Workers' Compensation

Insurer-Supported Engineering Controls Can Lead to Significant Reduction of Overall Workers’ Comp Claims and Costs

New study evaluates controls to reduce/eliminate workplace hazards

Thomas A. Robinson, J.D., the Feature National Columnist for the LexisNexis Workers’ Compensation eNewsletter, is a leading commentator and expert on the law of workers’ compensation.

Insurer-supported engineering controls—those sorts of primary prevention approaches that seek to reduce or eliminate occupational safety and health (OSH) hazards within the workplace—are effective in reducing overall workers’ compensation claims and costs, according to a recent study published in the American Journal of Industrial Medicine [See Wurzelbacher, Steven J., PhD, et al., “The Effectiveness of Insurer-Supported Safety and Health Engineering Controls in Reducing Workers’ Compensation Claims and Costs,” Am J Ind Med, 57:12, December 2014, pp. 1398–1412]. Engineering controls can include ergonomic interventions—introduction of material handling equipment, patient handling equipment, and other ergonomic equipment and tools intended to reduce risk factors such as overexertion, awkward postures, and excessive force.  Other interventions include the use of appropriate scaffolding, the installation of slip resistant flooring, and the use of other equipment such as specialty saws and machine guarding.  Still other examples of engineering controls include stand-alone ventilation systems or machinery and powered equipment with built-in ventilation intended to reduce airborne contaminants.

The study, which segregated the impact of engineering controls from the benefits provided by other primary prevention approaches—e.g., modifications in work practice or administrative changes—suggests that expenditures on such controls related to safety and ergonomic risks are worth the outlay. The study makes at least two other points: (a) that some specific interventions may be more effective than others and (b) programs which increase the overall focus on safety are cost-beneficial.

Specific Prevention Programs in Ohio

The study analyzed several large-scale OSH intervention programs and services to improve primary through tertiary prevention at employers insured by the Ohio Bureau of Workers’ Compensation (OHBWC)—the largest of four exclusive state-run WC systems in the United States. OHBWC provides WC insurance for approximately two-thirds of Ohio workers and, beginning in 1999, OHBWC began to provide matching funds to a number of insured employers to implement OSH engineering controls and measure their effectiveness. Providing grants ranging from 2:1 to 4:1 OHBWC to employer match in funds, with up to $40,000 per grant, OHBWC provided for more than 1,800 interventions with an average annual total of $3 million in matching funds. In addition to the funding, OHBWC consultants worked closely with employers to develop proposed interventions, submit applications, and verify that they had been implemented fully in the workplace. The consultants conducted onsite comprehensive safety assessments and five-year claims history reviews and recommended other steps to reduce identified hazards.

Partnership With NIOSH

As part of an ongoing partnership, OHBWC and the US National Institute for Occupational Safety and Health (NIOSH) collaborated, with NIOSH acquiring data in early 2012 from all 468 employers who had been approved for grant support in the period 2003–2009. The data was analyzed based on a number of variables, including size of employer, length and age of the claim, type of injury, type of claim—medical only, indemnity, etc.—and type of intervention.

Significant Reduction in Overall Claim Costs

Overall, the total (medical-only and lost-time claims) WC claim rate per 100 affected full-time worker equivalents (FTEs) decreased by 11 percent per year, independently of intervention. In any given year there was an additional 66 percent difference between an employer with an intervention and an employer without an intervention. The lost-time WC claims rate per 100 affected FTE decreased by a greater degree (78 percent) post-intervention. The WC paid cost per affected FTE was significantly lower (81 percent less) with an intervention in place than without an intervention.

While prior intervention studies had tended to demonstrate intervention effectiveness in specific industries, such as healthcare, this new study evaluated effectiveness in a wide range of industries (10 major industry sectors). As a whole, therefore, the study provides evidence that engineering interventions can be successfully implemented in a wide variety of applications and industrial settings. Moreover, earlier studies had tended to concentrate on a single type or narrow range of controls, such as ergonomic patient handling devices. The current study demonstrated significant reductions in WC outcomes for a wide range of ergonomic, safety, and multiple-purpose interventions, suggesting that many types of specific engineering controls are effective in reducing WC outcomes for affected employees, and that the same sort of intervention may be effective in a broad range of industrial settings.

Study Limitations

The researchers note that the new study is not without its limitations. For example, to some degree it lacked randomization and a true control group. That factor was mitigated to some degree by the fact that interventions occurred over a wide range of dates and locations. The researchers note an additional concern that the timing of the interventions studied might have coincided with other changes for the affected employee group. The researches add, however, that the data suggests coincident changes were not great at the overall employer level.

Another potential problem: Employers may have applied for grants at a time when claim rates and costs were high for the affected employee group. If so, rates would have tended to fall in the post-intervention period even without the interventions. The researchers concluded, however, that this factor was not the main driver in the study’s results. The researchers note some other analysis issues, and point to the need for additional studies.

Intervention Works to Reduce Overall WC Costs

In spite of the study’s limitations, it nevertheless underlines an important point: the overall reductions in WC claim frequency, in WC paid cost per affected FTE, and WC paid cost per affected employee claim was significant. The study provides additional evidence that engineering controls for safety and ergonomic risks are effective in reducing WC costs and it appears further that some specific interventions are more effective than others. Targeted funding of those effective intervention types may well be warranted.

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