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Disability and Disability Insurance

Behavioral Risk Management: Recognizing the Elephant in the Room

Marcia Carruthers | February 1, 2013

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Businessman with Down syndrome

Identifying and responding to behavioral risks in the workplace, complicated by resistant stigmas regarding mental health conditions, may be one of the most significant "elephants" that risk and disability managers have yet to tackle. We know that human behavior pervades all that we do, and yet, society continues to view individuals as two separate parts—the physical and the mental. We see this not only in terms of the medical community but also in claims, performance, and productivity.

Fortunately, we are a bit more enlightened in the 21st century, and several movements are afoot that will serve to integrate these two into a discipline called behavioral risk management (BRM). The 2008 passing of the Parity Law and the newly minted Patient Protection and Affordable Care Act are two elements that may ensure that this "whole person" view finally becomes standard procedure. Since we have traditionally focused on the pieces rather than the pattern, we end up seeing only the isolated parts and then wonder why some ingrained problems never get resolved. This opportunity for a systems approach provides a conceptual framework that allows us to see overall patterns and helps enlightened employers find ways of changing or improving them.

For a corporation to take this holistic approach, however, the next necessary step is to recognize that there is also a human cost savings to the equation, not just a dollar or bottom line result. That is a big cultural step for those only looking for short-term gains. However, by taking the comprehensive approach, long-term value and cost savings are not only possible but also repeatedly underscored and driven home in research studies and results from best-in-class companies.

Finally, as good risk managers, we are taught that every risk should be identified and analyzed, then reviewed for preventative measures, and finally measured and monitored. We now need to expand our analysis to include the identification of behavioral risks in the workplace. This can be done on a corporate basis through the BRM process in conjunction with our colleagues in benefits, safety, and human resources.

Behavioral Risk Principles and Focus

BRM is a term that has been around since the mid-1990s. One of the first introductions to the subject was Behavioral Risk Management (Yandrick, 1996), which suggested a detailed audit of an organization's behavioral risks. This assessment enables a company to quantify risk exposures and establish its degree of risk from four sources: personnel files, healthcare utilization/costs, employee interviews, and management surveys. While the focus is on behavioral issues, BRM is ideally preventative in nature.

Disability Management Employer Coalition (DMEC) took this concept a step further by defining BRM in the context of the emerging role of integrated disability and absence management, including this important behavioral component. It is now seen as a new and emerging best practice area of workforce risk, wellness, and healthcare cost containment to better understand the underlying behavioral aspects of claims, productivity, and performance including:

  • Psychosocial and psychosomatic factors
  • Comorbidity
  • Productivity losses and presenteeism
  • Psychiatric and high-profile claims management
  • High-profile human resource and labor relations cases

As we move forward with the realities of healthcare reform implementation, a myriad of ever-expanding federal and state leave laws, and post-recessionary financial forces, employers are pushed to consider new and innovative approaches to cost savings, productivity enhancement, and human asset management. Given the extreme pressure on human resources professionals in the current corporate climate to preserve and retain qualified employees, never has the impetus to keep employees healthy and on the job been more urgent.

On one hand, considerable research and effort have been expended into quantifying the effects of lost productivity in terms of presenteeism—keeping employees engaged and at work. The other side of the health and productivity equation is equally important—measuring and managing absence and disability when employees are off work. Both factors are affected by behavioral risks and require a disciplined approach to identify and minimize the potential effects.

Behavioral Risks Affecting Human Capital*
  • Physical health
  • Emotional/behavioral health
  • Threat of violence
  • Safety infractions on the job
  • Critical incident stress
  • Bullying
  • Conflict with supervisor
  • Sexual harassment
  • Discrimination
  • Marital/family issues
  • Drug/alcohol abuse
  • Family health issues
  • Conflict with a coworker
  • Work/life balance
*Source: Robert B. Johnson, "Behavioral Risk: A Systemic Approach," The Journal of Employee Assistance, September 2004.

Research and Statistics

Numerous research studies have borne out the fact that underlying mental health issues significantly affect employees' performance, health, and well-being. They point to the fact that underlying mental health issues add to costs, lost time, and productivity losses. We know that mental health illnesses (including substance abuse disorders) increase healthcare costs and are the fifth leading cause of short-term disability (STD) and third leading cause of long-term disability (LTD). (National Business Group on Health, 2010)

Since 2006, DMEC has conducted a biennial survey of its employer members (plus five healthcare coalitions) to track strategies, advancements, prevalence, and effectiveness in this discipline. These results provide an opportunity to identify changes in employer trends and a pulse on the industry. (For a copy of the executive summary, go to The 2012 report indicated increased awareness and attention to this emerging discipline. Employers continue to enhance these offerings and recognize the value they provide in improving the overall employee experience as well as containing the high costs that can be incurred as a result of behavioral risk conditions. Top-tier findings include:

  • BRM is a widely accepted program element: 84 percent believe BRM is or can be an important emerging area of concern; 60 percent of large employers (more than 10,000 employees) already have an embedded behavioral component and are leading the shift in thinking.
  • Involvement of the employee assistance program (EAP) was the most significant element of a successful return-to-work (RTW) program, with 67 percent of employers employing this best practice. Effective communication of EAP services and early identification of employees at risk are key program elements. Employers see the EAP as a risk-lowering management resource.
  • Use of a mental health professional (MHP) for claims management grew from 48 percent in 2010 to 64 percent in 2012. This methodology was employed in workers compensation, STD, and LTD cases to involve experts to ensure appropriate treatment and successful resolution.

Model Programs

A range of model programs has emerged over the past 15 years. The ultimate goal of any of these methods is to ensure that employees are productive, engaged, and at work. Progressive employers have implemented some or all of the following approaches with great success. The first takes an enterprise risk management approach, while the others are more program- and functional area–specific.

  • Organizational assessment to flush out toxic environments and supervisors (audit)
  • Assessment and triage—utilizing early intervention and psychosocial intervention
    • Functional assessment—by a trained MHP (including fitness for duty)
    • Treatment plan review—analyzing treatment, disability durations, and RTW goals
  • Prescreening utilizing "red flags" and other identifiers of behavioral risk by claims personnel, nurses, or even supervisors with "warm" transfers to MHP
  • Behavioral safety programs to identify and analyze accident repeaters, stress claims as prevention measures
  • Disability teams with a "psych" orientation and EAP representation to review high-profile cases
  • RTW and job coaches to support early and sustained return to the workplace

Best Practices

Many of the best practices that employers have found effective in their programs involve little in terms of expense and more in terms of a change in process, focus, and culture. Raising awareness, defeating stigma, and taking a holistic approach underscore the effectiveness and success. Of the 15 key best practices that were identified in the 2012 DMEC Behavioral Risk and Wellness Survey, the top 10 were:

  1. Include a behavioral component in your integrated and coordinated program.
  2. Provide EAP benefits, and promote their utilization.
  3. Incorporate EAP referrals as an RTW program element.
  4. Employ early intervention, identification, and communication with employees and supervisors.
  5. Review performance as a key indicator to detect underlying behavioral health issues, using the supervisor as the first point of information.
  6. Initiate three-point contact (company, provider, and employee) as part of the process. Encourage communication between employee and provider.
  7. Conduct interim touch-base meetings with employee.
  8. Utilize MHP for all claims (including physical), and consider telephonic connections.
  9. Conduct depression screenings at intake.
  10. Utilize predictive modeling from claims data.

Conclusion and Call to Action

As employers look to the future, productivity gains will need to be developed from a dwindling workforce. Challenged by the exodus and increasing disability of the baby boom generation and the inability of succeeding generations to replace intellectual capital, more effort will need to be put into retaining, retraining, and recovering activities for the current workforce in order to increase productivity. Managing the behavioral component is an integral first step toward making this happen, ensuring not only adequate numbers of qualified workers but also supporting a physically and behaviorally healthy workforce. Without a whole-person approach, we are just treating the symptoms and not the deeper-seated issues that contribute to poor productivity.

The future of workforce health with its emphasis on wellness, balance, and continued pressure to attain optimal productivity should be the catalyst for risk and benefits managers to join forces as thought leaders for the next generation. Only by taking this integrated approach can the elephant in the room be recognized and effectively diffused. Be the first in your organization to reach across the aisle and take the initial step in making this happen.

Marcia Carruthers, MBA, ARM, CPDM, is cofounder and chairman of the Disability Management Employer Coalition (DMEC), a San Diego–based nonprofit trade association providing educational resources to employers in the area of disability, absence, health, and productivity. For information, visit

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