Cost Estimation of OHS Cases: Prevalence & Incidence Approaches - Essay Sample

Introduction

Cost estimation for health and safety provided by the studies begin with a list of injury and illness at the workplace. The Occupational Safety and Health (OHS) cases can be retrieved from the literature that exists, statistics, and survey, especially from companies contracted to offer compensation. At an advanced level, the studies suggest the use of prevalence and incidence approaches to approximate the number of cases. The former method lists all the new evidence in the year, while the latter method records all the claims within the year. However, the incidence approach provides a better estimation that can be applied in subsequent years. Once the number of cases is developed, valuation takes place as the next step. The process involves attaching a monetary value to the listed incidences of OHS

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The valuation list of injury and illness in OHS is then categorized into five types of cost. Production cost deals with cases that influence the output. Healthcare cost covers medical bills. Quality of life depends on employee provision to avoid a particular injury or illness at the workplace. The other two prices include administrative evident through the payment of social security and insurance cost incurred during the process of compensation. All expenses were analyzed from the stakeholder's point of view to prevent double-counting in cost estimation. The stakeholders comprise workers and their families, society, organization, and government.

In the cost of production, the human capital method is employed for the workers. Further, the process suggests the integration of no-compensated activities of the household. The cases are valued by the time lost during leave applied because of poor or non- OHS with the wage rate. For organizations, the friction method is used, which incorporates the value lost when an employee is incapacitated by non- OHS of an organization and needs to be replaced. The additional costs of selection and recruitment as well as training are included. The government uses the social security fund, and since it is a contribution, the cost is not included in valuation from a society perspective. In society, the price is valued in terms of output loss. The assessment of healthcare cost is straight forward as it is picked from the medical bills. The cost of quality of life is measured by the willingness of workers to pay to prevent a particular health income. Opportunity technique is used to allocate monetary value by administration and insurance company. Therefore, the total estimated cost for poor and non- OHS is equal to the sum of all elements in production cost, healthcare cost, quality of life cost and administration and insurance cost

Limitations Identified By Authors in Costs Determination Method

The author discovered several constraints during the studies. When the employees went for long run sick leave and were expected to return, the organizations did not capture the time lost between the start of the financial year and the return of the employee. The data of sick leave revealed that employers only recorded the fatal illness per individual per year. Minor diseases that resulted from bad OSH and past injuries were not accounted for in the literature views. In the survey of the labor force, it used an inappropriate approach of accounting to estimate the cost of leaves as a result of health and safety measures imposed by the organization. The survey emphasized people were counted instead of cases, which led to under approximation of time lost since individuals experienced more incidents in a year. For the employees who decided not to return to the workplace, the injury or diseases were not primarily the new case, and other withdrawals depended on the previous condition of working.

Limitations In Cost Determination and Factors To Be Included In Future Studies

In the identification of the number of injuries and illness, the methods of cost estimation based on the literature that existed, surveys, and statistics. For example, others applied the risk of population attribution, which is based on probabilities to determine the number and used over various cases. The process led to the underestimation of the number of claims and costs. The study finds that the existing sources of estimation did not capture the diseases of the long tenancy as well as minor incidences that resulted in unnoticed short absenteeism at the workplace. Another limitation posed by the authors was the type of cost used in the valuation of cases in OHS. The studies looked at only five types of expenses. However, injury and illness cases reveal different classification of costs, not limited to what is provided by the reviews. Another limitation is a sampling. The size of the sample should represent the actual characteristics of the population. Therefore, the large the sample size, the lower the sampling error, and the higher the accuracy. When the authors were sampling their study, they did not consider the size of the population. They only picked 9 out of 475 presented reviews, which is below half of the cases (Weerd, Tierney, Duuren-Stuurman & Bertranou, 2014).

The authors estimated the cost of injury and illness resulting from health and safety using limited types of loss. Like for stakeholders, they would have exhaustively classified and valued the number of cases from all costs that existed in the study. During valuation, the authors did not take into account the time value of many. They used the pre-existing incidences at the historical cost to allocate monetary value to the future events of the same nature. Given the volatility of the estimates, costs sensitivity analysis should be carried on key factors and avoid placing much of the weight on figures.

Reference

Weerd, M., Tierney, R., Duuren-Stuurman, B., & Bertranou, E. (2014). Estimating the cost of accidents and ill health at work: A review of methodologies. Luxembourg. European Agency for Safety and Health at Work.