Prepare for Access Issues Now
How will the Affordable Care Act impact workers’ comp? Opinions vary, and so does the research, said Bill Wilt, president of Assured Research, at a session entitled “Healthcare Reform: Strategies You Can Apply Now,” presented at the 2014 National Workers’ Compensation and Disability Management Conference & Expo in Las Vegas.
Wilt presented the session jointly with Denise Algire, director, managed care and disability corporate risk for Safeway Inc.
According to the 2014 Workers Compensation Benchmarking Study published by Rising Medical Solutions, 73 percent of respondents said that the ACA had not yet impacted claims.
However, most believe that an impact will eventually be felt. There is significant disagreement over whether that impact will be positive or negative.
A recent RAND Corp. report suggested that higher rates of insurance take-up would result in less fraud by injured employees without health insurance and less embellishment of real claims. In addition, the report suggested that the ACA focus on creating a generally healthier population overall would positively impact workers’ comp costs across the country.
But, Wilt said, he wasn’t sold on RAND’s results. An Assured Research study of the effect of insurance enrollment on workers’ comp loss ratios showed results all over the board, with evidence of the positive correlation RAND suggested in some states, but with flat results in other states.
Curiously, there was evidence of the opposite effect in many states, with higher insurance take-up correlating to higher loss ratios.
The bottom line, though, said Algire, is that whether you think the ACA is a positive or negative thing, it has changed health care, which unarguably will affect workers’ comp. Employers need to be prepared for the fallout.
Where that will be most keenly felt, she said, will be provider shortages. “Prepare for access issues,” said Algire.
Employers’ should be prepared to cultivate partnerships with outcome-focused providers, she said. And to put an emphasis on front-loading care. That means putting the lion’s share of energy and resources into resolving claims at the primary care level, working to resolve them before they require heavy specialist care, which is where provider shortages will most dramatically impact outcomes.
Facing the Road Ahead
There are both new and evolving challenges facing workers’ comp practitioners in the coming years. But there is also an increasing level of sophistication among those who are working to meet those challenges.
Top carriers came together for a meeting of the minds for a session entitled “Workers’ Comp Insurance Exposed: Views from the Industry’s Leading Carriers.”
The session, presented at the 2014 National Workers’ Compensation and Disability Management Conference & Expo in Las Vegas, was led by Eric Silverstein, senior vice president and risk management leader for Lockton Cos., included participation from Russell Johnston, casualty president for the Americas Region with AIG Inc.; Debbie Michel, executive vice president, commercial markets with Liberty Mutual Insurance and president of Helmsman Management Services; and Sean D. Martin, vice president with The Travelers Cos.
One development carriers are encouraged by is an increase in employers exploring benefits integration, bringing together disability, health care and workers’ comp.
“The challenge is that many customers look at it in a bifurcated way,” said Johnston. A more unified approach can help employers address the issues that affect outcomes across the spectrum, which are of increasing concern for employers as ongoing economic woes continue to force older employees to work as long as they’re physically able.
A more holistic approach can help improve outcomes from both the occupational and the non-occupational sides by working to improve the overall health of the employee population.
“If you have a healthy employee, regardless of age,” said Johnston, “you’re going to have a better outcome.”
The potential to positively affect outcomes and cut costs across the whole of an employee population can also provide substance for workers’ comp professionals trying to make the business case for wellness investments such as on-site gyms or an on-site nutritionist, Johnston said.
Going forward, there are plenty of positives to build from, panelists said. Currently, 22 states have filed for rate decreases.
“If there’s any point in time where I think the industry has been exceptionally good at risk selection and pricing, it’s today,” said Johnston. And employers that have been diligent about managing their risk profiles can expect significant improvement.
Still, there’s a great deal of room for improvement, as evidenced by California’s ongoing challenges. Despite the most recent round of reforms, California is still plagued by dramatic increases in injury frequency and severity, and by crushing backlogs in the independent medical review process.
The uncertain fate of TRIA’s renewal is still on the radar for employers as well as carriers, but panelists said they are cautiously optimistic.
They are somewhat more concerned about other looming threats such as physician capacity and hospital consolidation, the Affordable Care Act, and cost shifting into the workers’ comp space, said Martin.
Carriers are also closely watching the development of interest in workers’ comp alternatives.
The formation of ARAWC – the Association for Responsible Alternatives to Workers’ Compensation – by many large companies is a clear sign that there is interest in an expansion of alternatives to state workers’ compensation systems, such as the nonsubscriber system in Texas and the recently enacted Oklahoma option, to other states.
In the end, said Michel, it will be up to states to find the “balance between doing the right thing for the economy and doing the right thing for the injured worker.”
Roosevelt’s Vision in Action
“This is an outrage,” wrote Theodore Roosevelt to Congress in 1908, explaining the need for a system of workers’ compensation. “It is a matter of humiliation to the nation that there should not be on our statute books provision to meet and partially to atone for cruel misfortune when it comes upon a man through no fault of his own … .”
Fast forward a century or so, and Roosevelt would be amazed by what workers’ comp and risk management professionals are accomplishing every day. Employers of all stripes are thinking creatively and maximizing resources to preserve the safety and well-being of employees while simultaneously looking out for their organizations’ bottom lines.
Part of what drives that progress is the continual sharing of ideas and strategies that work. At their core, that is what the Teddy Awards are all about.
To help select this year’s Teddy Award honorees, we enlisted the help of Bryan Schwartz, corporate risk manager of American Infrastructure, a 2013 Teddy Award winner; Bruce Jones, director of insurance and Texas plan administrator at Community Health Systems Inc., a 2012 Teddy Award winner; 2014 Risk All Star Patricia Hostine, U.S. director of disability management at Flex-N-Gate; Mark Noonan, managing principal at Integro Insurance Brokers, and Roberto Ceniceros, senior editor of Risk & Insurance® and co-chair of the National Workers’ Compensation and Disability Conference® & Expo.
The Elements of a Winner
Any analysis of Teddy Award contenders starts with the numbers. Injury frequency, lost time and medical and indemnity cost data is carefully evaluated with an eye toward year-over-year performance improvement. Judges factor in fluctuations in staffing levels, varying hazard conditions and other issues which may influence outcomes.
But the numbers never tell the whole story. Judges look for programs that are not only successful today, but have the tools in place to remain successful for the long haul. Flexible, sustainable programs have the infrastructure in place that can adapt if the company grows, shrinks, merges with another company, launches new product lines or even alters its business model.
Teddy Award winners distinguish themselves by applying a holistic approach to risk that addresses the entire pre-injury through post-injury spectrum. Their programs contain elements addressing safety culture, injury prevention, training and wellness strategies while also managing medical costs, ensuring the best recovery outcomes, minimizing lost time, and getting injured associates back to work swiftly and safely.
Teddy Award winners also exemplify the “it takes a village” paradigm in their approach to collaboration, and have painstakingly forged teams — either internally or including third parties — with the risk expertise and skills to make their programs successful.
Focus on the Positive
Lost time is the enemy of both employers and injured workers. The longer an injured person remains out of work, the less likely it is that he or she will ever be able to return. That’s why the effectiveness of return-to-work programs is closely examined by the judging panel.
Effective return-to-work programs require the right mind-set. It is not enough to rely on a doctor’s restrictions stating what the person can’t do. Instead, employers must be looking at what an injured worker can do as well as what he or she can do with some type of accommodation. That opens up the field to creative thinking and helps employers find productive work that benefits the organization while keeping injured employees engaged, active, and motivated to heal.
Sprinkled among the application narratives was something else Teddy Roosevelt would have been heartened to see. Successful employers are building health, safety and workers’ comp programs with a genuine goal of caring for their people. This truth was not lost on this year’s judges. If you focus on what’s best for employees, judges said during the judging process, cost savings will follow.
If that is the trend that guides the next century of workers’ comp professionals, Roosevelt’s legacy will be far greater than he ever dared to dream.
Read more about all of the 2014 Teddy Award winners:
Building Value with Trust: Honda of South Carolina boosted its involvement with injured worker cases, making a positive first impression on employees and health care providers.
The TLC Behind the Roar: A proactive and holistic approach to employees’ well-being has resulted in huge reductions in work-related injury claims for Harley-Davidson.
Quick to Act: Compass Group is lauded for its safety initiatives and for a return-to-work program that incorporates all of its business lines.
Healing the Healers: Teddy Award winner Cold Spring Hills Center for Nursing and Rehabilitation proved that even small organizations can make a huge difference in their employees’ lives.