The value of communication: Risk managers and insurers are seeing the value of getting everyone in on managing costs. New injury management efforts—including those involving the Internet—aim to get employees involved

Risk & Insurance, April 1, 2002 by Maddy Bowling, Cathy Johnson

Managed care, which was predicted a decade ago to be the cure-all for group health and workers' compensation program costs, has not lived up to its promises. As a result, employers have been caught in a serious financial squeeze because of rising costs and, in some areas of the country, difficulty obtaining coverage.

Moreover, as insurance costs are escalating, a depressed economy is bringing decreased sales and profits. Employer-driven solutions are more readily available to better manage group health costs than they are in workers' compensation. An employer can eliminate health care coverage as a benefit or increase deductibles and copayments. Not so in workers' compensation. Thus the rationale for exploring other creative ways to reduce loss costs, focusing on injury management rather than on the group health oriented managed care.

But how many employees in your company are asked to participate in safety, employee health, or return-to-work (RTW) committees? How many employees are involved in communication with a coworker who is out of work due to an injury or illness to encourage return to work?

How many employees understand the impact of an injury on the company's financial results? How many employees understand the impact of workers' comp costs on their own job security?

Would our injury management outcomes be different if we involved and empowered the employees and ensured their satisfaction with the workers' compensation process?

Creating Informed Employees

In a recent Injured/Ill Employee Gallup Survey conducted by Intracorp and Cigna Group Insurance, findings suggest that having informed and satisfied employees significantly impacts the outcomes. "Our study results paint a vivid portrait of the injured worker who is most likely to succeed and sends a strong message to employers," said Betsy Robinson, director, Intracorp IDM product development. "Workers who reported their information and communication needs were well met (before the loss, at the time of injury, and during their time away from work) said they were satisfied with the entire process. Overall satisfaction with the process correlated to a higher degree of satisfaction with employer outreach, which linked not only to more frequent returns to the workplace, but to significantly shorter time away from work. Workers returned to work in half the time than their unhappy counterparts when they perceived they'd been well-treated by their employer, regardless of the cause of their disability."

There is heightened interest regarding the injured worker's experience in workers' compensation. For example, the Workers Comp Research Institute has launched a multi-state injured worker survey to determine the:

* Interstate differences in key worker outcomes, e.g. health and functioning, satisfaction with medical care, return to work speed, sustainability and earnings recovery, and

* Quantification of the tradeoffs between medical costs and accomplishment of key worker outcomes, if such tradeoffs exist.

Why this increased interest in employee involvement and injured worker satisfaction? Many employers throughout the country are reeling from sticker shock as they review their renewal rates for workers' compensation and group health coverages. Group health premiums have been steadily increasing for several years; workers' comp premiums had been easing upward and now have spiked sharply.

According to William M. Mercer's most recent study, 2001 health plan costs were up 11.2 percent and increases are expected to range from 12 percent to 20 percent during 2002. Employers are facing even steeper increases for their workers' compensation coverage. A recent survey conducted by Council of Insurance Agents and Brokers revealed that commercial insurance rates (which includes workers' compensation coverage) were increasing across the board, some by more than 100 percent.

Injury Management Initiatives

Payers and employers are exploring new initiatives that attempt to involve the employees in better management of the bottom line. Travelers Insurance noticed employee passivity in recent focus groups that were conducted with both injured workers and employees who were never injured. VincentArmentano, VP of workers' comp claims, Travelers Insurance, notes, "Before an injury, employees feel that everything will get taken care of and they think they know how the system works. On the other hand, those that had experienced an injury were frustrated and readily admitted that they would have benefited from more information and involvement."

Using the feedback from these focus groups, Travelers developed the first workers' comp Web site for injured workers: www.mywcinfo.com. Here an injured worker can quickly access information and assistance around the clock on medical issues, frequently asked questions, state rules and regulations, state claims forms, claims office locations, medical network providers, and a prescription refill service.

Sedgwick CMS works with many employers, who "treat workers' compensation as a benefit and part of the employee's benefit package, rather than as a statutory obligation outside of the benefit plan," says Bob Wisecarver, senior vice president of the Sedgwick CMS workers' compensation practice. "Although not the only way to achieve results, this approach to workers' comp seems to engender a process that is less adversarial, more openly communicative and team based."