Media release 24 June 2010

Government privatising ACC by stealth

An internal ACC newsletter has revealed that the Government is planning to open up the case management of new accident claims to the private sector. The ACC Futures Coalition says that despite the Government’s claims to the contrary this is privatisation of front line services.

The ACC Insight staff newsletter of 18 June carries a message from ACC Chief Executive Jan White in which she says the corporation is going to “take a group of new clients who would otherwise have been allocated to branches or short-term claims centres and transfer them to a private claims manager.”

Hazel Armstrong, ACC Futures Coalition spokesperson said: “We have had experience of private claims managers. The private sector providers are often inferior to ACC. Without consultation, ACC has decided to instruct claimants to present themselves to a private company for claims management. This is disrespectful to New Zealanders who have not opted for a private insurance approach to managing their claims. The ACC scheme should be generous to New Zealanders as we gave up our right to sue. The private sector is not notorious for its generosity. Nor are they well known for their efficiency as anyone recalling failed insurance companies like HIH, remodelled companies like AIG, and Lloyds failure in the mid 1990’s, would know.

“It will result in new accident victims having their claims scrutinised to the tiniest detail, payments being delayed or refused altogether on spurious grounds and injured workers being forced back to work before they are properly rehabilitated. This is the experience of workers already case-managed by existing third-party providers. Research indicates that third-party providers in the Accredited Employers Programme (where large employers are allowed to contract out their own ACC claims management) are likely to deliver lower rehabilitation rates, slower payment of claims and less satisfactory experience of injury management than claims handled directly by ACC [see note 1].

“Why does this Government have such an obvious hatred of something that provides New Zealanders with unrivalled security at a low cost no other system can match? It is determined to introduce private business into ACC where private business has been proven incapable of performing better than the existing operator.

“The last paragraph of Jan White’s memo to staff clearly indicates that this initiative is not coming from within ACC but is being imposed from above. Why else would she feel the need to justify this ‘challenge’ to the corporation’s 36 years of superior performance in claims management? The Government is pushing the privatisation of ACC against all the best evidence, proving that it doesn’t care about the fair treatment of injured New Zealanders.”

ENDS

[1] “Service delivery under the Partnership Programme and the ACC Scheme: A comparison based on the perceptions of AE employees and ACC-managed clients injured at work”, Research New Zealand, November 2008.

Background:

Excerpt from the text of ACC Insight internal staff newsletter 18 June 2010 from Chief Executive Jan White:

“Front-end claims management

In April this year we announced partnerships with four external firms to manage a group of long-term clients. These partnerships will give us a chance to observe new ways of working, benchmark our own performance against others and access more resources in a flexible way. 

Recently we’ve also been considering whether we should extend this idea to new or front-end claims. In other words, take a group of new clients who would otherwise have been allocated to branches or short-term claims centres and transfer them to a private claims manager. Only a very small percentage of our new claims would be involved. 

A project team is considering how this might work but it’s early days and no decisions have been made about whether to proceed or not.  We’ll keep you informed as and when any decisions are made. 

I think we should all view this as something of a challenge. If we’re going to benchmark ourselves against other providers, then let's pull out all the stops and show that we can do this better than anyone else. ACC has been handling injury claims for 36 years and we're pretty good at it. Let's not fear external providers, let's learn from them and, if we can, do better than them. That's the best way to respond.”

12:00AM Thursday, 24 June, 2010