Cost of Workplace Injuries Keeps Rising Even as Accidents Decline, Study Finds

The results of three recently released studies show that employers are now facing two distinct issues - workers' attitudes towards the responsibility for safety and rising medical claim costs, the combination of which is delivering a powerful one-two punch to the best efforts of management to contain workers' compensation costs. Further complicating matters is the current weak job market which is spurring an increasing number of employees to file false or exaggerated claims for fear of being laid off or terminated without any benefits at all.

Missouri Employers Mutual Insurance is reporting that approximately two-thirds of the employees who participated in their just completed study disagreed with the statement that a workplace injury will eventually happen to them, and that 53% said the odds are slim that a workplace injury will leave them permanently disabled. While 75% of workers surveyed admitted that they could be more safety conscious at work and more than 95% said they should take a more proactive role in preventing injuries, 95.7% of these same workers stated that the responsibility for creating a safe work environment belongs to management! This prevalent "It won't happen to me" misperception is especially troubling because it is apparently reinforcing the attitude of workers that the responsibility for their own safety is someone else's job, even though almost 4 million of their coworkers were injured in an on-the-job accident in 2001.

The latest findings from the Insurance Information Institute only confirm what most employers already know - workers compensation costs are rising nationwide because of rising health care costs. The average medical cost of a workers' compensation claim in the United States rose 12% to $15,320 in 2002, a 51% increase from the 1997 levels. Meanwhile, claim costs have also become increasingly medically related. The average claim in 1982 was about 40% medical and 60% compensation. Today the medical claims portion of claims is nearly 55%.

The findings of the Insurance Information Institute were further reinforced by Liberty Mutual's "Workplace Safety Index 2003" (released Oct. 22nd) that reported that the cost of on-the-job injuries continues to rise even though the number of accidents at U.S. workplaces is on the decline. This annual study is based on data from 2001, the latest year for which data is available.

This study found that the frequency of serious work-related injuries fell 6 percent between 2000 and 2001, which was the largest single decline in the four years the company has maintained the index. The study also found:

• The financial burden of workplace injuries grew to $45.8 billion in 2001 from $44.2 billion in 2000.
• The cost grew 13.5 percent between 1998 and 2001, or 4 percent after adjusting for inflation in medical and wage benefits.

Top 10 Injuries

Among the top 10 categories of injuries, "overexertion injuries," caused by excessive lifting, pushing, pulling, holding, carrying, or throwing, took the number one spot at a cost of $12.5 billion and accounted for 27.3 percent of the injuries.

Overexertion was followed by "injuries by falls on one level" at a cost of $5.7 billion, accounting for 12.6 percent of the injuries. Bodily reaction injuries, resulting from bending, climbing, and slipping or tripping without falling, cost $4.7 billion and accounted for 10.2 percent of serious injuries.

Cumulatively, the top three injury causes--overexertion, falls on same level, and bodily reaction--are the fastest-growing of all injury causes, representing 50.1 percent of the total costs of serious workplace injuries in 2001 - $23 billion a year or $450 million a week!

The other top 10 injury causes in descending order were:

• falls to lower level--costing $4.1 billion, 9 percent;
• struck by object--costing $3.9 billion, 8.6 percent;
• repetitive motion--costing $2.9 billion, 6.3 percent;
• highway incident--costing $2.3 billion, 5.1 percent;
• struck against object--costing $.9 billion, 4.1 percent;
• caught in, compressed by--$1.7 billion, 3.7 percent; and
• assaults and violent acts--$0.4 billion, 1 percent.

The findings of these three reports serve to underscore the need for employers to expand their efforts to address, not only the fastest growing causes of work-related injuries in their workplaces, but the reasons why they are happening and what can be done to minimize their consequences. This is where there is a real potential for employers to get at the benefits of a safer workplace, protecting employees and avoiding the financial impact of on-the-job injuries.

Agency management must lead by example when it comes to worker safety and involve as many workers as possible in their safety programs. Workers need to take responsibility for their own safety and that of their coworkers. Management also needs to submit their First Reports of Injury to CompManagement as quickly as possible. Once submitted, prompt follow-up is a must so that all parties are aware of the specifics involved with each case. The first few days following any incident are the most important ones for agency management to exercise its control over the management of a claim. If this window of opportunity is lost, the ultimate cost of the claim will almost certainly be higher.