Case Management Network Inc. Tel 416-497-9437 Fax 416-352-5181 Email: cmnet@rogers.com www.casemanagementnetwork.com STATISTICS ON NON-OCCUPATIONAL DISABILITY COSTS EVER-CHANGING EMPLOYMENT ENVIRONMENT: Employers, (for the most part) are putting more emphasis on reducing workers' compensation costs and overlooking enormous costs related to their non-occupational disabilities (STD and LTD). The special difficulty of accommodating STD and LTD cases cannot be minimized, resulting in prolonged disability and consequently extensive costs under volatile group insurance experience rating plans. The duty to accommodate however, applies to non-occupational disabilities as well as workers' compensation cases, which is clearly defined in the Ontario Human Rights Commission's "New Guidelines On Disability And The Duty To Accommodate". ARE YOU AWARE OF THE FOLLOWING ALARMING FACTS IN REGARDS TO WHAT NON-OCCUPATIONAL DISABILITIES ARE COSTING YOUR COMPANY? * On average, STD and LTD combined represents approximately 70% of your total disability costs * There has been a major shift from physical to psychological disabilities. * Stress-related problems to Canadian Businesses estimated at: $12 Billion Annual Costs * Out of 1.4 million Canadians who suffer from depression, only 6% have been properly diagnosed * STD costs have doubled from 1997 to 2000 * Without early intervention on STD cases, LTD rates are 50% higher * LTD premiums have increased by 17% since 1999 * Absenteeism and overall disability costs for Canadian employers has increased by 27% from 1997 to 2000 and has risen from 2% of payroll in 1997 to 4.2% of payroll in 2000 * On average, Canadian employers pay between 11 and 12 billion dollars annually to cover workers' disabilities * Average of 9.2 days lost per year per employee due to absenteeism * Average direct cost of absenteeism is $3,550 per employee per year in 2000 (not including replacement and re-training costs) **Resources for above Statistics: Mercer Report 1999, Watson Wyatt Staying @Work 2000, Sun Life Financial Report 2001, IFEBP website, Benefits Canada, Human Rights Commission -1- MAJOR CONTRIBUTERS TO SURMOUNTING COSTS: * Daily stressors: - poor communication in workplace - little control over how and when job gets done - conflict between work and personal roles * Personal wellness, the health of the physical environment and organizational changes * Economic conditions * Dual income families * Work ethic changes * Performance Problems DISABILITY NOW MORE COMPLEX WITH CHANGING TIMES * Explosion of subjective diagnosis due to: - burn-out, deconditioning, psychiatric disability, sleep disorder, psychosomatic disorder, depression, fibromyalgia, chronic fatigue syndrome FACTORS DELAYING RETURN TO WORK: * Lack of specialized expertise within companies to handle the complexity of disabilities * Accommodation for non- occupational disabilities not a priority * No performance standards set with Insurance carrier * Delays - health care * Medical practitioners - lack of knowledge - workplace * Poor company morale and working relationships * Down sizing and layoffs * Anxiety over performance issues * Fear of losing disability income KEY RISK FACTORS: * STD claims converting to LTD failing early intervention increases benefit insurance premiums significantly * Success of return to work program declines with length of time off * Change of definition for LTD claims typically converts after 2 years - disabled from their own occupation, to disabled from any occupation * Delays in return to work correlate with increase in chronic pain disorder * Failing to communicate with family physicians regarding early intervention, appropriate assessment and treatment leads to lack of collaboration * Physicians in general not educated on effective rehabilitation -2- COST CONTAINMENT STRATEGIES: * Pro-active absenteeism management programs * Early intervention, education and prevention programs to respond to problems before they become disabling * Set performance standards with Group Insurance Carrier * Communicate with employees and maintain communication throughout recovery process * Consistency in Company Policies and Procedures on expediting the return to work process for both occupational and non-occupational disabilities * Ensure integrity of modified work program * Early intervention - ensure that appropriate assessment/ treatment /rehabilitation is taking place to identify rehabilitation and return to work potential as quickly as possible; * Investigate feasibility of EAP programs * Link up with preferred rehabilitation service providers to: - Develop and deliver practical, goal-orientated rehabilitation programs that produce results for the company, Insurance Company and the worker; - Identify true level of disability; - Ensure that appropriate treatment is being obtained - Expedite the safe and early return to work process to minimize the chance of STD claims converting to LTD claims COST BENEFIT OF EFFECTIVE REHABILITATION By comparing average costs spent on rehabilitation versus costs spent on the average disability period (not to mention replacement salary), appropriate disability management will reduce STD and LTD costs dramatically. Are you interested in learning MORE ABOUT PROVEN SOLUTIONS to reduce your disability costs? The Case Management Network specializes in recruiting disability management experts to many sectors of the economy on either an adhoc, contractual or permanent basis Jan Lowther Principal of the Case Management Network is a seasoned Health Care Professional with 20 years of "hands on" consulting experience in disability management and Author of Strategic Claims Management Systems Manual which assists Companies to be self-sufficient in managing their claims. For further information Contact Jan Lowther Telephone # 416-497-9437 Fax # 416-352-5181 http://www.casemanagementnetwork.com email address: cmnet@rogers.com -3-