Wounded Warriors

February 1, 2006 By    

A recent study of the major causes and costs of workplace injuries and illnesses in the propane industry found the industry to be slightly better on average than other industries as a whole.

“In fact, for the type of work that employees in this industry do, I expected to see higher costs and more serious claims when I started researching,” notes researcher and study author Philip S. Borba, principal and senior consultant for Milliman Inc. (New York, NY).

 Average Claim Payments as of December 31, 2002, by Accident Year
Average Claim Payments as of December 31, 2002, by Accident Year

Funded by the Propane Education & Research Council, Borba’s study indicated there are no unusual general trends or experiences with regard to claims and costs when comparing the propane industry to the norms experienced in the insurance industry. However, there were a number of noteworthy issues identified that could help improve incident prevention and case management systems and reduce both frequency and cost of injuries.

The 79-page report, “Workplace Injury Study of the Propane Industry” was based on workers’ compensation claim data collected from propane marketers from about 2,000 locations in all 50 states for the five-year period from January 1998 to December 2002. The information and benchmarks produced from the study are expected to help employers evaluate the effectiveness of safety management systems, including incident prevention and loss control initiatives.

Borba says he was impressed with the industry as a whole, noting that the large number of small operators helps explain the good safety performance.

“There seems to be a strong understanding among managements in these companies of the importance of safety as a way to control costs,” he notes. “This isn’t always the case in other industries. In trucking and construction, for example, there are a lot of small operators, but they don’t seem to be as safety conscious as the people in the propane industry.”

Percentages of Claim Costs for Accident Years 1998 through 2002, by Job Group
Percentages of Claim Costs for Accident Years 1998 through 2002, by Job Group

The study details the distribution of claims costs by workers compensation benefit type, injury group, geographic region, age of the insured worker, cause of the accident, job group and job tenure. It provides benchmarks on the incidents and costs of workplace injuries and illnesses.

Among the study findings:

  • The average payments varied from year to year, with a low of $2,400 per claim in 2002 to a high of $4,800 in 2000.
  • The average costs for 2002 claims were almost 25 percent higher than the average costs for 2001, an important finding because the average cost at the 12-month evaluation is often a leading indicator in the cost trends for a particular accident year.
  • About 20 percent of all workplace injuries result in compensable lost worktime. This finding is favorable to the propane industry, especially in light of the proportion of physically demanding work. Compensable lost worktime claims account for a larger proportion of workplace injuries in other industries.
  • About 45 percent of the claims and costs were for bobtail drivers, with field technicians in second place at about 30 percent. The remaining 25 percent were spread among transport drivers, salespeople, office/administration workers, site workers, field managers, etc.
  • Based on the number of claims, the most common injuries were cuts/lacerations (22 percent), non-back strains/sprains (20 percent) and back injuries (18 percent). Remaining injuries involved fractures, knee disorders, burns, major trauma, face injuries and others.
  • The most costly injuries were back injuries (32 percent), major trauma (20 percent) and non-back strains/sprains (15 percent). Major trauma was defined as injuries involving multiple body parts, including burns, contusions and strains.
  • The most common causes of injuries were strain (27 percent), falls/slips (18 percent) and miscellaneous (15 percent).
  • The most costly causes of injuries were strains (33 percent), falls/slips (30 percent) and miscellaneous (15 percent).
  • Older workers accounted for fewer injuries. However, as might be expected, the costs of their injuries were generally higher. For example, workers under 30 accounted for 17 percent of claims, but only 5 percent of costs, while those between 51 and 60 accounted for 18 percent of claims and 25 percent of costs.
  • As expected, claim costs were highest in states with the most liberal workers’ compensation programs, such as Florida and California.
  • About one-third of compensable lost worktime claims resulted in permanent disability. The significance of these permanent disabilities is that workplace injuries resulting in permanent disability account for fewer than 10 percent of all claims, but the claims account for more than 70 percent of total claim costs.

“Special attention should be given to lost worktime claims where the worker is away from the job for more than one week, the report notes.

“While only one in three injuries fall into this group, those that become permanent disabilities are the most costly claims. Often several weeks, if not months, pass before it is determined that a severely injured worker has suffered a permanent disability.

Distribution of Claims for Accident Years 1998 through 2002, by Proximate Cause of Accident
Distribution of Claims for Accident Years 1998 through 2002, by Proximate Cause of Accident

“During the period that the permanent disability determination is being made, the injured worker will be receiving temporary total income replacement benefits. Closer claim supervision may bring about a quicker permanent disability determination that reduces a portion of the temporary disability period.”

Copies of the study are available by contacting Stuart Flatow at 202-452-8975 or stuart.flatow@propanecouncil.org.

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