Revenue Required to Offset the Loss from Onsite Shoulder Injuries

posted on: Wednesday October 24, 2012

Manual material handlers are amongst three groups who report the most work-related injuries and musculoskeletal disorders (MSDs) each year. These injuries and MSDs have a significant impact on finances and morale. In a previous article, we examined the employer’s cost for the most common work-related injury – injury to the back. In this article, we will look at where the most severe MSD cases occur – the shoulder. Damage to the rotator cuff, like the back, is also closely linked with activities that are considered the top 5 causes of injury in the workplace. Shoulder injuries require longer recovery time, more frequently result in permanent disability, and are awarded more than most other injuries in a settlement.

The shoulder joint is the most moveable joint in the body. Damage here usually occurs to one or more of the four rotator cuff muscles or their attachments. The shoulders are used repeatedly for so many different activities that even a small loss of function can feel like a big disability. Nearly all job tasks require use of the shoulder, but the most likely to result in injury are: pushing and pulling, reaching, lifting, carrying, and any activity that is repetitive.

These actions make the shoulder vulnerable to general injury and MSDs, both of which can change a person’s life forever.  Injuries to this area include torn muscles, strains, sprains, impingements, dislocations, and fractures. These injuries require rest and days away from work amongst other treatments. MSDs in the shoulder, which can develop from an injury or many job tasks, most commonly include bursitis, tendonitis, frozen shoulder, and arthritis. The median recovery time for shoulder injuries and MSDs is 21 days. If the shoulder joint is left more susceptible to injury or loses function, the client may not be physically capable of the same job duties as he was before the injury. Treatment plans for MSDs will more likely require manual therapy than will a general injury. In addition to medical bills, a person may need physical therapy, chiropractic adjustments, massage therapy, stabilizing devices, help with personal care, and even surgery.

Given the great range of cases, it is difficult to obtain an average figure for workers’ compensation payouts or settlement amounts. Depending on the severity, one can find settlements for everything from $4,000 to $100,000. Using calculations from a workers’ compensation website, we can see the (very) rough estimate of a couple of scenarios. In one case, hypothesizing that a worker makes $35,000 a year, sustained a shoulder injury that rates a 6 out of 10 in severity, missed 21 days, and had 5 days of paid vacation, the estimated workers’ compensation payout is $21,325. If that same worker rated his injury severity at a 5, the rough tally comes to $8,000. An employee making $40,000 a year with the same parameters as the first example is estimated to receive $24,500. With a rating a 5 of 10, he may receive $9,200. One can see that the line between moderate and severe is a big one.

To tally the necessary revenue to cover the loss from a shoulder injury, we will plug in some numbers to get some idea of how financially devastating this can be. We can run the first 2 scenarios through the injury cost calculator with a 10% profit margin. We will run the second 2 scenarios through at a 20% profit margin. For a direct cost of $8,000, the total cost is $40,000, and the revenue required to offset the loss is $400,000. Where the direct cost was $21,325, the total cost is $106,625, and the required revenue is $1,066,250. For a company with a 20% profit margin and a direct cost of $9,200, we get a total cost of $46,000, and $230,000 in required revenue. A more severe injury totaling $24,500 in direct cost yields a total cost of $122,500 and $612,500 in required revenue.

The actual numbers will obviously depend on each situation and company’s profit margin, but these realistic scenarios result in some pretty big numbers. When employers are looking to make their sites safer, they are presented with a huge range of options. They may debate everything from forming a committee to redesigning a workstation to investing in equipment.  It can be difficult for employers to gauge the total value of these ergonomic implementations. Equipment can cost tens of thousands of dollars (if not more), and it takes about 5 years to see a return on that. However, if an employer can see the potential for injury and value equipment investment as saving hundreds of thousands of dollars, the price tag doesn’t look so big.

Ideally, of course, employers can find a solid, economical solution to prevent injuries. A popular item that businesses have to prevent overexertion injuries is the motorized cart. These take over a lot of pushing, pulling, carrying, and even lifting tasks. However, the older versions are not MSD-proof. Employees still have to stop or start the cart on their own, maneuver it awkwardly, or repeatedly use a cart with handles that are not at the right height. A much improved version of this is a Load Mover. This equipment is durable, powerful, and lasts all day on one charge. It is completely self-propelled, so employees don’t need to push or pull. Additionally, they maneuver easily and can move 1,000 to 50,000 pounds. Load Movers can eliminate pushing, pulling, lifting, carrying, and reaching tasks that other motorized and/or wheeled carts cannot. For more information, please visit our power mover page.