Poor workers’ comp loss ratios offer opportunities for forward-looking CMs

How to grab your share of the market

It’s time for case managers to mount their white horses and charge to the rescue of a workers’ compensation market that can no longer offset poor loss ratios with investment income. As that market continues to harden, payers and self-insured employers will continue to demand the type of effective management approaches to lost-time occupational and nonoccupational claims that case managers are best-suited to deliver, say market observers.

"Until recently, workers’ comp premiums have been depressed — the workers’ comp market has been cheap for the past five years. Employers weren’t that anxious to lower their costs, but that’s taken a turn, and rates are going back up quickly," says William L. Granahan, CIC, LIA, CMC, a senior consultant and practice manager with Milliman & Robertson’s Boston office and co-author of the recently released report "Fifth Annual Milliman & Robertson Survey of HMOs: Integrated Disability Management and Man-aged Workers’ Compensation Strategies and Products."

"There’s already a growing demand for medical management and case management services, and few health maintenance organizations are in a financial position to respond to market demand," he says.

Granahan notes that individuals and organizations should be ready to offer employers case management services and to form preferred provider organizations geared toward occupational medicine. Through those efforts, they will be able to build a substantial client base as workers’ comp rates start to squeeze employers in the coming months, he says.

"The control of health care and those who see the value of case managers is switching from the hospital and community ballpark into the employer market. Employers control health care dollars and where they go, especially in this full employment economy," explains Catherine H. Garner, DrPH, RNC, FAAN, president of CareManagement.com, an Internet-based care management firm in Tucson, AZ. "This is a great time for case managers to go to employers and say, I want to work with you on improving your productivity.’"

Follow the trends

The key to successfully gaining an employer client base is to understand trends in the current workers’ compensation market and the opportunities those trends offer to develop services that fill gaps in the current market, says Garner. However, case managers also must have the ability to market those services to employers using a language they understand, she adds.

Granahan and his colleagues report the following market trends in the fifth annual HMO survey report:

• Workers’ comp rates are inadequate in most states to cover costs on the majority of lost-time claims.

• The costs of medical services, prescription drugs, and durable medical equipment continue to rise.

• There is a continued increase in the frequency and overall cost of workers’ compensation and disability claims due to an increase in the number of employed workers, an increase in salaries of those employees, and a predicted increase in the number of occupational stress claims.

"I see case management as a total solution to this growing mess," says Garner. "Employers up until now have been most concerned about who shows up for work and what gets done when they are there. Now, with near full employment, they’re starting to look at who doesn’t show up for work and what’s wrong with them."

Case managers must speak the language of employers and develop services that make sense to them, she notes. "Forget terms like healthy employees,’" Garner advises. "We need to get comfortable with terms like maximize your employees’ potential.’ Healthy people don’t mean anything to an employer, but productivity — that means something."

The first step to developing services that appeal to employers is to identify the work force issues that impact employee productivity. Garner says those include:

• chronic disorders;

• illness/absence;

• preventable injuries.

Understanding the employee health issues that affect productivity should help case managers develop programs to address those factors that hurt employers’ bottom lines, she says.

"Many health plans are doing integrated workers’ comp/disability management, but all that does is bring the claim into one central location and then funnel it out where it needs to go. What if I have diabetes that is poorly managed? If nobody is helping me monitor my diabetes, and I drop this podium on my foot, the cost of managing my injury is going to be much higher. That’s where case managers can develop products that make a difference to employers — in those no-care zones.’"

Services to consider

Here are Garner’s suggestions for services that case managers should develop for the employer market:

1. Risk profiling. "Health assessments are easily administered in the workplace. They can be done on-line and blinded so that employers receive good information on their employees’ health risk without breaching patient confidentiality," says Garner. "Once you’ve identified employee health risks, you can suggest targeted intervention programs."

In addition, understanding the health profile and demographics of the employee population also allows the case manager to make benefit recommendations that save the employer money. "For example, an employer probably doesn’t need to spend money on extra maternity coverage if the average age of employees is 52. You can help employers design health plans that make sense for them and save money. That will make you very valuable to an employer client."

2. Disease management. "Many health plans offer disease management programs," Garner notes. "The problem is, if you work full time, exactly when do you attend a disease management program? How does the health plan reach you with good education and monitor- ing services?"

A growing number of employers are asking their health plans to provide disease management in the workplace where it is more accessible to employees, she says.

3. Quantifying absenteeism. Case managers also can help employers track absences and develop services that address the most common reasons for employee absence. "Many times we find the employees take sick days not for themselves, but to care for a sick child," says Garner. "It might be worth considering employee assistance programs that address that issue."

One employer with a high percentage of female employees found that many absences were related to employees keeping appointments for annual mammograms.

"At the urging of the company’s occupational health nurses, the company brought family health clinics and mammogram machines to its sites with large numbers of female employees," says Garner. "The nurses began to add up absences and found that women lost a half day of work for their general physicals and another half day for their mammograms."

Quantifying absenteeism also helps case managers market occupational health and safety programs to employers. "What if you find that an employer has a great number of back injuries? Employers need to meet regulations for mandated worker safety programs. Case managers can deliver those programs."

4. Job requirements/classifications. "Case managers are well-qualified to review job descriptions and help employers determine at what point a person is not able to meet the job requirements of a specific position," says Garner.

As the population continues to age, she notes that employers may have a need for case managers to help them evaluate and accommodate an aging work force. "Employers have a great deal of fear about age discrimination right now. Case managers can help employers evaluate employees’ production expectations and safety issues at different age levels."

5. Benefit administration/coordination services. "I predict that we are going to see an increase in the number of employers who tell their employees, Here is your $500 health care benefit. Go out and buy whatever coverage you want.’ Several large employers have already adopted this type of policy," Garner says.

Employees already have sued their health plans for denied or delayed services. Garner says she sees a day in the near future when employees sue their employers, as well. "I don’t believe it’s too far-fetched that an employee decides to sue an employer for inadequate health care coverage," she says. "The next logical step after you’ve sued your HMO for denial of benefits is to sue the guy who bought the policy. That’s why I believe many employers will get out of that business in the near future. When that happens, it will create a new opportunity for case managers at the same time."

Improving employee satisfaction

Garner says case managers should approach employers with employee health benefit education classes. "You can offer to help employees select the best plan for their particular health needs, or you can offer to have a counseling session where you explain the benefits covered by the employee’s particular plan."

She suggests case managers approach the human resource and financial staff. "Ask them how many complaints they get from employees each year about their health insurance. Tell them you think you can help increase employee satisfaction and decrease complaints by walking employees through the fine print on their benefits packages."

Case managers also can offer counseling to employees on how to work with their health plans. "If a prescription isn’t covered, where else can the employee turn to get that medication? Case managers have the answers to those questions. Employers rarely think in that regard, but they are consumers, too" she says. You can gain employer clients if you address those issues.

6. Care coordination/nurse triage programs. Most employees report satisfaction with their health care services once they enter their providers’ offices, notes Garner. However, she says, employees report dissatisfaction with the time they are forced to wait to be seen by their physicians. "Case managers can offer employers a triage system that helps get patients into their provider’s office in a more timely manner. Tell employers they’ll have a more satisfied work force. Any time you can help manage one of those no-care zones,’ you will help employers improve productivity."

An excellent place to start your entry into the employer market is your local chamber of commerce, Garner says. "I encourage you to sit through a few lunches with employers and listen to their concerns. Then, if an opportunity presents itself, educate them about case management and what it can do for them."

Getting started

Once you have a better understanding of the health care needs of local employers, there are several steps to getting an employer’s business, she says:

• define the employer’s problem;

• identify alternatives;

• identify the costs and benefits of each proposed intervention;

• present your findings in a one-page format;

• start small.

"You may have many ideas that you’d like to propose, but start small and build the relationship as you demonstrate your worth," she recommends. (Several formulas for measuring success appear in the story on p. 147.)

In addition, Garner says it’s important for case managers to select a target market where they are most likely to achieve success. "Start with one or two very progressive employers who are willing to hang with you. Make sure the employer doesn’t have a high turnover, too. You won’t see a long-term benefit if the employer has high turnover." n