A new study shows that medical expenses and losses in productivity amount to an estimated $406 billion for the lifetime cost of injuries for a single year in the United States. In the prepared statement from the Centers for Disease Control and Prevention (CDC), productivity losses include ability to perform normal household responsibilities, fringe benefits, and loss of wages.
“The financial and economic impact of injuries in the United States is serious. However, by expanding our science-based injury prevention programs, we can drastically reduce these costs and even more importantly, help people live longer and healthier lives,” CDC Director Dr. Julie Gerberding said in a prepared statement.
The study findings can be found in the book The Incidence and Economic Burden of Injuries in the United States, published by the CDC in cooperation with scientific research contractors RTI International and the Pacific Institute for Research and Evaluation. Their prepared statement states that their results use 2000 data to update a 1989 Report to Congress.
The study www.cdc.gov/injury shows some $80.2 billion can be attributed to direct medical expenses, while about 50 million injuries occurring in the year 2000 attributed for a massive $326 billion in lifetime productivity losses. The costs were accumulated from the occurrence of the injuries and spread over the expected lifetime of each person injured, according to their prepared statement.
“Many of the nearly 50 million injuries that occur in the United States are preventable. To accomplish that, though, we need greater recognition of the value of our prevention efforts. As the study shows, the benefits of preventing things like motor vehicle crashes, falls, residential fires, childhood abuses and other injuries, are significant,” according to Dr. IIeana Arias, Director of the CDC’s National Center for Injury Prevention, in their prepared statement.
New York has the second highest workers’ compensation premium for employers nationally. The New York Workers’ Compensation Action Network and the Business Council of New York State have announced that New York’s workers’ compensation system is in need of reform in order to keep more businesses and the jobs held therein, from leaving the state. Benefits paid to injured employees are the lowest in the US, according to the Utica Observer-Dispatch.
The burden of workers’ compensation costs are causing businesses to reexamine how competitive they are. Harden Furniture Inc. announced recently that they feared they would be forced to close their doors because workers’ compensation costs are affecting their competitiveness. Gregory Harden, company CEO, told the Utica Observer-Dispatch, “I don’t want to go down the path of other businesses that couldn’t compete. It’s tough surviving if we don’t have a state to support us.”
Gov. George Pataki has included workers’ compensation reform in his 2006-2007 legislative package, but support is questionable. “Workers’ compensation can be easily fixed, but unfortunately in Albany, its business as usual,” said New York Workers’ Compensation Action Network chairman Larry Gilroy, speaking with the Utica Observer-Dispatch.
California is another state concerned about companies leaving their state, even after Gov. Arnold Schwarzenegger signed reform legislation two years ago. The governor says the state will pay $8.1 billion less in compensation premiums, but there are businesses that have not seen rate cuts yet, according to InsideBayArea.com. California’s largest small-business federation said 80 percent of its membership is saving 20 to 40 percent in premiums so far in 2006.
According to the East Business Times, a new study including the responses of some 267 employers, completed by the Workers’ Compensation Action Network shows that:
- 83 percent of responding businesses found the reforms to have a “positive” impact, while some 43 percent say that they have been impacted in an “extremely positive” way.
- 68 percent have seen reductions in cost, while 25 percent have seen greater than a 25 percent cost decrease.
- 25 percent reveal that their employees have been given raises with the savings they have seen in workers’ compensation.
- 19 percent have expanded their businesses.
- 16 percent have added employees.
- 8 percent have provided employee benefits.
- 6 percent put off plans to reduce their work force.
- 6 percent changed plans to leave the state of California.
The California Commission on Health and Safety and Workers’ Compensation is recommending legislative changes to increase the competitiveness of health care organizations and make them more compatible with medical provider networks. Their report found that medical provider networks (MPNs) allow employers longer control over medical costs. The legislation recommendations allows for health care to be provided by both MPNs and preferred provider organizations until a better system is found.