Industrial Injury Cost Analysis by Occupation in an Electric Utility

Article excerpt

INTRODUCTION

In the last 20 years, U.S. corporations have established aggressive safety management programs. Although these efforts have reduced the rate of industrial injuries, industrial accidents still occur. A review of mortality research indicates a wide range in death rates and cost of accidents among industries.

The National Safety Council reported in Accident Facts: 1992 Edition that in 1990, transportation and public utilities constituted the fourth highest at-risk industry category. It had a rate of 9.6 injury cases/200 000 h worked. Within this category the rate among electric services was 6.6. cases/200 000 h worked.

In 1990, Southern California Edison had an injury rate of 7.8 cases/200 000 h worked (SCE, 1991). That report established that injury rates by occupation varied considerably. In addition to being concerned about the rate of injury, one needs to understand the resulting cost of industrial injuries (Sahl, 1993). Because there are many direct and indirect costs attributed to an accident, it is difficult to determine the actual cost of an industrial injury.

Jobs differ in exposure to potential injury risk. Other factors may also increase the risk level of an occupation, such as employee experience level, training, employee attitudes (Bigos et al., 1991), the organizational structure (Jacobs and Haber, 1994), the job task accomplishment process, safety rules, workload (Hales et al., 1992), and management support (Kohler and Kamp, 1992).

Managers typically focus on high-risk jobs, based on injury rates, in order to reduce injuries in those high-risk occupations (Dieterly, 1994a). The purpose of this analysis was to determine a credible cost estimate of injuries by occupation to be used in conjunction with injury rate to develop a risk management strategy.

STUDY

The Safety Data Management System (SDMS), which contains all the SCE industrial injury reports from 1980 to the present, was used in this study. (The initial costing data were developed from the SCE SDMS by EcoAnalysis Inc. This was done on contract to Occupational Research as part of the SCE Research, Design, and Development program.) It is "a computer based information management system for monitoring, reporting and analyzing work-related injury information" (SCE, 1990, p. 1-1). SCE is a self-insured company whose industrial injury program allows for lengthy recovery periods for severe injuries. If a case is litigated, it may require several additional years of negotiation before being completed.

An eight-year database was selected to establish injury costs (1980 to 1987). This sample allowed for six years' minimum time for case closure. The costs reported were adjusted to 1993 dollars, and an analysis was made by occupation of the number and cost of industrial injuries.

The three operational definitions used for the model cost categories were (1) medical costs - direct medical costs associated with the injury; (2) indemnity costs - direct costs associated with injury that were not medical; and (3) lost productivity costs - salary and other benefits paid to the employee while recuperating from injury. The three costs are combined to estimate the total cost reported. This basic cost model is a conservative estimate of the actual total cost of an injury event. A previous study offered a model that proposed cost areas of overhead, safety training, absenteeism, and the employee's reduced quality of life that I was not able to include in this model (Dieterly, 1994b; SCE, 1992). The estimates provided establish a relative baseline for making initial occupational comparisons.

There are more than 4000 job titles for 17 000 employees at SCE. A basic grouping system was devised to cluster similar titles and work. The original set of job titles was consolidated to a subset of 46 generic occupations (SCE, 1993).

In this study, injuries are operationally classified into four areas: (1) first aid - injuries treated by a nonphysician; (2) nonlost time/recordable - injuries requiring treatment by a physician but not requiring one full day of lost time; (3) lost time - injuries that resulted in one or more full days off from work; and (4) restricted duty - injuries that required the employee to be placed on restricted duty for one or more days. …