Using workers’ compensation claims data to characterize occupational injuries in the biofuels industry

Highlights

• Injuries in biofuel facilities investigated using worker’s compensation data.

• Data obtained from a leading insurance company based in the U.S.

• Age and Tenure of employee significant factors determining the claim amount.

• Claim type, body part, nature, and cause of injury are also significant factors.

• Strain, fractures, slips, falls, trips, show strong relationship with claim amount.

Abstract

Biofuels production is a fast growing and emerging industry. Occupational injuries are a serious problem due to their human, financial and social costs, yet little research has been published on injuries in the biofuels industry. Learning from past injuries are essential for preventing future occurrences, but the lack of injury information hinders this effort in the biofuels industry. The present study addresses this knowledge gap by utilizing data from over 900 workers’ compensation claims reported from 2008 to 2016 by ethanol and biodiesel facilities in the U.S. to characterize injury costs and severity. The total amount paid for each claim was used as a measure of injury severity, and the effects of age, tenure, type of claim, body part injured, nature and, cause of injury on the cost of work-related injuries were investigated. Contingency tables were used to classify the variable pairs, chi-square test and chi-square residuals were employed to evaluate the relation between the variable pairs and identify the at-risk groups. Results showed age, tenure of employee, type of claim, body part injured, nature of injury and, cause of injury have a significant influence in determining the claim amount. Age group 46–50, tenure group 1–2 years, strain and fractures injuries, slips, falls, or trips and, injuries to lower extremities were some of the at-risk groups identified. The findings from the study will assist biofuel producers to develop precisely targeted safety interventions that are effective in preventing worker injuries and also mitigating the financial and social losses from occupational injuries.

Introduction

The production of biofuels such as ethanol and biodiesel is a fast-growing business witnessing constant changes and improvements to its production processes (Dias et al., 2012, Gubicza et al., 2016, Moreno and Cozzani, 2015, Priambodo et al., 2015, Scovronick and Wilkinson, 2014). The manufacturing of biofuels involves processing, handling, and storing of grains such as corn, sorghum, wheat, and oilseeds as well as hazardous chemicals such as ammonia and sulfuric acid. The combination of grain handling and chemical hazards present a dangerous work environment (OSHA, 2016a, OSHA, 2016b). Handling and storing flammable liquids, working with heavy equipment, dealing with combustible dust and confined spaces, grain engulfment, working at heights, slips, falls, and trips are just some of the occupational safety hazards in biofuels production (OSHA, 2016b).

The presence of occupational safety hazards is a precursor for incidents and injuries in the workplace (Bevilacqua et al., 2012, Khanzode et al., 2012, Vredenburgh, 2002). Data gathered from trade journals, Occupational Safety and Health Administration (OSHA) records, Environmental Protection Agency (EPA) reports, academic, and newspaper articles suggest an increase in frequency of safety incidents, which in turn has resulted in higher levels of injuries and fatalities in biofuels producing facilities (Calvo Olivares et al., 2014, Calvo Olivares et al., 2015, Rivera et al., 2015). Despite the increased risk of worker injuries, very little scientific work has explored health and safety in the biofuels industry (Harper et al., 2008, Rivera et al., 2015, Riviere and Marlair, 2010).

Work-related injuries not only affect the injured worker and their family adversely but also impact the company in the form of increased medical, liability and insurance premium costs (Hajakbari and Minaei-Bidgoli, 2014). In addition to direct costs such as medical and indemnity payments, there are several indirect costs associated with workplace injuries. These indirect costs include equipment damage, equipment repair, incident investigation time, the cost of hiring and training an injured worker’s replacement, loss of reputation, loss of employee morale, loss of confidence and negative media attention (Gavious et al., 2009, Griend, 2011, Manuele, 2013). According to Bird et al. (1996), for every dollar in direct costs, there are $5 to $50 in property damage costs and $1 to $3 in other indirect costs associated with work-related injuries. Furthermore, Manuele (2013) suggested that the ratio of direct to indirect costs used by safety practitioners to estimate total injury costs is 1:4.

The average direct cost estimate for a work-related injury in the biofuels industry is $7150 (Griend, 2011). Using the 1:4 ratio, the estimate for indirect costs per injury equals approximately $28,600. Since biofuels production is a highly cost-sensitive business (Festel, 2008, Haarlemmer et al., 2014), such high injury costs represent a threat to the profitability of a biofuels operation. Hence, an improved understanding of injuries and fatalities in the biofuels industry is necessary to prevent work-related injury risks before they occur.

Learning from past safety events is a critical component of improving worker safety and preventing work-related injuries (Kletz, 2008, Pasman, 2009). Examining injuries and identifying associated causes provides valuable information that can help prevent recurrence of similar injuries (Ferjencik and Jalovy, 2010). Analysis of incident and injury data can also help identify at-risk groups (Anderson, 2009, Pirdavani et al., 2010), so targeted injury prevention strategies can be developed, thus improving the return on safety investments (Abdolhamidzadeh et al., 2011, Khanzode et al., 2011, Kim et al., 2012). In one example, Chettouh et al. (2016) examined incidents in an oil refinery and uncovered evidence that employees lacked safety awareness. One result of the research was suggested improvements to the hiring process and increased investments in safety education and professional competency. Likewise, Marhavilas et al. (2011) analyzed occupational injury data for an electric power provider and found that workers under the age of 45 years had the greatest risk of fractures, bruises and sprains injuries, caused due to slips, falls, and impacts with stationary objects.

Obtaining detailed historical records of safety events for data analysis is a challenge in the process industry (Meel et al., 2007, Pasman, 2009). In the U.S., organizations such as Occupational Safety and Health Administration, U.S Environmental Protection Agency, National Fire Protection Association, and the National Response Center track and collect data on industrial incidents (Keren, 2010). However, these organizations differ in their interests, procedures, and scope of data collection, and it is difficult to use their data for studying past incidents in a specific industry (Morrison et al., 2011, Tauseef et al., 2011). While some investigation has resulted in the development of an incident database for the biofuels industry (Calvo Olivares et al., 2014, Calvo Olivares et al., 2015), this database does not contain detailed historical records of work-related injuries.

The majority of employers in the U.S, including those in the biofuels industry, purchase workers’ compensation insurance to provide medical and indemnity benefits to an employee who suffers a work-related injury (Sengupta et al., 2012). For an employer, workers’ compensation insurance covers direct costs of a work-related injury, including medical expenses and wage replacement incurred by the injured employee (Bird et al., 1996, Griend, 2011, Manuele, 2013). Workers’ compensation data contains information that can contribute to injury prevention activities (Utterback et al., 2012). Several researchers have used workers’ compensation claims data to study occupational injuries in various industries (Coleman and Kerkering, 2007, Frank Neuhauser et al., 2013, Sears et al., 2013, Smith et al., 2012). To date, little research has explored the application of workers’ compensation claims data to characterize occupational injuries in the biofuels industry.

This study examined occupational injuries in biofuel production facilities using workers’ compensation claims data provided by a leading Midwest-based insurance company. The purpose of this study was to characterize the direct cost of occupational injury using the information obtained from the workers’ compensation claims including variables such as age, tenure of employee, and nature, cause and type of injury. A secondary purpose of the study was to identify and classify at-risk groups within the biofuels production industry.