The manufacturer faces production costs that continue to escalate at unprecedented rates with the costs of workers' compensation leading the pack. I believe that manufacturers today must be more astute in business than ever before, just to stay even on bottom line profits. If businesses had workers' compensation costs under control there would be a different bottom line return.
Albert Einstein said that we cannot solve a worldly problem by thinking the way the world thinks, that we must make a paradigm shift in our thinking and look at the problem from a totally different perspective. Let us look at this epidemic called workers' compensation claims' costs and follow Dr. Einstein's advice -- let us attempt a paradigm shift in our thinking.
The problem: Each manufacturer has specific physical demands that are inherent to the process necessary to produce its specific product. Although this may vary from the building of individual pieces by one worker, to the process of building and assembling pieces by a number of workers on an incentive quota, there is still a demand required of the worker. Clerical workers face much the same dilemma from the small office to the lines of computer terminals that are needed for some businesses to function. It is this demand that is perceived as causing injuries, specifically soft tissue injuries. Soft tissue injuries are those injuries that are comprised of strains/sprains of backs and necks, elbows, wrists, and shoulders. These injuries can happen at once, such as lifting a box and "hurting" a back, or the complaints can develop over time; then it is called cumulative or repetitive trauma. Cumulative trauma describes conditions such as carpal tunnel syndrome, tendinitis, headaches, tennis or golfer's elbow, to name a few. Either way, when the condition occurs, someone is expected to do something about it.
For those involved in manufacturing 20 years ago, I would like to pose a question. If the manufacturing process was essentially the same 20 years ago, with little change in the physical demands of the work, producing the same product in much the same quantity with the same equipment, why were there not the same amount of workers' compensation injuries back then? Further, if there were not many soft tissue injuries then, why would there be any now if there has been no dramatic change in the production process? The reason is very simple: The workers' compensation injury is totally different from the workers' compensation claim.
The 1990 definition of a work-place injury (in order to file a compensation claim): "Any physical discomfort or perceived disability that an employee determines is caused by, arising out of, or related to the work environment."
Twenty years ago there was a different relationship between the employer and his workers. The workers were there to do a job and do it well. If it was not performed on that basis, they knew the consequences and for the most part accepted it. Today, there seems to be a somewhat different attitude, perhaps spawned by the easy access into the workers' compensation system.
I would like to propose a model that I have used to explain the epidemic of workers' compensation claims. This model presents three primary causes of the compensation problem with a number of secondary causes that contribute to the overall effect. These primary factors will be listed and discussed in their order of importance.
Poor Management/Employee Relationship
This is the single most important factor in the reporting of claims involving cumulative trauma/soft tissue injuries. This relationship begins with the supervisor and permeates every level above or below. Corporate CEOs and vice presidents are not excluded as they set the tone for their managers which ultimately affects the individual employee. This poor relationship must also include that small percentage of individuals who use the compensation system as a valuable source of economic gain.
Physically Demanding Work Environment
This is the second contributor to the escalating costs of compensation claims. Individuals that are doing the manual labor will demonstrate complaints such as muscle ache, tingling, and numbness. There is a greater awareness of how symptoms relate to the job. Not all people report their discomforts as a work-related injury, as many of these pains are just "normal" aches and pains associated with labor. Some "authorities" such as doctors, lawyers, and the media paint a very alarming picture of the work environment of today. This has raised employees concerns. OSHA has targeted the work place as a primary source of increased incidence of injuries, especially repetitive motion injuries. There has been a great emphasis on ergonomics as the "cure all" for injury reduction. Efforts for changes to reduce stress on the operator is very important. Ergonomic changes can reduce some of the exposure to stress, but this may not reduce compensation claims in the long run. If repetitive motion was "the cause" then all of the employees that engage in repetitive jobs would be afflicted, not just a select group.
Lack of Medical Control
This is a significant contributor to workers' compensation costs. While poor management employee relations and stressful physical demands contribute to the production of claims, indecisive or poor medical control provokes the costs of the claims. If one would review the past experience in the company records for injuries, there would be no predictable pattern for cost or lost time that would be evident. If the company is ever to gain control of runaway costs, proper medical control must be established. Remember, all costs associated with a workers' compensation claim are generated by the doctor: medical costs, restricted duty, disability ratings, and subsequent settlement costs. If an attorney is representing the employee, the costs are always much more, and the doctor almost always gets paid.
The fact remains, treating an injury after the fact is a losing proposition. This issue was addressed by NIOSH in their publication, "Proposed National Strategies for the Prevention of Leading Work-Related Diseases and Injuries." They state that there exists "inadequacies in the existing health care and ancillary systems. There is a lack of medical knowledge and appropriate training for health care personnel on the etiology, diagnosis, and treatment of musculoskeletal problems that result from biomechanical strain." The health care professions have not demonstrated an ability to adequately address these disorders.
The final aspect of the problem involves the company's attitude towards the overall problem of workers' compensation. To this end, I have determined three basic attitudes of companies: Level one: The company's compensation costs are rising but they haven't become bad enough yet. Management is not ready or willing to listen to information from within (safety personnel, human resource, etc.). Level two: Management has noticed costs are beginning to affect the bottom line and are ready to listen to people with the ranks and expect them to solve the problem. A quick and singular solution is expected -- a magic bullet. Most companies think this way. Level three: Companies realize that management must ultimately take responsibility for the workers' compensation problem and set into place programs that allow their internal structure to establish effective short and long-term solutions that address the primary factors of compensation claims' costs.
The solution: In order to overcome the compensation malady that methodically infiltrates and corrodes the bottom line of every company, it should be clear that there must be a shift of company thinking that believes treatment is a losing battle or that there are magic bullet cures. There can be no "pre-employment physical" or "great doctors" that will solve your problems.
The solution comes from within, just as all things do in our personal lives. Management must assume leadership and responsibility for solving the problem and then must empower employees to carry it through. The tools to do this are needed, but the decisive action must be a directive from those responsible for the company's well being. This decision is really much easier than whether the plant should be closed or layoffs instituted.
I would like to close by giving an example of a company who made this paradigm shift in thinking three years ago; many others have as well. We began by educating their personnel in a course that initiated a program of effective medical control, which satisfied their employees as well. This began the immediate short-term cost effect. Then in a modular fashion of education, the company was taught how to methodically improve the management/employee relationship and offset the physical demand of the very labor intensive job tasks inherent to its manufacturing process. The costs to the company were minimal; the savings were phenomenal. Overall cost of workers' compensation dropped by 79 percent and maintains into the fourth year. Pre-employment physicals immediately reduced the exposure by 86 percent and has remained since. Strains and sprains have been consistently reduced each year. There have been no surgeries for cumulative trauma. There has been practically no litigation, and in those cases the medical control was so effective that the settlements discouraged further litigation. The costs of soft tissue injury are really not an issue anymore. However, the company must continue to participate in action and responsibility. The results are well worth the effort. As you better the management/employee relationship, the long-term compensation costs do go down, and quality and production get better in the process.
I believe that when you do something good it comes around again to you. This direction will allow you to do the right thing for your employees, and it will help make your business stronger. Taking responsibility is never easy, but the building of a business is not either. How we treat the issue of workers' compensation may very well make the difference of maintaining a profitable business that continues to provide jobs for the families that depend on it for their future.
Editor's Note:
Dr. Oslay has worked with industry on several levels. His private practice continues to provide support to responsible companies in his local area. On a national level, Dr. Oslay and Mr. Nick Ruggiero (who has formulated an effective and feasible way to implement a cost effective program to businesses), work with companies throughout the United States and Canada providing the means for companies to effectively take control of their workers' compensation problems.
Theodore Oslay, D.C.
DeKalb, Illinois
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