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Workers Compensation Issues

Improving Total Cost of Risk in an Evolving Workforce

Joe Galusha | August 11, 2023

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The US workforce has been changing dramatically during the past few decades with respect to the age of workers and their overall health. As employers continue to adapt to this new normal, many are developing informed and fresh perspectives to mitigate the challenges of keeping workers healthy, productive, and free of workplace injury and illness.

To that end, the good news is that advances in data analytics can help pave the way for more prescriptive solution sets to help employers mitigate financial risks and protect their most important resource—their full- and part-time employees and other workers.

An Aging US Workforce

Since 1980, the US workforce has been aging and generally becoming less healthy. Despite the Great Resignation associated with the COVID-19 pandemic, many individuals are working longer, continuing their employment into their 60s, 70s, and older.

Meanwhile, the entire US population is aging. The US Census Bureau reports the median age of the US population rose to 38.9 in 2022 from 30 in 1980. Furthermore, the US fertility rate is now well below the replacement level. According to the Pew Research Center, fertility has hovered around 1.8 births per woman compared to the replacement fertility rate of about 2.1. Thus, without factoring in the effects of net immigration, each new generation will be smaller than the previous one, and the United States will continue to have an increasingly more mature population.

At the same time, people are postponing their retirement. Given the demand, opportunity, and economic necessity, it's not surprising that more Americans are working into their later years. Generally, individuals across the country are planning to retire much later than they did in the decades of the 1970s and 1980s. At present, 44 percent of the US workforce is age 45 or older, according to the US Bureau of Labor Statistics.

While older workers tend to be more reliable—and in many cases, more productive—than their younger and less experienced counterparts, they can take longer to recover from injuries. A recent study by Aon finds the average cost of workers compensation claims nationally, for workers aged 45 or older, is 73 percent higher than for younger workers. The study found that these workers are away from work (on average) 14 days more per lost-time injury and are 30 percent more likely than younger workers to have a medical-only claim convert to time away.

In addition, older workers tend to be more likely to have comorbidities associated with age-related health conditions, such as obesity, diabetes, and high blood pressure. That stated, the US workforce altogether is generally less healthy than in past years, with higher incidents of these conditions seen across all age groups.

Rising Tide of Comorbidities

According to the latest National Health and Examination Survey (compiled in 2021), obesity affects 41 percent of American adults. Notably, there isn't a significant variation in obesity by age group: obesity prevalence was 39.8 percent among adults aged 20–39 years, 44.3 percent among adults aged 40–59 years, and 41.5 percent among adults aged 60 and older.

Among other issues, obesity has been shown to be a contributing factor to type 2 diabetes, high blood pressure, heart disease, and cancer.

Given the high rate of obesity across all age groups, no one should be surprised by the incidence of diabetes in the United States. Today, 30.3 million Americans (or 9.4 percent of the US population) suffer from diabetes. That includes 23.1 million people diagnosed with diabetes and 7.2 million that are undiagnosed, according to the National Diabetes Association.

At the same time, the National Center for Health Statistics reports that 1 in 3 American adults suffer from high blood pressure, but just 54 percent of these cases are controlled. High blood pressure can also be a serious complicating factor with respect to workers compensation injuries. Notably, high blood pressure and accompanying poor circulation reduce needed oxygen flow to cells through the arteries and capillaries, which regenerates and heals the cells.

Overcoming Organizational Silos

The convergence of an aging workforce and negative health trends means the time is right for risk managers, safety professionals, and human resources (HR) executives to adopt integrated approaches to promote workplace safety, employee productivity, and satisfaction. Yet, even today, organizational silos remain the biggest obstacle to developing such approaches.

Fortunately, new information technology applications enhance the ability to capture, analyze, and share a wide variety of aggregated and trend data on workplace injuries, accidents, near misses, and employee absences. Employers can also track changing workforce demographics and conduct granular assessments of factors contributing to accident and injury causation, as well as to evaluate the impact and return on investment (ROI) of various safety practices and ergonomic remedies pre- and postimplementation.

As employers continue to emerge from the impacts of the global COVID-19 pandemic, many still must navigate significant adjustments in their workforce composition, shift scheduling, acute worker shortages, and different work arrangements, including remote and hybrid work situations. Meanwhile, the increased investment in automation often requires careful ergonomic assessments and the design and implementation of new training regimens.

In this context, integrated analytics intelligence (IAI) brings together the various elements needed to understand workplace dynamics and the changing workforce demographics and to drive improvements in employee health and safety across an enterprise's multifaceted operations.

IAI: A Three-Step Process

Step 1: Identifying Top Health and Cost Drivers

This step uses data analytics to identify and understand the employer's top three health and cost drivers across multiple business variables. In this case, close collaboration across different internal and external functions and disciplines is critical for data collection and analytics.

This approach requires collecting individual member-level data from vendors, including insurers and third-party administrators, as well as appropriate internal departments, such as HR, risk management, workers compensation, and claims.

Once data are collected, they can be applied to map health, wellness, and injury experiences by individual employees. Data can then be aggregated to obtain a 360-degree view of each employee's benefits experience and cross-checked for accuracy.

Step 2: Solution Development

The insights gained from this analysis enable risk, HR, and safety to design appropriate evidence-based, integrated solutions that reflect the specific needs of the workforce and encompass treatment, risk reduction, and prevention. Given the challenges posed by a dynamic and aging workforce, evolving work environment, and the need to manage costs, effective approaches may involve a combination of several activities, including the following.

  • Directing care for musculoskeletal injuries
  • Establishing specialized centers for obesity surgery
  • Embracing new approaches to physical therapy
  • Exploring obesity immersion experiences
  • Providing effective addiction care
  • Integrated care for mental health
Risk Reduction
  • Assessing ergonomics issues and developing safe material handling practices
  • Safe patient handling and mobility (in healthcare settings)
  • Implementing multidimensional weight loss initiatives
  • Reviewing and updating stay-at-work and return-to-work initiatives
  • Implementing or updating stretching and other wellness programs
  • Job-related screenings, including having updated physical demand assessments (PDAs)
  • Depression and substance abuse addiction assessment

Step 3: Implementation and Measurement

Along with choosing and implementing appropriate treatment, risk reduction, and prevention measures (from the representative list above or others that address industry-specific or other health and wellness needs), employers should work to define what success looks like for each activity taken to address a specific challenge, such as dealing with obesity.

This may involve the following elements.

  • Establishing a process for implementation and evaluating impact within specific time frames
  • Determining outcome metrics for each activity (or group of related activities to deal with multiple aspects of a defined issue) and a methodology for capturing, recording, and reporting them
  • Projecting overall expected savings (ROI) and tracking progress against plan

Sharpening Focus on Wellness and Behavioral Health

As employers and their workforces have had to adapt to myriad challenges associated with the COVID-19 pandemic, including variations in work arrangements and schedules, worker shortages, and new health and safety protocols, employees at all levels had to deal with significant—and, in some cases, unprecedented—job-related stress. For many employers, one of the takeaways was the need to increase the focus on employee wellness and behavioral health.

In designing (or redesigning) activities to enhance employee safety and improve productivity and elevate performance as mentioned in step 2 of the IAI, employers may want to consider the following sets of questions.

Employee Health and Wellness

  • Are there any stretching and strengthening programs or initiatives in place?
  • Is there an integrated musculoskeletal component to the weight management strategy?
  • Are HR and benefit teams collaborating with operations and safety around ergonomics?
  • Are there clinical reviews or case management options by insurers in place?
  • Are there any opioid management programs in place?
  • Are there any digital or in-person physical therapy programs in place?
  • Are there surgical networks offered through existing vendors?
  • Are there any people analytic strategies on specialty prescription, high-tech imaging, or surgical procedures in place?
  • Are there provider guidance resources or expert medical opinion programs available?

Behavioral Health

  • Are there any initiatives in place to prevent substance use and abuse?
  • Are there any benefits offered for mental health and substance use disorders (MHSUD)?
  • Are there awareness campaigns around behavioral health?
  • Are there flexible leave and return-to-work policies in place?
  • Is there any contracting with centers of excellence around MHSUD in place?
  • Are there any therapy/counseling sessions available to members?
  • Is there any additional support in place?


By taking a 360-degree view of their employees and implementing holistic approaches to promote their health and well-being, employers will be in a better position to put the impact of the COVID-19 pandemic in their rearview mirror and move forward with a healthier, engaged, and more productive workforce.

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