Back in 1992, Sharon Kaleta was hired to set up a self-insured, self-administered long-term disability program for a large aerospace company in Southern California. It wasn't easy.
She discovered that the company already had several disability programs with a hodgepodge of policies and practices. But it was a "big stew without much flavor," as she describes it. The situation, highly inefficient and costly, was entrenched. Reform seemed impossible.
The unexpected and daunting challenges that job presented led Kaleta to convene an informal brainstorming session with some of her counterparts at other companies who, she discovered, faced similar challenges.
Today, that brainstorming group has evolved into the large, national employers' organization known as the Disability Management Employer Coalition, or DMEC, with Kaleta still at the helm.
DMEC, based in San Diego, has 12,000 members. It provides educational resources on disability, absence, health and productivity through conferences, networking, publications, training programs and other tools. Many of its members are risk managers.
Since its inception, DMEC has been riding the crest of a wave of change in the way employers view, and provide for, employee disabilities. The organization focuses on how to lessen the impact of disabling illnesses and injuries, not only on employees but also on corporate organizations.
Over the years, the idea of integrating all the benefits, policies, and case management components of workers' compensation and short- and long-term disability into one program has taken hold.
As a result, the job of disability management has become more professional. Companies now seek to help employees return to productive employment, regardless of the cause or nature of their injuries or illnesses.
"Our first big effort was to try to break down the silos within organizations," says Kaleta. "The problem was that people would go out on disability and stay out for years, and nobody checked. Companies had different programs managed by different people, and payments came out of several different buckets in the organization."
It wasn't unusual for the workers' comp doctor to provide different information than a regular doctor. But the nature of the injury remained. A broken leg is a broken leg whether it happened on the job or off.
"Meanwhile, some people were double-dipping, through no fault of their own," Kaleta says.
One department, for example, would authorize benefits to an injured worker. Another department would follow suit. A third department would do the same again. There was no integration, no communication, no attempt to break down the wall separating the silos. In some cases people were getting more on disability than they got when they worked.
"And there were no return-to-work programs," Kaleta says. "Millions of dollars were just going down the drain."
Through conferences, classes and publications, DMEC became a leader in the move to change employer thinking about employee injuries as companies began to understand the value of integrated programs and processes.
"An actual shift occurred in the industry," says Kaleta. "More and more employers are recognizing the need to change their internal operations to support a more coordinated process."
That shift, she says, happened in part because of DMEC.
Several years after its creation, DMEC expanded its message to include the value of modifying return-to-work programs to include on-the-job and off-the-job absences.
"It was not unusual for risk managers to have return-to-work programs for those injured on the job," says Kaleta, "but for those injured off the job--HR thought they were not to be touched, that the company had no right to try to bring them back to work.
"There are still employers who say they have no control of people injured off the job," Kaleta says. "I say, 'Why not? They're not at work, and it's affecting your bottom line--so why do you think you have no control?'"
Programs that encourage ill or injured employees to return to work help rein in disability costs. They do that by telling employees, "'We want you to come back to work as soon as it's medically allowed--no matter how your injury or illness happened--because we value you,'" she says.
THE HEALTH COMPONENT
According to Kaleta, work absence costs U.S. businesses as much as $5,500 a year per employee. But that doesn't tell the whole story, because the cost of absenteeism is greater than the payment of wages and benefits during an absence.
Employers also have to consider the indirect costs of staffing, scheduling, retraining, lost productivity, diminished morale and higher turnover. Sometimes the indirect costs exceed the direct cost of absenteeism, she says.
It was only natural, then, for DMEC's focus to segue into promoting good health to prevent absenteeism in the first place.
"We are growing away from just dealing with workers' comp and short- and long-term disability," she says. "Now employers are realizing the health component is the huge part of this puzzle."
She says employers are taking a closer look at health care as it relates to an integrated process. More employers are bringing in new programs to keep people healthy and to identify trends that could result in lost time. Many of these same employers, she says, are buying products like disease-management programs.
"In the old days, if someone went out with cancer, they just went out," Kaleta says. "Now, we realize that just because you have cancer doesn't mean you can't work. So employers are providing better health-care delivery, and at the same time they're identifying jobs that employees can still do--even if it's at home."
Kaleta expects the area of health and wellness training to be one of the largest areas of growth for disability management in the future.
"EAP programs are being utilized to a greater degree now, too, especially for behavioral risk interventions, because employers finally recognize that there's almost always a psychological overlay with long-term disability," she says.
The future of disability management holds even more challenges as baby boomers age.
"Older workers are often overweight, smoke and suffer from arthritis. They also suffer from loss of vision and hearing. It's a huge bloc, and they can't afford to quit working," she says. "They'll be in the workplace longer, so employers will have a longer time to pay for their aches and pains."
Luckily, and in part because of DMEC, employers are just beginning to take a look at how this group is going to influence benefits in the future.
JULIE LIEDMAN lives in Philadelphia.
December 1, 2006
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