Magazine article Risk Management

Liberty Mutual Studies Shed Light on Occupational Injury Costs

Magazine article Risk Management

Liberty Mutual Studies Shed Light on Occupational Injury Costs

Article excerpt

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. …

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