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The human and financial cost of providing health care in the United States

July 08, 2010
This report originally appeared in the June 2010 issue of DOTmed Business News

By Linda Chaff

According to the U.S. Bureau of Labor Statistics (BLS), in 2008 more than 345,000 private sector U.S. hospital workers (7.6 percent) reported work-related injuries or illnesses to the Occupational Safety and Health Administration (OSHA) that required medical attention beyond first aid or were due to cuts or needlesticks. Among their colleagues in facilities operated by state and local governments, the picture was significantly worse, with almost 12 percent reporting injuries and illnesses to OSHA.1 These injuries and illnesses are costing a minimum of $15 billion a year in workers' compensation and related costs.

To put this into a numbers perspective, the rate for all private sector businesses was 3.9 injuries and illnesses per 100 fulltime employees. For workers engaged in automobile manufacturing the number was 7.5 percent.
That hospital workers are incurring work-related injuries and illnesses at almost twice the rate of non-hospital employees has been apparent since OSHA began collecting this data in 1972.

The human cost

It is impossible to calculate the human cost of a work-related injury. When a person is injured at work, they may be treated and sent back to perform their duties. Or they may have to stay home for a few days, be transferred to other duties or in the worst case, they may never be able to return to their chosen profession. But it is not just the employee affected by a work-related injury or illness; their families are also involved in a myriad of day-to-day functional support roles to help the injured family member return to work or simply resume their normal at-home activities. Those are costs that can never be measured.

The financial cost

OSHA, in cooperation with the National Council on Compensation Insurance, Inc. has developed a tool that allows businesses to calculate the direct and indirect costs associated with a work-related injury or illness. Included among indirect expenses are training and compensating replacement workers, the cost of injured employee visits to emergency rooms, compromised patient care and administrative expenses.

One of the more common injuries associated with working in hospitals is dermatitis resulting from exposure to chemicals. The OSHA tool reveals that the direct costs associated with one case of dermatitis is equal $8,295, while the indirect costs amount to $9,954. In order for a hospital to recover those expenses ($18,249), at a 3 percent profit margin it will have to collect receipts of $608,300. A 1 percent profit margin requires $1,824,900 in billable receipts.

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