Costs of Occupational Injuries and Illnesses in California

Abstract

Objectives. The purpose of this study was to estimate the annual incidence, the mortality, and the direct and indirect costs associated with occupational injuries and illnesses in California in 1992. To achieve this, we performed aggregation and analysis of national and California data sets collected by the U.S. Bureau of Labor Statistics, California Workers' Compensation Insurance Rating Bureau, California Division of Industrial Relations, the National Center for Health Statistics, and the U.S. Health Care Financing Administration.Methods. To assess incidence of and mortality from occupational injuries and illnesses, we reviewed data from state and national surveys and applied an attributable risk proportion method. To assess costs, we used the cost-of-illness, human capital, method that decomposes costs into direct categories such as medical expenses and insurance administration expenses as well as indirect categories such as lost earnings, lost home production, and lost fringe benefits. Some cost estimates were drawn from California data, whereas others were drawn from a national study but were adjusted to reflect California's differences. Cost estimates for injuries were calculated by multiplying average costs by the number of injuries. For the majority of diseases, cost estimates relied on the attributable risk proportion method.Results. Approximately 660 job-related deaths from injury, 1.645 million nonfatal injuries, 7,079 deaths from diseases, and 0.133 million illnesses are estimated to occur annually in the civilian California workforce. The direct ($7.04 billion, 34%) plus indirect ($13.62 billion, 66%) costs were estimated to be $20.7 billion. Injuries cost $17.8 billion (86%) and illnesses $2.9 billion (14%). These estimates are likely to be low because: (1) they ignore costs associated with pain and suffering, (2) they ignore home care provided by family members, and (3) the numbers of occupational injuries and illnesses are likely to be undercounted.Conclusion. Occupational injuries and illnesses are a major contributor to the total cost of health care and lost productivity in California. These costs are on a par with those of all cancers combined and only slightly less than the cost of heart disease and stroke in California. Workers' compensation covers less than one-half of the costs of occupational injury and illness.