Concurrent Session Tuesday, July 19 th 4:00 pm 5:00 pm

Transcription

1 How to Measure the Impact of Outsourcing Where it Counts Outsourcing your leave of absence program can be a decision driven by many factors and measuring program performance can be challenging without the right pieces in place. In order to determine if outsourcing objectives are met, it is critical to capture both quantitative and qualitative data to determine employee, financial, and overall organizational impacts. Learn how Lutheran SeniorLife developed, implemented, and manages theirapproachtoassessing theperformanceoftheirleaveofabsenceoutsourcingprogram. Cheryl Kaclik Corporate Director Benefits Lutheran SeniorLife Holly Moyer Assistant Vice President Absence Management Alliant Employee Benefits Mike Secrist Assistant Vice President Data Analytics Alliant Employee Benefits Key Discussion Points About Lutheran SeniorLife Pre-Outsourcing State RFP Process Vendor Selection Measuring Success Baseline Data Benchmarking Key Metric Selection Evaluating Initial Results Ongoing Results What s Next for our Program Questions About Lutheran SeniorLife Lutheran SeniorLife (LSL) is a faith-based, not-for-profit organization, comprised of 13 companies, with 43 sites, located in the 6 counties around Pittsburgh, Pennsylvania. 1

2 About Lutheran SeniorLife Our mission: Lutheran SeniorLife serves elders in our three-synod region, intending that recipients of our services experience a more Abundant Life regardless of their physical condition or financial circumstances. We offer residential independent living, assisted living, personal care, skilled nursing, home health, hospice, private duty care, adult day services, LIFE programs, rehabilitation services. 2 Campuses with residential living independent through hospice Several other independent living communities 4 LIFE (Living Independence for the Elderly) senior day centers, in-home care, transportation, personal care Home Care Services Hospice at home or in our inpatient facility And many other senior services We have grown from about 800 to 1500 employees in the past 4 years. Pre-Outsourcing State Program Structure FMLA & Non FMLA Administration (In House) Voluntary STD (Insured) ADA & Return-To-Work (In House) Employer Paid LTD (Fully Insured) Legal Consultations Paid-Time Off (PTO) & a few Old Sick Hours Pre-Outsourcing State Decentralized Administration Leave benefits handled at each location by HR Directors Compliance concerns due to varying operational processes FMLA time only tracked in ADP Time and Attendance; BUT, multiple spread sheets to manage leaves Complexities Employees with multiple intermittent leaves and ADA 24/7 shift work coverage and reporting issues; staffing shortages Unions at one campus 2

3 Pre-Outsourcing State Patchwork of Challenges Lack of a Clinical Component Challenging Missed Time Legal Costs Compliance Concerns HR VP Involvement in Cases Operational Disruptions Privacy Issues Employee Advocacy Managers Not Able to Assist HR with Leave Management Intermittent Abuse Tracking Increments of Missed Time Pre-Outsourcing State Identified Challenges Clinical Employee Advocacy Appropriateness Compliance Legal Consultation and Costs VP Involvement Privacy Management Employee How to Address Concerns? Operational Missed Time Disruptions Intermittent Abuse Technology Next Steps - RFP Process - Implement Partner with your Expert Consulting Group Vet Specialty Leave of Absence Administrators Plan for at least a 6 month implementation process prior to go live Identify the Evaluation Criteria Important to Your Organization: Process Efficiencies and Consistencies, Compliance Lost Time and RTW Program Improvements Reporting Capabilities Legal and Clinical Support Other Leave Types Support NON-FMLA, ADAAA Satisfaction and Performance Guarantees Pricing, of course 3

4 Measuring Success Getting Started Establishing Baseline Data Obtaining Benchmarking Data Identifying Key Metrics and Methodology Initial Results Ongoing Results Measuring Success Baseline Data Baseline Data: Tracking data related to your program pre-outsourcing. Who was out on leave? How Long were they out? Measuring Success Baseline Data Considerations Characteristics to evaluate: Systemic or Manual Tracking? Consistent Tracking? Does at least a one year period of reliable data exist to account for seasonality? 4

5 Measuring Success LSL Baseline Data Data Sources Pre-Cleanup: Look familiar? Measuring Success LSL Baseline Data Who is away from work on leave? Approved Claim Counts Measuring Success LSL Baseline Data For How Long? Lost Work Time 5

6 Measuring Success Benchmarking Data Vendors Measuring Success Benchmarking Data Important Features: Is the time period available appropriate? Specific to industry? Large Sample Size Measures are weighted to make comparison appropriate Is calculation methodology transparent? Integrated Benefits Institute (IBI) 287 Employers 237,519 Claims Total Leaves Per 100 Eligible Employees Lost Workdays Per Leave Measuring Success Key Metric Selection Quantitative vs. Qualitative Basic element of analysis numbers and statistical analysis Focus concise and narrow Basis of knowing cause and effect relationships Single reality that can be measured and generalized Basic element of analysis words, narrative Focus complex and broad Basis of knowing meaning, discovery Multiple realities that are continually changing with individual interpretation Examples: How many leaves? How much lost work time? Satisfaction rating Good, Average, Poor 6

7 Measuring Success Key Metric Selection Lost Work Days Challenging Missed Time Operational Disruptions Leaves Per 100 Employees HR VP Involvement in Cases Intermittent Leaves Per 100 Employees Operational Disruptions Intermittent Abuse Employee Satisfaction Survey Employee Relations Qualitative FMLA Determination Timeliness Employee Advocacy Return On Investment Cost Effectiveness of Decision Measuring Success Key Performance Indicator (KPI) Reporting Key Observations: Significant decreases in both approved leaves and lost time associated with approved leaves Some performance leveling in year two Intermittent leave continues to be a challenge Measuring Success Key Performance Indicator (KPI) Reporting 7

8 Measuring Success Vendor Performance Measures Measure Description Target Y1 Actual Y2 Actual Trend Employee Satisfaction Survey Survey responses will be Strongly Agree/Agree which indicates a high satisfaction level. 80% 81% 64% Introductory Information Initial FMLA packets will be sent within 2 business days of intake. 98% 98.8% 100% Notification of FMLA Leave Inbound Calls Notification of FMLA Leaves are provided to employer within 2 business. 85% of handled calls will be answered by a live representative within 30 seconds. 95% 100% 100% 85% 76.8% 59% FMLA Determinations Abandonment Rate Quarterly Reporting Initial FMLA determination will be made within 2 business days of receiving complete and sufficient documentation. 5% or less of calls may be abandoned. Calls greater than 10 seconds go to an automated phone system. Quarterly reports will be delivered within a specified number of day by the end of the quarter. 90% 100% 100% 5% 1.5% N/A 100% 25% 100% Measuring Success Return On Investment (ROI) FMLA program costs can be tricky to quantify for several reasons: FMLA is unpaid It often runs concurrently with other types of leave (often paid leave) Self-insured STD programs; salary continuation programs Employer-opted paid time off programs (i.e. PTO, vacation) Employer-paid medical leave programs (i.e. sick leave) Continuous and intermittent leaves can be tracked differently by employers There is always a high potential cost of the risk exposure that exists for inadequately administered FMLA programs The true cost of any leave of absence extends beyond the cost of claim payments to include other direct and indirect costs Measuring Success ROI Methodology PROGRAM COSTS LEAVE COSTS (ALL LEAVES) LEAVE COSTS (PAID LEAVES ONLY) Direct Administrator / Carrier Fees Fees paid to administrator/carriers for administrative services. Replacement Workers Temporary worker pay, staffing agency fees, casual pool pay, and overtime pay attributable to employee leave. Claim Payments Payments made to employees on leave. Indirect Leave Administration Cost of the time your internal resources spend administering leave programs. Lost Productivity Cost of organizational productivity lost due to employee leaves. 8

9 Measuring Success Return On Investment (ROI) Return on Investment Summary Prepared For: Lutheran SeniorLife Vendor Annual Projection Year One Actual Year Two Actual Direct Savings Estimated Reduction in Replacement Labor Costs - FMLA - (dollars) $83,385 $206,830 $252,254 Indirect Savings Estimated Increase in Productivity due to Reduction in FMLA Lost Workdays $37,060 $91,925 $114,444 Estimated Increase in Productivity due to Reduction in Administrative Burden $2,912 $1,796 $2,331 Gross Savings: $123,357 $300,551 $369,029 Vendor Fees Projected Actual Actual $9,000 $9,000 $0 Implementation Fees On-Going Fee $34,200 $32,422 $41,040 Total Fees: $43,200 $41,422 $41,040 Projected Actual Y1 Actual Y2 NET SAVINGS $80,157 $259,129 $327,989 RETURN ON INVESTMENT Measuring Success Return On Investment (ROI) Financial results have far exceeded preimplementation projections from both a direct and indirect dollar perspective Projected ROI: 2.86 Year One Actual: 7.26 Year Two Actual: 8.99 Measuring Success Assessment Summary Identify Your Measurable Goals Identify Your Qualitative Goals Define Your Baseline Data Select the Right Vendor Partner with a Knowledgeable Consultant Success Measure & Improve 9

10 What is next for our program? Analyze and Address Future Qualitative Goals Consider NON FMLA leave management Consider ADA Management Feeds of Time Missed to ADP Ongoing Monitoring Questions? 10