Success Stories

A New Pepsi Challenge:
Reprinted from Human Resource Executive, October 4th, 1999
Copyright 1999, All rights reserved
Written by Tom Starner

     A little more than two years ago, PepsiCo Inc. and the Pepsi Bottling Group (PBG) took a long, hard look at short-term Disability benefits and medical management programs within the organizations.

     They weren't entirely happy with what they found.

     For starters, although PepsiCo/PBG had strong disability programs in place, they were fragmented, had different perspectives on the same event and were redundantly using costly clinical resources for the same cases.

     PepsiCo/PBG, based in Purchase, N.Y. and PBG, a separately traded entity located in Somer, NY, decided something had to be done. And to do it, a new approach, using the best technology available, was needed. You could call it the next Pepsi Generation of disability Management.

     First, PepsiCo/PBG talked at length with employees absent from the workplace for health-related reasons and found that although they felt very good about the companies, many perceived the disability and medical management programs as administrative burdens, and not helpful.

     PepsiCo/PBG also found that surveyed employees were looking for resources (e.g., access to support groups and vocational guidance) that were currently provided through PepsiCo/PBG or sponsored benefit plans to help them recover, yet they were unable to connect with them.

     In addition, these employees reported they were receiving clinical care on an "as-needed" basis, not as part of a regular treatment plan. Over two-thirds of the employees worked for an extended period of time prior to going out on disability.

     This information promoted the company to ask how it could get to employees earlier in their condition, deploy the correct level of service(s) and either avert a long-term absence from work or assist with a speedy return to functionality. Further, PepsiCo/PBG looked at its systems and processes to figure out how it could work together with one point person "in front of the curtain" for employees who would coordinate with other partners "behind the curtain." Health partners include AETNA US Healthcare, Health International Inc. and Managed Health Network. PepsiCo/PBG also wanted to ensure that it was able to "touch" its employees, regardless of their location.

Read one Claimant's Testimonial
To illustrate this program's success


     To reach those goals, PepsiCo/PBG turned to technology. Specifically, it retained VPA Inc. of Calabasas, Calif., one of the nation's largest independently owned disability benefit administrators, to act as "general contractor" in the quest to realize its goals.

     "Before we began to use this approach with new technology, we were doing very little, if any, disability management," says Ellen Abisch, manager, disability and medical management and workers' compensation at PepsiCo/PBG "This collaborative strategy with our partners helps us find people who need help."

     Abisch explains that before the new integrated disability management partnership began about a year ago, an employee going on disability sometimes would call in and sometimes not. And if they did call to report back pain, a cardiac problem or some other ailment, that was not always the full story.

     "Sometimes, it's not the cardiac problem keeping them from work," Abisch says. "The integrated approach helps us find that person and what their real issues are."

     PepsiCo/PBG began with the idea that it needed to find the best technological platform available in the marketplace to drive its process. "We felt, and still feel, that technology would enable successful collaboration," Abisch says. "With our goal being to open gateways to resources for employees experiencing difficult times, it was critical that technology bring together the data to enable us to address employee needs."

     In an effort to respond to PepsiCo./PBG's need, VPA Inc. brought its Disability Claims Management System, a proprietary software application, to the table.

     DCMS is basically an Oracle database management system that resides on a powerful server. "What differentiates this from our competitors is its scalability," says Tom Klett, VPA Vice President of Sales. "People are always looking for more information on the back end, and our ability to make changes has high appeal to clients. It's also very accommodating, so when you deal with a partnership arrangement like this one, it's not much of a challenge to deal with many sources. Mainframes just don't have that ability."


     As part of its strategy for PepsiCo/PBG, VPA Inc. created a platform that acts as central repository for all employee data. All health partners access the same database and can see new developments on cases and co-manage cases, ensuring compliance with all legislative requirements. In this way, PepsiCo/PBG uses data to isolate those cases that can be helped through targeted review and management.

     "When we studied marketplace offerings, we found they lacked an objective way to determine which cases to clinically manage," says Abisch. "Using our current approach, we were able to get to employees earlier. Historical experience acts as a predictor of high opportunity claims."

     The goal is to continually refine the database to better understand the characteristics of employees who disproportionately consume health and benefits dollars.

     Outside research as well as PepsiCo/PBG's internal analysis indicated that disability was not solely a clinical event. In fact, nonclinical factors (e.g. family, individual perception and corporate policy) can contribute significantly to frequency and utilization absence. For example, poor organizational health results correlated directly with higher frequency of work and nonwork-related absences.

     The collaborative approach works like this: Employees call PepsiCo/PBG health benefit partners to report an absence from work or to precertify for a hospital stay. If there are indications that this may be a more problematic situation (e.g., a high-need/high-cost situation), the case is reviewed in greater detail. A needs assessment, using a Web-based tool also is proving critical in building a solid rapport between a care deliverer and employee.

     "In fact, employees have been very receptive to the entire process," says Abisch.

     Critical claim information is electronically "shunted" between the respective disease management or behavioral management partner. The situation is assessed and appropriate resources applied or recommended.

     Resources range from help with understanding a disease process, access to information helplines, medical consultations with specialists or assistance form a local community group.


     "Our goal is to deliver the right service at the right time to help employees recover," says Abisch. "This web extends to all of our 70,000 employees, including those enrolled in any one of 60 HMOs."

     People from each organization involved were asked to volunteer to lead this initiative, as PepsiCo/PBG looked for creative case managers who think "outside the box." Those skills, says Abisch, are crucial to effective identification and resolution of employee issues and needs. The individuals selected also attended "Integrated University," which provided them with the tools and knowledge to bring this approach to life. It was also important for the group to be the "experts" on not only their own processes, but also the skills and competencies of PepsiCo/PBG's other benefit partners.

     As for the technology, the massive, complex nature of the project was the No. 1 hurdle.

     "The biggest technology challenge was trying to find a common denominator, to get a standard interface," says Jeff Bredehorn, VPA's chief information officer. "For example, we're transferring files over the Internet using FTP, and that works." But in another situation, one of the health partners didn't have Windows on the desktop, so a workaround for the problem had to be created.

     Another key technical issue was timing (i.e., when the file and data transfers would occur.) "Each partner needed to have data ready by a certain hour every morning, so we tried to automate everything we could," Bredehorn explains. "The system really hums along on its own."

     PepsiCo/PBG is pleased with the early results. In the year it's been operational, the new integrated system has resulted in:
  • Significantly improved collaboration and cross-pollination between partners, employees and PepsiCo/PBG
  • A functioning, technologically driver platform not only allowing PepsiCo/PBG to administer complex benefit plans, but one which incorporates and shares both clinical and nonclinical information among partners on problematic cases
  • Identification and resolution of other issues that can impeded an employee's recovery; e.g. lack of specialized medicine, inability to shop for groceries
  • An ability to identify employees for disease management programs (e.g., asthma, diabetes and cardiac) whom would not otherwise have been "flagged." The ability to intervene early in the disease state process has not only reduced lengths of absence, but also minimized future chronic conditions.
     "We definitely see durations starting to go down," says Abisch "And senior management is happy because it's working."


     The collaborative approach also has yielded some unexpected results in the form of awards. Earlier this year, the National Managed Healthcare Congress presented VPA with the Seventh Annual Astra Pharmaceuticals NMHCC Partnership Award for its work in implementing a leading-edge medical disability management model in collaboration with PepsiCo/PBG.

     Also in partnership with PepsiCo/PBG, VPA Inc. received honorable mention in this year's Creative Excellence in Benefits Award for its Integrated Health and Disability Model.

     "They've been great partners," says Abisch. "Of course, their technology was one of the keys, but their willingness to work with a variety of partners also was important."

     Based on the early success, Abisch says that PepsiCo/PBG added long-term disability management into the system on Sept. 1. PepsiCo/PBG also is considering using the effort for Social Security vocational rehabilitation and, perhaps, some day, even workers' compensation.

     "It couldn't have been done without the technology," says VPA's Klett. "The administrative element alone -- sharing information, eligibility of benefits, and the number of PepsiCo/PBG entities -- made for a major layer of complexity behind the scenes.

     Adds VPA's Bredehorn, "The point is they gave us the chance to go out and try something that hadn't been tried before. Unlike some companies, they didn't just hire us and say go away and do your thing. It was a partnership all the way, and PepsiCo/PBG took a definite interest in everyone succeeding."

Top Of Page
Home  |   FAQs  |   Site Map  |   Contacts   |    FeedBack/Comments  |   General Information  |   External Links