries that have to be treated outside of a person’s regular health insurance.
“At Healthesystems, we recently conducted a study to uncover pain points for various stakeholders in workers’ comp, including patients, claim handlers, and others from insurance carrier and TPA organizations,” she continued.
“We found many opportunities from the time an injury occurs all the way through to when the claim is settled, that can be better facilitated using mobile technology with other channels to provide information, empower patients, and make it easier for claims professionals to provide the right services at the right time.”
8) New and Expensive Medical Treatment
Only 15% of respondents saw new and expensive medical treatments as a disruptor during 2020 — a surprisingly low number considering 53% of respondents identified this as a top challenge in 2019.
Again, the pandemic is likely behind this apparent reversal of opinion. With many surgeries and elective procedures postponed or cancelled, and increased unemployment driving a reduction on work-related injuries, some of the biggest cost drivers for the workers’ comp industry have been nullified this year.
However, it’s possible new and expensive medical treatments will inch back up on the list of concerns and disruptors once delivery of care resumes a quicker pace.
Thanks to stricter formulary management, closer monitoring and legislative restrictions, opioid prescriptions continue to fall in the workers’ comp patient population. According to NCCI data, opioid utilization fell 13% between 2011 and 2016 and keeps dropping.
In 2020, only 14% of survey respondents selected opioids as a top disruptor. There is some concern that the stress and anxiety induced by the pandemic could drive an uptick in substance use disorders, including opioid dependency, but it seems unlikely that this class of addictive pain medications will ever see a resurgence as a preferred prescription in workers’ comp.
“The opioid epidemic may be resolving but current vigilance is required. A shift to non-pharma and non-opioid approaches to treatment of injuries still needs stronger encouragement,” said Dr. Goldberg.
10) Artificial Intelligence
Artificial intelligence was the least disruptive force to make the top 10 list, with just 9% of respondents selecting it. However, three times as many, roughly 27%, said they see AI as the most important technological advancement likely to impact the industry over the next three to five years.
As with mobile technology, it may be that artificial intelligence is perceived by many as a potential solution. AI and machine learning capabilities can help claims organizations turn their data into actionable insights faster and with less expense.
“AI can be applied to so many different areas of workers’ comp health care to help us do more,” said Kennedy.
“At Healthesystems we think of AI as Augmented Intelligence because it is at its most valuable when combined with human intelligence. Artificial intelligence is a powerful tool that can be used to inform important decisions by finding meaning in vast amounts of unorganized data, such as deciphering medical records in mass to uncover areas of concern and auditing larger samples with greater precision to improve quality and compliance.”
In a study conducted by National Institute for Occupational Safety and Health (NIOSH) and the Ohio Bureau of Workers’ Compensation (OHBWC), researchers used AI to auto-code more than 1 million claims, hoping to identify underlying causes and trends more quickly.
According to a summary by the CDC, “What took the revised computer program less than 3 hours to finish would have taken 4.5 years to manually code at an average manual coding rate of 2.2 claims per minute. With this success, researchers were able to create another major causation-specific U.S. occupational injury surveillance system.”
According to Kennedy, “We are beginning to live in the Jetson world with self-driving cars and robots (like Rosie) that anticipate our needs. In workers’ comp, Jetson style will mean anticipating which claims require more focus from experienced claim handlers to ensure the best possible outcomes with maximum efficiency.”
The COVID-19 pandemic is a unifying theme across many of these disruptors, presenting new safety threats, roadblocks to the recovery of injured workers, and operational challenges for workers’ comp organizations. It has overshadowed come traditional concerns in workers’ comp such as comorbidities and claim complexity, which took the second and third spots in last year’s survey of the industry’s top 10 challenges.
But this enormous disruptor could yield some positive long-term changes. On the technology side, the pandemic has illuminated what works and what doesn’t in the context of remote work, and could drive the increased investment in technology that many organizations need in order to move past the disruptive phase of new tools, and start reaping their benefits.
“The pandemic has caused an incredible acceleration of slowly progressing trends in the workplace, health care informatics and the delivery of health care. These trends will not be reversed, and the further adoption of new technology and solutions should only be strengthened in 2021 and beyond,” said Dr. Goldberg. &
About the Survey
In all, 602 stakeholders took part in the survey, representing every facet of the workers’ comp industry including executives, senior claims leaders, frontline claims professionals and adjusters, brokers and agents, medical providers, clinical case managers, attorneys, medical program managers and procurement professionals. By organization type, employers, state government agencies and insurance carriers were the three most prominent participants.
This year, there was increased participation by TPAs, managed care companies and health care providers, resulting in a more even mix of respondents. This may be due to the virtual nature of the survey — it was disseminated to a broader base of potential respondents beyond attendees of the annual National Comp conference.
Whether the disruptors of 2020 continue into late 2021 could determine whether it takes the same shape next year.