Tuesday, March 12, 2019

Is workers’ compensation spending on healthcare significant?...Would a "single-payer" system make a difference?


I’ve received a lot of questions recently on workers’ compensation healthcare spending in Canada, the US and other countries.  These questions appear have arisen as several US states and political analysts have proposed consideration of “single payer” healthcare systems for their jurisdictions. 

Questions include:

  • Is healthcare spending similar across nations? 
  • Is the workers’ compensation part of that spending similar across nations? 
  • Does it matter to workers’ compensation if there is a single payer system in place?   


At the California state Department of Workers’ Compensation (DWC) Educational Conference, my presentation highlighted workers’ compensation healthcare spending.  Time and format restricted the depth of that presentation.  Hopefully the following background will answer in greater depth some the many questions on this topic and help policy makers better understand the scope and context for their deliberations.

Healthcare spending is a big part of the economy

National spending on healthcare is difficult to compare across economies but may be expressed relative to Gross Domestic Product (GDP) or as an average cost per person (see https://www.cihi.ca/en/how-does-canadas-health-spending-compare-internationally
for comparisons based on 2015 data).  

The Organization for Economic Cooperation and Development (OECD) estimates average healthcare spending at about 9% of GDP with the US the top spender at about 17%; Canada, Australia and New Zealand are all slightly above the OECD average with national healthcare expenditures between 9 and 11% of GDP.

Healthcare spending comes from two general sources:  public funds and private sources.  Private funding includes out-of-pocket healthcare spending by individuals on medical supplies and services, co-pays or deductibles.  Spending by your privately-purchased extended health or dental plan is also considered private.  Public spending refers to spending from governments and public agencies.  The healthcare of military vets, grants for medical research and public medical insurance typically fall into the public spending category.  Workers’ compensation spending on healthcare may be in either category or both depending on the jurisdiction.  A state fund or provincial workers’ compensation board would have its healthcare spending grouped in the public category (often under the category of “social insurance” healthcare spending) while healthcare spending by private workers’ compensation insurers would generally be reflected in the private category. 

One might expect more spending will result in better health outcomes for the population.  There are many metrics on health outcome:  life expectancy, child mortality, disability-adjusted years of life, etc.  Many of these show some correlation with national health spending but there are exceptions.  Spending more does not always result in better health outcomes.  This chart compares life expectancy at birth and national healthcare spending [US in blue, Canada in Orange and Australia in white compared with all other OECD countries].




What portion of National Healthcare Expenditures are related to Workers’ Compensation?

Regardless of the workers’ compensation insurance arrangement (private insurer, exclusive public state or provincial workers’ compensation board) the healthcare expenditures by workers’ compensation systems are relatively small compared to the total national spending on healthcare.  Using data from a number of sources, workers’ compensation spending on healthcare accounts for approximately 1% to 2% of total national healthcare spending in the US, Canada and Australia.  [See figure at top of this post.]  The ranges for US and Canadian estimates are primarily related to the apportionment of administration costs.

In jurisdictions where hard currency amounts are actually expended by workers’ compensation systems, tracking and summation by reporting authorities is complex but relatively transparent.  Not all workers’ compensation systems (or other mandated employer liability arrangements covering occupational injury and disease) in the world cover medical costs; instead, healthcare spending arising from work-related injury and disease may be paid by the individual, included in mandated public or private health insurance coverage, or covered by a universal health plan.   

Where there is no hard currency audit trail for work-related healthcare spending, jurisdictions have to estimate the proportion of healthcare spending for work-related injuries and disease by other means.  The estimate of total healthcare spending related to work injury and disease in different jurisdictions will depend on what you include or exclude from the calculation but should be approximately equivalent to workers’ compensation spending on healthcare reported in jurisdictions where that model applies (and most workers are covered).

In the UK, the National Health Service (NHS) provides universal healthcare coverage for all injuries including work-related injuries, illness and disease.  The Health and Safety Executive (HSE) in the UK attributes the following health spending amounts [based on self-report]  to work-related injury, illness and disease:
  • Individual: 
    • Out of pocket health and rehabilitation expenses (including prescription charges, travel expenses, home expenses and funeral expenses      £ 83 Million
    • Proportion of individual private health insurance premiums attributable to work related illness/injury  £ 21 Million
  • Employer:  Proportion of corporate private health insurance premiums attributable to work related illness/injury  £ 97 Million
  • Government/Taxpayer:  NHS treatment and rehabilitation costs (short and long term) £738 Million 

[from Costs to Britain of workplace fatalities and self-reported injuries and ill health, 2016/17,  Annex 2: Detailed breakdown of costs by cost bearer in 2016/17 (2016 prices), [Health and Rehabilitation category] Published 31 October 2018.
http://www.hse.gov.uk/statistics/pdf/cost-to-britain.pdf ]

Total current healthcare expenditure for the UK in 2016 was £191.7 billion, so these amounts represent about 0.5%-- a little less than the proportion estimated above for Canada, the US and Australia.  The difference is likely related to the set of spending amounts included as work-related. 

How significant is the healthcare expenditure component of workers’ compensation costs?
It may be tempting to dismiss workers’ compensation healthcare spending as a rounding error in terms of the national healthcare spending.  In my view, this would be a mistake.  Those of us who study or work in workers’ compensation systems recognize the cost of healthcare for injured workers as a big part of the total cost of workers’ compensation claims.  

Healthcare or medical aid spending accounts for more than half the current year claims expenditures by workers’ compensation insurers in the US.  In some states, the proportion is even greater.  In Canada, the data suggest a lower proportion, from about a quarter to a third of current year benefit expenditures paid in the year for claims from all years (for most jurisdictions).  It should be noted, however, that Canadian workers’ compensation benefits tend to be greater than those provided in the US (typically 85-90% of Net or spendable average earnings vs. the typical 66 2/3rds % of gross, generally higher maximum insurable limits, cost-of-living adjustments, etc. ); Canadian healthcare costs (including for many hospital services and prescriptions) also tend to be lower cost than those in the US thus making the healthcare component of current benefits paid appear somewhat lower.   

Why is this important?

Many jurisdictions are looking at their healthcare expenditures.  Proposals in the US include reforms from single-payer systems, 24-hour coverage, and other arrangements.  Proponents of one position or another may draw on Canada, the UK, Australia, or other national system as examples of what to do or not to do in any reform.  While there is no question that comparisons can highlight important differences and may even suggest opportunities, there are challenges in understanding other systems and the context in which they arise. 

One key point to remember is the relationship between claim cost and premium for workers’ compensation insurance. Under the insurance model used in the US, Canada and Australia, workers’ compensation premiums are designed to reflect indemnity payments for lost wages, other benefits (such as rehabilitation), and the costs of medical care that may be needed for a lifetime.  This structure is based on the premise that the industry (or enterprise) that gives rise to a work-related injury or disease ought to cover the associated diagnostic, treatment and medical/rehabilitation costs. Self-insurance provisions seek to confine costs to the insured entity and experience modification to premiums (x-mod, experience rated assessment, etc.) are intended to distribute costs more directly to the entity giving rise to them.  The workers’ compensation insurance cost (including the medical cost) reflected in the premium forms part of the incentive for increased prevention and improved return-to-work outcomes.  Failure to confine and fund the medical cost to the workers’ compensation system by definition will externalize those costs to someone else (often the tax payer or premium payers for other health insurance programs, the worker, worker’s family or community, other employers, or other employees of group insurance plans). 

Is the healthcare spending by workers’ compensation insurers handled similarly in the US, Australia, and Canada,?

A worker gets injured, goes to the doctor or hospital and gets treatment.  In the US, Canada and Australia, if the injury is work-related, payment for the fee for service by the attending physician or hospital service will usually be made by the workers’ compensation insurer, typically as a direct bill by the provider to the insurer. Identifying that insurer can be complicated by the number of factors.  There are often several potential insurers in most states and the responsible insurer depends on which policy was in force on the date of the injury (not necessarily the date of treatment). 

In states with exclusive state funds or provincial workers’ compensation insurers, the responsible insurer is obvious and clear.  There is one insurer, on question of policy year or other coverage.  In jurisdictions where the definition of worker is independent of the coverage status of the employer, the worker’s medical expenses will be paid by the insurer even if the employer was uninsured by omission or fraud. 

The situation may be more complicated in states with employer “deductibles” or other arrangements.  In the Australian state of Victoria, workers’ compensation is payable but only after the employer has paid for the first 10 days of incapacity and $707 (2019, indexed yearly) of medical costs.  [see,  http://www1.worksafe.vic.gov.au/vwa/claimsmanual/Content/4EmployerObligations/2%204%201%20Employers%20liability.htm ].

Many people assume Canada, with universal health insurance has one big insurance plan that covers everyone for every health concern.  That assumption contains many misconceptions.  Saskatchewan adopted the first “Medicare” plan under then premier, “Tommy” Douglas [trivia: Kiefer Sutherland’s grandfather].  A federal Royal Commission on Health Services in Canada under Chief Justice, Emmett Hall, recommended Canada adopted universal healthcare in the mid-1960s but universal does not mean one plan.  Every province and territory has its own medical services plan—a single payer healthcare insurance plan in each province or territory that covers all necessary insured health services… except workers’ compensation for reasons noted below. 

Why are workers’ compensation medical payments not covered by provincial health plans?

Canada does not have a national, single payer healthcare plan; each province and territory does. The background is rooted in the constitution and in the evolution of healthcare in Canada.  The distribution of powers in the Canada Constitution Act, 1867, defines a relatively narrow set of federal powers [section 91] and gives provinces law-making power [sections 92, 92A) over a broader area including “hospitals”, “property and civil rights”,  and “generally all matters of merely local or private nature in the province”, (making workers’ compensation, occupational safety and health regulation healthcare, labour law clearly in the provincial domain for matters not specifically in the federal powers). [Note:  The Canadian federal government has occupational safety and health authority over industry under its constitutional powers (including inter-provincial transportation, communications, for example, as well as for its own government services and military).  It also has authority over workers' compensation for its own employees but contracts with the provincial workers' compensation boards to administer that for them.  See the Government Employees Compensation Act].  

The federal government has greater taxation authority under the constitution so it had the wherewithal to partially fund provincial healthcare system, if the provinces agreed to develop them in a specific way.  Under what is now known as the Canada Health Act, [CHA] the provinces agreed to set up health plans that adhered to five principles:

(a) public administration [single payer, not for profit, public authority];
(b) comprehensiveness [all necessary health services];
(c) universality [everyone entitled to same level of care];
(d) portability [coverage maintained even if in another province]; and
(e) accessibility [reasonable access to care and reasonable compensation to hospitals and providers for services].

Both the original Saskatchewan medical insurance plan and Hall’s recommended legislation excluded workers’ compensation.  The current CHA defines “insured health service” as follows:
insured health services means hospital services, physician services and surgical-dental services provided to insured persons, but does not include any health services that a person is entitled to and eligible for under any other Act of Parliament or under any Act of the legislature of a province that relates to workers’ or workmen’s compensation; [emphasis and underlining added]

The reasoning was clear:  workers were already insured for work injuries. 

Under the CHA and provincial medical services plans, extra billing or co-pays are not permitted.  In most cases, how a medical service is paid and who pays it happens behind the scenes with the physician or hospital billing the single payer provincial health insurance plan or workers’ compensation (sometimes using the same electronic platform).  Note that there is strong similarity of what is covered and not covered among provincial medial services plans but there are differences.

Healthcare spending is only one dimension

Work-related injury, illness and disease has a huge cost.  The human cost is not reflected in the healthcare or compensation dollars expended by workers’ compensation systems. 
It is clear that healthcare expenditures are a significant, growing and even predominant portion of workers’ compensation costs.  At the same time, workers’ compensation costs barely register as a percentage or two of overall national healthcare spending in many developed countries, regardless of the healthcare funding model. 

This analysis does not include any discussion of offsets.  Healthcare is a big segment of the economy; it employs many people and generates significant economic activity.  Workers’ compensation administration, rehabilitation and many other services are part of that activity.  The human and financial cost of work-related injury can never be justified by these activities but few studies quantify them. 

Does universal, single-payer system have advantages for workers’ compensation?

The universal, single-payer healthcare systems in each Canadian jurisdiction offer certain economies of scale and scope to the populace.  With everyone covered, there is no incentive to make claims against workers’ compensation just to ensure an injury gets necessary medical care.  A population where everyone has health insurance (universal coverage) is generally healthier than a population without such coverage, based on many health metrics (like life expectancy, infant mortality, etc.); a healthier population means fewer work-related injuries that do occur will carry with them to their workers’ compensation claims additional healthcare burdens.   Single-payer systems (that include or exclude workers’ compensation) offer efficiencies that lower costs, reduce duplication and provide rich data for further improvements to population health.   As in the Canadian example, the single-payer system can exclude workers’ compensation yet provide lower cost, higher efficiency benefits to the workers’ compensation system (shared systems, data, fee schedules, etc.).

Work-related injuries are almost entirely preventable.  In the ideal world, their contribution to national healthcare spending should be vanishingly small.  The world, however, is far from ideal.  Regardless of workers’ compensation model, the cost of work-related injury, illness and disease is significant.  Under private, competitive models and exclusive state fund or provincial workers’ compensation, those significant healthcare expenditures are a big part of the premium cost and provide further incentive toward prevention.  Keeping the healthcare cost of work-related injury, illness and disease a direct part of the workers’ compensation premium may hasten progress toward that ideal world.

Friday, February 8, 2019

Safe or Unsafe: a binary choice?

Commuting between two worksites,  I  crested an overpass, entered a construction "cone zone",  and noticed the caution signs.   Signs like these are intended for the safety of drivers, cyclists, pedestrians and workers in the construction zone.  One might assume that there is a simple choice to make:  Signs or No Signs-- Safe or Unsafe. Safety, however, is rarely a binary choice. 



In the first iteration [1] the signs were placed in my bike lane.  This placement made them highly visible, narrowed the available road surface to vehicles and clearly warned of the hazards ahead.  What could be safer than that?

For cyclists (and the occasional pedestrian), their lane was blocked by these signs, forcing them to ride in the vehicle lane.  Worse yet, any cyclist who drove in the bike lane between the signs would become invisible to drivers coming from behind when the signs were deployed facing oncoming traffic. 

The next morning, on the same stretch of road, the crew was not working and the signs were turned sideways, parallel to the traffic but still in the cycle lane [2].  The result was to make the signs essentially invisible to drivers.  As the day progressed, high winds (or drivers) caused the warning stations to be knocked down and blown to the road side further decreasing the visibility of these safety signs.  Cyclists, traveling at lower speeds than car traffic, would see the grey stands in time to avoid hitting them but still be forced to share the vehicle traffic lane.   

The next time I passed this way (this time as a passenger in a car), I noticed the signs had been relocated, clamped to the concrete traffic barriers adjacent to the road edge [3].  This arrangement provided similar safety warnings for vehicular traffic but left the cycle lane relatively free of obstruction. 

Acting in the name of safety

Clearly, warning signs are intended to increase safety but exactly how they are deployed can have an impact on safety itself.   It is not a question of Safe or Unsafe; rather, the choices we make in the name of safety have relative impacts on overall safety. 

Acting in the name of safety simply to comply with a rule, standard, or guideline does not make a worksite safe.  As with the sign example, doing something in the name of safety is not an end in itself.  Slapping the dust from your hands and ticking off the “safety-signs in place” item on your general checklist misses the point.  Perfunctory compliance with a safety standard (regulation, law) may provide a false sense of safety and actually increase the risk of injury.

As with the sign case, acting in the name of safety may have unintended consequences.  The initial method of deploying the safety signage for motor vehicle safety had unintended consequences for pedestrians and cyclists, increasing their risk of injury.  The engineered safety measure of separating cyclists and pedestrians from motor traffic was clearly defeated by the placement of warning signs. 

Safety:  A dynamic, multi-dimensional construct

While some actions and omissions are clearly unsafe, there are almost always more options to improve safety.  Actions taken in the name of safety are taken in a multi-dimensional context. Mindful safety implementation is preferable to blind compliance.  Rather than thinking Safe/Unsafe or even considering a continuum (with points like Unsafe/Safer/Safest), think in broader terms and be willing to consider alternatives.  It is more work but that keeps safety top of mind rather than letting it fade into the background of the worksite. 

Even with safety signs or other safety measures in place, hazards are still present.  Safety measures typically address known and likely hazards to reduce the risk of those hazards harming workers or other persons in the workplace.  Workplaces, however, are not static.  The activities of those present in the workplace, lighting, weather conditions, and many other factors continually alter hazards and risks even with safety measures in place.  The dynamic nature or risk means safety is rarely a “one and done” consideration.

Safety-mindedness

Next time you consider an action in the name of safety, be mindful about your options and choices.  Include multiple perspectives and be willing to change your implementation for options that improve safety overall.

Tuesday, January 1, 2019

Are Workers’ Compensation benefits protected against the rising cost of living?


The cost of living (almost always) goes up year over year.  If your earnings aren’t keeping pace, something has to give.  In the short run, you might be able to carpool more, eat out less, switch to generic products, and maybe repair your old car rather than buy that new SUV.  In the long run, if the cost of living continues to outpace your earnings, you might have to take on a second (or third) job, downsize your home, move to a lower cost city, or go back to school so you can pursue a career with higher wages.   Those are some of the options… if you are able to earn an income.   

Workers with permanent disabilities often don’t have those options.  The monthly workers’ compensation amount they receive may have sustained them initially but unless it is adjusted for the cost of living, permanently disabled workers will see the buying power of their workers’ compensation income decline with each passing year.  Over time, savings may be depleted, debts incurred, and their health and welfare diminished—furthering the burden of their original work-related injuries. 

To forestall this eventuality, the majority of North American workers’ compensation jurisdictions adjust periodic payments (sometimes called workers’ compensation pensions or permanent disability payments) to account for increases in the cost of living.  This policy, however, is far from universal among US workers’ compensation systems.  A recent WCRI/IAIABC survey of Workers’ Compensation Laws (2016) recorded 27 US states with no cost-of-living escalator for permanent total disability cases. 

Consumer Price Index:  A common reference with many versions and unique calculation characteristics

The most common approach used by North American workers’ compensation jurisdictions that do adjust their payments for increases in the cost of living is to mirror the increases to federal entitlement plans such as US Social Security (USSS) and Canada Pensions Plan (CPP and parallel Quebec Pension Plan, QPP).   These near universal social insurance plans for retirement and disability benefits for working citizens provide a convenient standard for workers’ compensation policy makers designing cost-of-living adjustments (often abbreviated COLA).   

Both USSS and CPP increase benefits annually based on changes the Consumer Price Index (CPI) for their respective countries.  The method of calculation and exactly which components of the CPI are used differ.  There are technical manuals on CPI calculations; however, for workers’ compensation policy makers there are a couple of general comments that may provide insight into the use of CPI as an adjustment factor.

First, CPI is not one universal thing.  The standard definition of CPI refers to the change over time in the cost of a selected (but arbitrary) “basket of goods” in a base year.  The simple concept is more complicated than it sounds; a lot of detail goes into selecting and weighting items for that “basket of goods”.  Most versions include goods and services such as transportation, education, recreation, communications, and medical care.  Other real expenses that are excluded from the “basket of goods” [in Canada, at last] are real estate and life insurance.  And exactly whose basket we are considering can make a big difference.  What a young, urban couple with two kids in school has in their typical basket probably differs from a rural farm family or retired manager might consider typical.   The definition of what is in that basket and what proportion or weight goes to each category are also subject to change over time.  Think about communications, for example; with internet services and mobile data becoming essential utilities, it makes sense that they be included and their weight increased. 

The second point to remember about CPI is that there are often multiple versions of the CPI even within one country.  Variations include geographic subsets [regions, states, provinces, cities], versions that include all or just core items, and even versions that designed to reflect cost of living impacts on specific populations. In the US, for example, two main indexes are often cited for specific populations:  urban consumers [CPI-U] and urban clerical and wage earners [CPI-W].  Note that CPI-U covers most people including the unemployed and retired whereas the CPI-W is intended to reflect the impact of price changes on those working at least 37 weeks per year.  Both exclude rural consumers.    There are other CPI series including CPI-E for elderly.  Each has its uses and merits (as well as limitations and drawbacks).  Each series will produce different results.

Finally, the monthly CPI change is measured against a base year.  The base year for some CPI series or specific line items may differ from others or be changed over the time series in question.  Specifying which CPI, components, geographic location, and base year may be important to interpreting what a particular CPI value means.  Policy makers should be aware of the potential for such changes when designing a COLA based on CPI.

The following table provides how the selected CPI can yield different results based on geography:



Note that increases in each CPI series vary.  Over time, the differential can become significant.
The following US BLS table illustrates CPI All Items data, not seasonally adjusted



The base period is 1982-1984 so each table entry indicates a value relative to that base. Note that the values monthly almost always increase.  Whether comparing month over month values in a  row,  year over year values for months (quarters, half years or other ranges) in a column, you are likely to find examples where the CPI value declines. 

Using the CPI to adjust social insurance payments may be a common approach but it is far from perfect.  It applies defensible average weights to a range of items to derive an adjustment that may fall short of actual individual need or experience.  The converse may also be true; individuals may actually use a different basket of goods and experience less of an impact than the CPI would suggest. 

The selection of a particular CPI series should be intentional and explicitly justified.  For example, if the data show that virtually all recipients of benefits reside in a particular region, then that may become the policy justification for selecting a regional CPI.

Despite the imperfections and caveats, changes in CPI provide a strong indicator of cost pressure experienced by consumers in the real economy.  From a public policy perspective, CPI provides a useful reference against which to assess how well a social insurance program like workers’ compensation addresses the reality of the (almost always) increasing costs of living. 

CPI and Social Insurance:  How US Social Security and Canada Pension use CPI

For US Social security, the following summarizes how CPI increases are applied to the amount sent to beneficiaries:

Social Security COLAs are based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), updated monthly by the Department of Labor’s Bureau of Labor Statistics (BLS). The COLA equals the growth, if any, in the index from the highest third calendar quarter [July, August, September] average CPI-W recorded (most often, from the previous year) to the average CPI-W for the third calendar quarter of the current year. The COLA becomes effective in December of the current year and is payable in January of the following year. (Social Security payments always reflect the benefits due for the preceding month.)

If there is no percentage increase in the CPI-W between the measuring periods, no COLA is payable. No COLA was payable in January 2010, January 2011, or in January 2016.

Note the actual application of USSS COLA evaluates changes in the CPI-W for the most recent third quarter and the previous highest third quarter.

Canada Pension Plan uses CPI data supplied by Statistics Canada to adjust CPP amounts once a year in January; rather than a single quarter of data, the calculation takes into account all monthly increases from the past year compared to the increases from the equivalent period the year prior.   The following chart shows the calculation method (see Government of Canada,  Canada Pension Plan Amounts and the Consumer Price Index):




The CPP increase is the percentage change from one 12-month period (November to October) to the previous 12-month period (November to October).  To calculate the 2019 CPP rates increase, a formula based on the average national CPI for all items for November 2017 to October 2018 is divided by the average CPI for November 2016 to October 2017 yields a 2.68 percent increase effective January 2019. 

Beyond the importance of understanding USSS and CPP use of CPI to develop their respective COLA for their plans, any statute that relies on the USSS or CPP COLA automatically rely on their respective calculation methods.  Workers’ compensation policy makers, for example, need to examine if the underlying assumptions and calculations of these social insurance plans make sense for the population of disabled workers receiving monthly compensation payments.

Workers’ Compensation jurisdictions:  Examples of policy implementations of COLA

Where workers’ compensation cases receive COLA adjustments, policy makers have had to make choices about how payment values should be adjusted.  The following are examples of how some jurisdictions have implemented their COLAs.

The Rhode Island workers’ compensation statute embodies the key elements in a COLA statute reliant on CPI by defining which CPI will be used, what time period will be referenced, the category of cases eligible and when the benefit will be applied:

RI Gen L § 28-33-17 (2017)  (f)(1) Where any employee's incapacity is total and has extended beyond fifty-two (52) weeks, regardless of the date of injury, payments made to all totally incapacitated employees shall be increased as of May 10, 1991, and annually on the tenth of May after that as long as the employee remains totally incapacitated. The increase shall be by an amount equal to the total percentage increase in annual Consumer Price Index, United States City Average for Urban Wage Earners and Clerical Workers, as formulated and computed by the Bureau of Labor Statistics of the United States Department of Labor for the period of March 1 to February 28 each year.

Virginia’s COLA escalator is based on the all items CPI each October 1 but because of the way Social Security disability payments are handled, the impact may be lower than the full CPI. In Virginia, the combined weekly compensation rate and weekly Social Security disability benefit cannot exceed 80% of claimant’s established pre-injury average weekly wage. Consequently, the application of the COLA is not automatic; it is subject to individual application and decision-making annually. 

Ontario’s workers’ compensation system, WSIB, recently improved its cost of living formula to fully reflect the Canadian CPI increase.   In January 2019, people receiving WSIB benefits will receive a cost-of-living adjustment of 2.3 per cent beginning on January 1.  The COLA escalator is automatic but wage loss benefits are offset by disability benefits a worker receives from CPP and QPP at a rate of 50%.  This partial integration or offset is common in workers’ compensation and disability insurance, although the degree of integration (and which benefit is reduced) varies.

British Columbia workers’ compensation pension recipients see indexation of their disability awards based on the following formula outlined in the Workers Compensation Act:
25   (1)For the purposes of this section, the Board must, as of January 1 of each year,
(a)determine the percentage change in the consumer price index for Canada, for all items, for the 12 month period ending on October 31 of the previous year, as published by Statistics Canada, and
(b)subtract 1% from the percentage change determined under paragraph (a).
(2) The percentage resulting from calculations made under subsection (1) must not be greater than 4% or less than 0%.

In practical terms, CPI change of 2.444614% less 1% results in a 1.444614% increase for most compensation recipients effective January 1, 2019. 

From a policy planning perspective, it is important to consider the longer-term impact of reduction policies.  For a 40 year old injured worker with a permanent total disability, the cumulative impact of the “less 1%” obviously increases over time.  Assuming just 2% CPI each year, the 1% reduction means that the purchasing power of each $100 awarded in 2002 will have grown after 10 years to $110.46 far short of the $121.90 necessary to meet the full increase in cost of living.  The difference increases with every passing year.  After 20 applications in this example, the adjusted value will have increased to $122.02 while full CPI would have increased that original $100 to $148.59. 

The geographic qualification to the definition of the CPI is fairly common.  Alberta’s WCB uses the change in the Alberta Consumer Price Index (ACPI) for 12 months, ending September 30   and applies the result in January of the following year.  Until a recent policy change to full ACPI, the ACPI amount was reduced by 0.5%.

While the trend is towards applying a full CPI increase to adjust for the cost-of-living adjustment, limits are often set in legislation.  The Yukon Territory uses the percentage change in the CPI for the geographic location of its capital, Whitehorse, calculated by comparing the 12-month period ending October 31st of the previous year with one year earlier, capped at a maximum of 4% and a minimum of 0%.

Which CPI to use is often an important determinant of the actual cost-of-living increase in other jurisdictions as well.  In Massachusetts, the increase is based on the CPI increase for the Northeast urban region.  In Saskatchewan, it is the percentage change in CPI for Regina and Saskatoon for the 12 months ending on November 30 of the previous year that determines the increase to be applied.  

Prince Edward Island combines a restricted formula that yields less than full CPI, a CPI geographic reference and a cap such that  extended wage loss benefits will be adjusted on July 1 each year by an  amount equal to the lesser of: 80% of the percentage change in the CPI [less than full CPI restriction] for Charlottetown and Summerside for all items [geographic reference] for December of the previous year and December of one year earlier and 4% [cap]. (see WCA s. 49.1(1.1)) 

One challenge with geographic or regional CPI considerations is that it may well under-reflect costs associated with individuals who relocate.  One can imagine a totally disabled worker in a rural setting wanting to relocate to a more urban centre where medical and support services are more appropriate and available to his or her need.  The relevance of a COLA based on a CPI indicator from where the injury occurred may be lost. 

Florida has a unique cost-of-living adjustment method.  According to the Social Security Administration:

Florida Workers’ Compensation does not provide for a traditional cost of living increase. However, individuals that are permanently and totally disabled are potentially eligible for a supplemental yearly increase of 3 percent. The increase is only payable for individuals under age 62 that are not subject to offset due to receipt of Social Security benefits. When the individual attains age 62, if they are eligible for Social Security benefits they lose entitlement to the supplemental benefits if the date of injury is on or after July 1, 1990. For injuries prior to July 1, 1990, the supplemental payments continue.

Not all jurisdictions use a version of CPI to adjust compensation payments.   Washington State’s Department of Labor and Industries uses a different method to calculate the cost of living increase.  In that state, most workers injured on or before July 1, 2017 will see time-loss and pension benefit payments increase by 5 percent based on the change in the state's average wage.  That increase was effective July 1, 2018.

Some jurisdictions apply the indexation to very restricted categories.  For example, in Connecticut, only permanently and totally disabled workers or those who have been totally disabled for a period of 5 years or more are eligible for a cost of living adjustment to their compensation. 

Reference frames, Application dates, Caps and floors

You may have noticed the reference range for calculating and applying a COLA varies.  BC and the Yukon use the year ending October 31, Alberta uses September 30, and PEI uses December 31.  The date of application also varies by jurisdiction:  July 1 in Washington state, and May 10 for Rhode Island.  While a period of time between the COLA reference period and its application is reasonable, the rationale for a lengthy delay should be explained.  When calculations were done by hand, a lengthy lag time was justifiable.  If systems are designed with COLA in mind, their routine application should allow a short period between the reference period for calculation and actual application of the COLA.

Most of the policies outlined in this paper use full year CPI data as the basis for their COLA.  This tends to smooth out seasonal variations.  Transportation costs tend to peak in the summer, fresh vegetable costs are lower in the harvest season.  Some CPI series are smoothed or seasonally adjusted; use of seasonally adjusted data should be justified and specified in a policy relying on such data.

Regardless of the CPI or other standard measure used to adjust workers’ compensation payments, policy makers may include limitations on the extent to which the indexation may be applied.  As noted above, several provinces including BC and Alberta cap the possible increase to a maximum 4%; many policies contain a floor of zero percent to prevent a negative percentage being applied should the COLA formula generate such a result.  Although rare, zero results have occurred. 

Accounting for the cost of living

Workers’ compensation legislators and policy makers have long acknowledged that “protection against the value-eroding power of inflation is necessary” [Burton, John F. Jr. [Chairman], Report of the National Commission on State Workmen’s Compensation Laws, US Government July 1972 chapter 3 page 71] for at least some categories of recipients.  In protracted recoveries, permanent disabilities, and compensation for survivors and dependents, that erosion can be substantial. Consider a disabled worker injured in 2002 and permanently disabled; using the “All Items CPI”, that worker will have seen an increase of more than 40% in costs of goods and services in the US or about 32% in Canada.   In most jurisdictions in North America, this worker will have received some cost-of-living adjustments.  In many jurisdictions, however, workers’ compensation payments will not have kept pace with the full increase in the cost of living.

To the best of my knowledge, there is no detailed study of the cost-of-living-adjustment mechanisms in workers’ compensation.  Aside from the WCRI/IAIABC survey, there are no studies that reflect current or at least recent policies in a comparative way.  Few jurisdictions post historical tables of past COLA increases in a convenient way (although WorkSafeBC and Rhode Island data tables were readily available on line).  

The indexation of workers’ compensation payments particularly for permanent total disability cases adds a significant value to the incurred cost of an injury.  That cost is reflected in premium values.  Workers’ compensation analysis that fail to account for compensation parameters such as COLA provisions may mislead readers. Many existing comparative studies of workers’ compensation premiums and claim costs exclude detailed information and cost implications of “system features” such as compensation rate, maximum insurable earnings, and COLA provisions from their analysis. Policy makers need to understand the cost implications of system features in interpreting comparative results and designing improvements to (or the addition of) their cost-of-living provisions.

Failure to include protection against the rising cost of living under-value the human and financial loss of work-related injury, diminish the value and adequacy of compensation as the years go by, and often externalizing costs to family, community and taxpayers through additional welfare and health costs.  

Work-related injury and death have real human and financial costs.  Workers and their families bear their share of both.  Permanent disability, survivor and dependent compensation payments offset some of the financial costs. To be clear, adding or improving inflation protection or cost-of-living adjustments may increase premiums—costs to employers; failing to do so, however, is an intentional policy choice to place an increasing share of the cost to workers, families and taxpayers.  That policy choice should be acknowledged, explicitly stated and justified… or abandoned.


Wednesday, August 1, 2018

Older Workers: Are we meeting their OH&S and Workers' Compensation needs?


The number of “older” workers is rising at an unprecedented rate.  Older workers- those age 65 and older- have always been present but their proportion in the workforce has been on the rise at rates that far exceed any change in their proportion of the population. 

For my recent presentations to audiences in the US, Canada and Australia, I customized the country-specific data on older workers.  Aside from scale, the charts from each country were remarkably similar. In each of those countries, data about older workers shows:
  • Workers over the age of 65 are increasingly continuing in, returning to, and entering the workforce
  • Older workers are increasing in both full and part-time categories
  • The trend has picked up pace since the early 2000s


Older workers are an increasing reality in the workforce

The phenomenon has not gone unnoticed.   Recent articles in the popular press have highlighted this change. 

“More than 53 per cent of Canadian men aged 65 or older were working in some form in 2015, including 22.9 per cent who worked full-time throughout the year, compared with 37.8 and 15.5 per cent, respectively, in 1995…”  [Michelle McQuigge, More older Canadians choose to keep working, census finds,” McLean’s / The Canadian Press . Nov 29, 2017 ]

“Overall, 255,000 Americans 85 years old or older were working over the past 12 months. That's 4.4 percent of Americans that age, up from 2.6 percent in 2006, before the recession. It’s the highest number on record.”  [Andrew Van Dam, “A record number of folks age 85 and older are working,” Wonkblog Analysis , Washington Post, July 5, 2018]

“[T]he number of people over 65 remaining in the workforce has increased from 9.4 per cent in 2006 to 21 per cent in 2016.”  [Gegory Bray, “Older workers are still clocking on beyond retirement age”, The Observer, July 12, 2018]

The US quarterly data demonstrate this dramatic increase.  The 1999-Q4 count was just under 4 million workers age 65 and older.  By 2018-Q2, the number was just shy of 10 million.  And employment is not limited to those in their mid-to-late sixties.  Older workers who are farmers, clergy, or supreme court justices may make headlines but workers in their seventies, eighties and beyond are increasingly represented across a broad spectrum of occupations. 

“A record number of folks age 85 and older are working.
Overall, 255,000 Americans 85 years old or older were working over the past 12 months. That's 4.4 percent of Americans that age, up from 2.6 percent in 2006, before the recession. It’s the highest number on record.”[ Andrew Van Dam, “A record number of folks age 85 and older are working. Here’s what they’re doing,” Washington Post [Wonkblog-online], July 5, 2018]

Similar trends in US, Canada and Australia

Using employment data from the US Current Population Survey (CPS).  Employment of those over age 65 has risen from about 10% of the population in that category in the early 1980s to 19% in 2018-Q2 [extracted from CPS using Unadjusted Employment – Population Ratio- Quarterly data].   



Charting this phenomenon in terms of full and part-time work shows trends that persisted despite the global economic crisis of the early 2000s—and may have accelerated, in part, because of it.  For the Canadian data, I compared the growth in both full and part-time employment to the change in population category. This chart is based on a CANSIM extract of monthly employment data, not seasonally adjusted. 


For a recent Australian presentation, I looked at monthly data but restricted the extract to categories of workers who identified and “full time” and reported 35 hours or more of work in the previous week.  For the part-time, I selected only those who identified as working part time and reported from one to 34 hours of work in the previous week. These restrictions likely understate the count but provide solid evidence of a steep increase in the working populations in both full and part-time categories. 



Implications for older workers … and those who will eventually joint their ranks

What are the implications of increasing numbers of older workers?  There are risks to workers themselves.  While there is strong evidence that work is actually good for your health and well-being, older workers have some greater risks:
Bodies change with age putting different joints and systems at risk of injury and disease

  • Co-morbidities tend to increase with age, a factor that may complicate risk
  • Working more years increases exposure to toxins and processes associated with work (thereby increasing the possibility of occupational disease)
  • Recovery times for many injuries increase with age
  • Degenerative conditions and the processes of normal aging may increase the risk of injury for previously “safe” work
  • Medications necessary to control common conditions associate with age may alter perception, reaction times, strength, tolerance and stamina changing the factors that influence risk (and recovery). 


Some implications for Employers

Employers have a duty to protect all workers and older workers may face different risks as they age, even if they are in the same occupation and work location.  A female care aide in a long-term care facility always faces slip and fall risks but the risk of fracture as a consequence of that fall climbs sharply with age.  Employers need to know how risks change with age and take steps to reduce risk and prevent injury.

We all know older individuals who are extremely fit in mind and body.  We know that an astronaut can effectively do that job in his late seventies and that there are marathon runners in their 90s.  We all age but we age individually.  Arbitrarily banning all those over 80 from driving would be ageism; functional testing can avoid some arbitrary age limits.  How testing might be applied to power-line electricians, transport vehicle operators, or airline pilots may be successfully implemented but there are still risks.  Commercial airline pilots face age restrictions in some countries but the maximum age limit may be 60 or 65, apply to either or both captain and co-pilot, and may be absent all together in some countries.  Employers and regulators must address these risks for the safety of all their workers and others in the workplace.

We know that “newness” to a job is a risk factor for work-place injury.  Many older workers may be engaging in new jobs or working in new locations that may carry different risks from past experiences.  Employers must avoid the pitfall of assuming age, knowledge and experience obviate the need for orientation and risk-specific awareness. 

And for workers’ comp (and disability) insurers and law makers

Public policy decisions are developed in a context that often includes limited data. Most data sets are historical and that typically means legislation is driven forward while looking in a rear-view mirror. 

Laws or policies that have an inherent assumption of retirement at a specific age or based on historical norms are no longer adequate.  The default assumption that, but for a work injury or disability, retirement would have occurred by age 60 or 65 is no longer be justifiable.  Wage continuance and compensation for injured or disabled workers beyond age 65 ought not to be arbitrarily limited when societal expectations have changed so dramatically.

There are implications for rehabilitation and return-to-work practice as well.  Disability management professionals and return-to-work coordinators will increasingly face accommodation challenges for older workers who anticipate and expect to work rather than be steered to a pre-mature and unwanted departure from the workforce.  With societal acceptance and even need for older workers, the parameters of “early retirement” may well move north of 70.

Changing expectations of when we will retire

In the 1980s and 90s, the expectation of “freedom 55” was common among the working population.  According to recent surveys of the working population:

           
The reality of an increasing population of older workers requires adjusting our expectations and actions toward employment, prevention/OH&S, and workers’ compensation.  The trend toward greater participation of older workers in the labour force is not going away.     It is time to reassess policies and our own perceptions regarding the length of our working careers. 




Monday, July 9, 2018

How risky is your job… really?



There are hazards in every job and every workplace.  Despite barriers, safeguards, and defenses, exposure to those hazards can harm workers and others in the workplace.  The possibility of injury (including illness, disease and even death) is a reality of work but specific job or task risk data necessary to assess the risk are rare.    Data on the past frequency and impact of work injury that do exist are often industry-based rather than specific to a job or task.  Unfortunately, supervisors and workers may equate the lack of accurate, accessible, and appropriate risk data with minimal risk; they may believe, “If this job or task was risky, I am sure someone would warn me”. 


Why risk awareness is important

Whether it’s your investments, sports activities, or medical treatments, having access to and an understanding of risk data are essential to decision making.  Depending on your risk tolerance and  armed with an understanding of the risks, you can decide whether or not to invest in a particular mutual fund, take up a particular sport, or undergo a particular therapy or treatment.  Knowing the risks, you can also make choices to mitigate them (diversification in your investments, classroom training for your chosen sport, and performing specific stretching exercises between physical therapy treatments, for example).  

Knowing the risks in your work is no less important.  Few employment engagements include explicit and precise information about risks.  Yes, employers have a duty of care and a general duty to inform workers about workplace and job-specific risks but few job interviews cover your risk of occupational injury, illness, disease or death.  Your job does not come with a warning sticker outlining the risks.  Under-stated, misrepresented or incomplete risk data may lead to incorrect judgements about precautions you ought to take or dissuade you from exercising your right to refuse unsafe work. 

Assessing Risk

So, how risky is your job?  What tasks in my job are risky?  Is working in healthcare riskier than working in construction?  How would you know?

Some jurisdictions require formal "risk assessments”.  These often involve examining the likelihood and impact of harm from a given task.  (see WorkSafeBCAssessing Risks, for example).  A risk assessment will include an analysis of who might be harmed, how that harm might occur, and what to do to eliminate, minimize or otherwise manage the risks, particularly those with the highest probability and impact.  

Risk Matrix.  Source:  WorkSafeBC, Assessing Risk

This type of risk matrix is typically applied to very specific job tasks and often relies on a subjective estimation of probability and impact.  At their best, words like "low", "unlikely" , "minor" are useful in relative terms but lack precision  and may, at worst, be misinterpreted as "not worth worrying about".  Even if the probability  is rare, the consequences may be extreme and warrant some form of mitigation.  This is particularly true for biological toxins where the probability of exposure is low but the consequences may be severe illness or death--a combination that may warrant a "high" rather than "medium" subjective risk rating. 

Quantifying and Comparing Risks

At the enterprise or sectoral level, performance data may exist to add objectivity to the risk analysis. Statistical measures help quantify both probability and impact in risk analysis.  Impact may be quantified by workers' compensation costs, average days away from work (calendar or working days), or thresholds that exceed a particular level or case definition such as "serious injury".  Probability may be quantified as a ratio based on exposure (cases per million hours worked or 100 employees).  

The lack of data at the jobsite, enterprise or sectoral level may be due to a number of factors.  Workplace injuries and deaths are (thankfully) relatively rare events.  With small numbers, it is often difficult to calculate an accurate frequency rate that adequately represents risk.  There are also counting issue.  Most risk data come from workers’ compensation administrative information or “OSHA Log” surveys but not all work injuries are recorded or result in workers’ compensation claims.  Poor record keeping, intentional under-reporting, claim suppression, high denial rates for some types of injuries and occupational diseases are among the main reasons that reported injury rates may not adequately reflect actual workplace risk.

Many sectors and employers use “injury rate”  or “incidence rate” data a way to quantify risk.  These are admittedly trailing indicators of safety and, (as we are always told when assessing risk in our investments), past performance may not be indicative of future results. 

The idea behind injury and incidence rates is to provide a standardized expression of risk in terms of injury (illness, disease or death) events relative to a quantity of exposure (a measure related to a quantity of employment such as “person years”).  The US Bureau of Labor Statistics publishes “incidence rates” (among other statistics) that provide data at an industry level.  Here are the top ten for 2016:

TABLE SNR02. Highest incidence rates1 of nonfatal occupational injury and illness cases with days away from work, restricted work activity, or job transfer, 2016  [Extracted from Supplemental News Release Tables, 2016]
Industry2
NAICS Code3
Incidence Rate
Nursing and residential care facilities (State government)
623
8.4
Other nonferrous metal foundries (except die-casting) (Private industry)
331529
6.0
Fire protection (Local government)
92216
5.9
Heavy and civil engineering construction (Local government)
237
5.8
Frozen cakes, pies, and other pastries manufacturing (Private industry)
311813
5.8
Couriers and express delivery services (Private industry)
4921
5.8
Scheduled passenger air transportation (Private industry)
481111
5.7
Truss manufacturing (Private industry)
321214
5.6
Amusement and theme parks (Private industry)
71311
5.5
Police protection (Local government)
92212
5.5


1 The incidence rates represent the number of injuries and illnesses per 100 full-time workers
 and were calculated as: (N/EH) x 200,000, where 
   N = number of injuries and illnesses
   EH = total hours worked by all employees during the calendar year 
   200,000 = base for 100 equivalent full-time workers (working 40 hours per week, 50 weeks per year)
 2 High rate industries were those having the highest incidence rate of injury and illness cases with 
   days away from work, restricted work activity,
  or job transfer and at least 500 total recordable cases at the most detailed level of publication,
 based on the North American Industry Classification System -- United States, 2012.
 3 North American Industry Classification System -- United States, 2012

Note the limitations of these data.  The “cases” relate to recorded cases; if record keeping is poor or cases are not reported, then the published incidence rate will under-represent the risk.  Also, note the calculation methodology; the specific calculation of the  100 full-time equivalents used as the denominator for this incidence rate is only one way to calculate risk.  Other sources may use different calculations and definitions. 

Rather than using an approximation for 100 full-time workers, SafeWork Australia use both Frequency rates (serious injuries per million hours worked) and Incidence rates (serious injuries per 1,000 employees).  Here are the top 10  from the 2016 tables [Extracted from Australian Workers’ Compensation Statistics 2015-2016] :

Table 22: Frequency rate (serious claims per million hours worked) by industry,
2000–01 and 2010‑11 to 2015–16p
 [Top 10 extracted and re-ordered based on 2015-16 column]

Industry
2000-01
2010-11
2011-12
2012-13
2013-14
2014-15
% chg
2015-16p
Agriculture, forestry and fishing
14.3
10.5
10.8
10.7
9.1
9.9
-31%
8.9
Manufacturing
13.9
10.5
10.7
9.5
8.8
8.8
-37%
8.4
Construction
13.5
9
9
8.4
7.8
8.1
-40%
8
Transport, postal and warehousing
14.9
11.8
12.2
10.4
9.6
8.6
-42%
7.7
Health care and social assistance
12.1
10.7
10.5
10
9.1
8.7
-29%
7.4
Arts and recreation services
13.7
9.8
9.7
8
9.2
8
-41%
7.1
Wholesale trade
8.2
7.7
7.1
6.5
6.6
6.6
-20%
6.6
Public administration and safety
8.8
9.1
8.1
8.3
7.2
6.9
-22%
6.1
Accommodation and food services
8.9
7.2
7.5
7
6.6
6.1
-31%
5.9
Administrative and support services
11.6
9.4
8.3
7.4
6.7
5.6
-52%
5.8


Table 23: Incidence rate (serious claims per 1000 employees) by industry,
2000–01 and 2010–11 to 2015‑16p
[Top 10 extracted and re-ordered based on 2015-16 column]
Industry
2000-01
2010-11
2011-12
2012-13
2013-14
2014-15
% chg
2015-16p
Agriculture, forestry and fishing
27.8
20.6
21.4
20.7
18.1
19.1
-31%
17.5
Construction
27.7
18
18
17.1
15.9
16.1
-42%
16
Manufacturing
27.2
20.2
20.7
18.1
16.4
16.6
-39%
15.5
Transport, postal and warehousing
29.3
22.4
23
19.7
18.1
16.3
-44%
14.4
Wholesale trade
16.1
14.7
13.4
12.2
12.5
12.7
-21%
12.3
Health care and social assistance
17.8
15.3
15.3
14.3
13
12.3
-31%
10.7
Public administration and safety
15.5
15.3
13.9
14.2
12.1
11.5
-25%
10.2
Arts and recreation services
18.6
12.4
12.8
10.7
12
10.1
-46%
9.7
Administrative and support services
19.1
15.2
13.5
12.1
10.8
9
-53%
9.2
Mining
25.1
12.5
12.2
11.9
11.1
9.9
-61%
9.2

Note these data relate to accepted workers’ compensation claims.  By definition, denied claims (and unreported injuries) are not included.  The definition of “Serious” is also important. In this context, only injuries resulting in absences of a working week or more are considered. The definition of serious is not standardized.

Note also that the rank order changes depending on the method of calculation.  Using both incidence and frequency rates provide a richer depiction of risk. 

Risks for males and females are more similar than injury counts might suggest

Frequency and incidence rates provide similar but different representations of risk.  A frequency rate may be more appropriate where there is wide variation in the hours worked by particular groups.  Men tend to work more hours in a work week than women.  On an incidence basis, the injury rate for women would under-represent risk.    The same Australian report notes the frequency rate (serious injury claims per million hours worked) for men and women differs:  4.9 for women and 6.2 for men.  

The injury frequency rates for men and women are much closer than conventional wisdom might suggest. One often quoted statement presents a wide variation in risk for men and women:

 "Women incurred less than one-tenth of the job-related fatal injuries and one-third of the nonfatal injuries and illnesses that required time off to recuperate in 1992-1996".  US Department of Labor,   "Women Experience Fewer Job-related Injuries and Deaths than Men",  Issues in Labor Statistics, Summary 98-8, July 1998
In the two decades since this analysis was published, women have increased their participation in the labor force.  Although most North American jurisdictions do not publish frequency or incidence rates specific to males and females, data representing risks by sex may provide valuable insights.  Women now account for about half the labour force in Canada, the US and Australia, although average hours worked per week are higher for men than women.  The apparent lower number of accepted workers’ compensation claims for women arises from a lesser exposure (the smaller pool of hours worked).  

I asked WorkSafeBC to apply the Lost Time Injury Frequency Rate (LTIFR) calculation to its data and data on work hours from Statistics Canada.  In this case, all accepted time loss injuries (rather than just serious injuries as used in the Australian study) were used in the calculation. 

WorkSafeBC  Unofficial Injury Rates and Estimated LTIFR for Males and Females - 2016

2016  Injury Rate (Accepted time loss claims per 100 person years of employment)
2016 LTIFR (Accepted time-loss claims per 1,000,000 hours of employment)
Males
2.61
13.9
Females
1.75
11.6

Comparing LTIFR to the traditional Injury Rate (per 100 persons years of employment calculation) reinforces the point.  LTIFR may present a more accurate and compelling representation of work-injury risk for women. 

Risks and consequences

Risk calculations noted above may carry a level of consequence in the case definition.  The US analysis uses a definition of "work absence or restricted duties" while the Australian data includes "accepted workers’ compensation claims with a week or more away from work". Many state and provincial jurisdictions publish workers’ compensation injury rate statistics but the case definitions used to calculate the risk indicator will vary.    WorkSafeBC publishes an annual Statistics Report with subsector injury rates and claim durations.  Cases are accepted time-loss claims and this is a no-waiting period jurisdiction so claims cover wages lost beyond the day of injury.   Here are the top 10 from that jurisdiction. 

WorkSafeBC Top Ten Subsectors by injury rate and duration
[Based on data extracted and re-ordered from the WorkSafeBC Statistics 2016 edition, Table 2-11]
 




Note that this analysis does not consider sectors that are “self-insured” (Deposit account employers including the provincial government).  

The duration part of the table is useful in considering conditional risk:  if you work in warehousing and  have an accepted time-loss workers’ compensation claim then, on average, you will miss 42 paid days from work (a bit more than eight calendar weeks).

Risk varies with age

The risk of work-related injury also varies with age.  Many studies point to the high risk associated with young male workers.  This table,extracted from an Australian study, reinforces this fact but it also demonstrates that risk varies with age.  Also, note the frequency of injury for females is essentially the same as males for ages 50 and above.  

Table 4: Frequency rate (serious claims per million hours worked) by injury or disease, sex and age group, 201516p    [Extracted from Australian Workers Compensation Statistics 2015-2016]  

Age group
Injury and musculoskeletal disorder claims
[per million hours worked]
Male
Female
Total
 < 20 years
7.7
3.4
5.7
20-24 years
6.5
3.3
5.1
25-29 years
5.1
2.7
4.1
30-34 years
4.6
2.9
4.0
35-39 years
4.8
3.5
4.3
40-44 years
5.3
4.3
4.9
45-49 years
5.6
5.0
5.3
50-54 years
6.1
5.9
6.0
55-59 years
6.4
6.3
6.4
60-64 years
6.9
6.6
6.8
65 years+
5.1
5.7
5.3
Total
5.6
4.3
5.1

Demographic change in the US, Canada, Australia and many other countries is driving dramatic shifts in the age profile of labour force participants.  More women, more older workers, fewer younger workers are driving changes in the risk in the labour force.  Frequency and mix of injuries as well as the duration of disability are all likely to increase as a result.

Risk data may under-represent actual risk

All representations of risk using workers’ compensation administrative data are subject to several important caveats.  As pointed out in previous posts, exclusions from coverage, under-reporting (including  claim suppression), claim denial rates result many potential cases of work injury missing from the calculation .  As a result, statistics like those in this post may well understate the actual risk.  

Categories of classification also vary by jurisdiction making simple apples-to-apples comparisons very difficult.  That said, data from multiple sources may provide a better sense of the risks.  Just like data from multiple medical trials or rating agencies can better inform your decisions regarding your health and investments, work-risk data from multiple sources may help workplace participants better understand and mitigate work-related risk.   

Your workplace is unlikely to have a warning sticker on the entrance providing risk data.  Your risk in your job on your worksite is going to be very specific, subject to a lot of factors,  and difficult to estimate accurately.  Risks associated with your demographic characteristics and your industry’s (and maybe even your firm’s) experience are likely more available and may provide guidance on just how risky your job really is. 

Providing risk data may not be formal regulatory requirement but sharing the risk data that are available with supervisors and workers may lead to a more accurate appreciation for the risk of workplace injury, illness and disease.  And that may lead to safer and healthier workplaces.