Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924002659690 COST OF HEALTH SERVICE IN INDUSTRY Research Report Number 37 May, 1921 National Industrial Conference Board *'^ 10 East 39th Street New York Copyright 1921 National Industrial Conference Board CONTENTS PAGE Introduction 1 I. Scope of Present Investigation 3 Previous Studies 3 Present Investigation 4 Conclusions , II. Cost of Health Service 6 Variations due to Special Conditions 6 Distribution of Costs 9 Cost by Size of Plant 10 III. Staff Organization 11 Physicians 11 Dentists 13 Nurses 13 Other Employees 14 Administrative Relations '. 15 IV. Equipment 16 Plant Hospitals 16 Plant Dispensaries 16 First-Aid Outfits 16 V. Scope of Work of Industrial Medical Depart- ments 18 New Injuries and Redressings 18 Medical Cases 20 Physical Examinations 20 Collateral Activities 20 Appendix .• 24 Cost of Health Service in Industry INTRODUCTION Health service in industry, as at present conducted, is essen- tially a product of the past decade. While some well-organized and properly functioning medical departments were maintained in industry prior to this time, the most substantial advance along these lines has been made since 1910. In fact, it required the war, with its increased demand for strength and skill, to reveal to industry the possibilities for good that lay in the active participation of the medical practitioner in the industrial organization. Formerly, the physician and his work were not recognized as integral parts of the economic administration of industrial plants. His function was to repair physical damage to the workers with the smallest cost to the employer, and to return the employee to his work with the least delay. If other func- tions were assumed by the medical practitioner in industry they were usually determined by considerations of benevolence and charity. Today we find that many medical departments in industry are operated along broad, sound business lines, and their activities are extending as they prove their beneficial influence upon production and health of workers. This influence is measured in terms of decreased absence from work, lessened labor turnover and increased productive efficiency, all due in large measure to improvement in the general health and con- , tentment of the workers. The value of health service in industry has been generally recognized, and a large number of employers have established it in their plants with gratifying results. An even larger number of employers appreciate the benefits to be derived from such service, but many have felt and still feel that the cost of health supervision for their workers would entail a heavy expense which they could ill afford to carry. Vague and often ex- 1 aggerated opinions are at times expressed regarding the amount of this expense. Many of the benefits obtainable from the work of medical departments in industry, aside from the care and treatment of injured or sick persons, can be demonstrated only by the active participation of such departments in the work of the plant. As these collateral activities, while diffi- cult to measure in direct monetary return have, nevertheless, been shown to be of great value to the organization in which they function, the cost of health supervision should not be considered exclusively from the standpoint of care of the sick and treatment of the injured. SCOPE OF PRESENT INVESTIGATION Previous Studies Several efforts have been made to find an adequate answer to the question of what industrial health service was costing. One of these was a study among 41 plants, based upon the experience of the year 1915. The investigation covered 223,416 workers and showed an average cost of effective health service of only jSl.88 per person per year.' It was realized that this first study was largely pioneer work and that some of the replies subjnitted were based on more or less general estimates. Another investigation ' was therefore made, based upon experience of the year 1916 and embracing 99 establishments with 495,544 employees. This study showed that it cost an average of $2.50 per year per person to look after the health of these workers; but after certain allowances were made for unusual service rendered, it was found that the cost was J2.21 per person. A later estimate ' states: At the present time we know of two establishments where the cost is between $6 and $7 per employee .... It is probable that 55 per employee more nearly represents the average total cost of well-administered industrial medicine at the present time. The latest published study of the cost of health service in in- dustry is that based on a survey of the industrial medical field in Cleveland, Ohio, in 1920.' It says: A number of firms stated the cost to be in the neighborhood of $5 a year per employee, but this amount, it is interesting to note, is relatively constant, independent of the size of the plants, nature of products, types of workers or the extent and quality of service rendered. In one large establishment the cost is $10.92 a year per employee and in another $11 .23. Such amounts are probably not excessive at the present time if the service secured is comprehensive and of a high order. lAlexander, M. W. The Iron Age, October 19, 1916. ^Alexander, M. W. Cost of Health Supervision in Industry, August, 1917. SDrinker and Drinker. Journal of Industrial Hygiene, June, 1920. Vol. 2, p. 5o. *Wright, Wade. Cleveland Hospital and Health Survey, 1920, Part 7. 3 Still another observer asserts ' that the work of the medical department in industry, instead of being a liability, is an asset of considerable value in partially eliminating the cost of hiring new workers, by proper placement of workers in their jobs, by reducing the amount of workmen's compensation cost, and by other means. In any event, these studies indicate that the cost of health supervision of industrial workers has not proved excessive, and it is significant that so much service as is represented in the average medical department in industry can be supplied at such moderate cost. Present Investigation In order to ascertain the present cost of industrial health service among a large and representative group of industries, and to revise previous estimates in the light of present practices, the National Industrial Conference Board undertook a broad study of the cost of health supervision and of closely related problems. Data upon which previous estimates were based seemed, in a way, too restricted for general application. While they reflected the situation in the localities covered, their application to general industrial conditions did not seem war- ranted unless more extensive investigations were made. The results recorded in this report are largely from plants with organized medical departments, but cover also a few plants without such departments where adequate records were kept bearing on the questions herein discussed. The information summarized in this report was gathered largely by means of questionnaires submitted to manufacturing plants in representative industrial communities throughout the country. Of the replies received, 207 contained complete information that could be used in the proposed analysis. One hundred and four of the replies were based on records of 1919, and 99 on records for 1920. Four firms used figures for 1918. In some cases periods for less than one year were reported upon, in which case the results have been calculated to a yearly basis. Throughout this report all figures given are on a yearly basis, unless otherwise stated. JHowe, G. L. Factory, March i, 1920. p. 618. 4 In the plants reporting, a total of 764,827 workers were em- ployed, of whom 631,582 were males and 133,245 were females. The number of workers per plant varied from 129 to 39,960. Two or more plants in each of 23 industries submitted reports, while eight other industries are represented by one plant each. Detailed information on each plant included in this report is given by size of establishment in the Appendix in Tables IX to XIV inclusive. These 207 plants are located in 24 states. Forty-nine are in the New England states, 78 in the Middle Atlantic group, 68 in the Central group, 7 in the South Atlantic region and 5 in Western states. In regard to the year when health supervision facilities were introduced, the information reveals that the earliest recorded effort was made in 1879. Only nine firms reporting had health s'upervision previous to 1900, while 164, or 86.7% established this service in 1910 or later. The largest number introduced it in 1916, and the next largest number in 1919. It is thus seen that the incorporation of health supervision departments in industry has taken place largely within the past decade. Conclusions While this study shows that the cost of health service per employee has substantially doubled since the estimates of 1916 were made public, this increase has not been out of propor- tion to increased costs in general. The average cost, as shown by this investigation, ranges from $1.84 per employee per year in the tobacco industry to |24.40 in the mining industry, averaging, for all the industries reporting, $4.43 per employee per year. With the increased cost of health supervision during the past four years, however, has gone a much greater increase in scope of work and service rendered. While medical service was introduced primarily to care for industrial accidents oc- curring within the plant, its work today, as shown by this investigation, reaches into practically all departments and into many activities of the industrial organization, and in certain instances even into the home and community life of the management and workers. Thus, when the various activities pursued and services rendered by the medical department are considered, it becomes plain that a large amount of constructive service is given at a very moderate cost. 5 II COST OF HEALTH SUPERVISION The results of the investigation of the cost of health service in industry are presented in Table I and the diagram below. All industries represented by two or more firms are herein listed separately. It is realized that in cases where the number of firms or number of employees reporting in a given industry is small, the cost figures here given should not be taken as illus- trative of the health supervision facilities and costs for the industry as a whole. These figures, however, give the con- ditions in the plants reporting, and to this extent are indicative for the industry. ' Variations Due to Special Conditions This investigation shows that the scope and cost of health supervision of industrial workers is greatly influenced by local environment. In some industrial centers much attention has been given to the provision of medical and nursing service in the plants, while in others health supervision is still in the early stages of development, little being done aside from com- plying with legal requirements. By reference to Table I it is seen that in certain industries the cost as reported is well above the average of |4.43 per worker. This is due in large measure to the hazardous nature of the processes carried on, which necessitate close and careful medical attention to safeguard the health of the worker. The cost in the boot and shoe industry is an exception to the foregoing statement, the higher cost here noted being due to the very complete health supervision provided by one large manufacturer for his employees and their families. The high cost in mining is explained by the fact that the mines reporting are situated in remote sections of the country where it is necessary for the management to supply medical and surgical care for families of workers as well as for the workers themselves. This necessity does not arise in the large majority of industrial establishments which are located in or 6 -Table I Industrial Medical Departments: Number of Workers and Annual Costs, by Industry (National Industrial Conference Board) Industry I" S XI »t- Number of Workers Male Female Total Total Cost S t", f. Abrasive Automobile Boot and Shoe Chemicals and Ex- plosives Clothing Electrical Apparatus . . . Food and Food Products Foundry Products Hat Manufacturing and Fur Dyeing Iron and Steel Leather Tanning and Finishing Metal Manufacturing.. . Mining Paper and Pulp Printing and Publishing Public Utilities Rubber Manufacturing. Shipbuilding Smelting and Refining. . Soap Textiles Tobacco Manufactures . Woodworking Miscellaneous 5 S 5 10 2 16 6 3 3 14 6 62 4 7 4 5 9 3 6 2 18 2 2 i 7,613 30,128 i 8,761 17,313 119 80,298 27,644 4,034 4,203 99,711 7,677 180,239 8,518 6,166 4,687 13,511 33,547 37,500 10,261 3,150 29,457 7,948 625 8,472 612 2,084 6,428 3,767 503 20,974 3,845 130 1,649 5,748 1,157 27,661 82 2,169 2,265 2,356 7,141 650 89 650 25,591 5,632 129 11,933 1 8,225 32,212 15,189. 21,080 622 101,272 31,489 4,164 5,852 105,459 8,834 207,900 8,600 8,335 6,952 15,867 40,688 38,150 10,350 3,800 55,048 13,580 754 20,405 $64,810 180,215 117,644 134,494 2,918 319,531 131,783 34,958 19,764 433,263 31,305 780,442 209,873 33,873 23,990 81,658 220,273 183,023 87,932 12,466 197,792 25,040 2,593 57,396 $7.88 5.60 7.75 6.38 4.70 3.15 4.18 8.40 3.38 4.10 3.54 3.75 24.40 4.06 3.45 5.15 5.41 4.80 8.41 3.28 3.59 1.84 3.44 2.81 Totals 207 631,582 133,245 764,827 $3,387,036 4.43 near communities where adequate hospital and medical facilities are available. The great variation in cost, ranging from $40.46 per employee in a metal mine, to $.48 per employee in a printing establish- ment, is also reflected in the wide variation in the amounts expended ( ,??r health supervision in plants of corresponding size in the same industry. Often a plant with a small number of workers will give a larger service than another with a much greater labor force. Thus two plants in the metal trades group report the same total cost of health supervision, although one employs 400, and the other 2250 workers. In the smaller 7 Industrial Medical Departments : Average Annual Cost per Employee, by Industry COST PER EMPLOYEE MINING SMELTING AND REFINING FOUNDRY PRODUCTS ^H 8.41 ■■ 8.40 ■i 7 Aft ABRASIVES BOOT AND SHOE CHEMICALS AND EXPLOSIVES H^^^H^^^^H^I 5.60 ■ '■■* 17.75 AUTOMOBILE H^^^^H^^^^^B 5.4] RUBBER MANUFACTURING PUBLIC UTILITIES ■I^^HH S'l^ SHIPBUILDING B^^HH 4.80 CLOTHING BHiH I'^o FOOD AND FOOD PRODUCTS ■I^H 4.18 IRON AND STEEL ^^B 4.10 PAPER AND PULP ■■■ 4.06 METAL PRODUCTS ^■1 3.7S TEXTILES IB 3.S9 LEATHER AND TANNING ■■ 3.54 PRINTING AND PUBLISHING ^: 3.4S WOODWORKING ■■ 3'M HAT MFG. AND FUR DYEING ■ 3.3S SOAP ■ 3.2S Fl FCTRICAL APPARATUS ■ 3.15 TOBACCO MANUFACTURES MISCELLANEOUS ^^^^■1 1.84 12.81 AVERAGE V/MW/M//MM/////////At.a W'y>*m plant there is a part-time physician, a part-time dentist, a trained nurse and a male assistant on the staff. The physician in this plant reports that all injuries, no matter how slight, must receive treatment in the dispensary. There were no infections, no compensation cases, and only seven days lost time due to injury in this plant during the first six months of 1920. In the larger plant, a trained nurse and a female assistant are employed. Their work is confined to first-aid treatment only, all injured or sick workers selecting their own physicians among general practitioners. Other striking contrasts of a similar nature will be found by a study of Tables IX to XIV in the Appendix. Distribution of Costs In those plants reporting costs so separated that the fact could be determined, it was found that salaries and wages consumed 69.5% of the total cost. The balance of the expense was charged to outside medical and hospital service rendered and to equipment and supplies. See Table II, below: Table II Distribution of Annual Cost of Health Supervision, BY Industry — 200 Establishments (National Industrial Conference Board) industry Abrasive Automobile Boot and Shoe Chemicals and Explosives Clothing Electrical Apparatus Food and Food Products. Foundry Products Hat Manufacturing and Fur Dyeing Iron and Steel Leather Tanning and Finishing Metal Manufacturing. . . . Mining Paper and Pulp Printing and Publishing. . Public Utilities Rubber Manufacturing. . . Shipbuilding Smelting and Refining.. . . Soap Textiles Tobacco Manufactures. . . Woodworking Miscellaneous Totals 4 4 5 10 2 16 6 3 3 14 6 61 4 7 4 5 9 2 6 2 16 2 2 7 Total Cost $52,306" 104,051* 117,644 134,494 2,918 319,531 131,783 34,958 19,764 433,263 31,305 762,442'^ 209,873 33,873 23,990 81,658 220,273 72,500> (Employees) O o Male Female a B 53 a cup ^ S £ B Below 500... 17 4,851 1,059 9 16 2 5 3 2 12 500-1000. . . . 35 20,453 5,483 6 22 9 2 3 1 33 7 7 7 1000-2000. . . 54 63,500 13,464 18 34 46 5 2 94 40 13 33 2000-5000. . . 59 146,319 32,874 60 39 10 7 17 127 20 22 102 5000-10,000.. 23 125,523 24,424 39 47 4 2 3 6 91 10 6 50 Over 10,000. . 19 270,936 55,941 118 24 175 1 86 10 14 2 22 22 48 158 508 33 113 19 69 153 Total. . . . 207 631,582 133,245 24) 357 14 Administrative Relations Analysis of the data presented shows that in 64 plants only is the responsbility for the medical work lodged in the general manager or other executive of equal or higher rank. In 44 plants the works manager is the official to whom the medical department is directly responsible, while in 95 establishments the person in charge of industrial relations, safety, employment or compensation, the office manager, or other subordinate official controls the work of the medical department. Four firms did not give the administrative relations of their medical departments, saying only that they were responsible to the medical director, but not revealing his status in the organization. 15 IV EQUIPMENT Plant Hospitals Eleven of the firms reporting stated that they had plant hospitals. Four of these firms were engaged in mining and smelting and were in rather isolated locations. The other firms were in or near large cities, but found it advisable to have their own hospital. Officials of a large hat factory stated that their hospital had been in operation for about 30 years. Other hospitals in this group had been operating from 2 to 41 years when this report was made. The number of beds in these hospi- tals varied from 5 to 121, the average being 41. Dispensaries All but eight of the firms reporting have dispensaries in the plant. Two of these firms were engaged in mining, and in these instances all cases are referred to the company hospital for treatment. The other plants without dispensaries are so organized that the employees work in small, widely-separated units, making it less practicable to maintain a central dispensary to serve any considerable number of the workers. Less than one-fourth of the plant dispensaries are reported as equipped to do other than minor surgical work. Even in plants with the best organized medical departments employing one ot more physicians on full time this same proportion holds true. Cases requiring the services of an operating surgeon are relatively few in industry, and when need for surgical treatment arises the injured persons can be taken to hospitals for treatment. FiRST-AiD Outfits The practice of allowing first-aid kits in the workrooms where employees can be given treatment by fellow workers, or can resort to self- treatment, is followed in less than half of the plants reporting. Ninety-four plants permit these outfits in workrooms, while 114 prohibit them. Several plants reporting 16 first-aid equipment in workrooms stated that it is intended for use only at night when the dispensary is closed, or that it is kept in certain departments in which there are peculiar hazards which make necessary immediate attention to injuries occurring therein. In the better-organized medical departments with full- time physicians proportionately fewer such outfits are permitted in workrooms than in plants where the physician is serving on a part-time basis or is only on call. Some of the plants reported opposition to the practice of permitting these outfits in work- rooms, saying that it tended to increase the number of cases of infection, and that infection cases had been reduced after the first-aid outfits had been withdrawn. 17 SCOPE OF WORK OF INDUSTRIAL MEDICAL DEPARTMENTS The results of this investigation indicate that the work of the medical department in industry is built around four main lines of activity: treatment of new injuries, redressing of injuries^ treatment of medical cases and physical examination. (See Table VII for details). There are also a number of collateral activities which are discussed on page 20. New Injuries and Redressings The total number of new injuries reported was 1,034,807 or 1.35 per worker per year. Slightly over two redressings (2.01) of each injury were made. This would indicate that the vast majority of injuries encountered in industrial work are relatively slight. This statement is further borne out by the fact that only 2.86% of the injuries sustained in the plants reporting were of such severity as to entitle the injured to compensation payments. These findings are at variance with opinions held in some quarters as to the frequency and severity of industrial accidents. The obvious explanation is this: Records of accidents in the files of industrial accident commissions are limited in large measure to those of such severity as to require the payment of compensation, the larger number of minor accidents not being recorded by such official bodies. Moreover, some firms do not keep records of accidents unless they are the cause of loss of a certain amount of work time. As noted elsewhere ', little of the health work carried on in industry is so recorded as to be of value for purposes of comparative study. Bearing in mind the necessary limitations on the use of figures here presented in drawing definite conclusions applicable to industry as a whole, it is seen that in analysing the reports by size of establishment, as given in Table VIII, the number of new injuries and medical cases per person decreases with an increase 1 National Industrial Conference Board. Research Report No. 34, p. 58. 18 >- ft h VI D Q !z; 1—4 E- iz; u ^? <«: o a. PQ "^ 3 o w w — « i< ii 00 u S £<2 ^i^2^C^ ^ ^ (N o c^ r^ o o ovr-^r-^ *j^^ O o> c>\ CTN « OO in ^ c^ 1-t CO ^ CS O vO CO c^ CM "-H »— 1 lO 2?'?^:r"^^^^cs^r^ovO'>**ONi-iio\£)^OThc\(Ncov' _ ss CO b ^ n S^ iS C" ^ '^ ^'St-^^ooo\-^G^t-^^c^'Sa\'^^ Tt co" 4^U cstNr^rJ o-H^ ^^t^corH^ o*o oooi ^ r^ O w S ^ ^ c^ ^ o. ^£" C9 .5 ^ 1-1^ '*"«** csi^ r^ ex) o\ cA \o u- S o^cs u^oco so*-Hi-i\o^^ r^oou-tco^^covotNr- o & cs cs cm' oi * oi ^r^^^^c>' c< co" O oococo '^so^ Thcsoo ^ ^ ^ ^ CT\ csi r-i r^ ,-. ^ 00 •o CS CS CO W-, ^^ o h <^ cm" J rocsvor^^esvooooooi\o»j-icouiTt^^woa\r-oov^o^oc r^ '^^SDint^00C0.^O\0C o 3 °°-'^^^^«*^ ^'*«^^«'^*J,'^''°„"^^«^«^«^«*^'^«n>*^,,'^ ^ OO 'S o vo -^ vo oo vo urTrCoo oC^-'i^co'uT'co'r^^r^oCcT'o' r- TjT (NO^^^ i-ics^ O ^ ^ oo n CO i ^ ^ CO O, Z cM^oo^-cO'^u-,o0^co^-1-HC^O\w^^o^OO^O»-^o^O^IC ■* ^ B \o o '^ r^ *n ON oo F-« \o r- ^ ^o ^ (N co ^ vo ^o »o \o ^ ©s CM^ ^ " CO 1 «5 & Ol 3 O Si •« 2 < S c < c/: c c 1 -a c bl e o U Z 1 t w t 3 t: S ■a s -a 1 3 •a > e 3 Hat Manufacturing and Fur Iron and Steel Leather Tanning and Finishi Metal Manufacturing. _ 1 Id a p bl c a bl c >l CM 1 2 3 CL, bl c c u 1 bl C T ': c 1 bl c 'c « CI] bl c s 1 o J :: c « bl c 1 'a c "a u f2 19 in the size of the establishment, while the number of redressings per injury increases. This relation of injuries and redressings to the size of the plant may be due to the fact that in the larger establishments health supervision, in connection with other activities such as those carried on by the safety department, has tended to the elimination of hazards, with a resultant re- duction in the number of accidents. Furthermore, where the facilities of the medical department are available throughout the working period, redressings can be made with less loss of time than would be the case if the injured employee had to visit a hospital or a physician's private office in order to have the necessary work done. When the physical examination of appli- cants for employment is properly correlated with the placing of successful applicants in their work, the liability to accident is lessened, largely through elimination of the maladjustment of the worker to his job. Medical Cases Some medical departments in industry encourage the workers to visit the dispensary for any reason they desire, while others confine their activities to the first treatment and redressings of accidents occurring within the plant. As both methods of industrial medical practice are represented in this report it is probable that the number of medical cases listed is representa- tive of the average experience among any similar number of workers in diversified industries. Medical cases treated num- bered 1,073,731, or 1.40 per worker per year. Physical Examinations One hundred and one of the plants, with a working popula- tion of 464,069, made physical examination of employees or of applicants for employment; while 106 plants, employing 300,758 workers, did not conduct such physical examinations. An annual total of 525,818 physical examinations was reported by the 207 establishments included in this investigation. Collateral Activities In addition to the primary functions of the industrial medical department discussed in this report, this investigation shows that some of these departments have taken on a variety of activities, the administration of which brings them in close 20 H t- Z iz w w S s H K B( « < 3 1=^, M J W <; M t^ Q O W < < M S'L n CN -^ lO TjH OO C^ CT\oo ON *o III r-^^o^r-^r--^r--^ OO CO in r-~ -.^H CO lo ^tS" Ti -^ o\c\r^ ts cs vo Medical Cases Per Worker o ^ a\o\^ ! o vor^ Qocsr^ . ■* oi c^ '-^ -h' 1 - oo -"^r^ (N o Ss r^ o oo OM^ CO v^o) oo^o^c>^ r^ p ar^-rcT-^r-^ ro r-- ^ Tr< cjs -^ r~ (NCO^C-l, o. ' ' ress- iPer ew ury (N to ^O On (N ^ 1 ^ U-l CO r-( -^ o irs ^ ^r-ioicN "iJ ^-HCO r^ l^lll Ol "^ On CO On r^ to in lO ^ ^ S "cu -B B ^ w S Q o 2 g g o,g ^ coo o"o_ "b ■£ 1 1 1 •- fS S88§S 1- ; = \s ?C 1 21 associatior; with the work of practically all other departments in the plant organization. Among the activities mentioned most frequently in the reports were: the giving of advice to workers on health and home sanitation; sanitary inspections of working conditions; health education; supervision of food supplies and service within the plant; participation in plant safety work; checking up absentees; inauguration of campaigns in the plant to reduce tuberculosis and venereal disease; coopera- tion with local health officers in matters affecting the general health of the community. Visiting nurses attached to medical departments in industry are reported as participating in work of a public health nature. While their first duty is to see that sick or injured employees are receiving the best treatment possible in the home, they also carry on educational work in personal and home hygiene, care of babies and prenatal hygiene. They investigate the need of financial aid to employees and their families and cooperate with the family physician in bringing about favorable termina- tion of illness and injury and early return to productive em- ployment. Members of the medical department were found to be asso- ciated with the work of the employee's benefit associations in some of the plants studied. Physical examination of applicants for membership in such associations is made by the plant physician in certain cases, and the nurse visits in the homes of sick members of these associations. Recreational features of some industrial plants were reported to be supervised by the medical department, and a few firms stated that their medical departments had charge of health supervision of the schools and of the housing problems in their communities. Only 12 of the 207 firms reported no activities of their medical department aside from the care of employees in the plant during working hours. 22 X! a X u w >- o .. J en 0. 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