Feature Article - September/October 2010

Health, Well-Being Come First

Effective Safety Incentive Programs Can Help Cut Spending

By Rick Dandes

A key element in the national dialogue over health care has included a discussion of workforce costs incurred by corporations, and its inevitable effect on profitability. Health and safety in the workplace are issues that most employers agree is critical, given the rising cost per employee of health care in 2008-2009.

And, the numbers are stark: Surveys by top global professional services companies Mercer and Towers Perrin point to continuing health care cost increases as we move through 2010 into 2011, though at different rates. Towers Perrin reports a per employee cost of anywhere from $8,904 to $10,104 in 2009. Mercer predicts a 9 percent increase in 2010, up from 6.4 percent in 2009, but finds that employers are trying to limit the actual cost increase to 5.9 percent through various cost containment measures. Towers Perrin anticipates a 7 percent rise.

Every year, nearly 5 million workers experience an occupational injury or illness on the job, according to the latest information from the Occupational, Safety and Health Administration (OSHA). More than half of these injuries and illnesses are severe enough to cause the worker to spend time away from work. That translates to decreased worker production time and lower corporate revenues. In 2008, there were 277,680 occupational injuries and illnesses with days away from work reported for state and local governments combined. Fifty percent occurred in service occupations, including health care support and protective service workers. In contrast, 22 percent of the injuries and illnesses in the private industry occurred in service occupations.

All of these costs put serious pressure on employers and employees alike, with more employees unable to maintain insurance with the added costs. Cost sharing is the most common strategy for containing the increase, followed by eliminating high-cost options and promoting consumer-driven health plans and other moderately priced alternative plans.

"Understanding and appreciating the value of safety and health in the workforce should be part of the culture of any company regardless of size or type of product," said Norma Knollenberg, past president of the Incentive Marketing Association, and owner and CEO of Top Brands Inc., in Oshkosh, Wis.

"As more emphasis is put on corporate profitability and eliminating all unnecessary costs," she said, "reducing workers' compensation expenses and creating a healthy environment by implementing a sound safety incentive program should be embraced now more than ever."