Real Money, Indeed

Worker's compensation covers less than 25 percent of the medical and indirect costs of occupational injuries and illnesses, according to a recent study.

The NIOSH Science blog recently featured a post by three agency officials who commented on a paper by J. Paul Leigh, Ph.D., a professor at the Center for Healthcare Policy and Research, UC Davis Health System, that was published in The Milbank Quarterly. Leigh carried out the most comprehensive analysis yet done of the economic costs of occupational illnesses and injuries. He concluded annual direct and indirect costs are at least $250 billion, which exceeds the individual cost of cancer, coronary heart disease, stroke, and diabetes, the NIOSH officials noted.

The costs of those illnesses are easier to measure because they require only a handful of primary data sources. Assessing the burden of occupational injury and illness requires many more primary and secondary data sources, and Leigh used more than 40 data sets for his analysis, wrote Paul Schulte, Ph.D., director of the NIOSH Education and Information Division; Elyce Biddle, Ph.D., senior research economist in the NIOSH Division of Safety Research; and Frank J. Hearl, PE, NIOSH Economics Program manager and chief of staff in the NIOSH Office of the Director.

Leigh calculated injuries comprised 77 percent of the total estimated costs and diseases accounted for 23 percent. His conclusion, that medical and indirect costs of occupational injuries and illnesses are at least as large as the cost of cancer, is highly significant because it shows that occupational injuries and illnesses play a bigger role in the overall cost of health care than many of us realized. Worker's compensation covers less than 25 percent of these costs, however.

The salient point of the "Economic Burden of Occupational Injury and Illness in the United States" paper is that $250 billion underestimates the full cost of injury and illness. It did not include retraining and turnover-related costs or the impact of "presenteeism" on productivity, for example.

"This paper is a major step in illustrating the economic burden of occupational injury and illness and how this affects the economic health of the nation and the productivity of the workforce," the NIOSH trio wrote. "Leigh observes that the cost of job-related injuries and illnesses are greater than generally assumed. However, the national investment in addressing occupational illness and injuries is far less than for many other diseases with lower economic burden even though occupational illnesses and injuries are eminently preventable."

To contact Leigh, email pleigh@ucdavis.edu or write to him in care of the Center for Healthcare Policy and Research and Department of Public Health Sciences, UC Davis Medical School, MS1C, Davis, CA 95616-5270 For a link to his paper, visit http://www2a.cdc.gov/nioshtic-2/BuildQyr.asp?s1=20040223&PageNo=1&RecNo=1&View=f&.

This article originally appeared in the June 2012 issue of Occupational Health & Safety.

About the Author

Jerry Laws is Editor of Occupational Health & Safety magazine, which is owned by 1105 Media Inc.

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