Comp Study: Injuries Down, Costs Up

By Caroline McDonald

NU Online News Service, Oct. 29, 2:45 p.m.EST?While the number of serious injuries in the workplacehas dropped again, the total cost of those injuries continues torise, according to the latest survey by a workers' compensationinsurer.

The Liberty Mutual Workplace Safety Index?a ranking of seriouson-the-job injuries based on payments to injured employees andtheir medical care providers?also found that the top three causesof injury that account for more than half of all workplace mishapsremains unchanged.

From 2000 to 2001, the Index found that the frequency ofwork-related injuries dropped 6 percent. This drop is the largestdecline in the four years of the study.

Between 1999 and 2000, the number of injuries fell 1.3 percent;it rose 0.2 percent between 1998 and 1999.

The cost of those injuries, however, grew to $45.8 billion in2001 from $44.2 billion in 2000.

"The most surprising part was that the total cost of injurycontinues to go up, despite a lower frequency of disablinginjuries," said Karl Jacobson, senior vice president of lossprevention, Liberty Mutual in Boston. "So we have counterintuitivedynamics."

Mr. Jacobson continued that the previous study, released in thespring of this year, revealed a fairly flat frequency, but asignificant escalation in cost. In the current study, however, "wehave a little less of a dramatic increase in cost but asignificantly lower frequency [of injuries]."

What is paying off "is that business is paying attention tolowering the number of disabling injuries," he said. "Fatalitiesare down as well."

Mr. Jacobson said several things account for higher costs, suchas more treatment and more expensive treatments for the injuriesthat occur.

He added that health care in general is getting more expensive."Also, we're dealing with the more serious injuries here?those thatresult in an employee being away from work six or more days."

While fraud continues to exist, the amount of fraud "hasn'tchanged that much and it is not the majority of costs," hesaid.

The real payoff in terms of safety is loss prevention, he said.Though larger organizations traditionally have been more involvedin loss prevention, "As your cost of insurance goes up, theinterest level goes up on the part of smaller and middle-sizebusinesses," he said.

Businesses are recognizing that injuries are a controllable costwith dedication of some resources and programs in place, hesaid.

"Larger businesses have more to gain, but now middle and smallerbusinesses are seeing that benefit can be obtained," he noted. "Sosafety programs are becoming more effective in smaller businessestoday than five or 10 years ago because the costs are much largernow," he observed.

He said that agents and brokers are also leaning on owners andrisk managers of organizations to keep costs down through losscontrol.

One method that is increasingly effective is benchmarking."Businesses are so competitive that they are interested in how theyare doing compared to their competition," he said. "That is aterrific tool to influence a company into taking action."

He explained that brokers and carriers are benchmarking "almostall of our policyholders now. It's fairly routine for us to notonly do a loss analysis like you see in the index, we do this forour customers every year to determine what are the causes ofaccidents."

Clients, he said, are told how they compare to their peers. "Weparade that out, sometimes in very tangible terms, like how muchproduct they would have to produce to be competitive with theirindustry."

Mr. Jacobson said that a new trend evident in the safety indexis that, "when you look at the causes of loss, the top 10 are solarge that they don't change order or change magnitude verymuch?they represent 89 percent of the total."

Also, he noted that for the first time the top threeinjuries?overexertion, falls on the same level and bodily reaction(injury from bending, climbing, tripping or slipping withoutfalling)?accounted for 50.1 percent of the injuries.

For the most part, the top 10 injuries have remained the same,which he said "points to the fact that the data is solid and thisis a continuing problem that has to be focused on."