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Erschienen in: Journal of Occupational Rehabilitation 4/2018

01.11.2018

Using Predictive Analytics for Early Identification of Short-Term Disability Claimants Who Exhaust Their Benefits

verfasst von: Kara Contreary, Yonatan Ben-Shalom, Brian Gifford

Erschienen in: Journal of Occupational Rehabilitation | Ausgabe 4/2018

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Abstract

Purpose Early interventions can help short-term disability insurance (STDI) claimants return to work following onset of an off-the-job medical condition. Accurately targeting such interventions involves identifying claimants who would, without intervention, exhaust STDI benefits and transition to longer-term support. We identify factors that predict STDI exhaustion and transfer to long-term disability insurance (LTDI). We also explore whether waiting for some claims to resolve without intervention improves targeting efficiency. Methods We use a large database of STDI claims from private employer-sponsored disability insurance programs in the United States to predict which claims will exhaust STDI or transition to LTDI. We use a split sample approach, conducting logistic regressions on half of our data and generating predictions for the other half. We assess predictive accuracy using ROC curve analysis, repeating on successive subsamples, omitting claims that resolve within 2, 4, and 6 weeks. Results Age, primary diagnosis, and employer industry were associated with the two outcomes. Rapid attrition of short-duration claims from the sample means that waiting can substantially increase the efficiency of targeting efforts. Overall accuracy of classification increases from 63.2% at week 0 to 82.9% at week 6 for exhausting STDI benefits, and from 63.7 to 83.0% for LTDI transfer. Conclusions Waiting even a few weeks can substantially increase the accuracy of early intervention targeting by allowing claims that will resolve without further intervention to do so. Predictive modeling further narrows the target population based on claim characteristics, reducing intervention costs. Before adopting a waiting strategy, however, it is important to consider potential trade-offs involved in delaying the start of any intervention.
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Fußnoten
1
Five states and Puerto Rico have mandatory STDI benefits; three of those states provide insurance to most workers via public funds: California, New Jersey, and Rhode Island. Hawaii and New York require employers to provide short-term disability benefits through self-insurance or a licensed carrier.
 
2
As with STDI, LTDI policies provide wage replacements following a specified duration of disability (often 14, 26, or 52 weeks), up to a maximum benefit duration.
 
3
Workers’ compensation covers cash benefits and medical care to workers with work-related (or “on-the-job”) medical conditions. In 46 states and the District of Columbia, employers may either purchase workers’ compensation insurance in a competitive marketplace or self-insure. Four states—North Dakota, Ohio, Washington, and Wyoming—rely exclusively on state workers’ compensation funds.
 
4
Ideally, we would also be able to distinguish between claimants whose labor force participation outcome is responsive to early intervention and claimants who cannot continue to work even with intervention. We do not address this complicated challenge in our paper.
 
5
With the exception of New York, New Jersey, Rhode Island and Hawaii which require that employers provide STDI benefits to workers, in the U.S., disability insurance is provided at an employers’ discretion as an employee benefit. California requires that all employees maintain disability insurance, but does not compel employers to purchase policies on behalf of workers. Whether or not an employer-based policy is state-mandated, the employer typically pays the STDI policy’s premiums if it fully insures through an insurance carrier. Employers may also self-insure, paying the dollar value of all wage replacements costs from its own cash reserves, with or without contracting for administrative services through a third party.
 
6
Claims with benefit duration of 26 weeks made up 73% of the claims in the IBI data. Regression and prediction results were similar for claims with benefit duration of 13 weeks and 52 weeks. We cannot observe reason for claim closure, and therefore cannot distinguish between claims that closed because the underlying condition resolved enough for a return to work and claims that closed for other reasons, such as death or transitions away from the sponsoring employer.
 
7
It should not be inferred from the lack of LTDI information on a claim that an employer does not have both STDI and LTDI policies for their employees. It may be that STDI and LTDI policies are provided by different entities, hence the data are held by different data suppliers.
 
8
We organize diagnoses into the major categories described in the ICD-9. Pregnancy-related claims are excluded. We selected specific subcategories based on relevance to workplace disability. These include back conditions such as intervertebral disc disorders, mental health conditions such as depression and affective disorders, malignant neoplasms, and sprain injuries. Categories of diagnosis that occur very rarely in STDI (such as diseases of the skin, blood, and blood-forming organs, congenital anomalies, and symptoms without a diagnosis) are grouped together as “other illnesses”. Other illnesses account for almost 8% of diagnoses, about half of which are undiagnosed symptoms.
 
9
Winsorizing involves setting extreme values to a specified percentile of the data to limit the effect of outliers, which may be spurious; in this case, we set all data below the 1st percentile to the 1st percentile value and all data above the 99th percentile to the 99th percentile value.
 
10
Presumably, some STDI carriers already intervene in some fashion to improve outcomes for claimants on certain employer policies. In that context, “resolve on their own” can be interpreted as “resolve under current practice.”
 
11
We also tested a version of the logistic regression model that included interactions between each age group and each diagnosis category, and a version that also included sex-diagnosis interaction terms. We also tested for nonlinear effects of wage and company size by using wage tercile categories and company size categories (0–5 k, 5–10 k, 10 k+). The results were nearly identical, so we present results from the model with no interaction terms, linear wage, and log of company size.
 
12
The AUC represents the probability that the predicted value for a randomly chosen positive is greater than the predicted value for a randomly chosen negative.
 
13
Usual practice may, in fact, include some efforts on the part of insurers and/or employers to resolve STDI claims. In the context of discussions around early intervention, we assume that proposed interventions would be in addition to business as usual, and that the attrition of claims from the sample over time forms the baseline resolution rate.
 
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Metadaten
Titel
Using Predictive Analytics for Early Identification of Short-Term Disability Claimants Who Exhaust Their Benefits
verfasst von
Kara Contreary
Yonatan Ben-Shalom
Brian Gifford
Publikationsdatum
01.11.2018
Verlag
Springer US
Erschienen in
Journal of Occupational Rehabilitation / Ausgabe 4/2018
Print ISSN: 1053-0487
Elektronische ISSN: 1573-3688
DOI
https://doi.org/10.1007/s10926-018-9815-5

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