Large databases and analysis of claims data is often discussed in isolation, but what are the meaningful benefits that employers can achieve by examining the details in this data? Costs associated with labor are often cited as the main expense for employers. What if you could use this data insight to reduce costs associated with employees out on leave and the cost of replacement labor?
Analyzing the Data
One employer recently aimed to reduce the number of employees out on short-term disability (STD). They began by examining claim data about the specific reasons for leave, the duration of leave, incidence rate, and the associated medical costs for STD claims. Claims data analysis revealed that the medical costs of STD claimants were an average of 9% higher when the claimants also had signs of metabolic syndrome. Metabolic syndrome includes high blood pressure, high blood sugar, and cholesterol, which increase health risks when combined.
Addressing the Issues Found
To address the issue, the employer launched a revamped wellness program designed to target high blood pressure, cholesterol, body-mass index (BMI) and other biometric indicators of metabolic syndrome.
One year later the percentage of employees at risk of metabolic syndrome dropped four percentage points. This decrease resulted in an estimated saving of $140,000 in costs associated with employee absences and replacement labor.
According to a Gallup poll, 86% of employees are above their ‘normal’ weight. This extra weight results in associated illnesses costing American businesses an estimated $150-225 billion in lost productivity each year. Now I’m not suggesting you go out and start weighing your employees, but examining the reasons for employees leaves of absence as in the case above opens up a wealth of opportunity.
For example, if your employees sit at a desk for eight hours a day there can be associated risk due to weight gain and metabolic syndrome, mental illness, or back pain due to sitting all day. Dreamworks has installed a Ping-Pong table in their staff room to encourage employees to “refresh themselves mentally and physically” while engaging with co-workers. I have also seen this implemented at Vodafone and in Google. Honest Tea offers their employees bicycles at cost through a partnership with a local bike company to encourage employees to bike to work. Another employer, Standard Process, has an in-house chiropractor to help employees who experience back pain from sitting in a chair all day.
There are so many ideas out there for wellness programs that benefit both employees’ health and an employers’ bottom line. If you are experiencing a large amount of absence and disability claims, examining the reasons behind them is a great place to start. The next step is to implement a wellness program to improve the health of your employees, and, of course, monitoring the progress will help you to justify the costs associated with the wellness program. The 2012 Aflac Workforces Report demonstrated that implementing an effective wellness program reduced the number of sick days by an average of 28%, and there was a 30% reduction in workers comp and disability management claims.
If implementing a wellness program as part of an Integrated Disability and Absence Management (IDAM) has been proven to reduce absence rates what are you waiting for? ClaimVantage provides an IDAM platform along with analytical tools to help you and your company streamline your claims processing and reduce absence rates.