Measuring the cost of employee injury, illness

NIOSH works toward more accurate analyses

Ask an accountant, an occupational health director, and the owner of a company how much workplace injuries and illness cost, and the answers are likely to vary wildly. Data from a NIOSH-funded study estimate that the costs of occupational illness in America total more than $171 billion per year, an amount NIOSH says is five times greater than the costs of AIDS and equal to the economic costs of all cancers.

With this in mind, NIOSH has launched an array of studies to get a consensus on how much workplace injuries and illnesses cost, and how much prevention programs can save employers.

"As we face competing demands for limited resources, we are challenged to show that a given investment of time and money will result in a safer, healthier workplace," NIOSH director John Howard, MD, MPH, JD, LLM, said in a statement announcing the studies in early December. "But measuring those benefits in dollars is difficult because one side of the equation is elusive. Where costs are indirect or long term, as they often are for work-related injuries and illnesses, they may not be recognized for years, if ever, using traditional tools of analysis."

NIOSH and an assortment of collaborators are attempting to better quantify the economic costs of injuries and illnesses and how interventions fare at paying for themselves. Some of the tools and methods currently under study are:

• Comparative Analysis of Methods for Calculating Employer Costs of Workplace Illness and Injury. NIOSH and University of Wisconsin researchers have taken on the task of identifying, characterizing, and comparing several of these methods to show common difficulties and pitfalls in calculating costs. Results will be used to help identify best practices for further development. For more information on this project, contact Tim Bushnell at PBushnell@cdc.gov.

• Economic and Social Consequences of Injury at Sand and Gravel Operations. To assess both the social and economic consequences of injuries to sand and gravel operators, researchers are developing a system safety model integrating the safety factors of workers, their equipment, and their work environment. Social impact will be measured based on workers’ self-reported levels of anger, anxiety, and depression as indicators of worker stress. Economic costs will be measured based upon the cost-of-illness method, incorporating a list of indirect costs such as lost earnings, lost fringe benefits, lost home production, employer costs of retraining and restaffing, and co-workers’ costs of lost productivity and time delays. For more information on this project, contact Tom Camm at TCamm@cdc.gov.

• Economic Cost of Fatal Occupational Injuries in the United States. Researchers are enhancing a previously developed NIOSH computerized costing model for calculating the societal costs of fatal occupational injuries using the cost-of-illness method. Using the model, researchers have shown that between 1992 and 2001 the cost of fatal occupational injuries in the United States was $48.7 billion. The model takes into account medical costs, the present value of future earnings summed from the year of death until the worker would have reached 67, and the value of home production lost. Costs can be separated by gender, age, race, occupation, industry, or event. Efforts to improve the model include expansion to calculate the cost of fatal occupational injuries, improving model specificity by estimating indirect costs using state-specific wage and benefit data, and improving the operational utility of the model. For more information on this study, contact Elyce Biddle at EBiddle@cdc.gov.

• Revision of the OSHA "$afety Pays" E-Tool for Employers. In collaboration with OSHA, NIOSH is updating and enhancing $AFETY PAYS, an OSHA-developed interactive software program for measuring the economic impact of occupational injuries and illnesses on a company’s profitability. The program uses a company’s profit margin, average costs of an occupational injury or illness and an indirect cost multiplier to project the amount of sales a company would need to generate to cover the cost. Contact Elyce Biddle at EBiddle@cdc.gov for more information.

• Technology Investment Agreement with Advanced Technology Institute. The domestic shipbuilding, ship repair, and ship recycling industries historically have had injury and illness incidence rates two to three times higher than those of general industry, manufacturing, or construction. Approximately half of all shipyard injuries can be considered musculoskeletal disorders. This three-phase study will assess the type and scope of trade or department-specific injury and illness rates among domestic shipyards; quantify risk factors by using exposure assessment tools and recommend unique ergonomic engineering controls and implement pilot ergonomic interventions; and evaluate the cost-effectiveness of these interventions. For more information on this study, contact Stephen Hudock at SHudock@cdc.gov.

• Economic Impact of Occupational Injury and Illness. With funding from NIOSH, the Center to Protect Workers’ Rights is addressing gaps in describing and measuring the economic costs resulting from occupational injuries and illnesses. This project seeks to quantify those costs and the burden on construction workers and their families, specifically looking at those costs not typically addressed in existing approaches. Researchers also will determine who estimates and actually pays the cost of these injuries and illnesses among construction workers.

• Job-Related Arthritis and Disability in Retirement. While the initial injury or pain of work-related arthritis typically occurs on the job, subsequent pain or osteoarthritis could occur much later in life. Current estimates of job-related injuries and illnesses ignore the costs of these later occurring health problems. NIOSH-funded researchers at the University of California will use data from several national agencies to determine the prevalence and cost of osteoarthritis.