Media Release

22 December, 2010

Government ignoring evidence on ACC

The Department of Labour's own regulatory impact statement on the ACC Stocktake report agrees with many of the major criticisms that have been levelled at it in the last 24 hours, said the ACC Futures Coalition today. The Government has once again chosen to ignore any advice that contrasts with its own ideologically driven determination to privatise the scheme even though this will make it more expensive to run and less beneficial for injured New Zealanders.

The DoL regulatory impact statement observes:

• that the Stocktake group did not consult widely
• that private insurers would have 20-25% higher costs than ACC in its current form due to profit loading, return on capital and operating expenses etc
• that there is a risk of cost shifting to the earners account from the work account
• that there is a risk of delays in payments and an increase in decline rates
• that there will be variability in service for claimants
• that insurer failure is also a risk.

Hazel Armstrong, ACC Futures spokesperson said: "This advice is consistent with the experience of ACC being opened to private insurance in 1998/9 (see the Blue Lotus report for DoL, March 2000) when the eight private insurers were reluctant to approve claims, were late in honouring invoices to treatment providers, when claimants knew little of their entitlements, and there were reports of employers pressuring employees to report work injuries as non work."

"The Price Waterhouse Coopers Report for ACC 2008 noted that the ACC scheme at that time had the benefit of returning workers to work, reduced the spend in health, provided legal cost savings, and
provided holistic case co-ordination."

"Since the 2009/10 policy and legislative changes brought in by this government litigation has almost doubled, and there is more cost shifting to health, to the taxpayer and to claimants. Privatisation will worsen these trends. A Research NZ survey of ACC1 claimant satisfaction showed 41 percent of injured employees had issues or concerns about the overall service they received from their third party provider in relation to their work injury claim and of those nearly two-thirds were dissatisfied with the way their issues were handled. It showed that more people were more satisfied with the service they received from ACC than by a contracted out third party provider. Yet the Government wants to increase the use of these third party providers."

"This Government is unwilling to take the advice produced by its own departmental advisors on what is best for ACC, but will act only in the best interests of private insurance companies regardless of the evidence."

02:16PM Wednesday, 22 December, 2010