BenefitsContributorsEngaged Workforce

HRO and Healthcare: It’s Time for Providers to Innovate

On-site healthcare and disability management benefits employees and the corporate bottom line.

by Glenn Davidson

The conventional wisdom among observers of the HR outsourcing industry is that providers want customers to focus more on service quality while customers primarily want to talk about costs. But what if a new HRO service were launched that not only helped lower employee costs but also had an immediate, measurable impact on worker productivity?

Most every organization operating in the United States—be it in the private or public sector—is concerned about healthcare costs. Yet despite this clear market need, HRO providers are reticent to offer innovative solutions. Clearly one of the greatest opportunities for an expanded HRO role is healthcare management.   

Workforce health—primarily in the form of on-site healthcare and disability management—creates numerous benefits, including:

  • Fewer lost work-time cases;
  • Reduced lost work time due to illness or injury;
  • Decreased workers’ compensation costs–both medical and indemnity;
  • Less lost work time because employees no longer have to travel offsite for medical care (a half hour for a visit to an onsite clinic versus a half day for an offsite doctor visit; and
  • Improved at-work employee productivity.

By providing programs that optimize workforce health and organizational productivity, HRO providers could take a more strategic role in service delivery.

Providers of occupational health and wellness services could offer more than on-site healthcare services. Through strategic partnerships, they could offer other health-related benefits that can be integrated into the employee health offering such as health promotion, exercise and nutrition planning, disability advice, and disease management. When offered by a single provider, the broad scope of these aggregated services represents a simplified employer offering. 

For organizations with geographically dispersed populations, HR outsourcing could incorporate national occupational health provider networks for pre-employment exams, fitness-for-duty exams, and medical surveillance. By doing so, another critical HR issue is addressed with an outsourcing solution that generates greater value for customers. So clearly, outsourced workforce health services could generate significant returns on investment.     

By incorporating occupational health and wellness services into an HRO product, significant workforce health management skills could be brought to bear for data analysis. The greatest appeal and value for incorporating workforce health into the HRO offering is the creation of a single, integrated information system in addition to the integration of health-related services.   

Comprehensive data collection and integration could more effectively identify the root causes of employee illness, injury, or lost work time, leading to effective solutions. For example, without integrated data, it might be difficult for an employer to acknowledge that the highest absentee rates are from a particular work area and are due to previously unrecognized environmental exposure. Or employees may remain out of work due to an ineffective return-to-work program and poor communication with disability case management.

And from a health benefits perspective, an integrated system could allow employees to have many more touch points. They could be referred to health and wellness programs that would effectively prevent much more serious and costly problems down the road. A fully integrated program results in more effective management and enhanced operational efficiency.

So, if these services offer so much promise, why haven’t they been implemented? I believe that healthcare management has fallen victim to a blind spot in organizations’ HR departments. This area of expertise doesn’t seem to be a core competency for many human resource departments. Because HRO solutions are commonly created to mirror services already provided by HR, innovation has lagged.

HRO providers helped usher corporations into the 21st century by promoting greater discipline in HR services. Now it’s time for this influence to spread–and for the true potential of HR outsourcing to be reached by becoming a true partner of CFOs. Getting a handle on the No. 1 issue facing organizations’ money managers is a great way to start.

Tags: Benefits, Contributors, Engaged Workforce

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