The human and financial cost of providing health care in the United States
July 08, 2010
This report originally appeared in the June 2010 issue of DOTmed Business News
By Linda Chaff
According to the U.S. Bureau of Labor Statistics (BLS), in 2008 more than 345,000 private sector U.S. hospital workers (7.6 percent) reported work-related injuries or illnesses to the Occupational Safety and Health Administration (OSHA) that required medical attention beyond first aid or were due to cuts or needlesticks. Among their colleagues in facilities operated by state and local governments, the picture was significantly worse, with almost 12 percent reporting injuries and illnesses to OSHA.1 These injuries and illnesses are costing a minimum of $15 billion a year in workers' compensation and related costs.
To put this into a numbers perspective, the rate for all private sector businesses was 3.9 injuries and illnesses per 100 fulltime employees. For workers engaged in automobile manufacturing the number was 7.5 percent.
That hospital workers are incurring work-related injuries and illnesses at almost twice the rate of non-hospital employees has been apparent since OSHA began collecting this data in 1972.
The human cost
It is impossible to calculate the human cost of a work-related injury. When a person is injured at work, they may be treated and sent back to perform their duties. Or they may have to stay home for a few days, be transferred to other duties or in the worst case, they may never be able to return to their chosen profession. But it is not just the employee affected by a work-related injury or illness; their families are also involved in a myriad of day-to-day functional support roles to help the injured family member return to work or simply resume their normal at-home activities. Those are costs that can never be measured.
The financial cost
OSHA, in cooperation with the National Council on Compensation Insurance, Inc. has developed a tool that allows businesses to calculate the direct and indirect costs associated with a work-related injury or illness. Included among indirect expenses are training and compensating replacement workers, the cost of injured employee visits to emergency rooms, compromised patient care and administrative expenses.
One of the more common injuries associated with working in hospitals is dermatitis resulting from exposure to chemicals. The OSHA tool reveals that the direct costs associated with one case of dermatitis is equal $8,295, while the indirect costs amount to $9,954. In order for a hospital to recover those expenses ($18,249), at a 3 percent profit margin it will have to collect receipts of $608,300. A 1 percent profit margin requires $1,824,900 in billable receipts.
Why are these injuries and illnesses occurring?
There is a general lack of understanding about the requirements for compliance with OSHA worker health and safety regulations among hospital leadership, employees and in some cases, insurance companies. As a consequence, work-related injuries and illnesses will continue to occur at this unacceptably high rate and hospital workers will not be properly trained in how to protect themselves from workplace health and safety hazards.
How can this long-standing problem be corrected?
The most effective way to reverse this pattern is by implementing a total health and safety program 3 reflects the hospital's core values:
What are the financial benefits of implementing a total health and safety program?
When employees are not injured, there are direct savings because there are no workers' compensation benefit claims. Therefore, there are no medical costs. And there are no administrative costs that would otherwise come directly out of the facility's operating income. Workers' compensation premiums are also reduced. These dollars are put directly to the hospital's net operating income.
Implementation of such a program at a 74-bed hospital in Washington resulted in a virtual elimination of needle stick injuries, a drastic reduction in all work-related injuries and illnesses and a savings in workers' compensation-related costs of more than $450,000 within eight months.
Linda Chaff is president of Chaff & Co. and is the author of "Total Health and Safety for Health Care Facilities." This book demonstrates how health care workers' health and safety, the environment they work in, patient care, the well-being of health care workers' families, and the corporate bottom lines are all connected. It also brings together caring values, core elements that promote a healthy self-image and workplace health and safety regulations proven to reduce employee injuries and illnesses.
By Linda Chaff
According to the U.S. Bureau of Labor Statistics (BLS), in 2008 more than 345,000 private sector U.S. hospital workers (7.6 percent) reported work-related injuries or illnesses to the Occupational Safety and Health Administration (OSHA) that required medical attention beyond first aid or were due to cuts or needlesticks. Among their colleagues in facilities operated by state and local governments, the picture was significantly worse, with almost 12 percent reporting injuries and illnesses to OSHA.1 These injuries and illnesses are costing a minimum of $15 billion a year in workers' compensation and related costs.
To put this into a numbers perspective, the rate for all private sector businesses was 3.9 injuries and illnesses per 100 fulltime employees. For workers engaged in automobile manufacturing the number was 7.5 percent.
That hospital workers are incurring work-related injuries and illnesses at almost twice the rate of non-hospital employees has been apparent since OSHA began collecting this data in 1972.
The human cost
It is impossible to calculate the human cost of a work-related injury. When a person is injured at work, they may be treated and sent back to perform their duties. Or they may have to stay home for a few days, be transferred to other duties or in the worst case, they may never be able to return to their chosen profession. But it is not just the employee affected by a work-related injury or illness; their families are also involved in a myriad of day-to-day functional support roles to help the injured family member return to work or simply resume their normal at-home activities. Those are costs that can never be measured.
The financial cost
OSHA, in cooperation with the National Council on Compensation Insurance, Inc. has developed a tool that allows businesses to calculate the direct and indirect costs associated with a work-related injury or illness. Included among indirect expenses are training and compensating replacement workers, the cost of injured employee visits to emergency rooms, compromised patient care and administrative expenses.
One of the more common injuries associated with working in hospitals is dermatitis resulting from exposure to chemicals. The OSHA tool reveals that the direct costs associated with one case of dermatitis is equal $8,295, while the indirect costs amount to $9,954. In order for a hospital to recover those expenses ($18,249), at a 3 percent profit margin it will have to collect receipts of $608,300. A 1 percent profit margin requires $1,824,900 in billable receipts.
Why are these injuries and illnesses occurring?
There is a general lack of understanding about the requirements for compliance with OSHA worker health and safety regulations among hospital leadership, employees and in some cases, insurance companies. As a consequence, work-related injuries and illnesses will continue to occur at this unacceptably high rate and hospital workers will not be properly trained in how to protect themselves from workplace health and safety hazards.
How can this long-standing problem be corrected?
The most effective way to reverse this pattern is by implementing a total health and safety program 3 reflects the hospital's core values:
- Recognizes that worker health and safety, patient safety and the corporate bottom line are all connected.
- Requires that leadership and employees share an equal legal and moral responsibility to comply with worker health and safety regulations (OSHA).
- Creates a positive environment where employee and patient are equal priorities.
- Constantly monitors the facility's health and safety performance to ensure continuous improvement.
What are the financial benefits of implementing a total health and safety program?
When employees are not injured, there are direct savings because there are no workers' compensation benefit claims. Therefore, there are no medical costs. And there are no administrative costs that would otherwise come directly out of the facility's operating income. Workers' compensation premiums are also reduced. These dollars are put directly to the hospital's net operating income.
Implementation of such a program at a 74-bed hospital in Washington resulted in a virtual elimination of needle stick injuries, a drastic reduction in all work-related injuries and illnesses and a savings in workers' compensation-related costs of more than $450,000 within eight months.
Linda Chaff is president of Chaff & Co. and is the author of "Total Health and Safety for Health Care Facilities." This book demonstrates how health care workers' health and safety, the environment they work in, patient care, the well-being of health care workers' families, and the corporate bottom lines are all connected. It also brings together caring values, core elements that promote a healthy self-image and workplace health and safety regulations proven to reduce employee injuries and illnesses.