Lost-time employee injuries cost healthcare billions

The Bureau of Labor Statistics (BLS) divides healthcare (NAICS 62) into three sectors: Ambulatory Health (NAICS 621); Hospitals (NAICS 622); and Nursing and Residential Care (NAICS 623).

I analyzed 2011 BLS data to get an idea of what lost-time injuries (“cases with days away from work” in BLS-speak) are costing each sector. These cases are the DA part of the Days Away, Restricted or Transferred (DART) rate.

The largest source of healthcare lost-time injuries was “patient or resident,” followed by “floors” (slips/trips/falls). “Back” was cited as the most commonly injured body part.

Nurses bear the brunt of these injuries, due in part to the physically demanding nature of their work. Such occupational hazards also no doubt contribute to their 14 percent annual turnover rate and certainly do not help the current nursing shortage that some predict might extend through 2030.

The OSHA $afety Pays calculator allows an estimate of what all of those injuries cost compared to sales for 2011. Brace yourself. These are some eye-watering numbers:

  • Ambulatory Health spent $2.1 billion for 30,660 lost-time injuries, requiring more than $8.2 billion in additional “sales” (at a reported 25 percent margin) to cover the loss.
  • Hospitals spent $6.2 billion for 78,770 lost-time injuries, requiring $85.5 billion in additional “sales” (at a reported 7.2 percent margin) to cover the loss.
  • Nursing and Residential Care spent $4.8 billion for 69,590 lost-time injuries, requiring $48.1 billion in additional “sales” (at a reported 10 percent margin) to cover the loss.

As a whole, in 2011 healthcare spent $13.1 billion to cover 179,020 reported lost-time injuries and forfeited nearly $142 billion in sales to cover the loss.

Of course, healthcare doesn’t “sell” in the traditional sense, so this really equates to patient billing. The need to replace billions in lost revenue lands healthcare in a quandary. Eliminating staff is not the answer, since many or most of these injuries came as a result of overexertion, often from a lack of staff and/or expertise to do the heavy lifting (pun intended). Forcing even fewer staff (mostly nurses) to do more just makes it worse. Is the answer simply to raise healthcare and pharmaceutical fees?

A 2010 AHIP report found that the average patient charge for a 325 mg Tylenol tablet among 10 of the largest hospitals in California was $7.50, while CVS sold that same pill for about 8 cents. With demands for healthcare reform making daily headlines and the average cost of a hospital stay already over $3,900 per day, the idea of a $100 billion dollar increase to pay for injuries that shouldn’t happen seems like a non-starter.

Healthcare’s struggle with safety is no secret, and in its 2010 Request for Information, OSHA stated frankly that healthcare has “a weak culture of worker safety.” The continual posting of some of the highest injury and illness rates in the nation drew a great deal of OSHA attention to healthcare in 2012, ranging from national and regional emphasis programs to targeted inspections that aimed potentially thousands of additional inspections at nursing homes and ambulatory health facilities.

Which brings us to investing in safety.

How can losing $142 billion in annual “sales” make better sense than building a culture of safety? We give this advice to every client pursuing safety excellence:

  • Start by putting a price on what it’s costing you to not have a strong safety program, as I did here.
  • Make it your mission to gain a thorough understanding of your company’s safety culture.
  • Perform a risk assessment of your systems and processes, including interviews with employees and managers.
  • Identify your strengths and limitation.
  • Measure against benchmarks.

If you want to avoid being the high numbers on the BLS tables (and spending the huge dollars that go with all of those injuries) and instead be part of a high-performance safety organization, this is the way to start.

To learn more about UL’S OSHA Solutions please, click here.