A lack of adviser knowledge could be contributing to the fact that only 6% of income protection claimants are engaged in rehabilitation services, according to a new report by Swiss Re.
The report, titled Rehabilitation Watch 2014, investigated the costs, benefits and trends in rehabilitation services in Australia’s life insurance market. It found that while many industry stakeholders are aware of the positive impact that rehabilitation can have on claimants and claims costs, only 5-6% of income protection claimants are currently engaged in rehabilitation services.
A clear link between the degree of stakeholder knowledge about the purpose of rehab services and take-up by claimants was also established by the report. The ‘motivation and attitude of claimants’ was found to be the biggest challenge in increasing the usage of rehabilitation services, and stakeholders, such as advisers and employers, were shown to play a significant role in influencing the claimant to pursue rehabilitation strategies.
According to the report’s author, and Swiss Re Claims Medical Specialist, Carly Van Den Akker, in order for rehabilitation strategies to be effective there needs to be engagement with all key stakeholders.
“However, the degree of stakeholder involvement can either help or hinder the strategy,” Ms Van Den Akker said in her report.
“Participants (insurers and rehabilitation providers) reported an inconsistent level of engagement with advisers in facilitating rehabilitation and return to work support. The factor driving this inconsistency was thought to be the adviser’s knowledge and understanding of the purpose of rehabilitation services. This response varies from advisers being quite positive and welcoming of such support for their client, through to negativity and resistance to rehabilitation.”
…adviser resistance is often driven by the perception that rehabilitation is a mechanism to force their clients back to work
Ms Van Den Akker explained that adviser resistance is often driven by the perception that rehabilitation is a mechanism to force their clients back to work.
“This mindset is also demonstrated when advisers (and now more commonly, claimant solicitors) block participation due to the fact that their clients are not obligated to participate under the policy,” she said.
In addition, Ms Van Den Akker believes that many advisers lack an understanding of what is included under policy rehabilitation benefits, often requesting funding or coverage for medical treatment for their clients. In addition, some insurers noted that they face barriers in managing claims when advisers have sold or promoted the insurance policy as a means for the client to retire if they cannot return to his/her own occupation.
“Returning a claimant to work is a benefit for all parties. For the insurer it means claims can be finalised and reserves managed accordingly, but for the claimant, a return to work is hugely important for reasons that extend beyond just the financial incentives of getting back to a 100% pre-disability income.”
Among the advantages of rehabilitation for claimants are:
- Improved health and confidence
- Supportive, gradual return to gainful employment
- Workplace return to work assistance, usually only offered to people on workers compensation claims
- Improved quality of life through enhanced coping strategies and functional abilities
- Improved communication and engagement between the insurer and the claimant
The Australasian Faculty of Occupational and Environmental Medicine has also produced the Health Benefits of Work statement, to which Swiss Re is the first life reinsurer to become a signatory. The Statement presents compelling international and Australasian evidence that long-term work absence, work disability and unemployment generally have a negative impact on health and wellbeing.
Further, when rehabilitation services are implemented, insurers reported a strong return on investment. The report showed that for every $1 spent on external rehabilitation providers, insurers saved an average of $39. The average cost for external rehabilitation was found to be $3,640 per income protection claim, and $1,803 per TPD claim.
“It is our belief that as an industry, being able to demonstrate the cost-benefit of rehabilitation should drive our focus to think innovatively about how we are able to increase utilisation and continue to deliver cost-effective claims outcomes,” Ms Van Den Akker said.
Mark Senkevics, Head of Swiss Re Australia and New Zealand, added: “Rehabilitation Watch has some encouraging messages. The positive financial impact rehabilitation can have is starting to be understood and the market is focusing on promoting the intrinsic value of rehabilitation in assisting people to make a recovery and a return to health and work.”
Interesting article and reconfirms that there is a high percentage of adviser who don’t get involved in claims however In my experience claims staff haven’t offered the client rehabilitation, we have had to ask or remind them of what their policy covers.
I agree with Don Fessey here. As he says, some advisers don’t get involved in the claims process. This is fundamental to good client relationships. Indeed, how can an adviser not do this and retain his client’s goodwill? It is also an excellent prospecting strategy. By focusing on the work an adviser can do/does on clients’ behalf it raises our profile as advisers rather than being viewed as – dare I say it – snake-oil salesmen.
As for rehab matters, this is an area in which we’d do well to focus more. Surely this will help increase our professionalism in the eyes of the insurance-buying public.
I certainly agree with Don’s comments above. Thorough knowledge of individual policies is required as although we have had wonderful claims assistance from insurers, we have rarely seen clients offered rehabilitation or additional support. We have had to request this on behalf of our clients in all cases. It may come down to a lack of time from the claims team as facilitating additional support requires time, effort and a thorough understanding of each clients needs and paying the monthly benefit may just be easier!. This is certainly where we as advisors need to continue our involvement with the claims process and continue to advocate on behalf of our clients for the best long term outcome.
Mixed experiences for me. Positive-a client had a depression interstate. A rehab specialist doing other work for the insurer rang me to offer to visit the client. A quick visit enabled the clients claim to be short cut. Excellent result
The opposite was when a rehab person turned up,( yes,by apt,) and grilled the claimant and then verballed him, interpreting everything wrong. This rehab guy was a failed nurse, but he clearly thought there were brownie points if he could bluster the client to admit malingering ( only 5 blocked arteries, not a problem)
Same insurer, different result. Neither operatives were on staff at the insurer., who had subbied out the rehab services
Insurers need to sell this to advisers. Insurers need to carefully select these people and remind them they ARE NOT CLAIMS investigators but people who may be able to assist a quicker RTW by facilitating NON COMPULSORY rehab services
I notice in the Swiss Re report that treating medical practitioners have, perhaps understandably, been omitted from the stakeholders list. Yet the greatest barrier I witness across many thousands of claims-related treating doctors’ and independent medical examiners’ reports on claimants, is a lack of ‘attitude’ compared to say the UK medical fraternity who have been taught to embrace the Return to Work value model.
Aussie doctors are too busy, untrained in rehab/RTW principles and too willing to throw meds and medical certificates at patients and certifications of disablement – often writing off young patients with huge potential for rehab as TPD – to insurers. They are a huge barrier to the whole prospect of rehabilitation working effectively here for our industry. Doctors tell patients they are lost causes not in so many words but by their very actions month in and month out. Patients – our claimants – develop a ‘non-recoverable’ paradigm early on and it sticks. There’s a huge job to be done with medicos and we need to take a leaf out of the UK’s book where government, insurance industry and health bodies worked very hard to turn disability upside down and turn it into work capacity. We are not even at first base yet.
So – good on Swiss Re for getting this conversation going, but there’s a huge amount of work to be done and it’s not with advisers as first port of call!
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