How low engagement and perception of safety correlates to high workers’ compensation claims

Authors: Mitchell Gold, Andy Richards, William Yaeger, Rani Collins

Workforce Safety and Workers Comp Claims

Literature has shown that a strong safety climate in a healthcare setting leads to strong patient and worker safety outcomes. The Joint Commission's 2012 report1 on patient and worker safety demonstrated a variety of benefits that a holistic and comprehensive approach to worker and patient safety has on employees and patients.

Further, improvement in workers' compensation safety practices can result in large savings for employers while reducing or eliminating employee accidents in support of overall organizational wellbeing. Eliminating a single lost-time workers' compensation claim can save an average of more than $41,000.2

A more recent study in 2019 by the Insurance Information Institute highlighted that, of the top 10 private industry occupations with the largest number of injuries and illnesses, healthcare occupations — including nursing assistants and registered nurses — occupy two of the 10 spots.3 Moreover, causes including falls, intentional injuries by others, contact with objects/equipment and exposure to harmful substances or environments comprised nearly two-thirds (65%) of workplace deaths and injuries.

Gallagher study reveals employee health and safety concerns

In 2020, Gallagher conducted a comprehensive study with one of its multisite healthcare clients, XYZ Healthcare. We surveyed 259 employees across five XYZ Healthcare locations to gauge a number of employee engagement and experience factors. Those factors included perceptions of senior and departmental leadership, career growth, teamwork, quality, wellbeing and safety. We analyzed this data by position/function to see how these perceptions differed by leadership level; professional, licensed or technical personnel; registered nurses; and service and other personnel. 

Gallagher's findings showed that of the key engagement drivers (see Table 1), safety and wellbeing items underperformed when compared to our normative or expected scores from a database of similar healthcare employees. Table 1 illustrates that XYZ Healthcare's results indicated positive employee attitudes in regard to strong communication, teamwork and providing a high-quality care experience. However, XYZ Healthcare's scores fell far below the expected normative percentile of 50% for key elements driving perceptions of wellbeing and safety.

Given the key role that nurses play in an acute care setting and the difficulty in filling these critical positions, our study highlights the importance of addressing the needs of nursing staff related to working conditions, workload, staffing and safety.

Table 1

XYZ HEALTHCARE 2020

(KEY DRIVERS OF EMPLOYEE ENGAGEMENT)

XYZ HEALTHCARE 2020

SURVEY SCORE*

PERCENTILE RELATIVE TO HEALTHCARE NORM
XYZ Healthcare makes my wellbeing a priority (wellbeing). 3.96 1
XYZ Healthcare is a safe place to work (safety). 4.61 6
The actions of senior leadership reflect their commitment to XYZ Healthcare’s vision and values (leadership team). 4.38 17
I am challenged to do my best at XYZ Healthcare (career growth). 4.86 24
If a family member or friend needed care, I would recommend XYZ Healthcare (quality). 4.88 26
As long as I meet performance expectations, I feel secure in my job (career growth). 4.46 29
I understand what I need to do to be successful in my job (career growth). 5.29  28

*Survey scores are measured on a scale of 1-6, with 1 being Strongly Disagree and 6 being Strongly Agree.

 

Survey flags working conditions and staffing level as safety issues 

When the Gallagher team examined perceptions of working conditions and staffing levels across XYZ Healthcare's network of hospitals (see Table 2), we found that how well or how poorly employees perceived these aspects varied by location.** With the exception of one hospital, employees rated physical working conditions and adequate staff especially low at all locations. This finding raises questions about how to replicate the higher scores of Location 1 at the other XYZ Healthcare locations, as well as how to drive workload balance and improvements in physical working conditions across the system.

Table 2

LOCATION

THE PHYSICAL WORKING CONDITIONS IN MY DEPARTMENT/ AREA ARE GOOD.

MY WORKLOAD IS REASONABLE.  

WE HAVE ADEQUATE STAFF IN MY DEPARTMENT TO DO OUR JOBS WELL. 

XYZ HEALTHCARE IS A SAFE PLACE TO WORK. 
Location 1  +0.30  +0.28  +0.53 +0.40 
Location 2 -0.51  -0.51 -0.57  -0.57 
Location 3 +0.01  +0.13  -0.25    -0.07 
Location 4  -0.05 -0.07  -0.13  +0.27 
Location 5  -0.39  -0.24 -0.38   -0.19 

**Cells indicate how each location compared to XYZ Healthcare’s overall score on each item. Survey scores are measured on a scale of 1-6, with 1 being Strongly Disagree and 6 being Strongly Agree.

The Gallagher team also discovered an association between specific roles and employee perceptions of safety and staffing level. Not only did respondents system wide rate safety lowest of all employee experience categories, but nurses reported the lowest perceptions of safety and employee wellbeing. Given the key role that nurses play in an acute care setting and the difficulty in filling these critical positions, our study highlights the importance of addressing the needs of nursing staff related to working conditions, workload, staffing and safety.

Low engagement and safety scores correlate with high workers' compensation claims

Perhaps most significantly, our analysis of workers' compensation claims and loss rates at each site found that lower engagement and safety scores correlated highly with workers’ compensation claims and associated dollars (see Table 3).

Figure 1 illustrates loss rates incurred per $100 of payroll. This measure standardizes larger hospitals to account for locations with a greater number of total claims and larger payroll.

Table 3 shows that the three-year workers' compensation loss rate at Location 2 comes to more than 3.6 times the loss rate at Location 1. The financial implications of this cost are significant. Had Location 2 reduced its loss rate to that of Location 3, the reduction in losses would amount to $406,705 over three years. These savings don't include the insurance premiums or insurance company administrative and profit charges, which inflate these potential claims. Further, the indirect expenses associated with a workers' compensation claim often exceed the cost of the actual claim. Indirect costs include other wages, overtime, training of replacement workers and lost productivity.

Table 3

LOCATION

2020 ENGAGEMENT SCORE 

2020 SAFETY SCORE  

3-YEAR TOTAL INCURRED ($) 

3-YEAR LOSS RATE ($)*  
Location 1  4.94  4.71  77,306.69 (0.29) 
Location 2 4.26  3.74  514,816.37 (1.35) 
Location 3 4.84  4.28   39,745.91 (0.51)
Location 4  4.86  4.33  9,319.59  (0.08)
Location 5  5.1  5.09 797.47   (0.01) 

Survey scores are measured on a scale of 1-6, with 1 being Strongly Disagree and 6 being Strongly Agree.

*Loss rate indicated loss incurred per $100 of payroll.

Workforce Safety and Workers Comp Claims

Patient handling/ manual handling incidents accounted for 34% of all incidents and 59% of all workers' compensation claim dollars.

A variety of incident/accident types accounted for the loss numbers. The Gallagher team classified accidents into primary categories, including:

  • Bodily reaction (occurs when an employee slips or trips and does not fall, but sustains an injury such as a sprained ankle) 
  • Caught in/under/between 
  • Exposure 
  • Miscellaneous 
  • Occupational 
  • Patient handling/manual handling 
  • Slips/trips/falls 
  • Struck by object 
  • Vehicle accidents

Topping the list of accident types across all locations, patient handling/manual handling incidents accounted for 34% of all incidents and 59% of all workers' compensation claim dollars ($380,719 of $641,986 total dollars). Such data delivers a strong call to action.

  • Ensure investments in such tactics as standard training, patient handling equipment, improved communication and reporting, and other resources.
  • Drive the right actions across all levels of leadership to improve employee engagement.
  • Create best practices and replicate strong safety culture across all locations.

As healthcare leaders implement a comprehensive plan to address safety issues, they will see employee satisfaction and engagement increase while saving safety-related expense. The XYZ Healthcare study underscores the high correlation between engagement and safety. For years, Gallagher has advised organizations whose success depends upon an engaged and safe workforce. Leaders benefit from survey tools to identify engagement issues and evaluate workplace safety, achieving a win-win for employees and those they serve to face the future with confidence.

Author Information:

Sources

1"The Joint Commission." Improving Patient and Worker Safety: Opportunities for Synergy, Collaboration and Innovation. November 2012.
2Injury Facts. "Work Injury Costs."
3Insurance Information Institution. "Facts + Statistics: Workplace Safety/Workers Comp."

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