Why safety programs are
not enough
A healthier workforce produces substantial financial
benefits
There is little doubt that employers’ efforts to promote
worksite safety have been good for Workers’ Compensation. The number
and rate of occupational illnesses and injuries requiring days away from
work has steadily declined. In fact, the number of lost time claims has
declined by more than half – 52.1% since 1991, with drops of 6.6 and
6.8 in 2005 and 2006, respectively.
Yet, in many ways, it is the success of safety programs that has transformed
Workers’ Compensation into a health care delivery system that must
be viewed quite differently than an injury prevention system. While the
number of injuries has declined, the cost and the severity of the claims
have increased – doubling in cost since 1993. Furthermore, the share
represented by medical costs continues to grow – representing 58%
of losses.
Add to this the growing prevalence of chronic health problems among employees
as well as latent disease developing in workers years after they complete
their jobs and there is a need to view Workers’ Compensation in a
much broader context. The distinction among the types of lost time, as well
as appropriate solutions, begins to blur. Employers who take a narrow, safety
and risk management approach to Workers’ Compensation will find it
ineffective in addressing the rising costs of injuries and chronic health
issues. Employers need to understand that all lost time is connected
and that employees who have frequent intermittent absences are more likely
to go out on disability and be higher-than-average consumers of group health
benefits and Workers’ Compensation.
It’s not unusual for employers to consider absenteeism – whether
it is incidental absence, short-term disability, long-term disability, FMLA
leave or workers’ compensation – to be part of the cost of doing
business. Employers who have stellar safety programs may solely measure
the number and cost of accidents, rather than looking at the overall costs
and interrelationships of absenteeism.
Lost productivity, reduced profits and low employee morale are all consequences
of employee absenteeism. In the paper, “How to Present the Business
Case for Healthcare Quality to Employers,” Applied Health Economics
and Health Policy, Sean Nicholson found that for many jobs the cost
impact is a multiplier of between 1 and 2 applied to the salary cost. Across
35 job types, the mean multiplier was 1.61. The more impact a person has
on a team or department, the greater the multiplier. Moreover, the longer
the absence, the more morale is adversely affected, causing a domino effect
of diminished productivity.
Without measuring the impact of employee absenteeism on lost productivity
and reduced profitability, employers might not be allocating their resources
to the right programs that meet the needs of their employees.
Each year, 10 common chronic conditions account for an average of more than
10 days of work loss, although some conditions such as depression, cancer
and respiratory disorders may account for many more. In addition, these
health conditions lead not only to lost work time, but also to reduced productivity
while at work (commonly referred to as “presenteeism”). While
very difficult to measure, presenteeism has a serious adverse effect on
productivity and profitability.
As the incidence of chronic illness increases, it is essential to develop
programs that address the problems, just as it was necessary to develop
safety programs to prevent injuries. For example, as the number of young
Americans who are diagnosed with diabetes increases, the condition is likely
to become more commonplace in the workplace. Complications associated with
diabetes can lead to increased absenteeism or impaired productivity, yet
workers who are able to achieve control of their diabetes are more likely
to be productive and miss fewer days at work.
Similarly, routine mammography screening may reduce breast cancer mortality
by as much as 30%. Mammograms offered by employers at the worksite benefit
both the employer and employee by overcoming the common barriers of cost
and inconvenience.
A survey by the Employer Health Coalition, Inc. found that workers in Florida
suffering from seasonal allergies lost more than three days of work in a
four week period due to impairment from seasonal allergy symptoms or sedation
associated with their medication. However, with the proper treatment there
is no significant decline in productivity.
Employers have a variety of tools to promote better health and productivity,
including on-site clinics, clinic relationships, health promotion and wellness
programs, disease management education and training as well as health insurance
and sick leave benefits.
According to a report by the American Hospital Association, these programs
not only help employees get and stay healthy, they also pay dividends. “A
review of 42 published studies of workplace health promotion and wellness
programs found an average savings of $5.93 for every $1 spent. This study
also found that workplace wellness programs yielded an average reduction
in sick leave absenteeism of 28%; in health costs of 26%; and in Workers’
Compensation costs and disability claims management costs of 30%.”
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