Speeches - (Archived) Table of Contents|
| Information Date:||11/30/1994|
| Presented To:||UBA-NAM Workers' Compensation Conference|
| Speaker:||Dear, Joseph A.|
"This document was published prior to the publication of OSHA's final rule on Ergonomics Program (29 CFR 1910.900, November 14, 2000), and therefore does not necessarily address or reflect the provisions set forth in the final standard."
Thank you, Barbara Naylor, for that kind introduction. I am delighted to have this opportunity to discuss current activities at OSHA and how they might impact on reducing employers' workers' compensation costs by preventing injuries, illnesses, and deaths in the workplace.
Some of you may be wondering what the results of the election mean for OSHA. Will it change the mission? What will happen to the drive to reinvent OSHA and prepare it to deal with the hazards of the workplaces in the new post-industrial economy? How does it feel to be the administrator of one of the most conspicuous federal regulatory agencies?
I think that raising my right arm as I swear to tell the truth at Congressional oversight hearings may be a new repetitive stress injury motion risk.
Some things definitely have changed. Reality does have policy implications. But some things haven't changed.
Whether you reckon the costs of preventable workplace injury, illness and death in human or economic terms, it is staggering.
Seventeen American workers are killed each day. Don't ask me how many workers died today as a result of work-related disease because we don't know. Even a conservative estimate places the number eighty times higher than the figure for deaths related to traumatic injury.
The total benefits paid out under workers' compensation in the U.S. have soared from $17.6 billion in 1983 to $50.2 billion in 1993, according to figures from the Social security Administration and the Commerce Department's Bureau of Economic Analysis.
The amount of compensation per covered employee in the U.S. went from $225 in 1983 to $451 in 1991, just about double. From 1971 to 1991, workers' compensation payments per worker covered nearly tripled.
This data reflects payments to employees, not costs to employers. Some estimates are that costs to employers are about 30% greater. This is largely due to administrative overhead.
The National Safety Council says that the true cost to the nation, to employers and to individuals of work-related deaths and injuries is much greater than the cost of workers' compensation insurance alone. The council estimated that the total cost in 1993 amounted to $112 billion and that each worker must produce an additional $940 in goods or services to offset the cost of work injuries.
No matter how you calculate it, reducing these costs through prevention of injuries, illnesses and deaths is a major problem for American employers. It also has a major impact on the ability of American businesses to remain competitive in world markets.
The Bureau of Labor Statistics says that a total of 6.8 million injuries and illnesses were reported in private workplaces in 1991, or about 9 for every 100 full-time workers. In other words, one out of 10 American workers suffered an occupational injury or illness.
The economists and statisticians have no way to calculate the human toll: we know it is enormous.
As human resources managers who have to contend with workers' compensation, your work is more important than ever and the environment in which you work is more challenging than ever. You work at the intersection of some vast and complicated systems: workers compensation insurance, occupational safety and health regulations; health care; labor law and employment discrimination to name a few. You have to take care of the organizations' people and keep the costs down. And do it while the organization downsizes, rightsizes, re-engineers or whatever they call it when your workload goes up and your resources go down.
Of all the people in your organization you are in a position to feel most acutely the tension between bottom line pressure to minimize costs and the ethical imperative to care for people. I believe that workplace safety and health problems offer a great opportunity to show that the tension between concern for economic cost and human cost can be successfully met when a comprehensive prevention strategy is developed and implemented.
Caring for the organizations' people is not just an ethical imperative anymore; it is a business imperative too.
In a world where capital, information and technology can move around the globe virtually in an instant, the only resource that stays relatively fixed within a nation's borders is its workers. Unless we wish to engage in a race to the bottom by competing for low wage, low skill jobs, jobs without the protection of labor standards, America must compete on the basis of high wage, high skill jobs, the kind which require a skilled and flexible workforce. That's why the Clinton Administration's program makes investing in the nation's workforce a centerpiece of its economic strategy. Individual firms and the nation as a whole will succeed by investing in the knowledge and skills of its workers. It's the best way to attain a sustainable competitive advantage. And investing in the health and safety of America's workers is part of that strategy.
The key investment I'm talking about is investment in prevention. OSHA is known for its regulation and enforcement which are intended to create incentives and sanctions to prevent workplace injuries and illnesses. But enforcement alone cannot succeed. Obviously, successful primary prevention is the best and cheapest way to lower workers' compensation costs. Secondary prevention, reducing the duration and magnitude of disability after injury or illness, is also crucially important to the reduction of workers' compensation costs. A comprehensive prevention strategy encompasses both primary and secondary prevention. It is based on the foundation of respect for human dignity.
As I've traveled around the country, I've heard two things over and over: Everyone is for improved safety and health. And everyone is critical of OSHA. We do too much enforcement. We do too little enforcement. Our standards are too specific. Our standards are too vague. The Act needs to be stronger. The Act needs to be weaker. This is not news, for sure. It's the continuing story of how business and labor approach the issue when it is framed in legislative terms. The camps inside the beltway are firm, the positions are staked out and not much is going to happen. Just more gridlock.
But I learned a funny thing. You can take the same set of leaders from labor and business, get them together in a room away from the Capitol to talk about the problems of workplace safety and health, the limitations on OSHA's resources and the common interest employers and workers have in providing safe and healthy workplaces and find a remarkable amount of agreement.
There is support for strong, targeted, focused inspections: Block the low road. Target the worst hazards and the worst actors.
There is support for programs which assist employers and employees in complying with OSHA standards and in recognizing and preventing hazards: help those who want help.
There is support for programs which leverage OSHA's resources through partnerships. We can establish and strengthen partnerships with trade associations, labor unions, workers' compensation insurers and other government agencies to assist in providing training, education and research.
Secretary Reich has called for a revitalized OSHA. One with the tools and smarts for the challenge of creating safer, healthier and more humane workplaces. OSHA has an enduring mission: to save lives, prevent injuries and illnesses and protect the health and safety of America's workers. We must focus our efforts on the most serious threats to worker health and safety -- and redirect our resources -- enforcement, standards setting, and education, training and recognition -- to where they can do the most to protect workers.
We are developing new and innovative ways to encourage workplace cooperation and educate workers and employers so they will be able to create the safest and healthiest workplaces possible. An energized, strong and effective OSHA is implementing and enforcing programs and policies that improve the safety and health of workers and make American business more profitable and competitive.
OSHA is changing the way it does business. Given the gap between our mission which encompasses over 93 million workers employed at over 6 million workplaces and our resources, $312 million and 2300 people -- we have to reinvent ourselves.
Command and control government regulation is following the path of command and control structure in the private economy. It's vanishing. Consider perhaps the most important initiative of the new OSHA: our attempt to bring the principles of labor-management teamwork and employee involvement to the field of health and safety. We're encouraging employers to take the high road by developing their own tailored health and safety programs that eliminate workplace hazards and prevent illness and injury. OSHA's Maine 200 program illustrates this approach.
The Maine 200 program uses state workers' compensation data to target employers with bad safety records and offers those employers an incentive if they develop and implement safety and health programs with worker involvement. The incentive is that they will be placed way down the inspection priority list. Not surprisingly, the response has been very favorable. In fact, one company actually issued a press release announcing that they had been accepted into OSHA's Maine 200 program. These 200 employers operate at over 1,350 locations and employ over 30% ot Maine's workforce.
Our data shows that Maine employers identified 95,000 serious hazards and abated 55,000 of them already in under two years. In the prior 8 years of OSHA enforcement, we found 35,000 serious hazards in compliance inspections. That's leverage.
Another example of focusing on the most serious threats to worker health and safety while at the same time encouraging employers to develop and implement safety and health management programs is the focused inspection in construction program. Focused inspection in construction is a way to spend OSHA's time more effectively and to get contractors to pay attention to serious safety hazards.
What we will do is determine who is the controlling contractor on the worksite and whether that contractor has an effective safety and health program and a person on the site responsible for implementing that program. If the answer is "yes," then we will perform an inspection focusing on the four major killers of construction workers: falls, electrocutions, being caught in (trenches) and being struck by machines or materials. Our own data show that today, the most frequently cited serious hazard in construction is hazard communication. The four hazards I just cited account for 90 percent of the fatalities in construction.
We are about to begin the work of developing similar focused inspection programs for general industry.
We will extend the reach and magnify the impact of these focused enforcement activities, by offering incentives, such as recognition programs or reduced penalties, for workplaces with strong demonstrations of worker participation and management commitment to comprehensive hazard recognition and control. In 1994 we added over 80 new sites in our Voluntary Protection Programs, expanding our safety and health excellence recognition program by over 75%. I am extremely interested in the possibilities for __________________ with workers compensation insurers to assist employers in developing and implementing focused hazard recognition and control programs and to assist them in preparing to participate in recognition programs such as VPP.
We will initiate a more systematic process of identifying priorities for regulatory activity and other protective interventions using our newly developed standards planning process.
We will concentrate our regulatory activities on a package of "building block" standards which will establish a clearer set of expectations for hazard recognition and control. These will, in turn, guide enforcement and assistance programs. These standards include ergonomics protection, safety and health programs, exposure assessment, medical surveillance and recordkeeping.
Ergonomics protection continues to be one of our top priorities. The U.S. is experiencing a rapid increase in both the incidence and reporting of work-related musculoskeletal disorders. Whether we refer to these problems as repetitive stress injuries, cumulative trauma disorders, carpal tunnel syndrome these disorders are real, they are growing, and they are serious. Overall, reported incidence of largely upper extremity disorders associated with repeated motion rose from 5 per 10,000 in 1982 to 30 per 10,000 in 1992.
In some industries, such as meatpacking, the rate rose to over 1,300 per 10,000 workers. As alarming as these rates are, they do not include back injuries. In 1992, according to the Bureau of Labor Statistics, there were over 398,000 overexertion injuries related to lifting.
In an article by Webster and Snook of Liberty Mutual Insurance, the estimated direct workers compensation costs for low back pain was $11.4 billion in 1990. The latest issue of the American Journal of Public Health estimates that 4.75 million workers suffer from back disorders related to repetitive motion on the job.
Workers' compensation costs of all musculoskeletal disorder (MSD) cases, which include other disorders besides those of the back, have been conservatively estimated at $20 billion each year. The National Council on Compensation Insurance says the average cost of a single MSD case, in lost wages and medical treatment, is $19,000 to 29,000.
The Bureau of Labor Statistics reported that the median lost work time for carpal tunnel syndrome was more than 30 days and was greater than for any other illness or injury, including fractures and amputations.
The good news is that there are also real solutions. There are a growing number of companies across this country who have implemented ergonomic programs and processes to reduce the frequency and severity of work-related musculoskeletal disorders as well as having secondary benefits of improved performance and reduced turnover. I've visited worksites such as Harley-Davidson in Milwaukee, GM in Lake Orion, Mich., Ford in Livonia, Mich., Teepak in Atlanta, and 3M in New Ulm, Minnesota, and listened to employers who have implemented successful ergonomic programs. Their programs have common elements:
* employee awareness and involvement throughout the process * early reporting of cases and appropriate follow-up * identification and assessment of risk factors * implementing controls * follow-up to make sure the control measures are working.
Although standards play an important part in your work, you shouldn't wait for them. The power of positive examples and success can help employers and workers now. Either approach requires information and assistance for employers.
Any Ergonomic Protection Standard has to be flexible and a logical extension of these existing solutions. It can level the playing field so at least minimum performance criteria are uniformly in place. A standard must lay out the performance parameters for compliance and also provide flexibility to industries to implement solutions that work in reducing exposure to risk factors. In other words, it can't be a "one size fits all" kind of standard. And as we move toward publishing a proposal, we invite your comments on how to further improve it.
Another "building block" project involves developing a proposal for a standard on occupational safety and health programs. OSHA believes that the implementation of a safety and health program by an employer generally results in a lower incidence of occupational injuries and illnesses. Management commitment to safety and health coupled with worker involvement can create a self reinforcing cycle of reduced accidents, lower workers' compensation costs, improved morale, quality and productivity.
Implementation of a safety and health program offers a systematic approach for workplaces to address occupational safety and health concerns. The developing draft is based on a variety of resources including state required programs such as those in California, Washington and Maryland, as well as OSHA's Voluntary Protection Program guidelines. The proposal may include a requirement for employee involvement in identification and abatement of workplace hazards.
Fourteen states now have requirements for employers to establish joint labor-management safety and health committees. Oregon's OSHA program has a proven track record. They have used innovative ways to bring labor and management together to create a system that is manageable and for the last four years, they have experienced double-digit premium decreases.
Experience has demonstrated that such committees can be a key ingredient in reducing workplace injuries and illnesses. However, committees are not the only answer to assuring employee involvement. There are alternatives, and it is vitally important to the development of a quality standard that information about successful variations on employee involvement be available.
We also will continue working on the improvement of our own processes. The same structured problem-solving techniques used in total quality management efforts and process reengineering are being successfully applied in OSHA itself. We will be implementing throughout OSHA improvements in Freedom of Information Act request processing, debt collection, complaint handling and discrimination cases.
We have a team of front-line compliance officers, middle managers, senior and support staff doing a complete redesign of our field office. Assisted by McKinsey & Company, this effort will result in the functional integration of targeting, training, personnel, outreach, information technology, process improvement, and empowerment activities.
We will continue to develop and implement a performance measurement system, integrated with our fiscal year 1995 goals and objectives. It is extremely important for OSHA to move from measuring activities such as the number of inspections or the percentage of serious violations to measuring impact in terms of lives saved and injuries and illnesses prevented.
What can you, as workers' compensation administrators and safety and health professionals in private industry, do to assist us as we strive to reduce injuries, illnesses, and deaths and consequently workers' compensation costs in America?
For one thing, study your own workplace data. See what it shows you about the trouble spots -- the hazards -- that are resulting in injuries and illnesses in the workplace. Then take action to abate those hazards. Enlist workers in identifying and abating the hazards.
Consult the benchmark data for your industry. Again, it should aid you in determining hazards. It also will show you how well you are doing in comparison with others in your industry. In other words, practice more of the primary prevention tactics of OSHA -- preventing worker exposure to hazards -- so that there will be less reliance on the secondary and tertiary prevention techniques used in workers' compensation -- treating workers' for injuries and illnesses, reimbursing them for lost time, and rehabilitating them before their return to work.
I know that you are interested in preventing injuries and illnesses as much as possible and in returning injured and ill workers to duty as soon as possible. OSHA is no different from you in that respect. We have the same goals.
Good safety and health, and the resulting reductions in costs, such as lower workers' compensation costs, and improved productivity can create a competitive advantage for your company. We in OSHA would like to help you achieve that, because competing on the basis of good workplace safety and health represents the best type of competition.
I have learned this in my first year as Assistant Secretary: there is a common ground between business, labor and government when it comes to improving workplace safety and health.
Partnerships are possible and powerful. Sure, some days that common ground can feel like no man's land. But whether your main concern is economic cost or human cost, there are solutions which simultaneously or concurrently address both. We must find them, celebrate them and press for their adoption.
Thank you for listening. I'd be happy to take some questions.
|Speeches - (Archived) Table of Contents|