© Copyright 1998 Maclean Hunter Publishing Ltd. The following article first appeared in the February 1998 edition of BENEFITS CANADA magazine.

Stating your case

How to sell the merits of disability management to senior executives

By Dianne Dyck

The popularity of disability management seminars, conferences and work groups among human resource practitioners is an indication of the pressure to contain the spiraling costs of disability plans. Such educational sessions leave attendees convinced that disability management is of value to their organization, often with no direction on how to effectively sell the idea to senior management.

Before such advice can be given, it is critical to realize that the term disability management has a variety of meanings. A reasonable definition is as follows: disability management is a systematic, goal-oriented process of actively minimizing the impact of an impairment in the individual's capacity to participate competitively in the work environment, and maximizing the health of employees to prevent disability, or further deterioration when a disability exists.

Operationally, disability management includes eight key elements:

• management-labor commitment and supportive policies;
• stakeholder education and involvement;
• supportive benefit programs;
• a co-ordinated approach to injury/illness management;
• a communication strategy;
• a graduated return-to-work program;
• measurement of outcomes; and
• disability prevention.

Defining the organization's preferred model is the first step in measuring and selling the results. There are a number of models for disability management in today's workplace. Four examples are:

• The Traditional Model--a method whereby the care plan, authorized leave and return-to-work process is medically directed. The employer relies on the treating practitioners (primarily physicians) to substantiate the authenticity of the illness and help the employee return to work. This is the starting point for many insurers' disability management models.
• The Job Matching Approach--a model which involves a fitness assessment of the injured/ill employee and a physical/psychological demands analysis of the employee's job to determine if there is a match or mismatch for a safe return to work.
• A "Managed Care" Model--an approach in which the employee's diagnosis is referenced against standardized care plans, procedures and diagnostic testing guidelines to determine if treatment and the physician's suggested leave duration are appropriate. This model, like the first example, tends to be medically oriented.
• A Direct Case Management Model--this employee-employer approach to dealing with the employee's reduced work capacity and the employer's business needs uses some of the elements of the first three models. However, it is the employee and employer who decide the terms of the medical absence and return-to-work plan.

Although each of these four models has been created in a response to different needs and drivers, they all have a valuable contribution to make towards disability management. The fact that most programs today use some elements of each model attests to this fact. Typically, the traditional model is the starting point for disability management programs and elements of the other models are added as required.

Based on experience, the best approach to disability management is one centred on the employee-employer. Effective programs, depicted in the schematic illustration, maintain the employee/employer relationship, focus on the employee's capabilities versus disabilities, and are supported by a variety of technical specialists and case management approaches.

Supporting the employee and family through an illness/injury period usually promotes a win-win situation for all parties and related stakeholders and reduces resistance to intervention. When developing and selling the merits of a disability management program one must consider the interests and values of the key stakeholders.

For the Corporation

At any given time, 8% to 12% of the workforce is off work on a disability leave. In general, absenteeism costs Canadian employers about 1.75 to 2.5 times the employee's salary in direct and indirect costs. According to a 1993 Conference Board of Canada study, this translates into 52.2 million hours of lost time per year at a cost of about $15 billion annually.

Through disability management programs, employers can identify the causes of injury/illness, prevent injuries, promote employee well-being and contain disability-related costs. The net result can be a healthier workforce, reduced absenteeism, good productivity, lowered disability costs, lowered insurance premiums and rates, and Workers' Compensation rebates. As well, the employer retains a valuable employee, while decreasing disability costs and meeting legislative obligations.

For the Union

Disability management programs afford unions the opportunity to:

• contribute to the company's profitability and competitiveness;
• problem-solve by addressing areas of mutual interest and concern;
• interact and build relationships;
• promote employee well-being;
• maintain labor's rights and principles; and
• demonstrate value to union members by protecting the employability of its members.

For the employee

The benefits of disability management to the employee and family include:

• the promotion of a speedy rehabilitation;
• the ability to maintain self-identity and respect;
• the opportunity to stay in contact with, and to gain support from, co-workers;
• the ability to remain current in their field; and
• less disruption in normal family/workplace relationships.

One employee who was on short-term and long-term disability identified the following benefits of the company's early return-to-work program. It allowed the employee to:

• concentrate on getting better and not worry;
• keep a regular routine;
• maintain a sense of self-worth;
• make a contribution to the company;
• work at regular duties for as many hours as they could tolerate;
• keep work contacts;
• remain "current" with the changing work skill sets, duties and responsibilities;
• keep up to date with changing technology;
• gradually adjust to full-time work; and return to work without upgrading.

Disability management offers tangible benefits to everyone involved. According to the National Institute of Disability Management and Research 1997, the direct and indirect costs of disability to British Columbia's economy accounted for $3.6 billion per year, or eight cents on every dollar earned in the province. This translates to 35% of the disability costs being borne by employers, and 27% borne by disabled individuals and families.

The most effective approach to selling senior management on the merits of disability management programs is to speak their language. A critical part of that language will include a cost/benefit analysis of launching such a program--it is here where outcomes will play a significant role. So what are the known outcomes that can influence your company's bottom-line and help you sell your idea for a disability management program?

A disability management program is like any other business endeavor. It must make good business sense and a financial return on the resources invested must be demonstrated for it to survive. Knowing that you must demonstrate the effect a disability management program can have on the bottom-line, HR professionals need to first determine their disability costs and resources. Secondly, it is important to determine the outcomes realized by existing disability management programs. Fortunately, many companies are now reporting their program results at conferences and in print. For example:

• The City of Winnipeg realized a $2.7 million saving since introducing their disability management program;
• Weyerhaeuser Company, New Burn Pulp in the U.S. was able to reduce their Workers' Compensation Board costs by 51% over six years through disability management efforts. It also noted an average reduction in cost per claim of 18%;
• Petro-Canada, through its Managed Rehabilitative Care Program, saved $1.33 million in 1996. It reduced LTD rates to 3.5/1000 (1996), lowered their LTD premium rates and resulted in LTD premium holidays each year since 1991;
• Canada Post saved $54.6 million per year due to the introduction of their early return to work efforts. It also experienced a drop in employee absenteeism from 20 to 9.93 days per employee per year;
• The University of Calgary (U of C) had 71% of employees indicate satisfaction with its Attendance Support Program. This is an integrated program that combines occupational health nursing and employee assistance counselling services to promote an early return to work. U of C's Annual Report indicated that 73.1% of the cases that were closed in 1996 resulted in a return to work;
• The Toronto Transit Commission, through its management of soft tissue injuries, reduced the length of its WCB claims by 17%, its WCB medical aid costs by 27%, the length of short-term disability claims by 19% and the number of employees on LTD by 11%; and
• MacMillan Bloedel Ltd. in Port Alberni, B.C., through the establishment of its disability management program, has saved $1.25 million in disability costs in one year. It has reduced the number of LTD claims by 37% from 1995-1996, and decreased the number of lost time days from 20 to four days.

Further support for disability management programs comes from recent studies done on early intervention following a disability. For example, a 1996 AIG Claims Services Inc. survey of 300 companies reported that by implementing case-management procedures immediately after the occurrence of a Workers' Compensation claim, the claim costs were reduced by as much as 40%. As well, the Alberta Workers' Compensation Board reports that employers who instituted post-injury reduction services lowered their injury claim costs by $2.3 million, or by 17% in 1995 as compared to their 1994 occupational injury costs. This resulted in a 19% reduction in disability days, and reduced the time away from work by 15%. In short, managing occupational injuries made good business sense for many Alberta companies.

One of the myths around initiating a disability management program is that workplace accommodations are expensive. A recent study by Alan Cantor of Cantor & Associates 1996, demonstrated that the majority of the workplace accommodations cost between $0 to $500 with 31% of the workplace accommodations occurring at no added cost to the employer. In fact, Cantor reports that only 5% of workplace accommodations cost more than $5,000.

A second concern is that there are limited modified work (MW) positions available for recovering employees. Experts argue, however, that if all stakeholders are committed to making disability management work, MW opportunities will materialize. From past experience, we have learned that the employee population and/or union members are very resourceful in unearthing MW positions. For example, work groups have banded together to alter their jobs so that a recovering work-mate can do tasks within his/her capabilities. In another instance, a company without truck driving positions was able to call on its partner company to provide the modified duties.

A third issue is that existing benefit plans may be non-supportive of MW programs. Plans that promote continued absence from work instead of being designed to encourage an early return to work are counter-productive to MW programs. As well, benefit plans that are rigid in their application prevent minor adaptation to suit the employee's needs and therefore an early return to work.

A fourth is disability policies/procedures that focus on the employee's disability versus his/her capabilities.

Analyze your company's situation by identifying the barriers and the drivers for disability management. Determine ways to decrease barriers while increasing disability management drivers. And finally, gather supportive disability data using research outcome findings.

Disability is costly to all involved. Substantive employer efforts to manage disability and return employees to work are not widespread. Plan sponsors need to take the lead and to manage their disabilities. You, as a human resources professional, can assist with this effort by demonstrating that disability management is fundamental to good business practice.

The Romanow Commission has released its final report on the future of healthcare in Canada.

For Commissioner Romanow's recommendations, click here.

Click here for Senator Michael Kirby's report, "The Health of Canadians – The Federal Role: Recommendations for Reform."