The Integrated Benefits Institute (IBI) recently
released an in-depth analysis of an integrated
medical and disability database that revealed several
significant relationships between medical episodes
and disability cases, including lost productivity
expenses, and increased costs for absences with
multiple medical conditions. IBI noted that such
databases can be a powerful tool for employers
to better manage employee health, medical treatment
and disability. This type of analysis is unusual
outside workers’ compensation, in that benefits
for non-work-related disability and medical care
traditionally are managed in separate databases,
both by employers and their benefits suppliers.
IBI analyzed 15,000 disability claims and 53,000
medical conditions from 183 employers over an 18-month
period. The integrated, confidential data, which
was not specific to employer or individual, was
supplied by CIGNA, an IBI board member.
Dr. Thomas Parry, president of IBI, says, “The
American workforce is both aging and becoming less
healthy. If employers are to fully understand the
business value of keeping their workers healthy – and
the positive impact of their health interventions – they
must be able to link data on medical care, disability
and productivity outcomes.” Parry added, “Federal
research shows that 23 percent of workers between
55 and 64 years of age have a disability, and as
the first of the baby boomers turn 60 this year,
there is no better time to act than now.”
The analysis provided the following conclusions:
- Though medical expense consumes 80 cents of
every claims dollar and disability payments consume
20 cents, analysis shows that the number of medical
conditions associated with a disability is a
key driver of this difference. On average there
are 3.4 medical episodes related to each disability
case. Usually, these episodes represent treatment
for different medical conditions. In fact, only
one in five disability cases involve a single
medical episode, while nearly 60 percent involve
three or more.
- The research suggests that disability cases
involving multiple medical conditions require
a different approach than cases with a single
medical condition. Identifying and managing only
the single diagnosis that ends up triggering
a disability episode is not likely to be an effective
approach to managing total medical and disability
costs. Even though average costs per
medical episode are lower with multiple
episodes, total medical costs per case are higher with
each additional episode. And disability costs
also are affected: Cases with multiple medical
episodes cost, on average, 24 percent more than
cases with just one medical episode.
- Just 10 percent of the disability cases account
for more than half the total medical and disability
costs. IBI suggests that a good business strategy
is to focus on employees at risk of having more
than one medical condition and to stress prevention
rather than treatment after the fact.
- Lost productivity associated with disability
absence averages $22,800 per disability claim,
compared with $13,600 for medical costs and $3,800
for disability payments. Considering only medical
and disability payments may cause employers to
misallocate resources, since conditions involving
musculoskeletal, nervous system, normal pregnancy
and mental disorder become proportionately more
costly overall once lost productivity is included.
Musculoskeletal disability cases are the biggest
lost-productivity driver.
For more information, visit IBI’s
website or read this 
one-page
summary (36k) which provides key findings
from IBI’s full study.
About CIGNA
CIGNA companies are among the nation's largest
providers in disability management and insurance
with solutions that focus on helping employees
return to work as quickly and as safely as possible.
CIGNA companies provide integrated health and
disability services to help employers reduce
costs and improve health outcomes and productivity. "CIGNA” is
a registered service mark, licensed for use by
operating subsidiaries of CIGNA Corporation.
Products and services are provided exclusively
by operating subsidiaries, including Life Insurance
Company of America and Connecticut General Life
Insurance Company, and not by CIGNA Corporation.
About IBI
IBI is a national, nonprofit organization supported
by employers, consultants, insurers, healthcare
providers, disease management firms, third-party
administrators and pharmaceutical companies.
IBI provides objective research, an integrated
health & productivity educational forum and
benefits measurement and benchmarking tools to
monitor benefits down and across programs and
up to business impacts.
Although some of the results are striking, IBI’s
conclusions are specific to this sample and database
and should be viewed as illustrative of the power
of integrated databases and not generalizable to
all employers. Any constructed database will be
influenced by population characteristics, underlying
health conditions, plan design and alternative
methodologies for linking medical care to disability.
