Three factors primarily drove this dramatic increase in psychiatric disability expenses. First, the stigma associated with depression and anxiety has been decreasing, leading more people to present for treatment. Second, like psychiatric disabilities, many other disabilities relying upon self-reported conditions increased as hard medical disabilities came under more effective medical management.
Finally, it should be recognized that cutting behavioral health benefit costs often added to the problem by delaying or denying necessary treatment. Diminished behavioral health treatment quality can take the form of severely depressed patients being diverted from hospitals, and patients with addictions receiving less than acceptable care.
Today, the total cost of mental health disability is estimated at $150 billion annually, according to the National Institute of Mental Health.
Why so high? The direct costs, in addition to treatment, include salary and benefits continuation for the disabled employee. Of particular note are the accounting standards requiring employers to accrue disability-related expenses as current liabilities instead of on a "pay as you go" basis. Employers dislike taking the complete charge against their P&L all at once.
Also, indirect costs such as replacement payroll, lost productivity, training expenses and the burden of administering disability claims substantially contribute to the total cost of mental health disability. Clinical depression is among the leading causes of short-term disability. Depressive disorders result in comparable or worse impairment than medical disorders. Depression alone is estimated to cost employers $24 billion a year in absenteeism and lost productivity, according to the article "Holding the Line of Elusive Ailments," Business and Health, December, 1996.
Think about the way your company s benefits are administered today. Most likely, each benefit program such as health care coverage, STD, LTD, workers compensation, employee assistance program and wellness/health promotion initiatives are all administered in silos.
There is probably little, if any sharing of information among benefit plans, creating costly redundancies and missed opportunities keep employees working effectively. Likewise, most of your company s benefits programs lack focus on getting the employee back to work. What s worse is that individual benefit programs can appear to be working perfectly when, in reality lack of benefit coordination drives up costs.
The good news is that when companies shift their focus from claims expense reduction to coordinated management of absenteeism and psychiatric disability, both employers and employees benefit.
Employers need to consider the total cost of behavioral healthcare on their businesses and demand products that provide the care to keep employees working productively.
In other words, employers need to drive plan design. Current behavioral health benefits plan design and vendor selection focuses almost exclusively on benefit plan costs. The goal of an employer s behavioral health programs should be to keep employees working effectively while driving down the cost of human capital as measured by both the direct and indirect expenses described above.
Benefit vendors and workplace HR resources need to be coordinated to ensure that high-risk individuals are identified and get the services they need.
The steps of a coordinated behavioral health approach are:
- Identify who is at risk
- Determine clinical need and workplace restrictions
- Deploy benefit program resources
- Utilize return-to-work programs
Coordination means profiling, prevention, managed disability and return-to-work programs.
The Coordinated Behavioral Health Solution.
Achieving these goals requires a -- forgive the cliche -- paradigm shift in the way benefits plans are managed. Here are several steps an employer can take towards introducing coordinated behavioral health benefits.
- Analyze total system costs, not just the cost of premiums and claims. Through managed care, chances are you have already cut medical and behavioral health and disability claims costs significantly. It's time to take advantage of the ample opportunities for reducing indirect expenses which far exceed claims costs by tracking turnover and absenteeism, and quantifying productivity.
- Create a corporate mandate for assessing and assisting the "whole" employee. This will involve coordination of benefits provision. Anticipate that internal departments and multiple vendors may be reluctant to cooperate on behalf of the employee unless the company drives the initiative.
- Identify return-to-work and productivity as shared, publicly-embraced goals. Make sure that all internal departments and vendors hear this message, and that you are vocal and sincere in your desire to provide coordinated services to employees that enable them to reach these goals.
- Coordinate administration of the key elements of your system. These include health plan benefits, disability programs, workers compensation, EAP, and initiatives to address workplace violence, wellness, and work/life issues. Consider integrating these services incrementally; for example, start with medical benefits, short-term disability, long-term disability, and EAP services. Your ultimate goal is full program coordination in order to provide the highest level of employee services.
- Use "trigger events" in your model to drive a pre-established series of responses and solutions to behavioral health problems and situations. Here s an example: Your company s wellness/health screening program identifies several employees who have clinical depression. These employees should be referred immediately to a psychiatrist to determine if antidepressant medication is needed, or whether counseling by itself is sufficient. Keep in mind the ultimate goal: to enable the employee to get well and work again.
- Establish clear, ongoing communication between all service providers regarding the shared expectations and goals of the coordinated management model. Effective communication practices will reduce the stigma associated with receiving behavioral health treatment, and promote the belief that good mental health is a critical component of a total wellness program.
- Train vendors, management, supervisors and employees on the purpose and function of each element of your benefit system. This fosters good inter-departmental communication and helps employees receive referrals to appropriate behavioral health services no matter where they access the system.
- Create or expand programs that identify high-risk behavioral health and medical situations and populations. Focus services appropriately on these individuals, groups and environments.
- Eliminate barriers to services and treatment. Help your employees understand your benefits services, and make it easy for them to access the system at any point. Getting the appropriate treatment without delay can prevent small problems from becoming insurmountable obstacles.
Why CFOs should invest in this.
The return on investment is significant. A major telecommunications company achieved a savings of approximately $131,000 per thousand employees by screening for potential psychiatric disability claims, utilizing a specialized disability provider network to treat potential and active disability claims and promoting early return to work through the company s employee assistance program.
A workers' compensation insurance carrier decreased the length of all their workers' compensation absences by 25%, simply by having an employee assistance program call the claimant and offer services and resources to facilitate recovery. The carrier embraced the philosophy that prolonged absence from work is a crisis event in an employee s life and through the employee assistance program, offered the claimant help in returning to work.
Every missed day of work results in lost productivity, quality and rate of production both suffer. Major companies are demonstrating that by coordinating their behavioral health programs, they can keep their employees working effectively.
Can you, as an employer, afford not to coordinate your behavioral health benefits? Your investment may require CFO approval to demonstrate corporate support for the position that employers drive benefit design, not vendors. Likewise, senior management buy-in may be required because coordination will require changes in the design and administration of employee health and disability benefits and workers compensation.
Keep in mind the payoff demonstrated decreases in claim costs, length of absenteeism, together with improved productivity. It s a logical business case.