Adjusting instead of cutting extended health care benefits

By Alain Thériault | October 27 2007 02:12PM

Group insurance advisors are recommending to employers to adjust their coverage instead of reducing or eliminating paramedical services. These services can be beneficial to employees suffering from mental health problems. Restricting them could cost the company more in the end.

Extended health care benefits are often singled out when an employer has to reign in group insurance expenses. But "clear-cutting" this kind of coverage can disrupt the very treatments that help employees return to work faster, which frequently occurs in the case of stress and mental health-related disabilities.

The costs related to mental health are the a growing problem in group insurance plans. The Canadian Mental Health Association estimates that close to one in ten Canadians will experience an episode of depression at one point in their lives, and that one Canadian in five will suffer from a mental illness.

This general trend has a definite impact on businesses. According to an Ipsos Reid survey (Mental Health in the Workplace) conducted in Canadian companies, about 600,000 employees reported receiving a diagnosis of clinical depression in 2007.

Claims for depression-related problems represented 7.22% of the total number of claims in 2007, a percentage second only to those for high blood pressure, as ESI Canada states in its special issue on the top 100 therapeutic classes of 2007.

Another report from Watson Wyatt entitled, 2007 [email protected] Canada, indicates that 82% of short-term disability claims and 72% of claims for long-term disability are related to stress and mental health problems.

The resulting pressure on group plans has forced employers and plan providers to find ways to contain costs. Coverage for complementary therapists and practitioners is often first to come under the axe, which is not always for the best, according to Frédéric Venne, a senior consultant with Aon Consulting.

In his practice, Mr. Venne has observed that the main causes of disability are either psychological or musculoskeletal in nature. Often the target of cutbacks, paramedical services are nevertheless critical to the recovery process for these health problems, an opinion that Mr. Venne formed after helping review many group plans for large companies, such as the plan of GTC Transcontinental Group.

"By restricting the number of physiotherapy or psychotherapy sessions, you run the risk of interrupting a treatment that could have allowed the employee to come back more quickly," he warned. "If three additional visits to the psychiatrist or physiotherapist at $100 an hour allow the employee to come back a week or two earlier, then the company comes out on top, especially considering that the average cost of disability benefits is between $500 and $600 a week."

He also advises against overly restricting lab charges. "A ceiling of $300 on these charges could limit treatment options, especially if the individual needs a scan that costs $600 or $700."

When Mr. Venne reviews a plan, he tries to maximize the employer's return on investment. "My philosophy is to manage the costs for services that employees can pay for themselves to free up money for coverage with a direct impact on their health and therefore on the length of disability." 

From this standpoint, alternative and complementary services (massage therapy, naturopathy, chiropractic, etc.) lend themselves more readily to coverage limits. "These services are generally lifestyle related, whereas physiotherapy, counselling, and lab expenses fall more under insurance coverage as they protect against the unexpected," asserted Mr. Venne. "What I often suggest to businesses is that they impose an overall limit on all paramedical services, let's say $600 to $700 a year, except for physiotherapy or psychotherapy treatments."

Mr. Venne instead recommends using the approach of "reasonable and customary charges" to limit coverage for these two essential services, such as $90 per physiotherapy session and $100 an hour for psychological counselling. The treatment should not drag on interminably either. "If the employer or the plan manager sees that the treatment is not effective, it should be changed," he recommended.

Mr. Venne also applies the idea of reasonable and customary charges to medications as a way to guard against major price discrepancies between pharmacies and to encourage the use of generic medications. If a medication does not have a generic equivalent, he suggests trying to find an alternate therapy that could also be effective and that calls for a generic drug.

The idea, according to Mr. Venne, is to educate employees about their medication use. However, the overall strategy rests on the employer's commitment to a solid communication and training program. "I do not make these changes for companies that have no interest in communication."

Johanne Potvin, a vice-president at AON Consulting and the supervisor of its leave management unit, along with her team of specialists, has seen the negative consequences of extended leaves.

Gilles Normandeau and Francine Lahaise work as senior consultants on her team and came back from an international symposium on mental health with facts that give cause for concern. "After a six-month leave for mental health reasons, only half of employees are able to fully function after returning to their original positions. After one year of leave, this number decreases to 20%; after two years, the percentage falls to a few decimals."

"Extended leaves should be avoided at all cost," stated Ms. Potvin, adding that a step in this direction lies in prevention. "Managing an employee's absence and return to work is much easier when action is taken before the employee goes on leave."

According to Ms. Potvin, this prevention strategy is essential and even easier to apply when it comes to mental disorders. "Except in cases of post traumatic stress, which can't be predicted, depressive and adaptation disorders should ideally be addressed by the employer three to six months before the employee leaves."

Otherwise, she said, the leave can easily drag on for nine or 12 months, the time when short-term disability runs out (generally at 17 or 26 weeks) and the insurance company orders a medical assessment. According to Ms. Potvin, an integrated approach is the only effective answer to this problem, meaning a combined effort is required from all parties involved, including the insurance company, the employer, the employee, the treating physician and any external assistance service.

This collaborative approach can, for example, help detect an incorrect diagnosis. Ms. Potvin's team has seen cases in which the employee's treating doctor, often a general practitioner, hastily prescribes an antidepressant for a mood disorder when a different treatment is in fact required.

Citing a recent study, Mr. Normandeau and Ms. Lahaise maintain that only one patient out of ten receives the correct diagnosis (or the correct treatment) from the start. On average, it takes from two to three diagnoses before an employee receives the correct treatment, yet another factor contributing to prolonged absence.

Ms. Potvin's team has discovered another reason for extended leaves in how insurance companies do not always give employers the claim information received from the treating physician.

She advises employers to contact the insurance company as of the employee's second day of leave if the problem stems from relationship or administrative difficulties related to the employee's duties.

With the need for employers to intervene early and for all parties to work together, companies that provide assistance and training solutions are experiencing significant growth.

At Shepell-fgi, a provider that specializes in health and productivity counselling, support and return-to-work services provided to employees on disability leave have increased by 40% according to its president and CEO, Rod Phillips. "Compared to last year, there really has been an awakening as to the need for both employers and insurance companies to attack mental health problems and reduce the associated expenses," declared Mr. Phillips.

According to him, the insurance company's traditional role in disability claims, which used to entail filling out paper work, is now a thing of the past. Today, reducing costs has led insurers to become true managers of the leave and return-to-work process. Shepell-fgi has also developed a new approach for its clients to promote increased coordination between all parties involved.

Mr. Philips also indicated that a class of antidepressants called selective serotonin reuptake inhibitors (SSRIs), such as Prozac, are most often prescribed for mental illnesses. He pointed out, however, that these drugs do not always provide the desired results.

"Our experience in Ontario indicates that treating physicians take an average of ten minutes to diagnosis a mental disorder and prescribe a treatment, when ideally they should take an hour. On top of that, they generally stop at prescribing medication, whereas some illnesses require a combined therapy, or medication accompanied by sessions with a health professional," said Mr. Phillips.

Ms. Potvin has also realized that many employees avoid filling their prescriptions for fear of being stigmatized. "They think it is socially unacceptable to need a pill to deal with a mental health problem. Employees need to be educated about the importance of taking their medication."

Insurance companies have been working to increase return-to-work programs that promote collaboration between everyone involved in the disability leave. An example is Manulife Financial's Workplace Solutions for Mental Health, which was launched in September.

The program is designed for corporate clients and uses an integrated approach on a case-by-case basis to reduce employee absence. "Our solution covers all aspects of the process, from prevention and early intervention to treatment management and the employee's return to work," said Donna Carbell, vice-president, disability and absence management solutions at Manulife Group Benefits.
According to Ms. Carbell, the manager's involvement is essential in trying to prevent the absence in the first place and in supporting an employee who returns to work after a sick leave.

Manulife has created online courses and guides specifically for supervisors to ensure they know what to do when someone returns after a leave for a mental or physical health problem. Meetings are also held between the employee, the manager and Manulife.

Ms. Carbell emphasized that in terms of prevention, the insurance company only provides services to managers if required. If these services are needed, managers receive tools to help them detect mental health problems. Managers can also access online training activities or courses developed in collaboration with Wilson Banwell, a firm that provides companies with psychological counselling services.

If supervisors think it will help, they can refer employees (with their consent) to Manulife before the individual goes on disability.

"We want the return-to-work process to succeed, which only happens when there is good coordination between everyone involved. All parties have to work from the outset to see, for example, if other treatments are available," explained Ms. Carbell.

While the Manulife program is free for the company, it does not relieve the employer of having to intervene early, as the program can only be applied when the claim is submitted.

However, trying to understand the employee's situation at the time of claim can still help, even if the company was not able to act beforehand. "We can improve the chances that an employee returns to work if we get a clearer idea of how the employee on leave is able to function."

Manulife says that more than 30% of the benefits that it pays out for long-term disability claims are related to mental health disorders. It cites industry studies showing that the impact of mental illness on the Canadian economy is more than $51 billion a year due to losses in productivity, direct medical expenses and reduced quality of life.