Transcript Hidden_Costs.ppt

MSHA
“Spring Thaw Workshop”
Hidden Cost of Accidents
Monetary and/or Emotional
Provided By: Paul McGehee, Oldcastle Materials SW Group
2/25/2003
Real and Hidden Costs
What does an accident really cost?
?
Real and Hidden Costs
What is the Medium-of exchange? What
are costs based on?
Quality of Life
Health and Welfare
$$$$$
Direct Costs
Typically Insured Costs
Medical Expenses
Wage Compensation (indemnity)
Legal Defense
Hidden Costs
Uninsured Amounts
Paid by the employer
3 to 5 times greater than direct costs
Direct Costs
$
Hidden Costs
$$$$$
Hidden Costs
Costs Of Lost Wages
Paid To Injured
Employee
Includes medical
treatment and time
away from work not
covered by insurance
Sick leave
Doctors visits
Hidden Costs
Costs paid to other
workers not injured
Includes those
employees that stopped
work to watch, talk
about or to assist
injured.
Those employees
whose job is dependent
on injured worker’s
products or tasks to
accomplish their work
Hidden Costs
Costs of damage to
material, property or
equipment
Repairs to any
equipment or property
damaged in the
accident
Hidden Costs
Costs of overtime
necessitated by the
accident
Including costs to make
up for lost production,
additional supervision,
and additional operating
expenses
Hidden Costs
Additional wages
paid to supervision
Involve caring for the
injured person
Transporting injured to
medical facility
Investigating accident
Getting operation
organized again
Hidden Costs
Resuming to normal
activities
Instructing, training and
repositioning employees
May require hiring a
replacement employee
with all costs of hiring a
new employee
Diminished productivity
Hidden Costs
Managerial or
clerical personnel
processing claims,
forms and any
related paper work
Processing claims and
related paper work
Tending telephone calls
and communications
related to incident
Conducting interviews
and investigations
Attending Hearings
Uncovered legal costs
Hidden Costs
Wages due to
decreased
productivity
After employee returns
to work, capacity is
diminished because of
restricted movement
Employee is nervous
and less confident
Employee spends time
discussing incident with
other employees
Hidden Costs
Reduced Competitive Position Caused by
delays
Increased operating costs
Rework time on damaged products
Increased cost of insurance (Mod Rate)
Higher Labor Rate
Unfavorable publicity
Civil penalties, fines, legal fees and time
involvement for violations
Intangible Factors
Family Stress
Mental and Emotional Strain
Loss of Ability to Make a Living
Danger Signs!
Indicators of Larger Problems
Near misses
Minor incidents
Serious Incidents
Property damage
Product damage
Equipment damage
Employee injuries
Danger Signs!
Production is not at optimum
Profitability is reduced
Employee moral is diminished
Public image is damaged
Getting set up for the “big one”
Dollars In Whose Pockets???
Revenues Needed To Cover Costs
Co s t o f
C la im (s )
2 % P ro fit
M a rg in
5 % P ro fit
M a rg in
1 0 % P ro fit
M a rg in
$ 5 ,0 0 0
$ 2 5 0 ,0 0 0
$ 1 0 0 ,0 0 0
$ 5 0 ,0 0 0
$ 1 0 0 ,0 0 0
$ 5 ,0 0 0 ,0 0 0
$ 2 ,0 0 0 ,0 0 0
$ 1 ,0 0 0 ,0 0 0
$ 5 0 0 ,0 0 0
$ 2 5 ,0 0 0 ,0 0 0
$ 1 0 ,0 0 0 ,0 0 0
$ 5 ,0 0 0 ,0 0 0
$ 1 ,2 5 0 ,0 0 0
$ 6 2 ,5 0 0 ,0 0 0
$ 2 5 ,0 0 0 ,0 0 0
$ 1 2 ,5 0 0 ,0 0 0
99.9% Good Enough?
 2 Unsafe Landings At O’Hare Airport Each Day
 16,000 Lost Pieces Of Mail Per Hour
 20,000 Incorrect Drug Prescriptions Per Year
 50 Newborn Babies Dropped At Birth Each Day
 32,000 Missed Heartbeats Per Person Each Year
 2 M Books In The Next Year Will Have The Wrong Cover
 900,000 Credit Cards Will Have Incorrect Information
Inexperience =
Accidents
20%
80%
Employees Who
Have Less Than 12
Months Experience
at a Different or
New Task, Account
For 80% of ALL
Accidents
While You Speak
CLASS
SEVERITY
ONE EVERY
HOUR DAY
ALL
DEATHS
INJURIES
6 MINUTES
2 SECONDS
11
2,200
257
1,800 93,800
52,900 371,200 19,300,000
5
260
118
6,300
MOTOR-VEHICLE
DEATHS
12 MINUTES
INJURIES
15 SECONDS
WORK
DEATHS
INJURIES
105 MINUTES 1
9 SECONDS
430
WEEK YEAR TOTAL
830
43,200
44,200 2,300,000
14
100
5,100
10,400 73,100 3,800,000
Guard Against These
Traps
Time Pressure
Vague Guidance
After Wake-up or Meal
First Time Evolution
Over-confidence
Distractive Environment
High Work Load/Stress
First Day After Time Off
Accident Investigation
Tips
 1. Secure 2.Treat 3. Investigate!
 Interview Witnesses
 Document
 Call In the Claim ASAP
 Don’t Wait!
 Facts Not Fault Finding
 Don’t Interrupt
 “In Their Words”
Accident Investigation Tips
1
Fatality
 What Accidents
10
Serious
30
Minor
600
Near
Misses
Do You
Investigate?
 Root AND Primary Causes
Identified
 Corrective Actions For Each
 Committee Should Review
 What Are You Doing Different
Now To Prevent Recurrence?