Markku Aaltonen , PhD(Eng), Team Leader

INTERNATIONAL CONFERENCE “THE SUCCESSFUL WORK SAFELY AND HEALTHILY”

7 November 2008, Ljubljana, Slovenia

Costs and benefits as a result of safety and health at work measures: implications for an individual, a business and a society as a whole

Markku Aaltonen, PhD(Eng), Team LeaderFinnish Institute of Occupational Health Occupational Safety TeamHelsinki, [email protected]

Finnish Institute of Occupational Health / 2

Work-related Fatalities – EU 25210 million economically active, employment 192 million

(Source: European Agency for Safety and Health at Work)

- 151,300 fatalities attributed to work-related accidents and diseases in EU, and within that- 142,400 fatalities attributed to work-related diseases in EU, and - 8,900 fatalities caused by accidents at work in the EU, - 31, 000 - 56,000 fatalities attributed to hazardous substances at work in the EU, (asbestos 21, 000)


Aims to reduce incidence rate of occupational accidents by 25 % during the strategy period in the EU-27.

The following actions are proposed: – guarantee the proper implementation of EU legislation– support SMEs in the implementation of the legislation in force– adapt the legal framework to changes in the workplace and

simplify it, particularly in view of SMEs– promote the development and implementation of national

strategies– encourage changes in the behaviour of workers and encourage

their employers to adopt health-focused approaches– finalise the methods for identifying and evaluating new

potential risks– improve the tracking of progress, and– promote health and safety in international level


Why occupational safety and health?

Safety is a value. Accident-free work place should be a human right for every worker.

Requirements of safety legislation should be fulfilled.

Safety is a part of quality of production. Accidents and incidents indicate problems in work processes.

Accidents have always unwanted consequences. Accidents cause costs for individuals, companies and socielty.

Safety culture is part of the company image. It is easy to loose it butvery difficult to get it back.

OSH can even be an integral part of company competitive advantage.


Why OSH economics? (Bjurström 2006)

Optimising well-beingAvoiding extra costsLack of knowledgeUse of economic approach in decision

making motivation better understanding choices between social goals

Necessary investments are part of production costs

Productivity effects are the most important


A classification of safety and health costs and benefits (Aaltonen & Söderqvist 1988)


Competitiveness and safety


Costs of work-related diseases and accidents in Finland in 2000 (Bjurström 2006)


Distribution of costs for work-related diseases and accidents in Finland in 2000 (Bjurström 2006)


Estimated total costs per worker due to poor working conditions in the Netherlands 2001 (Koningsveld 2006)


The costs due to poor working conditions in the Netherlands (Koningsveld 2006)

• The total cost for the Netherlands is equivalent to 2,96% of the gross national product.

• Two diagnoses are responsible for 83% of the cost of work related health effects: musculoskeletal disorders (43%) and psychosocial diseases (40%).

• Other diagnoses that result in relatively high cost are: diseases of the heart and the vascular system (5%), nervous system (4% incl. eyes, ears) and occupational accidents (4%).


Costs of OSH and company profitability

Costs Revenues

Accidents

Sick leaves

Early retirement

Profitability

Quality

0-

+

Personnel turnover

Cost of prevention


The study in Texas industry – Costs of prevention and accidents at work* (Rinefort 1977)

Sector Costs of accident prevention

Costs of accident consequences

Total

Chemical industry

6,1 2,3 8,4

Paper industry

3,3 3,8 7,1

Wood-working industry

3,1 10,6 13,7

*) costs are indicated as procent of workers´ wages


Professor Foster C. Rinefort

"Pay it now or pay it later"

"You must have a right cocktail"


European model for economic effects of safety and health at company level (Mossink & de Greef 2002)


Effects of OSH interventions (Koningsveld 2006)


The cost benefit – analysis ofuse of lifting devices for patients ( de Greef et al 2004)

• In a division of the A.Z. Sint-Lucas Sint-Jozef in Bruges, lower back pain was a frequent complaint of nurses caused by the manual lifting of bed-ridden patients.

• The project aimed at implementing the use of lifting machines for patients and training the nurses in the use of these devices.

• Following indicators were used:– Costs: investment and maintenance cost, training of the

employees, loss of time due to the use of the devices, stock cost

– Benefits: lower number of lost days due to back pain, better working conditions (less stress), better atmosphere, compliance with legislation, avoided administration costs, avoided cost for hiring temporary staff, quality of the service to the patient (the patient is treated in a safer and more comfortable way).


The cost benefit – analysis ofuse of lifting devices for patients, in euros(de Greef et al 2004)


The Balloon model developed by Johanson & Johrén (Kupi et al 1998)


Following questions are important when evaluating the amount of losses (Uusi-Rauva et al 1988)

Scope, i.e. which cost items or damage types are included in the calculation?

Timing, i.e. how long is the period to be considered in the calcyulation?

Measuring, i.e. by what means and accuracy could the amount of losses be evaluated and calculated?

Pricing, i.e. how will the losses be priced and what unit prices will be used?


References

• Aaltonen, M. & Söderqvist, A.: Costs of accidents in the furniture industry - A Nordic study. Scandinavian Journal of Work Environment & Health 14 (1988): suppl 1, 103-104.

• Aaltonen, M.: A consequence and cost analysis of occupational accidents in the furniture industry. Doctoral dissertation. People and Work 6. Finnish Institute of Occupational Health. Helsinki 1996. 68 p. + 6 app.

• Bjurström, L-M., The working environment and productivity. In: Proceedings of the European Productivity Conference, 30.8 – 1.9 2006, Espoo, Finland. www.epc2006.fi

• de Greef M, van den Broek K. Quality of the working environment and productivity. European Agency for Safety and Health at work, 2004

• Koningsveld, A.P., The costs incurred by poor working conditions - A burden to society, a prospect to companies. In: Proceedings of the European Productivity Conference, 30.8 – 1.9 2006, Espoo, Finland.

• Kankaanpää E, van Tulder M, Aaltonen M, De Greef M. Economics for occupational safety and health. SJWEH Suppl. 2008;(5):9–13.

• Kupi, E., Sumelathti, J., Bjurström, L., ‘Working environment in the service sector’, Economics of the working environment, Ministry of Social Affairs and Health, Tampere, 1997

• Mossink, J., De Greef , M., Inventory of socio-economic costs of work accidents, report, European Agency for Safety and Health at Work, 2002

• Rinefort, F., A new look at occupational safety - A cost benefit analysis of selected Texas industries. Prof. Saf. (1977) 22, 9, 8-13.

Markku Aaltonen , PhD(Eng), Team Leader

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