An Ounce Of Prevention Helps Cut WC Costs
Health and injury prevention experts can limit claims while boosting productivity
"An ounce of prevention is worth a pound of cure" is an old adage that has been on the minds of risk managers at the forefront of workplace safety efforts. Many have attempted to take a proactive approach to prevent and limit the damage caused by workplace injuries that is, increased insurance costs and lost productivity by tapping the services of a growing selection of health and injury prevention consultants.
"Experts in the field are telling companies that prevention must become part of their overall health care strategies to be effective," said Dennis Downing, president of Future Industrial Technologies Inc., based in Santa Barbara, Calif.
Mr. Downing explained that corporate insurance buyers used to believe that the best way to manage the expense of workplace injuries was to effectively manage the costs of rehabilitation and treatment of injured employees after the fact. That idea has evolved over the past decade with the rising costs of workers' compensation and health care, and has advanced toward proactive safety measures, often provided by outside agencies.
"Forward-thinking companies that want to maximize their efficiency and productivity now realize the importance of our field," said Gene McGuire, vice president of Prevention Services Inc., based in Bluebell, Pa., echoing a similar perspective. Explaining some of the issues he felt related to the present growth of the safety industry, Mr. McGuire noted that PSI is one company in the growing field of those that specialize in approaching workplace safety in a "proactive rather than reactive manner."
As a result of their initiatives, FIT, PSI and many others have found a market niche over the past few years. For example, in the last two years the reported number of clients for PSI has increased threefold, the company contends.
The fashion in which these companies attempt to tackle the issue of workplace safety has no set standard, and thus varies from firm to firm. The companies have used many novel and inventive methods of determining how to best prevent injuries.
One company may ground itself in assisting a business to adhere to Occupational Safety and Health Administration guidelines, while another focuses on advancing ergonomic standards through video training.
FIT and its prevention programs such as "BackSafe" actually integrate obstacle courses and scenarios suited to employees' daily work environments to help workers acquire the basic knowledge of their anatomy and biomechanics, while teaching stretching exercises so they can physically acquire the memory of how to safely do their jobs.
"Children cant learn how to ride a bike simply through pamphlets or videotapes, and we found the same principle applies to worker safety. The proper mechanics cannot be learned without actual practice," said Mr. Downing.
The methodology of PSI considers workplace safety and personal health to be interconnected. "What we believe, and our research has shown it to be true, is that healthy workers are safe workers," commented Mr. McGuire.
Before offering a course of action, PSI uses surveys of company employees to analyze where different employees lie on a health risk scale in terms of behaviors such as smoking and sleeping habits.
Describing a typical workplace, Mr. McGuire grouped employees within three categories: low-risk, high-risk, and those who may be stricken or ill at a given moment. "Of the companies we have worked with, personal behavior played a key role in preventable incidences90 percent of injuries were caused simply by behavior, and 50 percent of illnesses were caused by behavior, also," he said.
Mr. McGuire described the consultants that PSI would then provide to individual companies to assist employees in better handling their health issues and arriving for work more focused.
"Coaches were a novel approach because of the seamless integration involved in placing them within the daily life of a company and their available status to employees as beneficial resources," he explained.
The cost of workplace injuries serves as an economic drain for many small and large companies alike. An annual study funded by the Boston-based Liberty Mutual Insurance found in 2003 that "the direct cost of claims from disabling work-related injuries and illnesses grew 8.3 percent2.5 percent after adjusting for inflation between 1998 and 2000, to $42.5 billion."
The study went on to conclude that by including the indirect costs of injuries, as well overtime for uninjured workers, training and lost productivity related to an injured employee not being able to perform their normal work each $1 of direct costs generated between $3 and $5 of indirect costs.
Using this formula, the Liberty Mutual study concluded that the direct costs of disabling workplace injuries in 2000 produced between an additional $127 billion and $212 billion of indirect costs, bringing the total financial impact of disabling workplace incidents to between $170 billion and $255 billion.
Mr. McGuire noted that the positives of workplace safety extended outside of economic benefits, as well. "Understandably, fewer injuries and illnesses lead to improvements in morale, teambuilding, and management-to-employee relations," he said.
Mr. McGuire added that a possible reason for this is that employees grew to feel that managers had their best interests in mind and did not feel that they were purposely put into harm's way as safety efforts improve.
Mr. Downing acknowledged that early on many people considered safety consultants either an unneeded addition to already existing in-house loss control programs, or wasted prevention efforts for the inevitable. "It was hard at times for us to communicate the need for proactive measures, but the return on investment when dealing with us compared to the average costs incurred with lost days and injuries shows our value," he said.
Mr. McGuire also noted that workplace safety improvements cant be seen in "an obvious mark, since our success is shown by having nothing occur to the employees we assist." He explained, however, that gains in safety can be charted over a given course of time, as businesses begin to proactively work with employees and management, and rates of injury decrease.
Mr. McGuire noted that health consultants are beginning to focus on issues outside of sprains and strains, targeting the numerous health complications arising today from assorted health risks, such as weight control.
Mr. Downing noted that as the working-age population grows older and works until later in life, more companies will have to face the prospect of effectively teaching their employees how to be healthy on the job and at home, or risk collapsing under the weight of rising health care costs.
"We have to address home activities, as well, because little innocent stresses such as lifting a baby the wrong way can add up over time and lead to longer injuries," he said. "We have to continue to give employees skills that they can use at home and on the job to manage their health."
Reproduced from National Underwriter Edition, August 19, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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