the ohs business case and roi: a focus on 3 case studies · 2017. 10. 18. · the ohs business case...

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


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



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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.



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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


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.


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


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

[email protected]

www.crwdp.ca

the ohs business case and roi: a focus on 3 case studies · 2017. 10. 18. · the ohs business case...

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