We do not have the scheme that politicians implemented from the Woodhouse Report back in 1972 because it was found to be far too expensive to sustain from only a few years of operation. Since then it has been amended numerous times, many of those to try to reduce the cost of provision. Allowing competition for ACC is a natural move to open up the benefits of the marketplace in the provision of workplace insurance.

The scheme was borne from the inadequacy of the previous scheme but it ended up costing too much so it seems to have been another grandiose idea which because a political albatross.

I do not need to spend my time reading a book by someone whose objectivity is compromised by an unyielding public stance against ACC privatisation. There may be problems with private provision, there are also problems with public provision, the health sector being a prime example in hospital care. Simply put it is a question of whether the State needs to be involved and whether that involvement really does make a difference, I don’t believe it is justified.

The private sector can always do at least as good a job of anything as the government.

Except in health care where it is always far worse and much more expensive.”

If you were paying those private providers on contract with the same subsidies that the state is paying the DHBs et al would there be a fair cost comparison?

The reason private care is more expensive is simply because most taxpayers do not actually pay the true cost of what their healthcare in the public system costs.

In the 1990s ACC was deliberately run down by the then National government. It was a claimant and funder’s nightmare. For example National ran down the reserves that fund the long term claims by subsidising employer’s levies, and broke up the risk groups to advantage their mates in certain industries. Ironically employer’s levies are in fact cheaper now than they were in 2000 when Labour re-nationalised the scheme.

I worked in the private market in 1999/2000 I can tell you that the climate is significantly different. Only the Insurance Council and the National Party are asking today for ACC to be broken up.

The problem is that private insurers (like HIH) have difficulty with the concept of genuine long term or complicated claims. That cost factor drove HIH bust. They significantly underwrite the cost of claims like a worker in the Central North Island with a spinal injury hurt in a fork lift accident. That type of claim may go on for life. People cannot be risk managed like a car or house claim.

Serious and complicated injury claims have to be case managed much the same as any other serious injury would be by medical professionals not insurance brokers. Advocates for workers find that third party administrators do not manage these claims effectively in the best interests of the claimant and that the only organization with the necessary specialist experience for such claims in NZ is the ACC. They are more effective than any other comparable scheme for cost effectivenes and efficencies.

It is disingenuous of Chris Ryan (Insurance Council) to suggest today that insurance companies properly managed work injury medical claims in 1999/2000 when it took years for some of the claims problems that caused to be resolved. It’s no surprise National and the Insurance Council have intended to keep this out of the public arena just as they did in 2005 and now they’re caught out by John Key’s mates at Merrill Lynch telling it how it is.

The private sector can always do at least as good a job of anything as the government.

Except in health care where it is always far worse and much more expensive.

Workplace cover is another form of insurance. ACC is not and has never been a bottomless well of money. But as a monopoly it is a closed shop provider meaning there is no alternative.

I’d like to see anyone justify why workplace cover is different that it justifies a different approach. The fact is that in NZ, ACC only existed since the mid 1970s. For more than 130 years before the private sector provided.

The reason why we have ACC is pretty simple and has nothing much to do with the insurance marketplace or workplaces or anything. Labour decided they wanted to have a monopoly in workplace insurance, so they set about creating one. Someone decided back in the 70s it would be a good policy to shore up support from Labour’s union affiliates by bringing in this system and shutting the private sector out of part of the labour market.

The tradeoff for it being a monopoly is that it must provide cover for every single New Zealander, regardless of their health, ability to pay (or co-pay), lifestyle, hobbies, or employment.

You tell me what private provider would take on that risk without a free hand to set premiums as high as it wanted.

L

By the way – is ACC not already run as a privatised business? Is there not room for improvement in service delivery, efficient operations, increased profitability?

I can already hear the righties screaming “theft” if ACC made a cent of profit off the premiums charged to employers.

According to those radical leftist bastards at PWC that’s exactly what they’ve got Monty. Keep up.

Care to take up Lew’s challenge?

I’m not anti-competition, I’m pro what works and ACC works so well it is the envy of countries around the world.

SP – I would like the first question answered, but really do not care about the remaining three. I can see that such questions would be asked in a push poll – but really what most NZers want is an efficient accident insurance scheme that delivers good service with reasonable premiums. Whether or not Australia take some profits is opf no concern – I suppose I do not suffer from Aussie phobia like some on the left.

(I know, because I’ve seen him in his natty work suit )

L

[ants. If you can't contribute anything beyond petty (and falsely premised) insults, you can bugger off back to kiwiblog. SP]

No he will not privatise ACC, he will just allow competition which will give:

Higher higher premiums by employers to pay for higher administration costs – ACC is very efficient compared to most insurance companies; possibly arising from not needing to pay huge marketing costs and commissions and advertising and legal costs for disputes between insurers over who covers some injuries,

Higher premiums to pay for a return on higher capital requirements (smaller market shares will need more capital to ensure payment of claims – a smaller pool has less predictable claim levels)

Higher premiums to pay for profits to shareholders

And even then the taxpayer would have to pay if any insurer went broke (and that can happen).