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Limited Liability

With a new focus on risk management and safety efforts rather than just compliance, campus environmental health & safety offices are preventing on-the-job injuries and costly workers’ compensation claims.
University Business, July/August 2012

For years, Kevin Confetti would perform a metaphoric scratching of the head. Thousands of work-related injuries were reported at the University of California’s 10 campuses and five medical centers, costing the system $25 million annually in workers’ compensation claims. As a workers’ compensation specialist for UC, he was responsible for payments to injured employees while they were off their feet.

“When you’re on the claims side, you’re constantly dealing with failure,” says Confetti, who now directs the workers’ compensation program for UC, which employs approximately 254,000 faculty and staff. “If someone gets injured, something has failed. You can’t help but think that if something was done differently, not as many people would get hurt.”

At UC, approximately $420 million has been saved in claims over five years by spending $60 million to fund safety initiatives, such as its slip-resistant shoe program.

In the past decade, higher ed institutions across the country have been reaping the benefits of integrating risk managers like Confetti with their EH&S teams. They are using a two-fold strategy of preventing on-the-job injuries (by analyzing injury data to determine corrective measures) and monitoring injured employees to ensure they get back to work faster.

Bruce Backus, president of the College Safety Health and Environmental Management Association, says schools throughout the country are in different phases of implementing such money-saving safety programs, with the University of California, The University of Texas System, and Stanford University leading the way in innovation.

Recent lab accidents, including a fatal 2008 fire at the University of California-Los Angeles, as well as a hobbling economy, have catalyzed higher-education administrators to create more stringent safety programs.

Departmental Reorganization

Backus, who is also director of EH&S at Washington University in Saint Louis, says local, state, and federal regulatory compliance demands much of his staff’s time. When he started at the university in 1998, only two federal agency regulatory inspections needed to be conducted. By last year, the number of inspections had skyrocketed to 42. For each one, which can take up to a week, a staff member must escort a regulatory agent around campus. That's not even mentioning the 3,900 other inspections conducted by his staff as part of their regular responsibilities.

Compliance, however, doesn’t save money the way safety initiatives do.

To best understand how it works, Erike Young, director of EH&S at the University of California Office of the President, offers the example of the fire extinguisher. The fine for not inspecting one is around $300, he says. In an office environment, the chances of a fire being set are pretty slim. Yet, a school can pay out $10,000 to a cafeteria worker who slips on a greasy floor. Of course, the cost of buying a pair of slip-resistant shoes to prevent injuries is $70.

“EH&S is so focused on compliance, we forget about the person with the back injury,” Young says. Meanwhile, risk managers have a solid grip on who gets injured and how long they wind up on medical leave. Access to accurate injury data is key to linking the two departments.

At The University of Texas Health Science Center at Houston, the risk management program has attacked two areas—ergonomics and risk reduction—with a special emphasis on reducing retained losses to save additional money.

During the weeklong Environmental Health & Safety Academy course, taught by Robert Emery of UTHealth, staff from other institutions get hands-on practice with protective equipment.Robert Emery, who is vice president for Safety, Health, Environment and Risk Management at UTHealth, said a departmental re-organization occurred in 2003-04 to keep costs down. That’s how risk management and employee health were transferred to Emery.

“It evolved naturally ... since we work so closely with those groups,” Emery says. “The logic was let’s put them all together and get them synchronized.”

Emery recommends schools look at injury data for whole populations, including workers, students, and visitors on campus to discern safety risks. He says 60 percent to 70 percent of premiums on workers’ compensation insurance can be reduced with effective safety initiatives.

Emery teaches the Environmental Health & Safety Academy course, which has trained 1,000 professionals at institutions throughout the U.S., including UC, University of Louisville (Ky.) and The University of North Carolina at Chapel Hill.

Staff changes weren’t the order of the day at UC’s campuses, but the concept of sharing information between risk managers and safety officers was a matter of “breaking down the silo,” as Young puts it. Young also says some were worried compliance would be given short shrift, but that hasn’t happened.

It helps when workers understand that they are important to meeting the mission of UC, he adds. “When EH&S views themselves in that role, they buy into it a bit better. What role does a janitor play? They make the educational setting a nice one so people want to learn there. If stuff wasn’t getting picked up, why would people want to go to that classroom? It’s not just a job.”

How to Get Started

Steps to synchronizing EH&S departments and risk managers can include renaming a department to reflect its new mission, educating safety managers and risk managers on the benefits of working together, analyzing injury data (or first obtaining it if it doesn’t exist in a coherent form), and presenting data to actuaries who can provide estimates on savings.

It starts with determining where the greatest risk lies on campus.

In the case of UC, the system first asked its actuary, Mark Priven, principal at Bickmore Risk Services, to provide a breakdown of the most common injuries within the system, at each campus.

Young says UC’s 10 campuses and five medical centers then analyzed their workers’ compensation losses, and applied for grants that came out of the additional pool of money that was collected from each campus for Be Smart About Safety, a grant program that funds safety innovations on UC campuses.

Confetti of UC says each campus originally paid $1 for every $100 of payroll to go toward workers’ compensation insurance. To fund Be Smart About Safety, each location paid an additional 15-cent safety assessment for each $100 of payroll.

In 2004-05, the year before Be Smart About Safety was implemented, the accrual rate was 1.65 for every $100 of payroll. In that fiscal year, 8,053 workers’ compensation claims were filed. For the 2012-13 fiscal year, the systemwide accrual rate is $0.98 for every $100. Without including the safety program’s costs, the accrual rate would only be $0.85. For 2011-12, only 5,189 injuries were claimed when annualized, as of press time, a 35 percent reduction.

“Every dollar we don’t have to spend on workers’ compensation claims is a dollar we can return to our mission, which is education, quality research, and quality healthcare,” Confetti says.

Ergonomics and Monitoring Injured Workers

After 2008-09, UC officials wanted to know which safety initiative derived the most return on investment. It turned out campuses that spent the most money on ergonomics saw an ROI of 3 to 1 or 5 to 1.

Ergonomics is the study of designing equipment to create healthy, productive work environments. UC-Irvine experienced tremendous savings­—$27 million in workers’ compensation costs over the past seven years, according to Marc Gomez, assistant vice chancellor of facilities management and EH&S at the Irvine campus.

Because of UC’s Return to Work program, out-of-work employees are managed by the workers’ compensation staff, who help them quickly return to work. “That’s a good cost savings, as you can imagine,” Gomez says. “We have less injuries, and if they are injured, they are out a shorter period of time.”

Washington University’s injury and illness reduction program was implemented in 2006 (although formal safety efforts began in 1987), Backus shares. Between 2006 and 2010, the university saved $240,000 per year in workers’ compensation claims, for a total of $1.2 million total savings.

No federal regulation exists mandating ergonomically sound work environments. In California, each organization with on-site employees must develop an ergonomics training program. If two of the same type of ergonomic injuries occur in the same job title in a 12-month period, California mandates that a company create an ergonomics training program to reduce injuries.
“It just makes good business sense,” Young adds.

On-Site Employee Care

Some schools may use nonaffiliated, off-campus medical facilities to get staffers back to work after an injury. At Stanford, the Occupational Health Center opened on campus in 2007 to prevent injuries, address worker injuries, and get them working again. Ergonomic strains comprise 44 percent of all worker injuries and 56 percent of all costs, according to Larry Gibbs, associate vice provost for EH&S at Stanford.

Since implementing the safety program, Stanford’s total incurred costs have dropped from $4.5 million in 2006 to less than $2 million in 2010.

But the actual number of claims, 500, remains the same. “What it indicates is a much earlier intervention and the medical and indemnity costs are way down because of that,” Gibbs says.

Gibbs credits ease of access, outreach, medical surveillance, follow-up, and education as benefits of an on-campus facility. About 600 to 650 initial visits are for medical evaluation and treatment, while close to 2,000 follow-ups are made to the center.

While Stanford is self-insured, workers’ compensation insurance is provided by a third-party. The Occupational Health Center is funded by the university. As for the savings, they are the result of more than 50 percent reduction in workers’ compensation claims.

“We finally demonstrated a number of times that it saves the university money,” says Gibbs, who had been lobbying for the center since the late 1990s. “It did take a lot of time and effort and you finally reach a time when things seem to coalesce and everyone is on the same wavelength.”