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Safety Pays: How Much Is the Health Care Industry Spending on Employee Injuries?

March 27, 2013
Working in health care is more dangerous than you might think. A tradition of giving patient safety top priority has placed some employees at a disadvantage in terms of protecting their own well-being. In fact, health care jobs can be among the most risky of all.
Working in health care is more dangerous than you might think. A tradition of giving patient safety top priority has placed some employees at a disadvantage in terms of protecting their own well-being. In fact, health care jobs can be among the most risky of all.

The health care industry’s struggle with safety is no secret. In its 2010 Request for Information, OSHA stated that health care has “a weak culture of worker safety.” I analyzed 2010 and 2011 BLS data to get an idea of what this weak culture of safety has cost in terms of lost-time injuries.

It’s no surprise that nurses bear the brunt of injuries due to the physically demanding nature of their work. The largest source of lost-time injuries was “patient or resident,” followed by “floors” (slips/trips/falls).

The health care industry paid out $10.2 billion in 2010 to cover lost-time injuries. The 2011 numbers improved only slightly: $9.6 billion spent in lost-time resulting from injuries.

How does this break down? Using profit margins from previous years, it is as if $100 billion dollars in “sales” never happened each year.

Safety Pays

Using the OSHA $afety Pays calculator, I was able to estimate what injuries cost compared to sales (patient billing) for 2010:

  • Nursing and Residential Care spent $4 billion for 60,090 lost-time injuries, requiring $39.8 billion in additional “sales” (at a reported 10 percent margin) to cover the loss.
  • Ambulatory Health spent $2.3 billion for 33,580 lost-time injuries, requiring more than $9.2 billion in additional “sales” (at a reported 25 percent margin) to cover the loss.
  • Hospitals spent $3.9 billion for 60,010 lost-time injuries, requiring $54.5 billion in additional “sales” (at a reported 7.2 percent margin) to cover the loss.

The need to replace billions in lost revenue puts health care in a difficult situation. Clearly, eliminating staff is not the answer, since many of these injuries resulted from overexertion, often from a lack of adequate staffing levels.

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 most retail stores sold that same pill for about 8 cents. With demands for health care reform making headlines and the average cost of a daily hospital stay at more than $3,900, the idea of a $100 billion dollar increase to pay for injuries that shouldn’t happen seems like a nonstarter.

How can losing $100 billion in annual revenue make more sense than building a culture of safety? I give this advice to every company pursuing safety excellence:

  • The first step is to put 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 limitations.
  • Measure against benchmarks.

When it comes to occupational safety in the health care industry, it's clear that a smart safety strategy can pay off.

Sources: The Bureau of Labor Statistics (BLS) divides health care (NAICS 62) into three sectors: Ambulatory Health (NAICS 621); Hospitals (NAICS 622); and Nursing and Residential Care (NAICS 623). For clarification, these cases are the DA part of the Days Away, Restricted or Transferred (DART) rate. There isn’t enough detailed state data available, so this analysis looks specifically at private sector facilities. No state or local government data are included in the annual BLS survey.

Dr. Scott Harris is an occupational health and risk management consultant with the Workplace Health and Safety division of UL (Underwriters Laboratories). He also is an advisory member of the ASSE Health care Practice Specialty and a course director at the UNC – Chapel Hill Occupational Safety and Health Education and Research Center. His experience spans more than 30 years of environmental, health and safety management in federal and state government, consulting, general industry and university instruction. Harris is a former federal on-scene coordinator with EPA who led response efforts at Shuttle Columbia and water search and rescue operations in New Orleans during Hurricane Katrina. He holds a Ph.D. in environmental science with a specialization in disaster and emergency management from Oklahoma State University and degrees in Public Health (MSPH) and Geology (B.S.) from Western Kentucky University.

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