How Data and Analytics Can Power a Transformation in Long-Term Disability

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Employer-provided disability insurance has a problem — it’s reactive, risk-based payout, and in its current state, it cannot affect the metrics employers and employees truly care about: employee engagement, productivity and wellness.

Modern disability insurance first became available in the late 19th century and was called “accident insurance.” It was meant to protect workers in cases where a physical injury led to loss of productivity and gainful employment. Over a century ago, employees were mostly male, and employment often came with physical demands and risks. In the U.S. and other developed countries, the majority of workers who enjoy such benefits are now mostly white-collar, facing different risks than their 19th-century predecessors, and with vastly different goals. How can disability products be re-imagined to fit the 21st century?

Rethinking workplace risks

Except for 2012, employer-reported injuries and illnesses across all U.S. industries have decreased every year since 2004, according to the Bureau of Labor Statistics. Manufacturing, construction and other blue-collar industries saw injuries you’d expect from physically demanding jobs: muscles sprains, tears and other injuries related to overexertion.

But blue-collar workers account for only 13.9 percent of the workforce, according to the Washington Post; 15 percent of workers are in government, and the remaining 71.1 percent are in the service sector. The health risks that service and white-collar workers face aren’t as obvious as those blue-collar workers do. Workplace stress, for instance, isn’t easy to detect, but it’s one of the top risks to white-collar workers. A Gallup poll found 94 percent of workers in the U.S. and U.K. reported high levels of work-related stress, according to HRDive. Burnout and depression also threaten productivity.

Employers also have to contend with the consequences of opioid abuse. According to the National Business Group on Health, 60 percent of companies experienced at least one workplace issue because of prescription opioid drug misuse or abuse, and employees battling opioid addiction commonly make mistakes, underperform and pose risks to workplace safety. A Massachusetts Taxpayers Foundation study found that diminished productivity and absenteeism caused by opioid misuse cost the Massachusetts economy $2.5 billion every year.

And employers need to start identifying that employees’ mental health affects the bottom line as much as obvious physical injuries do.

Building a continuum of health

Healthcare providers currently have no insight into worker productivity. Without a broader understanding of potential workplace risks, they can’t proactively treat patients. Employers, meanwhile, want to promote wellness in the workplace, but they don’t have a strong grasp on how to help employees avoid and recover from health issues.

Workers are trapped in the middle. Many of them find their productivity challenged by outside factors — workplace conditions, their health, personal and family factors — but they don’t have holistic support to help them manage these issues. Meanwhile, employees who have been prescribed interventions such as physical therapy, often can’t make those appointments because they can’t take time off of work or struggle to pay high copays. As only point solutions are offered, each issue is compounded, contributing to greater stress and risk of productivity loss.

Cognitive solutions and predictive analytics can identify upskilling opportunities to help place workers into the right positions, even when they require modification of duties. This in turn helps increase employee engagement, improve long-term retention and boost productivity. It also relieves the burden and cost placed on insurers, human resources and managers who struggle to find the right options for employees with restrictions and limitations.

How can we combat this issue? By taking a digital view of the employee health journey across the ecosystem. The only way to do this is to aggregate the data and look for trends and breaks in the journey.

Such a platform requires partnership and transparency across health providers, disability insurers and employers and protection for employees under HIPAA and other regulations. The IBM Health platform and blockchain are a perfect fit for these challenges, providing HIPAA-enabled big data platforms, trust across blockchain networks and a neutral outside party to extract relevant insights and trends.

Learn more about IBM’s digital strategy and transformation consulting services to help you tackle your business challenges.