Katie Siegel

Katie Siegel is a staff writer at Risk & Insurance®. She can be reached at [email protected]

Ergonomic Exposures

The Overlooked Cost Cutter

Musculoskeletal disorders account for the majority of occupational injuries, but too few resources are dedicated to preventing them.
By: | July 1, 2015 • 3 min read
older worker in uniform moving,taking out,putting,segregating,lifting on (from) shelves in warehouse

Musculoskeletal disorders (MSDs) accounted for one-third of all occupational injuries and illnesses in 2013, according to the Bureau of Labor Statistics. Costs for workers’ comp claims involving MSDs are already around $26,000 on average, and can increase when costs associated with absenteeism, retraining, and lost productivity are taken into consideration.

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Despite these numbers, there are few proactive methods in place to identify risk factors for the development of a musculoskeletal injury and prevent it from occurring. Rather, approaches to these types of injuries are typically reactionary.

“Companies respond when an employee asks, by which time they already have pain or discomfort,” said Nate Rogoff, software specialist with Humanscale, a manufacturer of ergonomic products. “Ergonomists aren’t able to get ahead.”

Stats compiled by Humanscale show that there is only one certified ergonomist for every 100,000 workers in the United States. Many companies simply overlook the impact that improved ergonomics can have on decreasing injury claims and boosting productivity.

“Most employers do not proportionally allocate their resources — their time, talent and treasure — related to their injury experience and exposures,” said Tom Hilgen, senior risk control consultant at Willis Risk & Analytics. An article written by Hilgen details one company that was allocating only 5 percent of its cost-control resources to ergonomics, even though musculoskeletal injuries accounted for 50 percent of its incurred costs.

Ergonomists’ limited reach is further constricted by corporate silos that separate initiatives by risk management, safety and human resources departments.

“Safety and risk management have their own metrics, and operations have their own metrics, but they often are not aligning them. There needs to be the right alignment of business metrics that includes the impact of MSDs properly and how they affect costs associated with injuries, with absenteeism, turnover, and production quality and schedule,” Hilgen said.

Stats compiled by Humanscale show that there is only one certified ergonomist for every 100,000 workers in the United States.

Collection and sharing of the right data can help companies predict what injuries are likely to occur in which workers, rather than wait for them to appear.

Lagging indicators like type of injury, total count and total dollar amount of claims, and top causes of injuries can help employers pinpoint their top exposures, Hilgen said. But it’s also imperative to track the performance of existing ergonomics interventions.

“The best predictor of future performance is how well are they doing on a daily, weekly, monthly basis in terms of prevention of MSDs,” he said. “We call that a scorecard. We look at their ergonomics processes and score them between zero and 100 to see how they’re doing in terms of implementing best practices for prevention of MSDs.”

But best practices circle back to the professional ergonomists who come in such short supply. In addition to integrating efforts across an organization, employers need to strengthen the expert base from which they draw their best practices.

There are some tools that companies can use to help streamline and focus their efforts on MSD prevention.

Alan Hedge, a professor in the Department of Design and Environmental Analysis at Cornell University developed a software tool called Sonexes that uses predictive analytics to predict work-related MSDs based on the risk factors within a particular work environment.

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“[The tool] uses a rule-based algorithm or expert system which utilizes the knowledge and expertise of an ergonomist or practitioner through the software,” said Rogoff, a colleague of Hedge’s. The program checks results from an employee’s checkups against its rule-based system — based on established best practice — to produce a prediction of potential injuries.

“It was created to assist practitioners and ergonomists because they’re so outnumbered,” Rogoff said. “It allows them to gain visibility on their entire employee workforce at the same time. Within the software, they can drill down to different departments and identify high-risk individuals. It allows them to better prioritize their interventions.”

As safety, wellness and employee health initiatives grow inextricably linked, large companies are being called more and more to break down silos, improve communication and share data across all departments. Ergonomics can get lost in these efforts, but the high costs associated with MSDs certainly demand some attention.

Katie Siegel is a staff writer at Risk & Insurance®. She can be reached at [email protected]
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Workers' Comp Initiatives

Measurable Benefits in Health and Safety

ACOEM and UL present Integrated Health and Safety model, with new index to measure business impact.
By: | June 8, 2015 • 4 min read
Composite image of carpenter measuring wooden plank

The integration of workplace health initiatives and safety culture makes sense as a method to boost overall employee productivity, reduce accidents and shorten recovery time, but few employers really recognize the business value that integration offers and the leverage it gives them with investors.

“From both an individual’s and an organization’s perspective, health impacts work and safety, and work and safety impacts health,” said Dr. Ron Leoppke, past president of the American College of Occupational and Environmental Medicine (ACOEM).

Dr. Ron Leoppke, past president, American College of Occupational and Environmental Medicine

Dr. Ron Leoppke, past president, American College of Occupational and Environmental Medicine

Loeppke and Todd Hohn, global director of workplace health and safety with Underwriters Laboratories (UL), recently authored a guidance paper detailing a multi-phase implementation program to help companies of any size, in any industry, meld their health and safety measures into one unified program.

A key component of the resulting Integrated Health and Safety Model is the inclusion of a new index to measure the initiative’s effectiveness by standard metrics, following the format of the Dow Jones Sustainability Index (DJSI). The creation of the index is a response to a call among workplace health experts for standardized, metrics-based method for reporting of health and safety data. The index “would translate the impact of employer health and safety programs into business value for the investment community, measuring the effectiveness of employers’ health and safety programming.”

Since its launch in 1999, the Dow Jones index “is globally recognized by investors as the leading standard for corporate sustainability, tracking the performance of the world’s leading companies,” according to the guidance paper, titled “Integrating Health and Safety in the Workplace: How Closely Aligning Health and Safety Strategies Can Yield Measurable Benefits.”

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By aligning with the Dow Jones format — measuring economic, environmental and social impacts — ACOEM and UL hope to place health and safety on the same level as other sustainable business practices and attract an equal amount of corporate attention.

Measures of economic impacts include number of workers comp claims filed annually, prevalence of absenteeism and presenteeism, and employee turnover rate. Environmental measures include accident/incident rate and past OSHA inspection data. Social impact measures include wellness program participation, prevalence of chronic health conditions, and workplace demographics.

The index “incorporates forward-looking indicators, which are more objective in nature and can be used by a variety of organizations,” Hohn said. He added that the model as a whole is built on five cornerstones: organizational structure alignment, involvement across an organization, analysis, transparency and metrics. The index categories aim to include top tier leadership and management all the way down to those with specific roles in disability management and health and productivity programming.

Return on Investment

“Cost of accidents are going up due to an increase in medical costs and indemnity,” Hohn said. “The driver is health and well-being in the workplace, because accidents are already low in the U.S. Obesity and other co-morbidities are making recovery longer and costs higher.”

Todd Hohn, global director of workplace health and safety, Underwriters Laboratories

Todd Hohn, global director of workplace health and safety, Underwriters Laboratories

According to the paper, “Since 1970, workplace fatalities have been reduced by more than 65 percent and injury and illness rates have declined by 67 percent, according to the Occupational Safety and Health Administration (OSHA). Worker deaths have been reduced from approximately 38 per day in 1970 to 12 per day in 2012.”

A person with a pre-existing chronic condition, however, is twice as likely to develop an on-the-job injury or illness, and the growing prevalence of obesity, diabetes, hypertension, and other related issues is complicating the workplace health landscape.

“Every $1 in medical/pharmaceutical costs is equal to $2.30 in productivity costs,” Hohn said. The connection between workplace health and safety and overall business performance has received increased recognition “because of converging financial, political and cultural trends,” said Leoppke.

Loeppke pointed to several recipients of ACOEM’s Corporate Health Achievement Award — who have documented success with health, safety and environmental programs — as examples of how those efforts translate into business value.

ACOEM tracked the stock market performance of these companies through various market simulations. In one scenario that excluded outliers, the study found that a theoretical $10,000 investment made in mid-1999 would grow, on average, to $19,404.12 by mid-2012, a 94 percent return on investment. The rest of the S&P 500 saw a decrease in ROI by .77 percent over the same period.

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According to Hohn, it can take anywhere from six to 18 months for employers to see success from an integrated health and safety system, but the payoff is real.

ACOEM and UL’s guidance paper defines integrated health and safety as “the strategic and systematic integration of distinct health and safety programs and policies into a continuum of organizational, personal, occupational, community, and environmental activities that are replicable, measurable, and integrated across institutional silos, enhancing the overall health and well-being of workers and their families.”

If more employers adopt an integrated model based on the holistic viewpoint ACOEM and UL present, the U.S could be looking at not just a healthier workforce, but a healthier economic environment as well.

Katie Siegel is a staff writer at Risk & Insurance®. She can be reached at [email protected]
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Public Sector

Upgrading America’s Infrastructure

Climate change is speeding the deterioration of an already aged system. The fix will cost trillions.
By: | June 1, 2015 • 8 min read
** FILE ** Construction crews work to repair a 36 inch water main break that crumbled pavement and sent thousands of gallons of rushing water onto a major city street turning it into what looked like a small lake, in this file photo of Tuesday, Jan. 22, 2008, on the north side of Chicago. It was not clear what caused the 80-year-old cast-iron main to break, but engineers say we are in a crucial era for the nation's infrastructure, especially in older cities where some pipes and tunnels were built more than a century ago, and are now nearing the end of their life expectancies. (AP Photo/M. Spencer Green, File)

D+. That’s the grade assigned to the overall quality of America’s infrastructure by the American Society of Civil Engineers (ASCE). Just one notch above failure.

ASCE’s economic report on surface transportation, released in July 2011, reported that deteriorating infrastructure will cost the American economy more than 876,000 jobs and suppress the growth of GDP by $897 billion by the year 2020.

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Bad infrastructure has a cascading effect on the economy. Lack of capacity and poor road conditions lead to backups and bottlenecks.

That means products sitting in trucks aren’t reaching their destinations in a timely and efficient manner. Commuters are wasting time and fuel sitting in traffic. The cost in wasted fuel and lost productivity is staggering.

“The Federal Highway Administration calculates that highway bottlenecks cause more than 243 million hours of trucking delays each year, costing $7.8 billion.

When shipping takes longer, businesses have to reorient their supply chains and rely on more distribution centers, adding more costs,” said Mark Brockinton, managing director, transportation and logistics practice at Aon.

“In 2011, traffic congestion caused American commuters to purchase an extra $2.9 billion in fuel, costing more than $120 billion in added fuel costs and wasted time.”

The effects of climate change and increasingly severe weather only further constrain traffic flow and worsen road conditions.

“If you look at the severe winter we had in the Northeast, that created a lot of wear and tear on our roads and bridges,” said Andy Herrmann, past president of the ASCE.

“They had to put a lot of de-icing material down to combat that, but that salt mixes with water and accelerates the corrosion of steel and gets into the concrete and starts corroding the reinforcing bars. And when steel corrodes, it expands seven to eight times its volume. So when you look at a bridge deck or a roadway surface and you see a pothole, that’s those reinforcing bars expanding and pushing against the concrete.”

Steve Bojan, vice president of fleet risk services for HUB International, added, “When you talk about climate change and harsh weather, you look at the Northeast and it wreaks havoc. [This past winter] was horrible. All bets were off on everything. Roads, whole cities, interstates were shut down. So you end up backing everything up for days, and at some point, some goods and services are just not produced. It’s in the billions of dollars a day in activity that can’t be done.”

“People are starting to understand that when they rebuild their infrastructure, they have to do it to a new standard.” — Erik Johanson, manager of strategic planning and analysis, SEPTA

Federal and state governments are taking steps to improve infrastructure, especially after Superstorm Sandy demonstrated that the effects of climate change can literally bring major cities to a standstill and incur huge costs.

In 2011, the Federal Transit Administration selected seven transit agencies across the country as part of a pilot program to conduct risk and vulnerability assessments of their systems and create plans for climate change adaptation.

After Sandy, it doled out capital funding to help turn some of those plans into reality.

In Philadelphia, the Southeastern Pennsylvania Transportation Authority (SEPTA) received $87 million to fund seven projects it developed during the pilot program phase.

The authority’s regional rail system in particular has been taking a beating.

06012015_03_risk_report_Johanson

Erik Johanson, manager of strategic planning and analysis, SEPTA

“We did a pre-screening process to determine the most vulnerable points in our system, and the Manayunk/Norristown line, which parallels the Schuylkill River pretty close to the level of the river, has flooded 13 times since 2003, out of a total of 21 recorded flood events in history,” said Erik Johanson, manager of strategic planning and analysis.

“So more than 50 percent of recorded flood events that have occurred on that line have happened since 2003.”

While plans focus on flood mitigation and shoreline stabilization, improving the system’s resiliency will also involve building a backup control center and power systems, and insulating bare copper wires that can easily trip and cause signal failure.

In general, extreme temperature changes and powerful storms make any transit system vulnerable to failure.

“For heat, the big things are track buckling and sagging wires, which have major impacts,” Johanson said.

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“Once it reaches 90 degrees, we have to slow the trains down, so it has service impacts.”

Snow, ice and strong winds can also lead to downed power lines, damage to signal systems and other equipment, and labor workforce issues associated with snow removal.

“People are starting to understand that when they rebuild their infrastructure, they have to do it to a new standard,” he said.

Building in Resiliency

That new standard may include building with new materials and technologies.
According to the ASCE’s Herrmann, “The University of Michigan came out with a concrete that can take some tension. Concrete is a compressive material, but if it can take tension, it can prevent it from forming the little cracks that allow salty water to get into it and start the corrosion cycle.”

Monitoring devices can also be built into bridges to track ground movement.

“When it comes to settlements of soil or ground movements, those things can change just due to small gradual movements, but can also be drastic. It has impact on the stability of a structure,” said Guido Benz, head of engineering and construction at Swiss Re Corporate Solutions.

“Structural elements today have more up-to-date monitoring tools that can be built in during construction, which was not the case in the ‘50s. — Guido Benz, head of engineering and construction, Swiss Re Corporate Solutions

“Structural elements today have more up-to-date monitoring tools that can be built in during construction, which was not the case in the ‘50s.”

When bad weather strikes, lower salt and salt-free mixtures can also be used on roadways to melt ice. There are also new high-performance forms of concrete and steel, which are less permeable, more resistant to corrosion, and higher strength.

“But those things come with a cost,” Herrmann said. “State departments of transportation have hard decisions to make — what to do with limited dollars. Do they do maintenance, repairs or replacements with new structures? Maintenance can get put off, and it just gets more expensive the longer you put it off.”

By Bojan’s estimates, “It’s probably at least 20 years to uncork this. These projects are all very long term and take a lot of planning.”

Critical infrastructure may also be delayed due to lack of will.

“Infrastructure is not sexy, for lack of a better word,” Bojan said.

“People are much more likely to want a park on the lakefront. They’ll spend $150 million for that, but to spend $100 million for a viaduct, for example, they react negatively.”

Finding Funding

Lack of funds is another primary reason that necessary upkeep and upgrades to transportation infrastructure have not been made.

Guido Benz, head of engineering and construction, Swiss Re Corporate Solutions

Guido Benz, head of engineering and construction, Swiss Re Corporate Solutions

“Investments needed are in the billions of dollars. They’re massive numbers. The big question is: Where will the funds come from?” Benz said. The ASCE estimates it will take a $3.6 trillion investment by 2020 to bring the many components of America’s infrastructure up to an acceptable standard, and that total could increase if higher-strength, weather-resilient tools and materials are considered.

The federal government may invest in rebuilding efforts after a disaster, but these long-term projects need a steady stream of capital for maintenance.

Public-private partnerships (PPPs) are one way to attract investors to costly infrastructure projects.

“Models that bring in private investors but also involve project parties in long-term operational contracts generate revenue to maintain the structure. Achieving proper maintenance and keeping infrastructure upgraded is the critical element,” Benz said.

“In times of financial difficulty, maintenance gets cut short, so the quality will decay over time. So the benefit of the PPP approach is that the upkeep as well as the operations of the infrastructure is outsourced, and that presents a business opportunity for the private parties. From the investor’s point-of-view, it’s attractive because they can make a profit off of tolls, for example, and sell the property back when their contract is over.”

Other experts say a fuel tax increase is necessary to move projects forward at a steady pace. As vehicles have grown more fuel-efficient, the fuel tax percentage has remained static, meaning that more miles are being driven while fewer funds are collected. The revenue can’t keep up with the demand for repairs, upgrades and maintenance.

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“The fuel tax needs to be raised an additional 40 cents to a total of 65 cents. The federal diesel tax hasn’t changed since 1993,” said Aon’s Brockinton.

“The American Trucking Association actually is pushing for higher taxes now,” HUB’s Bojan said.

“Freight is good, profits are up, and they’re saying, ‘We need to improve our lanes and infrastructure so we can improve our throughput, otherwise we’re just getting clobbered by constraints.’ ”

Planning for the Storm

The Environmental Protection Agency predicts that unless greenhouse gas emissions decrease substantially, temperatures will continue to climb, the world’s oceans will become more acidic and the frequency of severe storms and precipitation levels will increase.

Failure to address the risks to infrastructure will not only worsen congestion, but threaten to totally shut down transit if roads, bridges and rails become too dangerous to use. Safety also becomes a major issue.

Mark Brockinton, managing director, transportation and logistics practice, Aon

Mark Brockinton, managing director, transportation and logistics practice, Aon

“Certain insurance companies have products insuring against a loss a company might have within the transportation infrastructure, such as a port delay, local embargo, or a natural disaster,” Brockinton said.

“The products would include business interruption, contingent business interruption, trade disruption, political risk, logistics insurance.

Certain companies will insure risks without an actual loss of product under certain circumstances, which would include a delay or non-delivery of product due to a strike or natural catastrophe.

“A well-performing transportation network keeps jobs in America. It allows businesses to expand, and it allows businesses to manage their inventories and transport goods more cheaply and efficiently.”

Benz of Swiss Re said companies should view infrastructure failure as an “operational risk,” and mitigate it by building redundancies into their supply and delivery chains. As harsh weather presents an ever-growing challenge, it becomes more and more important for risk managers to “always have a Plan B ready to go.”

Katie Siegel is a staff writer at Risk & Insurance®. She can be reached at [email protected]
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