The percentage of claim costs attributed to medical benefits has progressively increased in recent years. Many of the same health risk factors that adversely affect healthcare in general proportionately affect an organization’s workers’ compensation claims cost.
One medical issue that poses a higher risk for a workers’ compensation claim to occur is obesity. It can also dramatically affect the outcome of the claim.
The Impact of Obesity on a Workers’ Compensation Claim
Obesity is a prevalent health risk globally, but the United States has the highest incidence of all reporting countries. Recent research has confirmed work-related injuries bear a higher claim spend when the injured person has a diagnosis of obesity. Also, morbidly obese individuals are at a higher risk of being deemed permanently disabled. Their claims also tend to remain open for a longer period than claims with no diagnosis of obesity.
A recent data brief by The National Center for Health Statistics stated that the prevalence of obesity among U.S. adults was 39.8%. The report also identified a continued rise in obesity rates year over year. The overall obesity rate for adults aged 40-59 was 42.8%, which was higher than adults aged 20-39 at 35.7%. Adults aged 60 and over had an obesity rate of 41.0%.1
Since the group with the highest obesity rate – those aged 40-59 – represents a sizable portion of the working population, it is important to understand how this diagnosis may affect claim frequency and severity.
The obese injured person is also likely to incur higher claim costs. An NCCI research brief noted that medical costs of obese claims continue to grow at a faster pace than the non-obese. At 36 months, they were four times costlier, and by 60 months, the difference was more than five times greater. The study also noted it is not uncommon for an obese injured person’s claim to be 30 to 60 times more expensive than its non-obese counterpart since the latter's claims are often less severe and resolved in a shorter timeframe.2
There are additional diseases and health complications correlated with being overweight. These include diabetes (Type II), high blood pressure, vascular disease, increased risk of stroke with poor circulation, joint and bone inflammation, some cancers, high cholesterol, gallbladder disease and respiratory capacity decline with potential sleep apnea.
Three Key Cost Drivers for Claims with a Diagnosis of Obesity
Data analytics – which is key to understanding factors that will lead to the most efficient and effective medical outcomes – have identified the primary cost drivers of the obesity claims. They are physical therapy, complex surgery, and prescription drugs.
Medical management teams should have a therapy provider partnership that consists of mutually agreed upon, evidence-based guidelines for services. Partnerships create efficiencies with:
- proactive communication on authorizations
- treatment by quality providers
- access to obtaining fast appointments
- turnaround times on reports
- payments at agreed discount volume rates
These all allow for timely maximum medical improvement and return to work or claim resolution, while simultaneously receiving claim cost savings with volume discounts.
Medical management teams should ensure optimal medical outcomes by partnering with quality providers. Cost savings are possible by negotiating the deepest discounts possible with surgical facilities. The benefit to the provider is that they receive timely payments at the agreed-upon rates.
Prescription drug medical management should include:
- An intuitive drug formulary incorporated into an electronic claims process which opts for generic medication approvals in same drug classes and excludes higher tiered medications.
- System logic to alert the claims adjuster when prescribed medications are unsafe, interact with other prescribed medications, or are high-cost medications. This alert prompts a further discussion with the medical management team regarding alternative treatment options.
- Communication with prescribing physicians (by a peer physician or pharmacist) to consider a change to the medication regime can positively impact unsafe prescribing patterns and reduce the high cost of medications.
How Employers Can Reduce Risk and Claims Costs
- Invest in a workplace wellness program. Employee participation creates a health and safety-centered work environment which can reap benefits well beyond the initial investment.
- Encourage employees to adopt healthy lifestyles, including a healthy diet, weight loss, regular exercise, and smoking cessation programs.
- Post-hire employment physicals. Gaining knowledge of an employee's baseline medical state at the time of hire is valuable. This proactive measure allows an employer to understand which measures they may take to keep their new employee safe at work. When employees undergo an assessment of body height, weight, and BMI, employers can identify employees with an obesity diagnosis before a work injury claim even occurs. If a post-hire employment physical isn't possible, employers may consider implementing a process in which the group insurer collects weight and height on the application for workers' compensation benefits.
While all the above steps are important, determining a pre-existing diagnosis is a key component in predicting work injury outcomes. Management of pre-existing conditions such as obesity when an injury occurs will improve health outcomes and opportunities to decrease disability days and early return to work. When an employee has an injury on the job, it is beneficial for the claims management team to be aware of these pre-existing conditions and for medical management to minimize the additional complications resulting from these pre-existing conditions.
When an injury does occur, all parties involved should implement a proactive and holistic approach to the unique claim at hand. The employers' insurer's medical management needs to communicate with claims personnel about the added risk associated with a diagnosis of obesity and other related health issues. Providers, the injured person, and their significant other should receive education on disease management and how it may affect the work injury. Including the injured person in plans helps them to understand expectations and buy into goals, which is beneficial to claim outcomes.
Innovative Medical Management to Achieve Optimal Outcomes
There must be adequate investment in managing the medical component of the claim to achieve an optimal outcome. An effective medical management strategy focuses both on the root cause of why medical spending is increasing, as well as on developing solutions to ensure injured workers receive a high quality of care that is still cost-effective.
When an employer and their claims team implement innovative medical management practices like the ones described in this article, it is a win-win experience for all parties.
- Increase in employee satisfaction; receiving quality healthcare shows employees they are valued by their employer
- Realized maximum medical improvement in a shorter time spans
- Increase in medical cost savings
- Reduction in disability benefits with efficiencies in healthcare delivery
- Increase in employee return to work or speedier claim resolution
1 Hales, C. M., M.D., Carroll, M. D., M.S.P.H., Fryar, C. D., M.S.P.H., & Ogden, C. L., Ph.D. (2017, October). Prevalence of Obesity Among Adults and Youth: United States, 2015–2016 (Issue brief No. 288). Retrieved from https://www.cdc.gov/nchs/products/databriefs/db288.htm
2 NCCI Holdings, Inc., Shuford, H., & Restrepo, T. (2010, December). How Obesity Increases the Risk of Disabling Workplace Injuries. Retrieved from https://www.ncci.com/Articles/Documents/II_obesity_research_brief.pdf