Safety and OSHA News

Is the mantra ‘safety saves money’ causing more injuries?

Two new reports suggest that changes in state workers’ comp laws could be having an unintended consequence: an increase in occupational injuries. Is the mantra “safety saves money” behind all this?

OSHA issued one report; the other is a collaboration between ProPublica and National Public Radio.

Their content is very similar. OSHA concentrates on the economic impact to families when one member is seriously injured on the job. Injuries lead to income inequality, according to the agency.

ProPublica focuses on how changes in state workers’ comp laws are reducing or denying benefits to injured workers and shifting the cost of their medical treatment onto taxpayers.

But one of the conclusions in the OSHA paper will get the attention of anyone dealing with workplace safety: The financial incentive of lower workers’ comp costs that encourages high-hazard employers to invest in injury prevention, has been lessened or eliminated.

The ProPublica report lays out how this is happening.

Responding to employer concerns about the rising cost of workers’ comp insurance, at least 33 states have changed their comp laws. This started around 1990 but continues to the present.

Some examples from ProPublica:

  • time limits on benefits to injured workers
  • employers and insurers control more medical decisions
  • in California, insurers can re-open old cases and deny medical care based on opinions from doctors who never examine the patient, and
  • restrictions on courts’ abilities to overrule decisions made by workers’ comp boards.

The result: Employers now provide only about 20% of the total cost of workplace injuries through workers’ compensation.

ProPublica says that shifts the burden for injured workers onto U.S. taxpayers through Social Security Disability Insurance, Medicare and Medicaid for lost wages and medical costs not covered by workers’ comp.

Is safety about saving costs or lives?

OSHA says these reductions in workers’ comp costs will cause some companies to pay less attention to worker safety because they no longer have the incentive to prevent injuries to gain lower insurance premiums.

And this points out a problem with the “safety saves money” argument to bolster workplace safety programs.

Each year, 4,500 workers in the U.S. die because of workplace injuries. That number has plateaued recently. Thousands more suffer life-changing injuries annually.

Injured workers may never work, play sports, be able to pick up a child or grandchild, or even be able to tie their own shoelaces again.

OSHA has denounced employers who see worker injuries as just a cost of doing business. And rightly so.

But one effort to encourage these companies to improve safety is to show them that “safety saves money:” Have fewer injuries and your workers’ comp costs will go down.

Now it appears that some companies, their business lobbies and lawmakers empathetic to cries about high workers’ comp costs have figured out a way to circumvent the argument. They can save money without spending the funds to improve safety by changing workers’ comp laws.

“Safety saves money” dangled a financial incentive in front of companies reluctant to do the right thing for their employees regarding safety.

But just as OSHA has said financial incentives for zero employee injuries are wrong, time has now shown that the “safety saves money” incentive has its own problems.

OSHA says employee incentives for zero injuries are bad because people will cheat (not report injuries) to get their bonus or prize. You always have people who want to game the system because the goal to get the incentive can be difficult to reach.

Now the same thing has happened with “safety saves money.” If it were as easy as saying it, more companies would do it.

But as someone in charge of safety in the workplace, you know reducing the number of worker injuries isn’t that easy.

So some companies that have found reducing injuries particularly difficult developed a way around the incentive.

In his book, Drive: The Surprising Truth About What Motivates Us, Daniel Pink says many businesses, governments and even nonprofits operate using outdated assumptions about human motivation:

“They continue to pursue practices such as short-term incentive plans and pay-for-performance schemes in the face of mounting evidence that such measures usually don’t work and often do harm.”

Pink says rewards narrow people’s focus. They create short-term thinking and shortcuts.

What’s the better way, according to Pink? Make the reward the activity itself.

Isn’t making sure that employees go home from work the way they came in the real reward when it comes to workplace safety?

What do you think about the reports from OSHA and ProPublica? Do you think the mantra “safety saves money” has hurt occupational safety? Let us know in the comments.

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