Absence Management to the Max

April 9, 2003

One company's comprehensive program has been around for nine years and is still finding ways to expand.

Absence management to the max

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By Annmarie Geddes Lipold

One company's comprehensive program has been around for nine years and is still finding ways to expand.

Some employers really know how to stretch the envelope. Take, for instance, Pitney Bowes Inc. The mail and message services company wasn't satisfied with its exemplary absence management program, which already integrated group health, workers' compensation, short-term disability, long-term disability, Family and Medical Leave Act administration, employee assistance, occupational safety, work/life and wellness programs. This year the $4 billion firm folded in yet another set of benefits that help workers suffering mental illness or chemical dependency return to work sooner.

This latest initiative gives Pitney Bowes' 27,000 employees a consistent return-to-work policy for physical and mental disability based on functional capacity rather than diagnosis, says Corporate Medical Director Jack Mahoney, MD.

Pitney Bowes' comprehensive approach to employee health and productivity has been evolving since 1993, when it began to treat work-related and nonwork-related disabilities on an equal footing. Under the program, known as Time Out, employees make a toll-free call and receive assistance from the same nurse case managers who handle medical case management and return to work. Mahoney says that all this reflects a corporate philosophy of guaranteeing on an individual basis that employees receive the best care, ensuring an early and safe return to work.

What does the company get in return? Between 1993 and 2000, absenteeism related to physical illness fell 42 percent, the annual equivalent of the hours worked by 100 employees. Since 1999 the company also experienced a 13 percent decline in medical costs associated with disability. Clearly, Mahoney says, the effort has boosted productivity.

What moved the Stamford, Conn.-based company toward integrating benefit programs? The "alarm bell" sounded nearly 10 years ago, Mahoney recalls, when management noticed an unusual number of employees on long-term disability. At the time, the company did not have a consistent return-to-work effort for employees on short- or long-term disability, and its workers' compensation return-to-work program was limited.

A review of medical claims and payroll-based absence data also revealed an "excessive amount" of short-term disability claims with above-average duration, Mahoney reports, adding that "once you began to analyze the pieces, there was a commonality." Combining disability case management simply made sense.

Getting started

When Time Out was introduced nationally in 1993, Pitney Bowes had about 14,000 employees, most of them in Connecticut. The company formed a new department to handle disability claims and dropped its insurers and third-party administrators. "We did up-front evaluation and saw there was enough money to be saved to justify realigning some relationships," Mahoney explains.

Management took care to select "some really motivated people" to run the new program and hired top-quality nurses, Mahoney says. Eight years later, he's convinced that having either a separate internal unit or a single vendor to run the integrated program is the best approach to begin combining benefits.

Implementation included a new approach to return-to-work policies. "We are always looking at functional ability," says Mahoney, a mindset that can be applied to the Americans with Disabilities Act, Family and Medical Leave Act and other federal and state regulations. The paperwork may differ, especially for FMLA, but the claim pathway is the same.

Over time, the company modified the Presley Reed guidelines (The Medical Disability Advisor, published by Reed Group Ltd., in Boulder, Colo.) to create its own. Employees began coming back to work sooner because of effective case management, and their return was based on their ability to work rather than on a diagnosis.

A nurse case manager is assigned to any health-related absence that exceeds five days. Case managers also help employees who want to use FMLA. Helping family members get the best treatment means employees return to work sooner, Mahoney says.

In 1995, Pitney Bowes implemented managed care for its group health program and integrated the nurse case managers who handled disability with those who handled group health. "I wanted to get them together so there weren't two entities chasing at the same information," Mahoney says. The company's employee assistance program services were brought into the fold in 1997. Its wellness program followed in 1998.

Assembling an absence management program has had its challenges. Mahoney cites the difficulty of managing data, noting that the company has gone through three systems since it began integrating. Still, managing data helps Mahoney identify more opportunities to promote health and save money. When several complicated pregnancies were noted, for instance, the company responded with a maternity management program.

The decision to hire a vendor in 2001 to integrate mental health benefits into absence management was "gutsy," Mahoney admits, "in that we are trusting the behavioral health company to make these decisions. But it shields unwanted intrusions to the employee's privacy."

A freelance writer based in Arlington, Va., Annmarie Geddes Lipold has been reporting on workers' compensation, disability and employee health issues for the past decade. She is a contributing editor to Business & Health.

What other employers have learned

The Integrated Benefits Institute recently surveyed 11 employers to learn about their experiences in setting up integrated benefits programs. Here are highlights of the survey report, Lessons From Employers That Implemented Health & Productivity Management: Shortened Paths to Benefits Integration.

• Few integrated programs are able to promise savings at the outset, despite an expectation of savings, because of difficulty documenting baseline costs. Instead programs are sold with the promise of improved health care and enhanced employee satisfaction.

• Effective information system development is an issue. Most initiatives find ways to create management databases and reports without replacing legacy systems.

• Employers generally draw best practices in claims management from each benefit program into a central case management unit, rather than deconstruct departments responsible for individual benefits.

• All initiatives use a single contact for claims reporting.

• Most employers modify benefit plans, eliminating return-to-work disincentives.

• Family and Medical Leave Act administration is often part of integrated programs because the integrated approach helps determine and track FMLA eligibility across benefit program boundaries.

• Managing the transition from short-term to long-term disability can yield savings if a single entity creates incentives to discourage the transformation of disability cases into long-term disability claims. Double payments are also eliminated.

• Clear employee reporting requirements and a central case management unit reduce claim duration and are believed to be critical to disability savings.

• Most employers help supervisors fit the new program mandates into their existing responsibilities. The challenge most employers face is reducing supervisors' administrative workload, while supporting the personal contact employees need during recovery.

 

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Resource Links:

The Hartfordwww.thehartford.com

The Integrated Benefits Institutewww.ibiweb.org

The Washington Business Group on Healthwww.wbgh.org

 

Annmarie Geddes Lipold. Absence Management to the Max. Business and Health Time is Money: The Mechanics of Absence Management;21.