Estimating the societal costs of work injuries and illnesses in five EU countries

New economic burden method developed by IWH used to estimate the value of OHS to workers, employers, society at large

Published: January 5, 2020

Having a clear picture of occupational injury and illness costs is crucial for policy-makers, employers, labour, researchers and other stakeholders in the occupational health and safety field. Such cost estimates can help set priorities when allocating resources for prevention efforts. They are also key to tracking the effectiveness of prevention efforts over time.

In the summer of 2019, the European Agency for Safety and Health at Work (EU-OSHA) published an analysis of the economic burden of work injuries and illnesses in five European Union (EU) countries—Finland, Germany, the Netherlands, Italy and Poland. It was conducted by a team of researchers from the Institute for Work & Health (IWH), the Netherlands Organisation for Applied Scientific Research (TNO) and Valdani Vicari & Associati (based in Italy). Leading the project for IWH was Senior Scientist Dr. Emile Tompa, who worked with IWH post-doctoral fellow Amir Mofidi to develop and apply a new method for calculating such estimates.

The method, based on what’s called a “bottom up” approach, was developed by Tompa and recently used in a research project on the economic burden of lung cancer and mesothelioma from work-related asbestos exposures in Canada. It’s an approach that starts with an estimate of the incidence—the number of cases—of work injuries, illnesses and fatalities. Health care costs (direct costs), productivity costs (indirect costs) and health-related quality of life costs (intangible costs) associated with each case are then calculated to arrive at the overall economic burden.

Using this method, Tompa’s team found that the total costs of work injuries and illnesses in 2015 ranged from 6.0 billion euros (Finland) to 107.1 billion euros (Germany). These costs ranged from 2.9 per cent (Finland) to 10.2 per cent (Poland) of a country’s gross domestic product (GDP). And according to a report published by EU-OSHA last July, The value of occupational safety and health and the societal costs of work-related injuries and diseases, the costs per case were highest in The Netherlands (at 73,410 euros) and lowest in Poland (37,860 euros). A journal article on this research has been submitted for peer review.

Having an estimate of the economic burden of occupational injuries and illnesses is the first step in understanding the magnitude of the problem. In addition, having country-level data to compare countries against one another can be valuable in many ways, says Tompa. It lets policy-makers of these countries ask, ‘Are we doing better or worse than our peers in the EU?’ ‘What are they doing differently?’ ‘What are their legislations, policies, programs and practices that are leading to better outcomes and lower costs?’

Information on the costs per case is also useful when calculating the cost-effectiveness of prevention efforts, adds Tompa, who shared his findings at an IWH Speaker Series presentation in November 2019. It helps stakeholders understand how much investment they can make in prevention and still realize a net benefit. It also helps them evaluate the economic benefits of addressing an issue—as well as the costs of not doing so.

Two approaches used

With a few exceptions, analyses of the economic burden of work injuries and illnesses to date have tended to be conducted on a smaller scale. They have focused on particular health conditions or specific sectors; country-level analyses are complex to carry out and have rarely been done, says Tompa.

The team used two burden estimate approaches—a more commonly used top down approach that draws on country-level aggregate data as its starting point, and the bottom up approach, which begins with granular data—i.e. the number of new cases in a given year. 

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One advantage of the bottom-up approach is that it allowed Tompa’s team to consider consequences beyond an individual’s economic output. In the bottom-up approach that we’ve developed, we aimed for a more holistic approach to estimating the impact of work injuries and illnesses in order to better reflect the total costs to society. We weren’t just looking exclusively at productivity, Tompa says.

Three broad cost categories are used in the bottom-up method (see sidebar below). They include some novel or difficult-to-estimate items, such as the loss of ability to contribute to domestic activities, informal caregiving of family members, and the loss of health-related quality of life. Productivity costs include those associated with presenteeism, absenteeism, reduced work ability from permanent impairment and the costs to employers to replace a worker on leave due to injury or illness.

As part of the study, the team broke down the share of costs borne by three different stakeholders—workers and their families, employers and society. This required identifying the intricacies of each country’s social security system to determine who pays for what. Tompa’s team made some high-level estimates of the costs borne by each of the three stakeholder groups. It found workers bear the largest part of the costs.

The methodologies used in this project are now being applied in other European countries, says Tompa, who notes that little effort has been made to use uniform methods in previous economic burden analyses. There are benefits to using standardized methodologies. That was part of the contribution of our work with the EU—to develop a methodology that the EU can use to do comparative work across all countries in the region and over time, he adds.