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The OHS Business Case and ROI:
A Focus on 3 Case Studies
Emile Tompa, MBA, PhD
Health and Labour Economist
Senior Scientist, Institute for Work & Health
Co-Director, Centre for Research on Work Disability Policy
Manual Materials Handling and Prevention of Musculoskeletal
Disorders: Making it Work!
October 2, 2017
• Business case: what is it?
• Summary of studies on the economic effects of OHS interventions
• Integration of OHS and operations
• Guidance and tools for workplace parties
• Summary and recommendations
Presentation Overview
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OHS Economic Evidence
and Business Case
in 20 minutes
1. Management tool that supports planning and decision-making for an
investment.
2. Positions an investment decision in the context of business objectives.
3. Meant to generate the support and participation needed to turn an idea
for an investment/intervention into reality.
4. Explains what the proposed intervention is about, how and who it will
impact, each of the alternatives, the associated impacts, risks and
cost/benefit of each alternative.
5. Provides recommendations.
6. Includes an implementation plan.
Business Case: What is It?
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• Company specific analysis
• Combines external evidence with internal intelligence
• Generally prepared in advance of making an investment
• Considers the financial bottom line but not exclusively about it
Key Features of the Business Case
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What Economic Evaluation is About?
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Consideration
•Individual
•Organization
•Society
Ultimate Objective
•Maximize value
added when using
resources
Valuation
•Material resources
•People time
•Health and intangibles
Systematic Reviews
• Synthesize evidence from multiple studies for decision making purposes
Summary of Systematic Reviews
• Economic effects considered include reduced work absences,
productivity/presenteeism, organizational performance
• Key types of programs evaluated include:
1) Health promotion, disease management and wellness
2) Disability management
3) Ergonomics
• Reviews find economic returns for organizations are positive within
a few years following implementation for most programs
There are Many Good Summaries of Evidence that
Suggest OHS Interventions have Positive Returns
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Health and Safety Programs with Economic Analyses (Tompa et al., 2008
& 2010)
• Synthesized evidence on ergonomics and disability management programs
published from 1990-2006
• Identified 35 ergonomic studies and 17 disability management studies
• Strong evidence in support of the financial merits of ergonomic programs in
the manufacturing and warehousing sector, based on 6 studies
• Moderate evidence in administrative support services, health care and
transportation sectors, based on 3 studies in each sector
• Strong evidence on the financial merits of disability management
interventions in a multi-sector environment, based on 4 studies
Evidence on Economic Effects of OHS Programs (8)
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Plans to
update this
review
late opportunities are
better than none at all
Three almost missed opportunities
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INTEVENTION STUDY
(**#!!^%!+>*!)
These studies are based
primarily on administrative
data collected routinely by the
organizations involved!
Long-term care facilities in British Columbia
• Measurement time period of intervention was 8 years
• Comparison of program to ceiling lifts without coaching
• Statistical modelling used with data at the facility level
• Introduction of coaching program staggered across 15 facilities
• Key outcome – reduction in lost-time injuries attributed to patient handling
• Study undertook a CBA from the societal perspective– considered
worker, employer, system costs and benefits
Tompa E, Dolinschi R, Alamgir H, Sarnocinska-Hart A, Guzman J. (2016). A cost-benefit analysis
of peer coaching for overhead lift use in the long-term care sector in Canada.
Occupational and Environmental Medicine. 73:308–314.
Ceiling Lift Coaching Program Evaluation in British
Columbia
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• Cost considerations: program development, coach training, staff training,
ongoing resources used (primarily coach and staff time)
• Benefits considered: monetary value of injuries averted, including impact
on worker, employer and insurance system
• Intervention costs were $894,002 over the 8 year time period
• Intervention benefits were $748,431, based on 62 injuries averted -- 34%
during the program and 56% after the program concluded
• Net-present value of $ (145,587) and benefit-to-cost ratio of 0.84
• Best case scenario ratio was 2.31 and worst case 0.05
Ceiling Lift Coaching Program Evaluation in British
Columbia (cont’d 1)
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• Key driver of program costs is coaching time
• Not included are some worker and patient outcomes
• Loss of health-related quality of life for injured workers
• Quality of care and patient safety
• Safety climate
• Job satisfaction and engagement
• Productivity implications of averted injuries likely underestimated
• Additionally, workers’ compensation may undercount injuries
• Did not include no-lost-time injuries
Ceiling Lift Coaching Program Evaluation in British
Columbia (cont’d 2)
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1. Peer coaching added to a ceiling lift program is effective – reduction
in lost-time patient-handling injuries with a modest net cost.
2. Impact of reduced injuries is enduring – after the program ended in
some facilities, injuries continued to be averted. Might expect such an
outcome from an intervention focused on the acquisition of new skills.
Ceiling Lift Coaching Program Evaluation in British
Columbia (cont’d 3)
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Textile plant of 300 workers in southwestern Ontario
• Measurement time period of intervention was 144 weeks
• Comparison of program with period before its introduction
• Statistical modeling used with firm-level time series data to estimate
impact of intervention on various health and productivity outcomes
• Study undertook a CBA from the company perspective
Tompa E, Dolinschi R, Natale J. (2013). Economic Evaluation of a Participatory
Ergonomics Intervention in a Textile Plant. Applied Ergonomics, 44:480-487.
Participatory Ergonomics Program Evaluations in the
Textile Sector
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1st
• Most changes were low tech, i.e. equipment modification and adjustments
• Intervention perceived by workers as being overwhelmingly positive
• Outcomes considered— workers’ comp claims, first aid cases, modified
duty cases, casual absenteeism, long-term sickness absences,
percentage right first time, percentage efficiency
• Intervention costs were $65,787 (primarily people time in training,
meetings, implementation, downtime)
• Intervention consequences were $360,614
• Net-present value of $294,827 and benefit-to-cost ratio of 5.5
Participatory Ergonomics Program Evaluations in the
Textile Sector (cont’d)
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Car parts manufacturer
• Measurement time period of intervention was 23 months
• Statistical modeling with monthly firm-level data from before and after the
introduction of the program
• Considered various health outcomes
• Study undertook a CBA and CEA from the company perspective
Tompa E, Dolinschi R, Laing A. (2009). An Economic Evaluation of Participatory
Ergonomics in an Auto Parts Manufacturer. Journal of Safety Research, 40(1):41-47.
Participatory Ergonomics Program Evaluations in the
Automotive Sector
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• Most changes were low tech, i.e. equipment modification and adjustments
• Outcomes considered— workers’ comp claims, denied claims, first aid
cases, modified duty cases, casual absenteeism, long-term sickness
absences
• Intervention costs were $25,402 (primarily people time in training,
meetings, implementation, downtime)
• Intervention consequences were $269,823
• Net-present value of $244,416 and benefit-to-cost ratio of 10.6
• Cost-effectiveness ratio of $12.06 per disability day averted
Participatory Ergonomics Program Evaluations in the
Automotive Sector (cont’d)
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1) Include multiple perspectives in the analysis
2) Increase comprehensiveness of costs and consequences – in
particular, include value of health outcomes for workers
3) Advance productivity and output measurement protocols –
include both absenteeism and presenteeism
Advancing Quality of OHS Economic
Evaluations
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Why might they affect co-worker productivity?
1. Substitutability of worker
• Replacement worker is less experienced and less productive
2. Team production
• Co-workers not as productive without the worker
3. Time sensitivity of output
• Revenue falls because of lost sales
• Penalty for being late with product or service
Impact of Absenteeism and Presenteeism on Co-
worker Productivity
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Absenteeism Costs as a Percentage of Absent
Worker’s Wages
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Type of Job 3-day cost of
absence*
2-week cost of
absence *
Construction engineer 447% 1,140%
Paralegal 213% 193%
Flight attendant 143% 143%
Mechanical engineer 154% 157%
Restaurant cook 132% 148%
Bartender 124% 114%
*Productivity losses due to worker absence– assumption that employer pays sick leave
benefits– a value of 100% means that the loss is simply the absent worker’s wages
Nicholson et al., 2006
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Presenteeism Costs Per Day as a Percentage of
Affected Worker’s Wage
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Type of Job Acute health
condition*
Chronic health
condition*
Paralegal 56% 75%
Engineer 75% 75%
Cook 25% 25%
Cashier 20% 13%
Registered Nurse 38% 38%
Waiter 25% 20%
*Includes sick worker’s lost productivity, cost of covering for the sick worker, spillover effects
on the productivity of co-workers, lost sales, and expenses to accommodate the worker
Pauly et al., 2008
Two in-depth interview studies undertaken in Ontario to better
understand how economic evaluation information is used in OHS
decision making
• Manufacturing and service sectors (20+ interviews)
• Hospital and long-term care sectors (25+ interviews)
Why are Companies not Embracing the OHS
Business Case?
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1. Lack of economics evaluation training in OHS departments
2. Data collection systems often not in place to undertake in-house
computations
3. Disconnect between OHS, HR and operations
4. Time constraints—OHS departments often under-resourced
5. Not clear where to get external information and support
Findings from In-depth Interviews with OHS
Managers
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• OHS managers lack data or access to data on output, productivity and
human resources
• OHS not integrated into the management information systems
• As a result, OHS managers have poor understanding of organizational
impacts of OHS investments
Bridging the OHS-Operations Divide
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Economic Evaluation Training Workshop
Recommendation to OHS Managers
Ensure OHS impacts are incorporated
into organizational performance
indicators by joining or starting a
measurement task force!
Growing body of evidence suggests
organizations that integrate OHS and
operations perform better in both areas.
• We started with a systematic literature review of workplace OHS interventions with
economic evaluations
• Developed a methods text for OHS researchers
• Continued with software for workplace parties
• Ontario manufacturing and service sectors
• BC health care
• Manitoba multi-sector with
training videos
• Licensed to France
• Created issue briefing for EPRI
• Developed full-day training
workshops for OHS managers
• Planning a portfolio of case
studies with business case
guidance and supporting app
Developing Tools for Workplace Decision-Making
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What else can we do to help
support organizations with the
OHS business case?
• Growing body of literature on the economic effects of OHS programs
• Key types of interventions evaluated: 1) health promotion, disease
management and wellness; 2) disability management; and 3) ergonomics
• Between 65-80% of studies found positive returns for the organization
• More investment needed in tools and training for OHS managers to
ensure better uptake of evidence
Summary and Recommendations
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Message to OHS Managers
1. Talk to operations and finance to find
out about what excites them.
2. Join or start a measurement task force
with operations and finance.
3. Build OHS metrics into organizational
performance indicators.
Talk to me about how we can make OHS
economic evidence more accessible to you!
International Efforts by Global Reporting Initiative (GRI)
• GRI promotes a sustainable global economy by providing
organizational reporting guidance
• Health and safety performance is part of “corporate sustainability
reports”
• Objective is to move health and safety performance measurement
from traditional lagging indicators to an integral part of an
organization's external overall corporate reporting
www.globalreporting.org
How many organizations currently
mention OHS in their annual report?
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www.iwh.on.ca
Emile Tompa
Senior Scientist, Institute for Work & Health
Co-director, Centre for Research on Work Disability Policy
etompa@iwh.on.ca
www.crwdp.ca
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