Employers are saddled with $10 billion in annual medical and wage replacement costs of non-occupational disability insurance. This insurance covers only a fraction of the workforce. The total costs of non-occupational disability are much higher, ultimately showing up in social security disability awards. Rousmaniere: Do We Have a Role in Non-Occ Disability Absences?
It’s in our interest to expand our view to include these employee risks, and learn if we can help employers reduce employee disabilities that are not work related by cause. Can we apply the expertise we have in the workers’ compensation industry?
The answer is yes, especially regarding preventing and treating musculoskeletal problems. In round numbers, there are about 150,000 lost-time back work injuries each year, which is roughly equal to the number of non-occupational short-term back disabilities a year.
A recent study of employee disabilities over a five-year period found that a non-work disability-related absence costs in medical care on average about $45,000. That average is remarkably close to the average cost of a lost time compensable workers’ compensation claim today.
There are more non-work-related disabilities than there are lost time work injuries. On a per capita basis, the total health and wage replacement costs come to about $5,000 per worker per year. Compare that to the per capita costs of workers’ comp benefits of the American worker, which is around $500 (that is, when you divide the entire workers’ comp benefit bill by the total number of employees).
Brian Gifford is director of research at the Integrated Benefits Institute, which has researched for years how employers gain by coordinating their approach to employee health and productivity. The IBI knows more than any other group in the country about how work and non-work-related disabilities match up.
Gifford says that “Roughly two out of every five working-age adults have one or more chronic conditions that may place them at risk of a disability leave. This risk will increase as the labor force ages.”
Let these figures sink in. Total health and wage replacement benefits paid, for non-occupational conditions, are ten times what the workers’ comp benefit costs might be. And, any reasonable comparison will show that vastly more employees are at risk of a non-work-related disability than they are a work-related disability.
So what can we do? Workers’ comp people know essentially nothing about health conditions such as cancers and cardiovascular problems. But, according to a study, 38% of disability claims are for musculoskeletal conditions. We know a lot of about these conditions – something about prevention, a lot about medical care, and even more about return to work or stay at work. These are the musculoskeletal problems of backs, knees and shoulders.
The author of the study, in the February 2017 issue of Health Affairs, is Gifford.
The IBI reports that among employed U.S. adults, 11% are treated for back pain. Each year, employers with short-term disability insurance policies incur an average of 4.3 new claims for back pain per 1,000 covered lives. These workers lose on average 50 lost work days. On average, they cost about $10,000 in benefits.
As for long-term disability (LTD) insurance policies, there are about 2.7 active claims for back pain per 1,000 covered lives. Some 30% remain open two years after they begin.
Workers’ comp professionals know their way around conservative care for back pain, and in concert with regulators, have pushed back against opioids. But our industry’s expertise in back pain goes well beyond that.
I asked workers’ compensation professionals what the industry could do to help in medical care and return to work.
Kevin Schmidt of Workwell wrote to me that “we have seen that regardless of whether the pain was caused by work or weekend softball that it typically is made worse by work and the employer is well served by intervening early.” Workwell’s physical therapy services at the worksite address both work and non-work-related musculoskeletal disorders.
Michael Stack coaches employers on workers’ comp for AMAXX. He told me that for non-work-related back pain, the employee and her employer need to agree that problems need to be reported. “If an employer is not aware of the back pain, there is nothing they can do to address it until after it becomes a big problem.”
He went on to say that “the thing we do well in workers' comp better than group health is a mechanism and incentive to return the employee to work. The general default treatment is to stay at home to recover, this only prolongs the employee's pain and increases the potential for isolation and downward spiral. “
Gifford further writes, “About one in four employees in [the cohort he studied of 408,000 US workers] took a temporary leave of absence from work because of illness or injury in the period 2008–12. They accounted for nearly 60 percent of total worker health care and disability payments.” A comparable figure for work injuries alone is likely around one in twenty employees over a similar five-year period.
His finding underscores the value of the expertise in prevention, early intervention, treatment and return to work which we in the workers’ comp community have cultivated.
ABOUT THE AUTHOR
Peter Rousmaniere is widely known throughout the workers’ compensation industry, both for his writing and consulting experience. Based in the picture perfect New England town of Woodstock, VT, he is a regular on the conference circuit, and is deeply in tune with trends and developments within the industry. His passion is writing and presenting on issues largely related to immigration, and he maintains a blog on the subject at www.workingimmigrants.com.
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