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Health, Wellness, and Workers’ Comp: A Promising Cost-Saving Connection

May 19, 2020

Employee Benefits

We all know that staying physically and mentally well reduces healthcare costs. But have you thought about how health and wellness affect workers’ compensation costs? By improving physical and mental health and preventing disease, wellness programs can lower workers’ compensation costs.

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Comorbidities in Workers’ Compensation

When we think of workers’ comp (WC) claims, we imagine things like back strains from heavy lifting, knee injuries from a trip and fall, or wrist problems from repetitive tasks such as keyboarding. Some employees may have prior injuries involving the same body parts they have re-injured on the job. We know these pre-existing conditions can aggravate WC injuries. However, anxiety, depression, diabetes, smoking, substance abuse, heart disease, and hypertension don’t usually come to mind when thinking about workers’ comp claim scenarios. These conditions are known as comorbidities, which are medical conditions that exist simultaneously in a patient. Just like pre-existing problems, these comorbid conditions can worsen WC injuries and increase their costs by requiring longer periods of lost time, disability, more costly medical treatment, and higher permanent impairment.

Comorbidities are often overlooked as a cost driver in WC claims. Most employers believe these belong outside the WC arena and in the private medical sector. However, comorbidities are significant because most state WC jurisdictions rely on some variation of the “accept the person as you find them” premise. It is challenging to tease out comorbid conditions from a WC claim. Employees are hired as whole person packages, not an unbundled group of body parts and systems. An employee who suffers from non-industrial medical conditions is more adversely affected by an industrial injury than an employee with a similar injury without the additional conditions. Below are some common examples.

An employee with type II diabetes who suffers a work-related crush injury to their foot has a higher likelihood of infection, and even amputation, when diabetes is present, particularly if uncontrolled. The work injury did not cause the diabetes, but the existence of the diabetes has significantly worsened the injury. Another example is an employee with a pre-existing mental health condition who may encounter a work-related psychiatric event such as being robbed at gunpoint. Employees with underlying mental illness are more prone to experience higher levels and longer lasting anxiety and depression from such a traumatic incident. An injured employee with a history of substance abuse is more at risk for abusing pain medication prescribed for their injury. Additionally, employees who are obese or otherwise deconditioned are more likely to suffer injuries and take longer to recover. They are also more likely to have secondary comorbidities such as hypertension and diabetes.

Studies have been conducted on the impact of comorbidities on WC costs. In general, workers’ comp claims with a comorbid aspect had a two-fold increase in medical costs compared to similar claims with a non-comorbid diagnosis.

One study by Duke University Medical Center showed that obese employees filed two times as many claims, saw seven times higher medical costs for their claims, and lost thirteen times more days from work.

Research conducted by Harbor Health Systems has shown that claims with certain comorbidities had more protracted claims, higher medical costs including increased risk of surgery, increased litigation, and longer duration of disability.

Historically, the focus in addressing comorbidities in WC has been reactionary. Case reserves have been increased to account for higher costs associated with such claims. In an attempt to argue against employer/WC carrier liability, lengthy and costly litigation is undertaken with often minimal positive or cost saving outcomes. While it is appropriate to continue these efforts in applicable cases, it is prudent to become more proactive and turn our attention to efforts to prevent and lessen these problems within our employee base.

This is where health and wellness programs come into play. Ideal programs address lifestyle factors with components designed to improve both physical fitness, emotional/mental wellbeing, and even financial wellness, which has been shown to improve overall mental wellbeing and reduce employee stress. Employees who actively participate in employer sponsored wellbeing programs are less prone to diseases and comorbidities that are cost drivers in WC claims.

The Impact of Health and Wellness Programs on Workers’ Compensation

The Institute for Healthcare Consumerism completed an analysis of various studies on wellness programs showing that organizations that implemented such programs saw a 30% average reduction in workers’ compensation claim costs.

Programs that offer nutrition counseling, tobacco cessation, and substance abuse support resources lead to more healthy lifestyle choices, thus reducing other comorbidities and directly impacting safety and WC costs.

Employees with better physical conditioning are less likely to get injured, and when they do, they rebound more quickly.

Mindfulness, a part of emotional wellness, can improve safety. Mindful employees are more aware of their environment, more focused, and more careful, which can lead to less work-place accidents. Additionally, employees who practice mindfulness are better able to manage stress and are less likely to file stress related or more costly claims.

In general, wellness programs increase employee motivation, productivity, and job satisfaction, leading to less turnover. Employees retained longer have less work-place accidents due to having more job experience and practice. Higher retention leads to lower WC claims as these longer term employees are less at risk of injuries than newer employees just learning.

Regardless of the type of program, any wellness program should be results-oriented, increase accountability and goal setting behavior, as well as provide incentives for successful outcomes. Continuous evaluation of program results is also key to ensuring the program is constantly evolving to meet its intended goals and changing course as needed. Wellness programs can be implemented and driven by any department within the organization, however, the best wellness programs include all levels of employees and departments to ensure broad support across the organization. Consider including a dedicated team made up of people from different departments to encourage collaboration and provide ways to make participation a coveted experience as opposed to an appointed task for any member of the group. Broad collaboration across the organization helps prevent burnout and affords greater reach for more long-term success of the program. WELCOA’s 7 Benchmarks

Health, Wellness, Workers’ Comp, and Pandemic

In light of the ongoing COVID 19 pandemic, employees who remain at work are experiencing significant levels of stress. Front-line workers, including healthcare, grocery employees and others, certainly bear the brunt. But no employee is immune to the degree of heightened anxiety during this time. Fear, loneliness, uncertainty over health, job and financial security, and concern for loved ones are prevailing themes. Some wonder if a mental health pandemic will follow. As stay-in-place orders are lifted and businesses reopen, employees returning to their jobs may continue to experience these feelings for some time to come. This may cause decreased productivity and increased distractibility, raising the risk of injuries. Employee Assistance Programs (EAP) are always a great resource to implement or publicize. Another idea for emotional support is to add a crisis line for employees to anonymously call and speak with a counselor.

Now is an ideal time to make health and wellness initiatives part of both your employee benefits and workers’ compensation safety plan or to add new resources to your existing program.

Please feel free to reach out to a Woodruff Sawyer WC claim or Benefits Specialist for additional information and to help get you started on the road to better health and possibly lower risk.

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All views expressed in this article are the author’s own and do not necessarily represent the position of Woodruff-Sawyer & Co.

Debbie Hammer

Workers’ Compensation Senior Claims Consultant

Contributor, Property & Casualty

Debbie specializes in technical & reserve claim audits, large claim loss evaluation, training, developing claim handling procedures, disability management and return-to-work programs.

415.878.2476

LinkedIn

Debbie Hammer

Workers’ Compensation Senior Claims Consultant

Contributor, Property & Casualty

Debbie specializes in technical & reserve claim audits, large claim loss evaluation, training, developing claim handling procedures, disability management and return-to-work programs.

415.878.2476

LinkedIn