Alarming Disability Trends
In an unexpected and alarming trend for U.S. employers and government policymakers, disability rates for adults in their prime working years have risen sharply in the past two decades, a 2004 RAND Corp. study shows. The number of people 30-49 years old who cannot care for themselves or do other routine tasks jumped more than 50% from 1984 to 2000, and smaller but significant rises also occurred among those aged 18-29 and 50-59.
The numbers are relatively small – about 2% disabled in the 30-49 age group – but the size of the jump foreshadows potentially huge issues for employers wrestling with productivity and healthcare costs. In addition, a study from Brandeis University found that, for the first time ever, hospital and healthcare expenditures are rising faster for people in the Baby-Boomers’ age group than for the elderly. Increasing disability rates were expected as the Baby Boomers aged, but they are occurring sooner and in larger numbers than forecast.
“Obesity may be the primary reason,” says Dana Goldman, the RAND study’s principal investigator. Diabetes, mental illness and musculoskeletal problems are the top causes of disability in younger people, and all are statistically linked to obesity. Obesity-related disability claims have gone up tenfold over the past decade, a UnumProvident study shows.
This isn’t just a U.S. problem. Obesity, for example, affects nearly 300 million people worldwide, and it’s increasingly occurring in developing as well as developed nations. This could cause disability problems to grow at a faster pace than demographers once anticipated. The International Labour Organization (ILO) estimates there are already 610 million people with disabilities worldwide, 386 million of working age. About 80% live in developing nations.
These trends have a number of impacts on the workforce. For one thing, unemployment is significantly higher among people with disabilities than in the workforce as a whole, ranging from twice as high to 80% higher-than-average unemployment rates in some countries. Among OECD countries, employment of the disabled population ranges from 60% in Norway and Switzerland to 20% in Poland and Spain.
A labor force made up of more disabled workers can also present employers with a complex array of legal issues. In the U.S., despite Supreme Court rulings that have significantly limited the scope of the Americans with Disabilities Act (ADA), companies must contend with the complicated interplay among the ADA, the Family and Medical Leave Act, occupational safety and health laws, a maze of state and local regulations protecting disabled workers, and Social Security Disability Insurance coverage. What constitutes a disability, who is covered, under what circumstances, through what accommodations, and who pays all continue to be sorted out.
But perhaps the biggest employer concern of all is related to rising costs, which can be measured in billions in the U.S. alone. In response, many large companies have turned to integrated disability management (IDM) plans. A study of private-sector employers by Cornell University found that effective IDM plans help increase acceptance of employees with disabilities, raise supervisor awareness of the accommodation process and develop an organizational structure that funds accommodations.
In essence, IDM programs “break down the imaginary barrier between occupational and nonoccupational disability coverage and healthcare delivery by combining wellness/disease management, short-term disability coverage, long-term disability coverage and workers’ compensation coverage into one program,” explain Steven Cyboran and Barry Miller of The Segal Co.
Lighting and materials enterprise Osram Sylvania recently developed an IDM program to encourage absent workers to come back to work, keep employees productively engaged in the workplace, and coordinate vendors, processes and claims payment strategies. The firm’s risk management professionals Christine Sheedy and Tricia Chambers detail how their organization “installed a medical/case management program that encourages employees to report injuries in a timely manner, works with them to develop treatment plans, directs them to appropriate medical providers and accommodates their early return to work.”
In addition, the company set goals for local managers in regard to on-the-job injuries, recruited a legal expert who monitors the most costly and critical of claims, and created managed care measures in order to “direct care within an approved medical network, resulting in reduced medical costs,” according to Employee Benefit Plan Review.
Osram Sylvania reportedly enjoyed a 20% cost savings in the first year of the program. As healthcare costs climb and the number of workers suffering disabilities continues to grow, other organizations are likely to establish or work to improve their IDMs and other absence-management policies.
For a PDF article on workforce strategies for helping to reduce obesity, see http://www.unum.com/newsroom/publications/April04ObesityAnfield.pdf
For an article on how UnumProvident Corp. wants to help workers lose weight, see http://www.telegram.com/static/reprints/unumreprint.html
For an article on how to make leave management more workable, go to http://www.jacksonlewis.com/legalupdates/article.cfm?aid=580
To read the ILO’s The Right to Decent Work of People with Disabilities, which is in PDF format, click here.
The following sources were used in the writing of this TrendWatcher:
Anfield, Robert. “Worksite Strategies Help Battle Costly Rise in Obesity.” Health Insurance Underwriter, April 2004, pp. 83-84.
Curtis, Jeff and Liz R. Scott. “Integrating Disability Management into Strategic Plans: Creating Healthy Organizations.” AAOHN Journal. ProQuest. July 2004, p. 298.
Cyboran, Steven and Barry Miller. “Absence (Management) Makes the Heart Grow Fonder.” Workspan. ProQuest. June 2004, p. 36.
Esposito, Andi. “Insurer Setting Example: Company Helps Workers Shed Pounds.” Worcester Telegram, Business section, July 11, 2004.
Nobile, Robert J. “The Interplay Between the FMLA and ADA.” HR Advisor, May/June 2003, pp. 42-47.
“Obesity-Related Disability Claims Increase Tenfold.” Human Resource Management, April 30, 2004.
“‘Peripheral Vision’ Needed to Navigate Requirements on Employee Leaves.” New York Law Journal, February 23, 2004.
Racette, Susan B., Susan S. Deusinger, and Robert H. Deusinger. “Obesity: Overview of Prevalence, Etiology, and Treatment.” Physical Therapy, March 2003, p. 276.
Reilly, Arthur. The Right to Decent Work of People with Disabilities. International Labour Organization. 2003.
Rivera, Patricia V. “Disability Management Growing Amid Productivity, Cost Concerns.” Dallas Morning News [Knight Ridder/Tribune News Service]. Lexis/Nexis. August 17, 2004.
Sheedy, Christine and Tricia Chambers. “Absence-Minded.” Employee Benefit Plan Review. ProQuest. May 2004. p. 16.
“Study: Obesity Raising Disability Rate.” New York Times [Associated Press], January 8, 2004.
Winslow, Ron. “Obesity Is Linked to Rising Disability in Younger Adults.” Wall Street Journal, January 9, 2004.
The numbers are relatively small – about 2% disabled in the 30-49 age group – but the size of the jump foreshadows potentially huge issues for employers wrestling with productivity and healthcare costs. In addition, a study from Brandeis University found that, for the first time ever, hospital and healthcare expenditures are rising faster for people in the Baby-Boomers’ age group than for the elderly. Increasing disability rates were expected as the Baby Boomers aged, but they are occurring sooner and in larger numbers than forecast.
“Obesity may be the primary reason,” says Dana Goldman, the RAND study’s principal investigator. Diabetes, mental illness and musculoskeletal problems are the top causes of disability in younger people, and all are statistically linked to obesity. Obesity-related disability claims have gone up tenfold over the past decade, a UnumProvident study shows.
This isn’t just a U.S. problem. Obesity, for example, affects nearly 300 million people worldwide, and it’s increasingly occurring in developing as well as developed nations. This could cause disability problems to grow at a faster pace than demographers once anticipated. The International Labour Organization (ILO) estimates there are already 610 million people with disabilities worldwide, 386 million of working age. About 80% live in developing nations.
These trends have a number of impacts on the workforce. For one thing, unemployment is significantly higher among people with disabilities than in the workforce as a whole, ranging from twice as high to 80% higher-than-average unemployment rates in some countries. Among OECD countries, employment of the disabled population ranges from 60% in Norway and Switzerland to 20% in Poland and Spain.
A labor force made up of more disabled workers can also present employers with a complex array of legal issues. In the U.S., despite Supreme Court rulings that have significantly limited the scope of the Americans with Disabilities Act (ADA), companies must contend with the complicated interplay among the ADA, the Family and Medical Leave Act, occupational safety and health laws, a maze of state and local regulations protecting disabled workers, and Social Security Disability Insurance coverage. What constitutes a disability, who is covered, under what circumstances, through what accommodations, and who pays all continue to be sorted out.
But perhaps the biggest employer concern of all is related to rising costs, which can be measured in billions in the U.S. alone. In response, many large companies have turned to integrated disability management (IDM) plans. A study of private-sector employers by Cornell University found that effective IDM plans help increase acceptance of employees with disabilities, raise supervisor awareness of the accommodation process and develop an organizational structure that funds accommodations.
In essence, IDM programs “break down the imaginary barrier between occupational and nonoccupational disability coverage and healthcare delivery by combining wellness/disease management, short-term disability coverage, long-term disability coverage and workers’ compensation coverage into one program,” explain Steven Cyboran and Barry Miller of The Segal Co.
Lighting and materials enterprise Osram Sylvania recently developed an IDM program to encourage absent workers to come back to work, keep employees productively engaged in the workplace, and coordinate vendors, processes and claims payment strategies. The firm’s risk management professionals Christine Sheedy and Tricia Chambers detail how their organization “installed a medical/case management program that encourages employees to report injuries in a timely manner, works with them to develop treatment plans, directs them to appropriate medical providers and accommodates their early return to work.”
In addition, the company set goals for local managers in regard to on-the-job injuries, recruited a legal expert who monitors the most costly and critical of claims, and created managed care measures in order to “direct care within an approved medical network, resulting in reduced medical costs,” according to Employee Benefit Plan Review.
Osram Sylvania reportedly enjoyed a 20% cost savings in the first year of the program. As healthcare costs climb and the number of workers suffering disabilities continues to grow, other organizations are likely to establish or work to improve their IDMs and other absence-management policies.
For a PDF article on workforce strategies for helping to reduce obesity, see http://www.unum.com/newsroom/publications/April04ObesityAnfield.pdf
For an article on how UnumProvident Corp. wants to help workers lose weight, see http://www.telegram.com/static/reprints/unumreprint.html
For an article on how to make leave management more workable, go to http://www.jacksonlewis.com/legalupdates/article.cfm?aid=580
To read the ILO’s The Right to Decent Work of People with Disabilities, which is in PDF format, click here.
The following sources were used in the writing of this TrendWatcher:
Anfield, Robert. “Worksite Strategies Help Battle Costly Rise in Obesity.” Health Insurance Underwriter, April 2004, pp. 83-84.
Curtis, Jeff and Liz R. Scott. “Integrating Disability Management into Strategic Plans: Creating Healthy Organizations.” AAOHN Journal. ProQuest. July 2004, p. 298.
Cyboran, Steven and Barry Miller. “Absence (Management) Makes the Heart Grow Fonder.” Workspan. ProQuest. June 2004, p. 36.
Esposito, Andi. “Insurer Setting Example: Company Helps Workers Shed Pounds.” Worcester Telegram, Business section, July 11, 2004.
Nobile, Robert J. “The Interplay Between the FMLA and ADA.” HR Advisor, May/June 2003, pp. 42-47.
“Obesity-Related Disability Claims Increase Tenfold.” Human Resource Management, April 30, 2004.
“‘Peripheral Vision’ Needed to Navigate Requirements on Employee Leaves.” New York Law Journal, February 23, 2004.
Racette, Susan B., Susan S. Deusinger, and Robert H. Deusinger. “Obesity: Overview of Prevalence, Etiology, and Treatment.” Physical Therapy, March 2003, p. 276.
Reilly, Arthur. The Right to Decent Work of People with Disabilities. International Labour Organization. 2003.
Rivera, Patricia V. “Disability Management Growing Amid Productivity, Cost Concerns.” Dallas Morning News [Knight Ridder/Tribune News Service]. Lexis/Nexis. August 17, 2004.
Sheedy, Christine and Tricia Chambers. “Absence-Minded.” Employee Benefit Plan Review. ProQuest. May 2004. p. 16.
“Study: Obesity Raising Disability Rate.” New York Times [Associated Press], January 8, 2004.
Winslow, Ron. “Obesity Is Linked to Rising Disability in Younger Adults.” Wall Street Journal, January 9, 2004.