GuilfordPare Press Room.

Employers' soaring bills for workers' health care and workers compensation benefits are causing some to step back and broadly re-evaluate the cost effectiveness of such programs, so they can better identify true cost drivers and adopt programs to better address them.

While a few observers think this re-evaluation may include reconsidering 24-hour coverage, many others say that concept has been supplanted by programs that focus more on integrated disability management and-more recently-on employee health and productivity.

"Companies are hungry for cost savings these days," said Dr. Wayne Burton, corporate medical director of Chicago-based Bank One Corp., which employs about 75,000 workers, primarily in the United States.

Currently, many are seeing a second year of double-digit rate increases for workers' health care benefits, as well as upward trends in workers comp medical and wage-loss costs. In addition, coverage is less available not only for workers compensation risks-which has forced some into assigned risk plans-but also for short- and long-term disability risks, according to sources.

Many short- and long-term disability carriers are pulling out of the market or restructuring their offerings and coverage because of inadequate profits, said David A. North, president and chief executive officer of Memphis, Tenn.-based Sedgwick Claims Management Services Inc.

In today's economy, "we are desperate for cost-control measures that do not jeopardize the health of people," said Mary France, a consultant with the Baltimore-based firm of GuilfordPare.
Both Mr. North and Ms. France say that 24-hour coverage may be re-examined in ' sweeping quest to come to grips with current market conditions.

Twenty-four-hour coverage "can loosely be defined as any combination of traditional health insurance and workers compensation insurance that attempts to dissolve the occupational and non-occupational boundaries between the two coverages," according to the National Assn. of Insurance Commissioners' last report on the topic, which was issued in December 1999.

Beginning in the mid-1990s, the Kansas City, Mo.-based NAIC monitored and issued reports on efforts by individual states to implement pilot programs that tested various aspects of such coverage.

According to the NAIC, proponents of 24-hour coverage at that time emphasized the potential for employer cost savings in areas including medical care, administration and the avoidance of duplicate payments.

Opponents, though, found "major impediments" to the system, primarily due to its structure. For example, and insurers were reluctant to relinquish exclusive-remedy protections under the traditional workers comp system because they feared that increased litigation would drive up costs, according to an NAIC statement in its 2001 publication summarizing regulatory issues.

"Twenty-four-hour coverage is something from the past that has a lot of baggage," said Tom Parry, president of the San Francisco-based Integrated Benefits Institute Inc., a national research organization. As managed care techniques adopted in the late 1990s helped control medical costs, "employer and insurer interest in (24-hour coverage) evaporated, because it was price-driven rather than value-driven," he said.

Also, that process-driven approach has been supplanted by a goal-oriented one, he said. The discussion now has changed "dramatically" and focuses on an employer's investment in health, rather than its expenditures, he said.

Essentially, 24-hour coverage morphed into integrated disability management, and that is now morphing into a broader integration of health and productivity-related programs, said Wendy Manners, assistant vp of integrated benefits for Specialty Risk Services, a unit of The Hartford Financial Services Group. The Hartford, Conn.-based insurer offers a program that combines workers compensation and short- and long-term disability, as well as the administration of the Family and Medical Leave Act.

The services offered under ' integrated disability management programs may vary, though.
For example, a basic IDM program often seeks to coordinate employees' workers comp and short- and long-term disability leaves, as well as federal and state FMLA absences, regardless of the cause of the disabilities or the durations of the leaves. A worker with a health care claim crosses the threshold into participating in an IDM program when his or her ailment is of sufficient severity that it requires more than a few days away from work.

Meanwhile, UnumProvident Corp.'s program offers short-term and long-term disability coverages, in addition to coordinating absence management services with the assistance of other vendors, said Cissy Grebowski, vp-return-to-work services for the Chattanooga, Tenn.-based company.
In some cases, such a coordinated approach has netted a large employer a 30% decrease in its new long-term disability claims and a 25% decrease in lost work days, according to a UnumProvident statement.

Midland, Mich.-based Dow Chemical Co. is currently integrating several programs as part of its broad program to help workers.

"Our goal is managing the total amount spent directly for health care, as well as the more indirect costs, by including human performance as a component," said Dr. Cathy Baase, a physician who is responsible for the company's programs dealing with occupational health, health promotion and epidemiology.

The company also is engaged in a large-scale study of "presenteeism," which measures the extent to which employees are working, but not at full capacity, because of health-related reasons. Data are being collected anonymously by a third party and may be used in the future to develop educational programs, such as migraine management.

"The majority of (workers' health care) costs may be related to presenteeism," but that is more difficult to quantify than production-related benchmarks, said Bank One's Dr. Burton.

His major focus, though, is on integrating a wide range of employee health programs, including short-term disability, wellness, fitness centers, worksite nurses and leave under FMLA. In addition, the bank offers an array of programs to enhance employee health, including free flu shots and lunchtime discussions about managing diseases such diabetes. Another educational program for pregnant women promotes their health and that of their babies.

These educational programs are coordinated with other bank programs that provide long-term disability, workers comp and health benefits, he said.

Mergers and acquisitions over the past seven years have allowed the bank to demonstrate that worker disability costs generally can be reduced by about 20% through such coordinated programs, he said.

Underlying Dr. Burton's educational program is the fundamental belief that "employees want to feel better, and they want reliable information about health," he said.