Organizations have traditionally been working in a siloed approach to
manage health, absence, workers compensation, pharmacy, and nonoccupational medical and
Recent increases in average costs of claims indicate that this
traditional approach may have reached a position of diminishing returns in the area of
workers compensation. Workers compensation practitioners are now expanding their focus
on collecting data to solve for the increasingly complex overlap among the costs of
work-related injuries and employee health, prevention, and safety. Insights revealed
from these combined data sets are being referred to as integrated optics (IO).
David Mallett, senior vice president and data forensics and
intelligence team leader at Aon, has been leading a number of these data-integration
exercises and describes the process as "an approach to holistically managing health,
lost time/productivity as well as risk management opportunities. Data integration
strategies are designed for the types of employers who:
Have already invested in some form of health improvement or
absence management programs, and are looking to validate the results—what's working
versus what's not working; and/or
Have not yet invested in health improvement, risk management, or
absence management/lost productivity programs, and need a more comprehensive
baseline to help identify and prioritize areas to most effectively and efficiently
focus their efforts.
According to Julie Norville, absence management practice leader at
Aon, organizations that use IO have gained critical information around creating an
outcomes-based, holistic strategy. This strategy then highlights where investments can
be made in order to realize the full potential and impact across risk and
Ms. Norville adds: "Taking a more strategic approach to integrating
data has given us a clear view of what contributes to absence in the workplace. For
example, at one organization we identified that 76 percent of workers who experienced a
musculoskeletal disorder (MSD) also have a weight issue, and 46 percent of workers
experiencing a MSD condition also had a behavioral health or addiction claim. Insights
such as these highlight the fact that we can't solve for absences from issues like MSDs
without considering other aspects of employee
The use of these insights is changing perspectives and traditional
thinking. Organizations are using IO to identify and respond more effectively to the new
normal of today's workforce, which is increasing in age and health complications. As a
result, safety professionals are working more closely with health and wellness
professionals to identify the types of accidents that show statistical significance as
well as designing programs that focus on these overall health and safety risk
For example, one company's IO indicated that obesity within their
organization was linked to a 25 percent higher rate of work-related injury and a 30
percent greater chance of an Occupational Safety and Health Act (OSHA) safety event.
Insights have also led to the establishment of physical therapy provider Centers of
Excellence that target improving functionality against an employee's own job to prevent
occupational or nonoccupational time away from work or a focused therapy regime aimed at
returning the employee back to his or her job after a lost time claim.
Figure 2 Top 10 Costliest Health Conditions for Employers
10. High-risk pregnancy—Although high-risk pregnancies have seen a dip of 1% since 2015, they still bottom out of the list in 2017; 5.6% of employers report these costs are a leading cost concern for health plans.
9. Smoking—Smoking has remained a consistent concern of employers over the last several years; 8.6% of employers report smoking has a significant impact on health plans.
8. High cholesterol—While high cholesterol still has a major impact on health costs-11.6% say it's a top cause of rising healthcare costs-that number is significantly lower from where it was in 2015 (19.3%).
7. Depression/mental illness—For 13.9% of employers, mental health has a big influence on healthcare costs. This is down from 22.8% in 2015.
6. High Blood Pressure/Hypertension—This is the first condition in IFEBP's report to have dropped a ranking in the last 2 years. In 2015, hypertension/high blood pressure ranked fifth with 28.9% of employers reporting it is a high cost condition. In 2017, the condition dropped to sixth with 27.6% of employers noting high costs associated with the disease.
5. Heart disease—This year's study found that 28.4% of employers reported high costs associated with heart disease. In 2015, heart disease was the second highest cost driver with 37.1% of employers citing high costs from the disease.
4. Arthritis/back/musculoskeletal—Nearly 3 in 10 employers (28.9%) say these conditions are drivers of their health plan costs, compared to 34.5% in 2015.
3. Obesity—Obesity is still a top concern for employers, but slightly less so than it was two years ago. In 2017, 29% of employers found obesity to be a burden on health plans. In 2015, 32.4% cited obesity as a major cost driver.
2. Cancer (all kinds)—Cancer has become more expensive for employers. Now, 35.4% of employers report cancer increasing the costs of health plans, compared to 32% in 2015.
1. Diabetes—The king of rising health costs, diabetes has topped the list both in 2015 and 2017. In the most recent report, 44.3% of employers say diabetes is among the conditions impacting plan costs.
While the benefits of the insights can be very rewarding, the
pursuit of this information is not without its challenges. Many organizations
struggle internally with the connectivity among the multiple data-stakeholders
required to assemble the information necessary to perform an integrated
The first step is understanding the breadth
and depth of the information required to create actionable insights. As a starting
point, the following are a few examples of the disparate data sets needed and their
Medical and pharmacy data—benefits providers
OSHA records—safety department
Workers compensation information—third-party administrator
or insurance company
Health program participation information—health plan
Population biometric information—benefits provider
Colleague engagement and performance information—human
The next challenge, as with any data mining exercise, is gaining
insights from correlating the data. This requires combining the data in a way that
can be meaningful.
Providing clear objectives to the data team is critical for
an efficient and productive exercise.
Understanding trends from overall employee health costs will
lead to intelligent questions about your specific workforce. As an example, big
data on healthcare costs suggests there are a handful of modalities and health
risks that drive a large percentage of costs for employers. In the International
Foundation of Employee Benefit Plans' Workplace Wellness Trends 2017 Survey,
more than 500 employers were asked to select the top three conditions impacting
plan costs. (See Figure 3 above for the results.) The logical questions to solve
for it include what is the prevalence of these cost drivers in your workforce,
and how are some of these underlying conditions impacting work-related injury,
frequency, and recovery?
Adding a third element, such as employee morale indicators
(i.e., colleague engagement and performance), will result in valuable insights
by correlating variables that are driving costs.
US workforce demographic studies continue to indicate that the
challenges workers compensation and safety practitioners are currently experiencing
from an aging and less healthy workforce will likely exist beyond the next decade
and may, in fact, have become the new normal of society. Integrating workers
compensation data with other sources, such as health, wellness, safety, and HR, can
provide a valuable perspective. Insights from integrated data exercises are making
it increasingly clear that viewing and acting on workers compensation issues from a
singularity of focus will have diminishing returns. Long-term success will require
working more closely with colleagues in HR, safety, wellness, and benefits, and IO
will be a stimulus for this successful collaboration.
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