A new way of thinking

By Anna Game-Lopata | Vol: 41 Issue: 1 | Apr 2018
  • Life Health and Retirement Income
A new way of thinking

Consider this, an aggregate of real cases: A woman in her early fifties, working as a senior university lecturer and gaining recognition for her research has her mental health devastated by bullying. 

Instigated by a run-in with her boss, she is subjected to extreme harassment and isolation over several months and eventually has a nervous breakdown. 

Now diagnosed with severe depression, anxiety and post-traumatic stress disorder, a protracted WorkCover claim and litigation exacerbate her condition. A lump-sum TPD payment is a financial support, but she will never work again. She feels her life is over.

While this story is fictional, it raises some of the complex challenges inherent in the current adversarial system that people with mental injuries arising from the workplace must face.

Too little too late

For life insurers, most of whom are striving to understand and respond to these challenges in a positive way, one of the key issues is the inability to have an input to a customer’s case early enough.

Dr Bill Monday, Pacific Life Re Chief Medical Officer, says typically, the majority of mental health cases land on an insurer’s desk six months to two years after symptoms began. 

Conditions such as depression may be chronic with relapses, and so a portion of cases will have long, past histories of mental health-related symptoms with acute or chronic relapses. 

He strongly believes that outcomes would be better if insurers could become involved at an earlier stage, as currently, by the time  mental health cases are seen, behaviours are entrenched, detachment from the workplace has occurred and insecurity around being able to perform duties have started to creep in. 

Mental health issues go untreated

Meanwhile, GPs have limited time with patients, and only a small percentage of patients they see for mental health conditions are being referred on to specialists. 

Bill points out that if a mental health condition is so severe as to cause TPD, then it may be beneficial for more specialist referrals or dialogue between specialists acting on behalf of the insurer and the claimant’s health care team.

He adds that in the ideal word, claims prevention in the first place would be encouraged, and he sees this happening in the group space. In the workplace, he suggests more of a focus on absentee auditing would be useful, to get employers involved early with maintaining wellness.

“Allowing the insurer to directly offer assistance such as the ability to influence and implement rehabilitation would also be helpful,” he says.

Claims costs on the rise

In 2017, Australia’s Actuaries Institute launched a Green Paper exploring possible ways forward for the insurance industry when dealing with mental health cases.

According to the paper, over 80 per cent of mental health or injury insurance claims are paid.

A podcast series to promote the research also notes that in the year to 31 March 2017, TAL paid more than $210 million for mental health claims (second only to the number of claims paid out for cancer).

Lump sums not always best

Given TPD products were built at a time when mental health wasn’t even on the radar for people with physical injuries, they’re not well designed for mental health and will need a rethink.

Cases vary widely, but it’s clear the industry needs the ability to respond where lump sum payments might not be useful. Options such as time limited income streams and other mechanisms, where appropriate, might deliver better outcomes and get people back to work.

While “one-size-fits all” solutions may be outdated, scaling tailored products isn’t easy. It’s also critical to find a right balance between positive outcomes for customers and making sure products are sustainable.

To that end TAL hired Glenn Baird last year as its first head of mental health in attempt to better inform its product development, underwriting processes and to help its claims managers “rethink” their dealings with customers suffering mental illness.

Early successes with this approach have seen all the relevant stakeholders to a claim, such as the employer, the workers compensation insurer, the super fund and the life insurer brought together effectively. 

Collaboration is the key

Finity Consulting Principle and Green Paper author Geoff Atkins confirms that the research findings suggest significant improvements are unlikely to be made if parts of the ecosystem are working in isolation.

“We need systems thinking where the improvement process involves a conscious assessment of all the elements of the equation,” he says in the podcast series.

“For example, early intervention can’t happen if it takes months before the insurance company knows a customer is suffering from a mental health condition and may make a claim. 

"In this situation, the insurance company is given no opportunity to offer support. An important recommendation [of the Green Paper] is to create linkages through clinicians, super funds, employers and the relevant insurance companies.”

Urgent need for data

Geoff also asserts that the existence of applicable data would greatly assist efforts to underwrite the risk of insurance applicants with mental health issues, and to assess claims lodged following mental health injuries. However at present such data isn’t readily available.

“We need to establish a system of collecting relevant data and collating it in the right way,” he says in the podcast. 

“This might require a new approach to the competitive market place. It would be in the best interests of the industry overall, if we broke down the barriers we have created by declining to invest time and money in the collection of information for other people’s benefit.

“A lot can be done with relatively small resources in a short period of time.”

Other key recommendations of the Green Paper include:

  • Expert neutral evaluation — Adversarial dispute processes exacerbate mental health conditions. A system where all parties present their evidence at an early stage, and which is empowered to form a binding decision may deliver better outcomes, including saving the claimant from having to repeat their story.
  • The development of definitions and criteria specific to mental health conditions rather than to physical illnesses such as heart attacks or strokes.
  • Inclusions in products that focus on wellness and recovery beyond financial payments.
  • The development of consistent, reliable underwriting guides applicable to mental health conditions to assist insurance companies with making an assessment and advising the customer of the reason for a decision. This will improve transparency.
  • Providing a more sensitive and expert interface with customers and potential claimants such as specialist teams or psychologists that work to prevent further injury to a fragile person.

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