Early RTW: An Important Tool in Containing Total Employer Medical Spend
By Shawn Austin, MBA
SVP Distribution
Liberty Mutual Benefits
Early return to work (RTW) is a valuable cost-control approach that can be more effective than other strategies, such as wellness programs, cost sharing, and cost constraints.
By helping workers return to work as soon as appropriate — regardless of the type of claim — an employer often saves medical, indemnity, and indirect costs such as temporary employees and overtime.
Healthcare premiums are growing at an estimated annual rate of 6.5%, and will likely continue to outpace general inflation. Healthcare premiums are the largest benefit expense at 8.3% of employer compensation costs, according to the U.S. Bureau of Labor Statistics (Dec. 2016).
Employers have developed a range of responses to this challenge. Two of the most popular are:
- Wellness Programs: 76% of employers offer one, yet there is little evidence that they significantly lower total healthcare costs.1
- Cost Sharing/Cost Constraint: Employees are paying a greater share of their healthcare premiums, prescriptions, deductibles, and out-of-pocket costs. This approach reduces employer costs but may also reduce access to appropriate treatment.
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