New Solutions Vol. 3, No. 1

Volume 3, Number 1

Tell Us How You Reduce Your Mod

Research Correlates Drug Testing to the Reduction of Mods in the Construction Industry

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What advice would you give to your clients or other insurance professionals about how to reduce a mod? We're compiling a list of the Top Ten Ways to Reduce Your Mod, and we want to hear from you! Please fill out our quick survey. We'll publish the results in a later version of NewSolutions.

One way to reduce the mod has been positively demonstrated through the research of Cornell University student Jonathan Gerber. Since university research reports don’t frequently find their way to the independent agent/broker, we thought you might be interested in seeing it here. While Gerber's study focused on the construction industry, it's not hard to imagine that similar trends could be found in any industry where safety is a primary concern.


Research Correlates Drug Testing to the Reduction of Mods in the Construction Industry ITHACA, N.Y. – From large international corporations to small local contractors, construction companies that drug test appear to be successfully reducing workplace injuries, according to a new Cornell University study. “While drug testing is controversial, this study provides useful data on a readily-measurable outcome,” says the study’s author, Jonathan Gerber, a student at Cornell University’s School of Industrial and Labor Relations who conducted the study as part of an independent research project. Professor Robert Smith served as the advisor of this study. In the last 15 years, drug testing in the workplace has gone from ground zero to widespread universal employer acceptance. In 1983, less than one percent of employees were subject to drug testing. Today, approximately 49 percent of full-time workers are subject to some from of workplace drug testing, according to the Substance Abuse and Mental Health Administration.
This growth is particularly evident within the construction industry. High rates of drug and alcohol-abuse in the construction industry, coupled with the high-risk, safety-sensitive nature of the industry’s jobs have prompted many companies to implement a variety of safety strategies including drug testing – particularly when the safety of workers and the public hand in the balance. The study, titled “An Evaluation of Drug Testing in the Workplace: A Study of the Construction Industry,” was undertaken to test the efficacy of workplace drug-testing programs in establishing safer workplaces by examining company injury incident rates and workers’ compensation experience-rating modification factors over a period of five years. The results reported are based on scientific analysis of data collected form 71 companies by a voluntary survey faxed to a randomly selected national sample of 405 construction companies in December 1999. Additional data was provided by the National Council on Compensation Insurance (NCCI). Among the study’s findings: The average company that drug tests in the study sample experienced a 51 percent reduction in its injury rate within two years of implementing a drug-testing program from a rate of 8.92 incidents per 200,000 work-hours to 4.36 incidents. The difference was proven statistically significant when compared to the 14 percent decline in the average construction firm during the same time period. As a result of fewer job site accidents and injuries, the average company that drug tests in the study sample experienced an 11.41 percent reduction in its workers’ compensation experience-rating modification factor. At the same time, companies that did not implement drug testing programs saw no decline in their workers’ compensation experience-rating modification factor. This means that companies that drug test can save substantially on their workers’ compensation premiums Drug test is most effective in reducing workers’ compensation experience-rating modification factors in the first three years immediately following the implementation of a program. The vast majority of respondents, whether or not they utilized drug testing, think substance abuse is a “moderately serious problem” in the construction industry. The majority of company officials who responded to the survey think the problem of drug and alcohol abuse on the job has dropped in the past five years. Seventy-two percent of respondents with drug-testing programs in place said they think the benefits of drug testing outweigh the costs. Company officials generally believed their drug-testing programs had a positive impact in virtually every respect. The most positive impacts of the programs concerned the overall safety of the work environment, reductions in workers’ compensation costs, and the quality of job applicants. The number one reason why employers in the construction industry drug test their employees and job applicants is to promote the safety of their workers and those who use the products and services. In addition, company officials believe that drug testing contributes positively to a company’s image and is an effective deterrent in preventing drug abuse. The number one reason why some employers in the construction industry do NOT drug test their employees and job applicants is a concern for increased legal liability. Other reasons include concern that drug testing is too costly or that it is prohibited or restricted by state legislation. The study also revealed that larger construction companies are significantly more likely to test workers for drugs and alcohol. This could make small firms particularly vulnerable to substance abuse problems as drug users may intentionally seek employment where they are not likely to be detected. This article was released by Cornell University Contact: Jonathan Gerber E-Mail: JKG4@cornell.edu Office: (516) 239-8144