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.
– culture – WC 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.