ACC – who does it really benefit anyhow?
In April 2008, the government issues a press release identifying some of the pitfalls of privatising ACC. Since then, National now say they do not want to privatise ACC, but would introduce competition.My question is a simple one. Why?Some things work well in private hands, other things do not.What are the benefits to the people of this country? What would the affect of competition be to our world renowned and admired system? It seems like a system which inspires many.
“”The ACC system is one of the simplest in the world for patients to navigate“…Straightforward claims are processed in weeks, with all decisions made within nine months, and a fixed award structure ensuring that similar injuries receive similar compensation…The system, funded through general taxation and an employer levy, is remarkably affordable. To date, compensation for medical injuries has cost just $29 million—for a population of about 4 million. Reforms enacted in 2005 are expected to incur additional costs of $5 million per year.” (ref and ref)
Marie Bismark and Ron Paterson’s article “No-Fault Compensation in New Zealand: Harmonizing Injury Compensation, Provider Accountability, and Patient Safety” is well worth a read.Given that Australia use a mix of private and state sector mechanisms to provide similar accident compensation systems, isn’t it a bit ironic that many in Australia call them to follow us – but here’s National with a fairly uninspired co-option of Australian broken systems? Would it provide greater flexibility to the public and employers?ACC isn’t admired by everyone. Roger Kerr, Executive Director of the New Zealand Business Roundtable had a thing or two to say.Yest according to the government:
“Research shows private insurers are often less concerned about the vocational rehabilitation of injured clients – and that a significant group of people can miss out on injury cover altogether under privatised schemes.”
I’m not sure how true the first part of that is, though, and which research they are drawing upon. many insurers already offer income protection insurance that covers people for rehabilitation. But of course, you have to pay quite a bit for that privilege.So why do National want to do this? I just don’t understand their rationale.I get that there might be benefit to business owners in so far as they can reduce costs.But Is there a real benefit here to the public which I’m blind to, particularly when we are entering one of the most economically challenging times since the 1990s (when National were last in power)?I can only see it leading to possible job losses and increased costs relating to ACC due to loss of scale of cover – so we end up with a two tier system. It seems I’m not alone. And will competition assist businesses in creating, nurturing and maintaining a healthy and capable workforce?I don’t think any of us should be a slave to dogma, left or right. But we need to ask some serious questions, and get answers, about who benefits from policies like these, and whether that’s consistent with a just society.
According to Chris Ryan of the Insurance Council, as reported in today’s Dominion Post, “In the time competition existed, employers saved a total of $200 million a year in premiums, the number of claims fell by 40 per cent, deaths halved, the return to work rate improved by 50 per cent and disputes fell by 85 per cent”.
Whenever did a state monopoly do the best job for those using its services?
For a full discussion of the case against ACC, see ‘Accident Compensation: Options for Reform’ at http://www.nzbr.org.nz/documents/publications/publications-1998/acc_options_for_reform.pdf
Roger Kerr
New Zealand Business Roundtable
Roger, do you have any idea where Chris gets his data from I wonder?
And I think your question about state monopoly and services is odd – it seems to suggest they never do. Historically, that’s clearly not the case. It’s true that they don’t often do the best for business though.
And what do you make, I wonder, of SOEs?
Anthony, regarding Chris’ data you can reach him at chris@icnz.org.nz
On SOEs, see Phil Barry’s The Changing Balance Between the Public and Private Sectors at http://www.nzbr.org.nz/documents/publications/publications-2002/changing_balance.pdf
Roger
And here’s some balance to Roger’s advocacy for private provision of national services.
http://www.scoop.co.nz/stories/PA0807/S00317.htm
A few more comments on the prospect of ACCprivatisation from around the place:
•“This will be bad for the country, but good for me as a lawyer.” John Miller, ACC lawyer (Morning Report, 3 July 2008)
• “The insurance industry is not set up to handle long-term claims or to handle rehabilitation.” Don Rennie, New Zealand Law Society convenor on ACC (TVNZ Breakfast, 3 July 2008)
• “ACC adds considerable value to New Zealand society and economy, and performs very well in comparison to alternative schemes. . .”
ACC review http://www.acc.co.nz/PRD_EXT_CSMP/groups/external_communications/documents/news_article/prd_ctrb076534.pdf by PriceWaterhouse Coopers, March 2008.
And I do enjoy John Key’s mindblowing linguistic precision sometimes – see quote by Michael Cullen below:
This statement, made by Mr Key on radio, [said that] privatising accident compensation, if a National Government were elected, was—and this is a real beauty, when we get to the substance of it—“almost certainly likely”.