Association for Public Policy Analysis & Management

In 2014, approximately 3 million nonfatal injuries occurred at the workplace (BLS, 2016), costing employers approximately $88.5 billion on workers’ compensation (National Academy of Social Insurance, 2016). To assure safe and healthful working conditions, Occupational Safety and Health Administration (OSHA) conducts around 80,000 on-site inspections annually. This study assesses the effect of OSHA inspections on workplace safety and service quality. While inspections are likely to improve workplace safety as they mandate the employers to correct any violations of safety standards, they may negatively affect the quality of the output. For example, in nursing facilities, nearly half of the injuries among nurses come from patient moving and handling activities. Thus, any efforts devoted to reducing the injuries of nurses may negatively affect the quality of care provided to the patients.

This study examines the effect of OSHA inspections on workplace safety and quality of care in nursing facilities. Nursing facilities, employing approximately 3.3 million workers in 2015 (BLS, 2016), represent one of the most dangerous industries. The workplace injury rate in nursing facilities is 7.1 cases per 100 employees in 2014, much higher than 3.2 cases as the national average. The effect of inspections is identified by exploiting the design of OSHA’s Site-Specific Targeting (SST) plan. The SST plan surveyed a sample of firms annually, then prioritized inspecting facilities with injury rates greater than a designated threshold. To estimate the effect of inspections on worker safety and service quality, a regression discontinuity design is used, which essentially compares the outcomes of facilities with injury rates right above and below the SST threshold. A unique establishment level dataset is constructed by linking data on injury rates from OSHA Data Initiative (ODI) and inspection records from Integrated Management Information System (IMIS) to the quality measures of nursing facilities from Centers for Medicare & Medicaid Services (CMS).

The estimates show inspections not only reduce the injury rates of the nurses, but also negatively affect the quality of care. Specifically, one year after the inspections, the Days Away, Restricted, and Transfer (DART) case rates decreases by 5.60 cases per 100 employees, representing a 38 percent decrease. However, the quality of care worsens after inspections. The quality of care on activities of daily living, which contributes to more than 60 percent of nursing hours in nursing facilities, decreases significantly. Facilities are 17 percentage points more likely to receive citations regarding providing ADL care, issued during annual recertification inspections of Medicare/Medicaid providers. Additionally, the fraction of residents fully dependent on staff to transfer, use toilet, and eat decrease by 4.2, 6.9, and 3.6 percentage points respectively. Nurses are likely to reduce these patient moving activities to prevent workplace injuries. The patients also show more behavioral symptoms, suggesting worse quality of care. Overall, this study highlights the unintended effect of these government enforcement activities. OSHA inspections may be effective to reduce the injuries among nurses, but such improvements could be at the expense of service quality and the welfare of the patients.