Seamless insurance programs are changing the role of case managers

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ince the health care reform debates of 1994, our nation's health care system has undergone major transformations that have restructured and reengineered health care delivery, including more and bigger health maintenance organizations (HMOs), more and bigger business coalitions for shopping and buying health benefit plans, more physician-hospital organizations (PHOs) and integrated delivery systems (IDSs), and several other changes. Since 1994, most changes have been organizational and driven by hectic mergers and acquisition activities in the insurance, HMO, hospital, and pharmaceutical industries, as well as in the physician community.

Another major change has been the constant expansion of the managed care concept to both old and new insurance products and populations. Managed care and case management approaches have found their way into the care of Medicare and Medicaid populations enrolled in HMOs, subacute services management, and automobile accident insurance management. Currently eight states have mandated managed care workers' compensation programs; another 18 states regulate managed care but do not require employers to offer it. We also are beginning to see managed care concepts applied to the management of employee absenteeism, thereby influencing the production rate of worker populations in large, self-insured employers. Maximizing the bottom-line profitability of large companies is the newest focus of risk managers who are using more managed care and case management approaches to control all disability and medical costs associated with their companies. The prolonged 1994 debate on "universal coverage" and the advantages of "one policy for all" have provided the impetus TCM 40

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for many Fortune 500, self-insured companies and carriers to combine oncefragmented insurance products into a unified policy for managing episodes of illnesses and injuries regardless of their causes. For example, occupational and nonoccupational injuries and illnesses now are coupled into one universal insurance program. This has evolved into the development of 24-hour programs by several large and prominent HMOs over the past 2 years. The rapid organizational and benefit program changes that have occurred recently provide more opportunities and special challenges to the case management profession and to case managers themselves. Some of those challenges are highlighted in this article.

The Cost Crisis In Workers' Comp Drives Stato Reform Initiatives Rising and runaway costs have been the primary force behind workers' comp reform and the movement toward embracing managed care. From 1985 to 1990, national health care expenditures increased 9.8% per year; workers' comp increased 15.2% annually. The increases from 1990 to 1995 did not indicate any significant improvement. Because of the runaway expense, many states passed legislation allowing insurers and employers to use managed care programs as a means of putting a lid on rising costs. Cost containment also has prompted states to allow carriers to merge workers' comp medical care coverage with group medical coverage.

~.amieu Employee Benefits System The rising cost of employee benefit programs has forced many prominent and innovative employers, particularly large, self-insured companies, to create seamless systems of employment-based benefits. The primary reasons for these companies to create such unified programs were to reduce duplication, eliminate waste, cut

administrative expenses, simplify the process of care, and prevent the cost shifting that has been going on for years. Corporations finally recognize it makes little sense for a person injured as a result of work to receive medical care differently from someone suffering the same injury at home. Another primary driving force for the coverage merger is a prevalent CEO attitude that makes workforce productivity a top priority in American businesses facing stiff competition both at home and abroad. Examples of companies that see the financial promise through integrated health care include Hershey Foods, Sears Roebuck & Co., Bell Atlantic, Owens Corning, Pepsico, Pitney Bowes, General Electric, Steelcase, and Alabama Power. The challenges of merging both health benefits and health care systems to form only one care system to handle group medical, workers' comp, short-term disability, and long-term disability are many. The impediments that need to be overcome include insurance and Employee Retirement Income Security Act regulations, data requirements, medical control, federal constraints, state mandates, claimadjusting restrictions, and emerging new roles of case managers, including "who is in command and control" issues. It's not business as usual anymore. Insurance programs once sold and managed separately now are managed as one unified, multiline program, creating several additional problems. One problem is setting new program goals driven by bottomline profitability of the company. With disability costs increasing 13% a year and the cost of disabilities taking 8% to 10% of a company's payroll, the risk managers of American businesses are fighting to bring these costs under control to sustain their company's competitive edge. As a result, risk management and loss-control programs are being micromanaged across all

MCO TRENDS insurance plans that cover work absences. Many forward-looking Fortune 500 companies now take an aggressive, holistic approach to managing both health and disability benefits for their workers. The focus is directed at the care of people versus worrying about the cost of a particular insurance program; the company goal is redirected at getting healthy employees and keeping them healthy on the job and as productive as possible. For some businesses, this goal is accomplished by also investing in aggressive health promotion and wellness programs, creating exercise and child care facilities, and applying progressive rehabilitation and hands-on medical case management services.

has not been significant to date because many still are focusing their attention on renewed opportunities to add more Medicare and Medicaid beneficiaries to their membership. The movement to integrate medical group coverage with workers' comp presumably has several advantages to employers. Integration yields cost and service advantages because it reportedly:

9 Reduces administrative costs 9 Reduces (by as much as 40%) medical costs and claims management 9 Eliminates opportunities for cost shifting

The initial movement toward insuranceproduct coupling increased soon after the health care reform debates in Washington. Since that time, more than a dozen states have passed legislation permitring insurance companies to combine insurance products. The first major attempt at integration gave rise to the 24hour program, a concept that produces a seamless employee insurance program by integrating group medical coverage with workers' comp. Not a simple task.

9 Maximizes health and work injury management outcomes

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Changing the network composition of providers, especially those specializing in the management of occupational injuries/illnesses Managing the crossover access to greater benefits under the workers' comp portion of the programs

9 Eliminates double-dipping

Initial Movement Toward Integration of Benefits and Care Services

This attempt to integrate benefits is being tested in California and Oregon with mixed results. Very little data for evaluation have yet to be found in the literature. The prevailing concept is to have one program of care and to provide the necessary services through m a n a g e d care organizations, primarily through H M O provider networks. Much hype appeared in the literature in 1996 that HMOs somehow would move aggressively into this market and capture the lion's share of the business before the turn of the century. Some HMOs indeed moved in this direction either by buying insurance companies or by becoming partners with large commercial carriers that offer workers' comp programs as a primary line of business. Again the number of HMOs that have moved into the 24-hour care market

create several programmatic challenges, questions, and concerns for those HMOs who have ventured in this area, including:

Coordinating services and information-sharing between the programs and attendant providers 9 Determining who should be members of the case management team Answering the age-old problem of who's in charge of the multidisciplinary case management team (adjusters versus nurse case managers)

9 Results in faster return-to-work rates 9 Reduces sick leave and absenteeism and improves workers' productivity and morale Designing, developing, and implementing a seamless benefit system and care delivery system result in several organizational and administrative challenges to HMOs, namely: 9 Obtaining doctors who can treat both occupational and nonoccupational injuries and illnesses 9 Resolving issues of patient confidentiality regarding medical and work injury data 9 Managing patients across the continuum of care using two distinct and sometimes conflicting products in terms of extent of coverage ~ Developing cost accounting and databases that allow aggregation and disaggregation of information Attempts to produce seamless products

Eliminating the voluminous paperwork required to satisfy state regulatory requirements of workers' comp programs

Combined Coverage Challenges Despite the fact that little data have been published on the serious dilemmas created by seamless systems of care, several innovative employers already are moving ahead to combine short-term disability and long-term disability with their group medical and workers' comp programs. The new focus of these programs is to manage the lost production time of employees that results in lost profits. Integrating the management of both occupational and nonoccupational disabilities provides employers with a uniform return-to-work approach; a nonbureaucratic, seamless system of care for employees; consolidated information; and substantial savings. Integration is an idea whose time finally has arrived and adds millions of dollars to a company's bottom line. Some large, self-insured employers are managing care on a much more aggres-

sive basis by encouraging their employees to stop smoking, drink less, and lower both their weight and stress levels. Others are focusing on micromanaging the diseases that cause 80% of the medical group costs. These employers recognize that good health first looks to well-being. Many companies promote worksite health promotion and self-care programs that keep their work force fit and work attendance high, thus making the company more profitable. The number of companies that will take a combination approach is expected to grow. The strategy of combining group medical, workers' comp, and disability coverage into a universal program makes a great deal of sense. However, it does demand an enormous amount of coordination and information exchange between providers, case managers, employer, claims adjusters, and daims payment personnel. Problems typically are encountered by employers when they first buy into the idea---easy to view in terms of flowcharts, steps, and procedures but extremely difficult to implement. The major problems relate to sharing information, identifying who has the need to know, maintaining confidentiality, sharing decision-making, and balancing the sometimes conflicting roles and responsibilities of all persons involved: employee, employer, case manager, claims adjuster, vocational counselors, physicians, and other health care providers. The concerns begin to multiply when an HMO becomes a partner with an employer. The problem is not one of daims management or reporting the costs; it is a matter of getting the case managers to be part of the company culture so the program works right. Because the case manager needs to "work" for the company, providing both medical care and case management services is difficult for some HMOs. The end result in many cases is the HMO just provides the uniform medical delivery system. Building a case management team necessary for these types of integrated insurance products poses new challenges. Several major problems must be overcome

The multidisciplinary world of case management is affected by the employment of the case manager, the patients' insurance programs, and the expected outcomes. to achieve the overall goals of reducing absenteeism and company-wide disability costs while improving the productivity of the workforce. The problems that must be addressed and resolved up front by the employer, HMO, case managers, and other partners include: 9 Major differences in workers' comp, group medical, and disability coverage, each of which are defined and regulated differently by individual states 9 Litigation perils that come with the integration of workers' comp and group medical into a 24-hour program 9 Turf battles of claims adjusters, case managers, and vocational counselors 9 New timing for actions, expectations, and accountability 9 Language diversity and nomenclature issues 9 The need to blend the best practices from the clinical and technical components of the once-different insurance programs 9 Compensability and coverage issues

9 New reporting and tracking systems 9 New monitoring approaches for new outcomes for the medical, clinical, and financial impact to the company New flexibility and "out of the box" thinking definitely are required to overcome the barriers these problems create for integrating case management approaches. Many of the above are easy tasks when one has an employer-based case manager w h o works for the company. They become more complex w h e n case managers are independent contractors or are employed by a partnering HMO that provides the uniform medical delivery system. Implications for the Profession and Profeuionals Of course many paths to the future exist. H o w successfully the case management future evolves will depend on the visions of forward-thinking employers, HMOs, health care professionals, and carriers involved in shaping the future's game. The visions promoted by large, innovative employers and HMOs involve more new applications of case management theory and practice in treating employees and patients holistically. That it is the right thing to do drives many

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employers in this direction. By offering employees case management services in all lines of insurance coverage (group, workers' comp, short- and long-term disability), each c o m p a n y demonstrates its interest and concern for treating individuals holistically, thereby improving the welfare of its most important resource-people. Changes in the case management marketplace affect everyone involved---corporations, HMOs, insurers, patients, case managers. The newest changes are promoted by risk managers who push the envelope of integrating old insurance products. Their motives are shaped by the bottom-line need to realign and rework the production resources of their companies. These business forces cause profound changes in how case managers respond to new demands for their skills and how they are viewed by companies, HMOs, and insurers alike. Several paradoxes and frustrations befall today's case managers. Case management is a young profession that continues to evolve in a somewhat volatile, changing world. Case management needs to be further defined, but it also needs to become more flexible and nontraditionaL Case managers must always extend their ability to work in different work environments with other disciplines and to further develop and improve the practice of case management--a tall order when case management is being pushed and pulled in many different directions by insurers, HMOs, employers, and the profession itself, each of which is trying to satisfy its constituency. Case management is pushed to broaden its approach to somehow include all lines of insurance yet is pulled in other directions to specialize in specific disease management programs and specific insurance coverage. Such demands are going to be a dilemma for tomorrow's case managers; however, they also create a strong argument for the introduction of case managers who handle all product lines or multiproduct lines and who will further develop the generic guidelines initially TCM 44

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proposed by Aetna/ICMA. HMOs continue to wrestle with the problem of employing case management specialists who can focus only on specific disease problems (e.g., obstetrics, prenatal care, and diabetic care) rather than generalists who can address a wide range of (disease) problems regardless of their cause. Yet HMOs also want to offer case management services across multiple providers and to different populations-commercial, Medicaid, Medicare, and, for some, 24-hour programs. The situation worsens when case management is applied across insurance programs, changing its scope to returning people to work without regard to the cause of illness or injury. Return-to-work is a difficult issue for today's HMO and independent case managers because they need on-site access to the workers and the company to assimilate the company's culture into their services.

Conclusion As the health care industry changes, integrates, and consolidates, so does the demand for integrated case management across both multiprovider and multiline insurance products. New case management models developed by tomorrow's case managers will result in stronger companies, HMOs, and case managers. They also will improve the practice of case management by demonstrating economical, quality care for m a n y ill people touched by the case management process. (3

medical care is affected by health care reform. Public Health Rep 1996;III(1):12-24. Kreider J. The ultimate in case management opportunities: all lines case management coverage. The Case Manager 1996;7(4):47-52. Major MJ. Managed care and case management: the dynamic duo of the future. Managed Healthcare 1996;6(8):28-32. Shalowitz Cowan D. 24-hour coverage faces barriers. Business Insurance 1996;30(45):15-8. Strickland T. The HIAA study: rehabilitation/case management programs yield substantial costs savings. The Case Manager 1996;7(3):67-9. Toran MR. Case management in a changing world. The Case Manager 1996;7(1):69-73.

John Coleman, PhD, is an associate with The Corridor Group in Overland Park, Kansas.

lUbllogmphf Bradford M. Mandating managed care draws resistance. Business Insurance 1996;30(45):3-4. Etheridge L, Jones SB, Lewin L. What is driving health system change? Health Aff 1996;15(4):93-104. Gemignani J. Making wellness programs pay off. Business & Health 1996;14(8):61. Himmelstein J, Rest K. Working on reform: how workers' compensation

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