A New Pepsi Challenge:
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.
Reprinted from Human Resource Executive, October 4th, 1999
Copyright 1999, All rights reserved
Written by Tom Starner
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
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
TURNING TO TECHNOLOGY
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
Resources range from help with understanding a
disease process, access to information helplines, medical consultations with
specialists or assistance form a local community group.
TIMELY IS KEY
"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:
"We definitely see durations starting to go
down," says Abisch "And senior management is happy because it's working."
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.
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
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
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