Cataclysm and Recovery

In 2011, the world experienced both. Expect more of the same — and then some — in the year ahead.

• By Laura Swift, Ronnie Rittenberry, Jerry Laws
• Dec 01, 2011

No matter what bad things happen in the course of any given year —- and somewhere they always do and ever will -— when it comes time to turn the calendar and look ahead to a fresh 12 months, it's hard not to feel hope and see the promise harbored in the year to come. For 2012, however, that innate optimism has, for some, been tainted.

Thanks in part to a serious misreading or flat misunderstanding of ancient Mayan prophets, coupled with popular fodder such as the disaster flick "2012" distributed by Columbia Pictures in late 2009, many otherwise sane citizens find themselves in this season of transition looking forward to next year with a sense of unease. Some see the earthquakes and hurricanes that struck the East Coast within days of each other this year as mere precursor of the cataclysmic events to come.

2011: Tumult and Progress
7 billion may be the most significant number of 2011. The world's estimated population reached 7 billion in October 2011, and UN demographers project it will hit 10 billion by 2100. Public health experts wonder how the countries whose populations are growing fastest can cope with the strains. Rising immigration tensions in many countries are "one visible sign of unrestrained growth," Christen Brownlee noted in the fall 2011 issue of the Johns Hopkins Public Health magazine.

Natural disasters stood out in 2011. The biggest was the Great East Japan Earthquake on March 11, which triggered a devastating tsunami and crippled the Fukushima Daiichi nuclear power plant. Japan's National Police Agency reported 15,826 deaths and 3,810 others still recorded as missing. In the United States, the Joplin, Mo., tornado on May 22 was one of the worst among a record 87 federally declared disasters (as of Oct. 11), with 162 deaths, 10,961 survivors registering for assistance, and $53.4 million in disaster grants and loans approved by FEMA. Also on the major declared disasters list were Texas wildfires, flooding in several eastern states because of rains from Hurricane Irene, and a series of destructive tornadoes striking southern states in April and May. Only 2010, with 81 declared disasters, came close to the 2011 total.

Federal agencies announced their Healthy People 2020 targets shortly before 2011 began. When the Healthy People 2010 Final Review was released in fall 2011 (visit www.healthypeople.gov), it said 64 percent of the occupational safety and health objectives had achieved their 2010 targets. Specifically, according to the review:

• A 26.7 percent drop in work-related fatalities between 1998 and 2009, from 4.5 to 3.3 per 100,000 workers, neared the 2010 target of 3.2.
• Work-related deaths among miners at least 16 years old fell 46.2 percent, from 23.6 to 12.7 per 100,000, more than achieving the 2010 target of 16.5.
• Work-related deaths among construction workers at least 16 years old declined 33.1 percent, from 14.5 to 9.7 per 100,000. This, too, achieved the 2010 target of 10.1.
• Work-related injuries declined by 45.2 percent between 1998 and 2009 for all industry groups and achieved the 2010 targets.

However, the review noted only about half of all injuries are reported and said existing data sources for needlestick injuries don't allow injuries in that category to be tracked satisfactorily. The 2020 targets include a new objective to track work-related injuries treated in emergency departments; the new targets retained the 2010 objectives of reducing black lung deaths, lost-time overexertion and repetitive motion cases, and new cases of noise-induced hearing loss.

The economy was almost as tumultuous as Mother Nature in 2011. From the threat of a government shutdown and the European debt crisis to Standard & Poor's downgrading of the U.S. credit rating and persistent high unemployment, the economy did little to inspire public confidence. Large safety companies weathered the storm well, however, with Honeywell's and Grainger's third-quarter 2011 sales rising by more than 10 percent from 2010 and Dräger, MSA, and Kimberly-Clark seeing net sales increase in the first half of 2011.

"Although this has been a challenging economic period, there have been areas of notable recovery," said Rick Morris, U.S. business director for 3M Occupational Health and Environmental Safety. "Markets such as mining, transportation, heavy manufacturing, and petrochemicals have performed above the average economic growth rate." OSHA's increased enforcement efforts and announced regulatory changes, such as the revised compliance directive for fall protection in residential home construction (29 CFR 1926.501(b)(13)), have contributed to the increased demand for PPE, Morris said.

2012: Growth in Many International Markets
Analysts are cautiously optimistic about the U.S. economy next year. "The sustainability and magnitude of U.S. economic growth going forward is subject to debate," said Morris. "We envision that employment and overall recovery in many markets will continue to be gradual. We are optimistic that given the continued focus on safety, the industry and our company will experience growth rates that exceed those of the general economy." He said several federal standards and regulations that are under development are likely to influence safety product purchases in 2012 and beyond, while the 2012 presidential election could affect OSHA and EPA standards development, enforcement, and funding.

Internationally, the debt crisis in Europe, in addition to slow population growth and an aging workforce, could reduce demand there. "There are isolated areas of economic concern in international markets, such as Western Europe," Morris said.

However, the population boom in developing countries may boost international economic growth as a whole. "As the global population grows, there will be even more critical need for protection materials to keep people safe and to protect the environment, structures, and critical processes," said Thomas G. Powell, president of DuPont Technologies.

"Areas such as Latin America, Asia Pacific, and Central and Eastern Europe have, by and large, emerged quickly from the recession and are experiencing economic growth in a number of different segments that require PPE consumption," Morris said. "As a business, we are experiencing marked year-on-year sales improvement throughout the world, especially in the aforementioned regions."

Comp and Workplace Health Trends Worth Watching
Todd Hohn, CSP, vice president of Strategic Resources at PureSafety, said increased pressure on workers' comp spend per company is a trend that started in 2011 and will continue in 2012 . "The insurance marketplace is finding it more difficult to turn a profit, so I think you will see fewer carriers in the work-comp space, and that's going to force employers to look differently at how they manage their programs -— instituting price increases, larger deductibles, and other options," he said.

Rising health care costs will continue to be driven by an aging and largely less healthy workforce, with employees bearing the burden of those increases, Hohn said. What does seem to be changing, he said, is the frequency of employees' turning to workers' comp as an avenue to cope with the ever-rising costs.

"The trend used to be that medical costs of a work-comp injury were about 45 percent of the total claim dollars; today, that's in the 58 to 62 percent range, so that's impacting overall costs," Hohn noted. "As higher deductibles and other health care expenses are transferred to and being carried by the employee, I think we're going to see more employees turn to workers' comp as a way to take care of some of those issues. According to the most recent data from the National Council on Compensation Insurance, that's already happening. Even though it was only a slight uptick, the most recent numbers show an increase in the frequency of work-comp claims, and I think that's the first time in 10 years that that's had an increase."

Employers dealing with an aging workforce also will feel the impact caused by the retirement of experienced workers, causing what Hohn calls a "brain drain" and potentially disastrous consequences. On the positive side of things, he said, a number of solutions are helping employers combat such issues, the biggest of those being in the realm of analytics.

"Safety analytics is one area I see becoming more prominent," he said. "Analytics in general are used today in forecasting the buying patterns for groceries, the need for hotel rooms, the rates of air fares, and so on —-I mean, the field is already prevalent. The movie 'Moneyball' was based off of analytics, showing how better decisions can be made around baseball players. Analytics has been used on the claims side for years, and now increasingly we see it being applied to prevention.

"So I think analytics will help in terms of predicting, or helping clients and customers predict when their next loss will be. I think that technology is going to play a big role, but so is just the aspect of health and wellness and the opportunity that exists around that. More companies will be migrating to occupational health practices in general and looking at the overall health and well-being of the employee to better manage workers' comp, the idea being that it will have an impact on health care costs that the company is experiencing."