Some companies have seen dramatic savings from using rehabilitation providers in return-to-work initiatives, but too few companies even attempt to measure the results.
That's according to Chesterfield, Mo.-based RGA Reinsurance Co., which recently released its findings from a survey of 66 disability carriers in the United States, United Kingdom, Australia, Canada and South Africa.
It finds widespread use of both in-house and third-party rehabilitation service providers -- with most companies tending to rely on third-party expertise.
Rehabilitation services include physical or occupational therapies designed to help insureds get back to work after time spent on disability.
The most successful company reported that, for every dollar spent on rehab services, they saved $57 by shortening the duration of the claim, according to RGA. The smallest savings was $3 for every dollar spent, according to the surveyed companies that tracked return on this investment.
Although most of the companies (90 percent) record and monitor information regarding expenses, a majority (60 percent) of the companies providing employee benefits do not measure ROI of their rehabilitation programs, according to the survey.
That did not surprise Mark Taylor, director, claims-consulting, RGA U.S. Group Reinsurance, who is one of the study's authors. "I know they don't really do that consistently and the way they measure it is all over the board," he said.
But regardless of how they measure the cost versus the expenses, he said, companies "should have a benchmark. If they are consistent in their measurement, they can use that to determine which claim is more expensive than another."
"They need to have a consistency in valuation of the rehabilitation services to demonstrate to senior managers that it's beneficial and cost effective," he said.
Noting the widespread difference in savings between $57 and $3, Kathy Thiesen, manager, research, RGA U.S. Group Reinsurance Client Services, said companies should aim for an ROI between $15 and $28.
Canada, followed by the United States, makes the most case referrals and "not surprisingly, perhaps, Canada reports the highest return-to-work success rates," according to the survey.
Only the North American companies appear to have "some automatic systems for referring cases for rehabilitation services," according to the survey. "The majority still use 'ad-hoc' case assessor referrals."
Taylor said a combination of both modeling tools and case-manager input is probably the most successful for making an appropriate referral to a rehabilitation specialist, as there are "so many variables" involved in disability claims.
-- By Anne Freedman
October 11, 2012
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