As business leaders strive to address health care inflation, absenteeism and diminishing worker productivity, few understand the positive impact that an effective return-to-work (RTW) program can have on improving the health and productivity of their workforce.
Historically, RTW has been viewed as a tool to reduce workers’ compensation costs. RTW strategies, however, can become the foundational approach to workforce management. Achieving that goal requires measuring unscheduled employee absence and outcomes in more sophisticated ways. Rather than looking at duration — e.g., reducing the average short-term disability absence from 45 to 42 days or reducing the number of lost-time workers’ compensation claims — companies need to see how a successful RTW program can improve the productivity of their workforce and staffing models significantly.
Although occupational data collection and metrics are readily available to most employers because of OSHA requirements and the maturity of the workers’ compensation claims industry, it can prove challenging to measure the impact of non-occupational disability management. Traditionally, employers have used short-term disability duration as a single benchmark. It is generally accepted that the shorter the duration over time, the more effective the RTW program. However, it is important to understand how other factors and limitations can influence this measurement:
- Only a closed-claim view allows an accurate comparison. If open/active cases are included, the average duration will be underestimated.
- Small sample sizes are subject to high variability. A few catastrophic claims can make the average duration look worse even though RTW practices have improved. Conversely, a high incidence of short claims from a workplace disruption (e.g., merger, acquisition, layoffs) can make durations look much better without new interventions.
- Lack of a standardized metric definition. Durations used for benchmarking should have the same definition. Some administrators use only paid days and do not count the elimination period, which might be three, seven, 14, or 30 days, and it can distort the comparability significantly.
The need for a standardized metric definition is paramount for comparability inside and outside the company. The Employer Measures of Productivity, Absence and Quality (EMPAQ) is a set of standardized metrics and benchmarking tools developed by the National Business Group on Health. EMPAQ provides a standardized definition that requires that only closed claims be considered and ensures a total lost time view in calendar days that adjusts for plan design variations in elimination periods.
Focus on Full-Time Equivalent Data
Rather than rely on duration, the effectiveness of RTW programs is illustrated better to senior leadership with a productivity view. The objective is to show how disability days translate into a number of full-time equivalent (FTE) employees who are off work all year. In other words, how many additional employees are needed to compensate for the expected absence patterns to ensure continuity of business operations and/or a lack of disruption in customer service?
For example, a hospital system had a well-run RTW program for its workers’ compensation cases but needed to make the case to senior leadership to expand into an integrated program that addressed non-occupational injuries/illnesses resulting in short-term disability claims. By focusing on an FTE view for workers’ compensation and short-term disability, management received a startling comparison of how staffing was impacted:
- 569 lost workdays per 100 employees attributable to short-term disability resulted in 93 FTEs out of work all year.
- 28 lost workdays per 100 employees attributable to workers’ compensation resulted in five FTEs out of work all year.
Further, using the EMPAQ metrics that measure RTW efficiency, the hospital system’s data showed that 61 percent of lost-time workers’ compensation cases were placed on transitional duty, but less than 9 percent of short-term disability cases were provided with transitional duty. Thus, the largest contributor to lost productivity as measured by FTE was short-term disability, yet it was barely being addressed with transitional duties. (See sidebar, below.)
Gauging RTW Program Efficiency
Return-to-work (RTW) programs that allow employees to resume working in an appropriate and timely manner, even though they have temporary work restrictions, are critical for minimizing health-related absences and optimizing productivity. EMPAQ’s Return-to-Work Metrics help to measure the utilization and effectiveness of RTW programs. The metrics allow employers to benchmark how efficient their RTW program is by separating out claims where employees waited until they could resume their regular job duties from those where proactive assistance allowed employees to return sooner, with a reduced work schedule or modified/transitional duties.
Companies can collect RTW metrics separately for short-term disability and workers’ compensation programs to gain insight into RTW practices for occupational versus non-occupational illness and injury, revealing the need for better integration strategies.
The efficiency of a RTW program can be easily measured, without large sample sizes, using the EMPAQ RTW Efficiency Metric, RTW Claim Percentage:
The total number of claims that are returned to work in any transitional capacity during the time period, divided by the number of total claims, then multiplied by 100.
Total Number of Claims with
RTW Transitional Duty
Total Number of Active Claims
As the data is examined, certain factors emerge. For example, there might be a percentage of claims, albeit very small, that eventually become long-term disability cases and the person never returns to work. Another percentage represents maternity cases that might not be subject to RTW until FMLA is exhausted. These two subgroups can be excluded in the denominator to drill down further into a significant portion of disability cases in which transitional duty can reduce lost workdays and improve a company’s workforce management.
Metrics Point to Staffing Solution
Another example is a telecommunications company that had focused historically on workers’ compensation cases and OSHA reporting, responding with good safety practices and an effective workers’ compensation RTW program. While the employer made a solid effort to reduce the incidence and duration of occupational injuries, it did not see the full productivity picture. Only by using data and metrics that revealed the spectrum of disability-related employee absences could the telecommunications firm gauge the productivity impact and the potential to improve the cost and efficiency of its staffing. Moreover, once the full productivity view was captured, there was a strong business case to present to operational leadership in order to show the potential to improve workforce management.
The telecommunications company had to maintain a certain level of staffing to provide service to customers; e.g., crews in the field were expected to handle a certain number of service calls each day. To make up for an expected number of employee absences, staffing had to be increased by a specific amount to maintain field service. So what would be the impact of using RTW interventions and transitional duties to put more people back on the job sooner?
The telecommunications firm knew about its workers’ compensation claims, but had not quantified short-term disability. That data revealed:
- 239,913 lost calendar days in the prior year from short-term disability claims. (This did not include the seven-day elimination period for short-term disability, stand-alone Family & Medical Leave Act, and other incidental absences.)
- Total lost calendar days equated to 762 FTEs off all year.
The disability management team then posed the following scenario: What if the total FTE impact could be reduced by 10 percent through an integrated RTW program that addressed both occupational and non-occupational incidents? What would be the positive, bottom-line contribution from a RTW program that could return 76 employees to the workforce over the course of the entire year?
Using the data, a convincing business case was presented to leadership to expand RTW, which had already proven its value with workers’ compensation cases, to address short-term disability.
Making the Business Case for Expanded RTW
The business case starts with the data. The number of lost workdays attributable in any time period to occupational and non-occupational disability converted to FTEs is a powerful metric to reveal productivity losses to senior leadership. When expressed in terms of FTEs, these absences show the ability to improve productivity with existing staff without having to hire as many replacement or temporary workers.
Digging into the data to separate certain employee groups, departments or divisions allows for comparisons internally. Results for specific employee groups or divisions might reveal the influences that led to improved RTW rate and lower FTE impact in one group versus another: For example, a wider array of transitional duties or greater supervisor buy-in.
Making the business case cannot be done with anecdotes or the typical disability management measures such as duration. Rather, it requires an operational perspective that focuses on productivity and staffing, which in this economic environment are prime concerns and sure to capture management’s attention.
Maria S. Henderson, MS, CRC, CDMS, CCM, is chair-elect of the Certification of Disability Management Specialists Commission (CDMSC), a nationally accredited organization that certifies disability management specialists. She is also founder and principal of HDM-Solutions Inc., a Denver-based consulting firm that specializes in health and productivity management.
Return-to-Work/Stay-at-Work Programs: Reduce Lost Time, Boost Productivity, SHRM Online Benefits Discipline, March 2008
Short-Term Disability Plan Design: Effects on Employee Behavior and Outcomes, SHRM Online Benefits Discipline, April 2007
SHRM Online Benefits Discipline