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Indirect Costs of Back Pain and MSDs

Workers' Compensation Claims and Cost |
Written by Dell Dorn

September 5, 2014

 

If you have never experienced back pain, consider yourself lucky. More than 31 million Americans are afflicted with back pain1. All of those injured workers cause a serious drag on the profitability of American companies.  In our last post, we looked at the prevalence of back pain and other musculoskeletal disorders (MSDs) and their huge cost to employers.

  • An OSHA study from 1990 found that the direct costs of work-related musculoskeletal disorders totaled $15 to $18 billion dollars per year. When adjusted for inflation, that is approximately $20 to $25 billion expressed in 2014 dollars. Other estimates place the number much higher.
  • That same study found 2 million workers experience MSDs every year, with 600,000 workers missing work as a result.
  • A 2006 study in The Journal of Bone and Joint Surgery found that the total cost of low back pain to the United States totaled $33 to $66 billion ($39 and $78 billion when expressed in 2014 dollars)2.

 

As incredible as those numbers are, estimates of the indirect costs of back pain and MSDs are much higher. That same OSHA study found that indirect costs were $45 billion per year – a staggering $62 billion in 2014 dollars. As if those figures weren’t compelling enough, the Journal of Bone and Joint Surgery study found that the indirect costs of low back pain are twice as large as the direct costs.

OSHA study found that indirect costs were $45 billion per year – a staggering $62 billion in 2014 dollars.

Numbers this large are difficult to wrap our head around, so here’s another way to think of the $62 billion estimated by the OSHA study: If you spent $100 every second, it would take you nearly 20 years to spend the as much money as the U.S. economy loses on the indirect costs of low back pain every year.

 

Defining Indirect Costs

Let’s take a step back and explain where these huge numbers come from. The direct costs of back pain include workers’ compensation claims made by employers and the amount of money spent on healthcare to heal the lower back pain – to the extent that it can be healed.

The indirect costs of back pain to include costs of reduced productivity while still working, absenteeism, and mortality.

Vijay N. Joish and Diana I. Brixner’s study “Back Pain and Productivity: Measuring Worker Productivity from an Employer’s Perspective” from the Journal of Pain & Palliative Care Pharmacotherapy defines the indirect costs of back pain to include costs of reduced productivity while still working, absenteeism, and mortality3. The paper also points out that the indirect costs to an employer include lost production, idle assets, benefits, and fixed payroll costs. Additional very serious costs to employers are the cost of replacing, hiring, and training new workers to take the place of those who cannot perform their job due to back pain or musculoskeletal disorders.

Indirect_Costs_Blog_Post

 

The Significance of Indirect Costs

Although the direct costs of back pain and other MSDs is staggering, the indirect costs mount quickly. Take a look at these stats from a 2006 study published in The Journal of Joint and Bone Surgery4:

  • Lost Productivity – MSDs account for $50 billion ($59 billion in 2014 dollars) a year in productivity loss.
  • More Jobs to Fill – One in five workers that report an episode of low-back pain are not able to return to work within a month, one in ten workers are unable to return within three months, and one in twenty are unable to return to work at all.

 

Whether or not an employee is able to eventually return, many employers will need to hire and train a new employee for at least temporary work to cover for the employee who is missing work for an extended period of time.

 

Employee Turnover

A study published by the American Center for Progress found that the median cost of employee turnover to an employer was about 21% of an employee’s annual salary. The cost of replacing an employee with salaries between $75,000 and $50,000 a year rises to around 22% of the annual salary. Replacing employees who make over $75,000 a year can be much more costly, and jobs that require more specialized education tend to have more expensive turnover than jobs that do not require specialized education.

 

Reducing Back Pain and Musculoskeletal Disorders in Employees

Because of the great costs associated with back pain and musculoskeletal disorders, employers should invest in their employees’ health before an injury occurs. Knowing where to start, though, can be daunting. The human body is complex, and it is difficult to identify which tasks in a workplace lead to back pain and musculoskeletal disorders that will lead to absenteeism and employee turnover. When these risky exertions are identified, it can be even more difficult to develop a new way to handle the task that puts less stress on the employee’s body.

 

[1] Katz, Jeffrey N. “Lumbar Disc Disorders and Low-Back Pain: Socioeconomic Factors and Consequences.” The Journal of Bone and Joint Surgery 88a.2 (2006): 21-24. Web. 26 Aug. 2014.

[2] Joish, Vijay N., and Diana I. Brixner. “Back Pain and Productivity: Measuring Worker Productivity from an Employer’s Perspective.” Journal of Pain & Palliative Care Pharmacotherapy 18.2 (2004): 78-85. Web. 26 Aug. 2014.

[3] Vijay, Brixner. 78-85.

[4] Katz, Jeffrey N. 21-24.

 

This article was originally published by the Ohio State University’s Spine Research Institute. You can see the original article here: https://spine.osu.edu/blog/2014/09/indirect-costs-back-pain-and-msds

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About the Author

Dell Dorn

Dell Dorn is the founder of DORN Companies. He started DORN in 1998 to help employers save money on workers' compensation claims and reduce OSHA recordables. Today, DORN customers realize the immense cost of employee pain and the enormous impact our service has on employee morale and their bottom line.
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About the Author

Dell Dorn

Dell Dorn is the founder of DORN Companies. He started DORN in 1998 to help employers save money on workers' compensation claims and reduce OSHA recordables. Today, DORN customers realize the immense cost of employee pain and the enormous impact our service has on employee morale and their bottom line.
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