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Liberty Mutual studies shed light on occupational injury costs.

Occupational injuries are a severe drain on U.S. corporations, not only in terms of workers' compensation costs but also in terms of loss of human life. "According to the Bureau of Labor Statistics, in 1991 there were nearly 6 million injuries in private industry, approximately 370,000 cases of workplace illness and 2,800 fatalities," says Tom B. Leamon, Ph.D., director of Liberty Mutual Insurance Co.'s research center in Hopkington, Massachusetts. "The Bureau also reports that some of these illness and injury rates in increasing rapidly."

In an attempt to calculate the costs of certain occupational injuries, The Liberty Mutual Insurance Co. has conducted studies that analyze the costs of low back pain, slips and falls and cumulative trauma disorders (CTDs). "The studies' objectives are to establish the real extent of these costs so that risk managers and insurers can take steps to reduce these risks," says Dr. Leamon.

The study on low back pain examined the incidence and cost of all workers' compensation low back pain claims filed with the Liberty Mutual Insurance Co. during 1989. The study found that the mean cost per case was $8,321 - more than twice the amount for the average workers' compensation claim. However, the median cost per case was much lower, at $396. "The significant cost difference between the mean and median demonstrates that the huge losses are coming from a small proportion of cases," says Dr. Leamon. "This is because the high-cost cases typically involve a lot of medical care." Besides the higher medical expenses, low back costs also arise from attorney involvement, psychological impairment and prolonged disability.

If other insurers sustain low back case costs similar to those experienced by Liberty Mutual, the study estimated that the total workers' compensation costs for low back pain in the United States in 1989 equalled $11.4 billion. To reduce these costs, insurers and corporate risk managers can institute measures to prevent or reduce the costs of prolonged disability due to back pain. These measures may include ergonomic evaluations of office or plant equipment; job redesign, education and training in proper body movements and lifting techniques; the use of psychological, vocational and rehabilitation programs; and the development of modified work duties for injured workers.

In regard to the study on slip and falls, Dr. Leamon emphasized that "although the issue of slips and falls may seem trivial, they actually result in a large number of losses." In fact, slips and falls are responsible for an alarming number of injuries and fatalities; for example, the National Safety Council estimates that in 1991, 12,200 deaths were due to falls both on and off the job, and that approximately 10.6 percent of worker fatalities in 1991 were caused by falls.

The slips and falls study analyzed nearly 1,700,000 claims filed by Liberty Mutual policyholders in 1989. This analysis revealed that approximately 16 percent of these claims were due to slips and falls, at a cost of over $760 million and an average injury cost of $5,400. The study analyzed two types of falls: "falls on the same level," which includes slips, trips and other falls, and "falls from elevations," including falls from elevated surfaces such as stairs, ladders and scaffolding. Overall, 65 percent of the cases were caused by falls from the same level, and had an average cost of $4,160. However, falls from elevations, which are typically more serious, result in an average cost of $7,161.

Since the costs associated with slips and falls are so high, Dr. Leamon strongly recommends that risk managers implement certain measures to reduce the potential for slip and fall incidences. These measures can include conducting an inspection of the company grounds to determine areas where slips and falls are more likely to occur; auditing the floor finishing methods used by the janitorial staff; analyzing the slip and fall potential when conducting job or task analyses; and using the maintaining slip-resistance surfaces.

The study analyzing the frequency and cost of CTDs found that upper extremity CTD cases represented .83 percent of all claims and 1.64 percent of all claims costs. But although the number of CTD cases is small relative to the number of other workplace ailments, CTDs represent a workplace problem that is on the increase, says Dr. Leamon. In fact, according to the Bureau of Labor Statistics, CTD cases increased from 23,000 in 1981 to 223,600 in 1991. Additionally, Liberty Mutual's study also estimated that the total compensable cost for all upper extremity CTDs in the United States was $563 million. Some of the measures risk managers can use to ameliorate CTDs include job redesign, the use of automation, selecting the proper power tools for particular jobs, the use of work positioners and periodic job rotation - B.C.
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Title Annotation:Liberty Mutual Insurance Co.
Author:Christine, Brian
Publication:Risk Management
Date:Oct 1, 1993
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