The return of 24 hour coverage?

A decade ago a lot of folks were working on ’24 hour’ coverage – the combination/integration of workers comp and group health and disability management. AIG, United Healthcare, Reliance National, Broadspire (nee Kemper) and Unisource Administrators were among the players; the Integrated Benefits Institute was founded, and consultants formed practices and marketed their expertise to interested parties. (disclosure – I was heavily involved in the AIG-UHC, Reliance-UHC, and Unisource-UHC-AIG programs)
Then it all sort of faded away, and not much was heard until today’s announcement that Sedgwick CMS and UHC have re-entered the market.


The idea has a lot of merit – managing disability should be as important on the group side as it is for WC, and managing medical should be focused on how best to keep people fully functional, a metric sadly absent from most medical management efforts.
There are so many reasons this makes sense – productivity is absolutely critical to industrial competitiveness; employers suffer whenever an employee is absent, regardless of the cause; there is needless and expensive duplication of processes and staff functions.
The tough part is getting employers to buy the program.

Among the challenges Sedgwick and UHC will face are:
silos – decisions on WC are typically made in the finance/treasury/risk management department while group health is in benefits/HR. The people in these departments can be pretty protective of their turf, unfamiliar with the other coverage, and evaluated on the success of their specific program.
timing – policy renewal dates are often different, thus employers looking to integrate the programs have to ‘short year’ one (usually comp) to integrate with the other.
flexibility – comp is highly regulated, with states dictating what employers can and cannot do to manage medical, direct to provider networks, authorize treatment, and pay providers. Conversely, the large employers that are (assumption) the target market for 24 hour are largely self-insured for group and thus have a lot of flexibility re benefit design, networks, coverage options, funding arrangements and the like.
cultureWC and group health are like chalk and cheese (gotta love the Brits’ colloquialisms) – a ‘member’ in group v, a claimant in comp; a ‘claim’ is a bill in group v the entire episode of care for a disability in comp; group docs practice watchful waiting (e.g. back injury treatment), comp docs want to get a diagnosis and treatment started stat; comp is often litigious and group rarely so; comp and group disability benefits are often different.
buying patterns and motivations – when the WC market softened, employer interest in 24 hour waned pretty dramatically. In today’s soft market, employers are just not that concerned about WC costs, and therefore are not focusing staff on finding solutions. Without pain, there is little motivation to do anything.
These obstacles are by no means killers – the market will harden, smart employers will figure out how to overcome cultural issues, and UHC and Sedgwick have good distribution and lots of smart people.
But it is going to be tough sledding for a while.

4 thoughts on “The return of 24 hour coverage?

  1. I worked on this back in the mid-80s for a major insurance carrier on the business side. It didn’t go far because of all the reasons you mentioned plus one…the databases for the medical side (HMO/PPO)and the P&C side could never match data successfully and therefore could not prove savings. The 2 claim platforms (only 2? That company had nearly a dozen)were designed for two entirely different purposes. IMHO, millions of dollars will have to be spent on designing a database/claim system specifically for 24 Hour coverage for this to be successful.

  2. To say that there are obstacles is an understatement on the order of saying there are some philosophical differences of opinion among various countries in the Middle East.
    Coming in from the technological angle, where I have extensive experience with development and deployment of software designed to bridge the gaps described, I believe the biggest challenge is selling the employer the idea of hanging in there the 18-36 months it will take to prove out the numbers. In order to sell the employer, the top management of the WC and GH have to be singing the exact same tune. Workers Compensation has become so specialized and focused on niche differences over the years, that it has bred some executive management with sharply focused tunnel vision with scorn for fellow industry competitors. Imagine the disdain for group health methodology.
    If the prospective employer gets a whiff of that division in the ranks, give up on the sale.

  3. While the naysayers come out with the usual objections, I salute Sedgwick and UHC for acting on their own business data as obtained from the EMPAQ annual survey. EMPAQ (Employee Measures of Productivity, Absence and Quality) provides a single report for employers showing standardized measures for health and productivity management for each category of absence – Disability (STD and LTD), Work Comp, group health, FMLA and incidental absence. This data collection and reporting tool has been developed and is managed by the National Business Group on Health and the University of Michigan. It is statistically significant and reports baseline data that impacts the employer’s bottom line – average benefit cost per employee, average benefit cost per claim, Return to Work effectiveness among others.
    As employers begin to analyze and compare results from the variety of employee benefit products purchased, seriuos issues will be raised about the fractured insurance sytem and solutions for integration will be required. Both Sedgwick and UHC currently participate in the EMPAQ review – how wise they are to see the results and introduce a solution.

  4. Are you kidding me? Why are we so intent on dividing people into their relevant insurance categories with concerns about which format the claims management system will take on. If we look at humans with injuries or illnesses, at work or not at work, and capture data on the “person” level (with indicators for why their using insurance benefits. since we’re so used to this, e.g. workers comp, STD/LTD, health, auto, etc.)
    For those employers who still pay for these types of benefits, it seems like just bucketing the money differently – more aggregately, could make the entire health care system run more smoothly. Incorporate return to work programs with disease and/or case management and some UR to encourage appropriate utilization and provide a balance of services to help people lead healthier lives.
    Though they allegedly do, providers should not be treating patients differently based on their line of insurance. Outcomes should be identical regardless of line. (Am I preaching to the choir?)
    I haven’t recently looked at the data on total health care expenditures across ALL industries that pay for health care for all people (in the US), as compared with actual expenses for all of these services (for everything – facilities, personnel, equipment, Rx, administrative, etc…), as compared with what is charged and ultimately reimbursed; I’m sure the data is out there, but it just feels more and more like universal health care is the best possible solution if all segments were aggregated.
    Happy holidays!