Ignore indirect costs of injuries at your peril
Direct costs of workplace injuries are fairly straightforward, but indirect costs are often ten times that amount. If occupational health doesn't consider indirect costs, which may be difficult to compute, prevention programs may appear not worth the expense.
Pam Dannenberg, RN, COHN-S, CAE, ergonomic and occupational health services manager at EK Health Services in San Jose, CA, recommends looking at the actual cost of claims at your location for a year, and multiplying these by two to ten times to get the indirect cost of claims.
"Various sources differ on the multiplier, but the true cost to a company includes the indirect costs," she explains. "Compare each year to see if your costs are going up or down."
Direct costs include medical care, physical therapy, medicines, medical equipment, and litigation costs, while indirect costs include down time right after an injury due to stopping production. "People hesitate to go back to work right away," adds Dannenberg.
There is also time lost to care for the injured employee, investigate the incident, calm people down, and possibly, training a new person. "Quality can also take a hit," says Dannenberg. "This will have a negative effect on the bottom line."
If you add the direct and indirect costs of near-miss and first aid cases to those of actual claims, this will give you some powerful data. "You will probably have enough cost to cause management to care deeply about safety and to allocate money for solutions," says Dannenberg. "This has worked in many companies that EK Health has worked with."
For more information on indirect costs of workplace injuries, contact:
Pam Dannenberg, RN, COHN-S, CAE, Ergonomic and Occupational Health Services Manager, EK Health Services, San Jose, CA. Phone: (877) 861-1595. Fax: (415) 643-6775. E-mail: email@example.com.