Musculoskeletal disorder (MSD) injuries come with a high price tag.
According to Fit2WRK, the direct cost for all U.S. workers out of work due to MSD injuries is estimated at $13-20 billion annually, with indirect costs between $26 and $110 billion annually.
Direct Costs
Most companies track the cost of injuries by tracking direct costs, as they are the easiest to see and track.
Direct costs include:
- Worker’s compensation premiums
- Case management
- Medical costs for surgery and rehabilitation, including emergency room visits, doctor visits, and medical bills
- Medicine costs
- DME or auxiliary aids
Depending on the severity of the injury, direct costs can range from relatively low to incredibly high.
Indirect Costs
Direct costs are only a small part of the equation.
According to R. Gange, the VP of Worker’s Comp and Disability at Fit2WRK, “The direct costs are literally just the tip of the iceberg. Indirect cost multipliers for work-related injuries range from 3 to 10 times as direct costs!”
Indirect costs are the unbudgeted costs associated with an injury in order to get the employee back to pre-injury status.
Indirect costs include:
- Lost/decreased productivity
- Time to go to medical appointments
- Production downtime
- Administrative costs
- Additional overtime pay required
- Time to replace hire
- Interviewing and training new employees
- Delays in shipments and filling orders
- Unwarranted negative media attention/reputation loss
- Potential OSHA penalties
- Attorney fees
- Damages to equipment, machinery, materials, and facility
- Higher Worker’s Comp premiums
- Degraded client loyalty and support
- Managerial costs due to the accident including inspections, investigations, meetings, and administration
- Loss of employee time associated with assisting with the accident, administering first aid, and witness interviews
- Loss of employee morale
Days Away from Work Costs
Musculoskeletal injuries are a primary cause of days away from work.
According to research done by The Burden of Musculoskeletal Diseases in the United States, musculoskeletal disorders (MSD) accounted for nearly one-third (30.5%) of the 933,200 injuries involving days away from work in 2010. In addition, MSD injuries consistently across the years result in more median days away from work than all workplace injuries.
As any employer knows, days away from work, especially due to injury, can be expensive.
The National Council on Compensation Insurance (NCCI) found that the average lost-time workers’ compensation claim costs the employer $29,400 in medical expenses and $23,600 in indemnity, or wage replacement, costs.
Let’s break this down for the food processing industry.
A BLS report states that the food production industry saw injury rates in 2008 of 6.2 cases per 100 full-time workers.
If half of those injuries were a lost time claim, the direct worker’s compensation costs would be $159,000 with indirect costs that typically double this number — $318,000 for 3 claims.
The average profit margin among the top 10 food producers is only 13%, meaning an employer with just 100 workers would have to generate nearly $2.5 million in new revenue just to cover the cost of work-related injuries.