ACC and the rhetoric of ‘choice’

23 comments on “ACC and the rhetoric of ‘choice’ ”

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1. Robert Cowan 1

   17 July 2008 at 12:13 pm

   NZ herald on 17 July quoted key saying:
   “Despite Labour’s rhetoric, it has actually retained the ability for larger employers to opt out of the state monopoly and either self-insure or use a private insurer.”

   So it would seem that ‘choice’ for employers is already in place?
2. Steve Pierson 2

   17 July 2008 at 12:16 pm

   No Robert. Larger employers cannot use private insurers. The Minister made that clear on Morning Report. They can opt to cover all costs themselves directly, rather than via ACC but this scheme has already been problematic with employers trying to get out of paying their dues.
3. Tane 3

   17 July 2008 at 12:27 pm

   Cheers Steve, was about to point out the same myself. Robert, John Key says a lot of things, and on ACC they’re mostly wrong.

   From what I’ve seen of the accredited employer scheme it’s not good news for workers, or the public, as the recent case of Affco trying to shirk its contractual obligations has shown. But the worst aspects of this scheme are only a sign of things to come if National gets to hand ACC over to the insurance industry.
4. Phil 4

   17 July 2008 at 12:35 pm

   So, in summary…

   Current situation:
   Employee’s get no choice

   Probable scenario under National government:
   Employee’s get no choice

   Tane says; NATIONAL IS TAKING AWAY YOUR WORK RIGHTS!!!

   Tune in to http://www.thestandard.org tomorrow where we’ll reveal:
   JOHN KEY IS REALLY AN ALIEN FROM MARS
5. Tane 5

   17 July 2008 at 12:43 pm

   Phil, workers currently have democratic control over ACC. National proposes to hand the system over to private interests in the name of ‘choice’.

   You need to understand that the rhetoric of choice implies empowerment. The entire subtext of neoliberalism is “We will give you the power to choose your own destiny rather than being told what to do by others.” It’s very a powerful idea, but it’s also a fraud.

   National’s ACC reforms won’t give ordinary people choice, empowerment, liberation, or anything else you want to dress it up as. All National will do is remove democratic control and vest that power in the hands of employers and the private insurance industry.
6. Greg 6

   17 July 2008 at 12:59 pm

   How is ACC an ‘efficient monopoly provider’? Monopolies by nature maxamise producer surplus and restrict consumer surplus. To give an example ACC levies dropped dramatically after National started to privatize in 1998. Higher insurance costs means less money for workers. Why would lefties want to take income away from their main support base?
7. Steve Pierson 7

   17 July 2008 at 1:10 pm

   Greg. “Monopolies by nature maxamise producer surplus and restrict consumer surplus” You don’t understand economics. Self-utility maximising monopolies do maximise producer surplus at the cost of consumer surplus, but ACC isn’t self-utility maximising – ie it isn’t out to make money, it’s out to provide the service as cheaply and comprehensively as it can within the law.

   That’s why conventional economic theory is that commercial legislation should prevent monopolies in general, natural monopolies (roads, railways, telecom networks, electricity) should be in public hands because they are optimal to the economy as monopolies and only if they are in public ownership will they not rip off the public, and certain forms of insurance (health, police, defence, unemployment, retirement) work best (ie most economically) when they are universal.

   Phil. You didn’t use to be this shrill
   .
8. Snelly Boy 8

   17 July 2008 at 1:13 pm

   Thankfully, the factual errors in National’s policy statement are now coming to the fore. Namely:

   * larger employers currently able to use private insurers;
   * little incentive for those who adopt good sfatey practices (are they unaware of current “workplace safety discounts” & the significant incentives of the partnership programme?);
   * employers and other ACC consumers should have the option to purchase more than the basic entitlements set out in the legislation (currently allowed and commonly taken up).

   When they clearly don’t understand the current scheme, how can their assertions on the benefits of coverage provider competition be taken seriously?

   The comment that the 1998 change to the worker account led to substantial levy reduction is correct.

   However, this had nothing to do with risk assesment but everything to do with a salivating pack of insurers jostling for market share and adopting a cash flow underwriting mentality. Little, if any, consideration was given to individual loss records or workplace saftey.

   The same will happen again until the market matures with the inevitable increase in levies to a sustainable level. Will this be at a benchamrk better than what the current system would have provided? Only time can tell.

   Will hoped for benefits outweigh the risks of change to both employers and employees? From one who stands to gain finanacially from National’s approach, I still advocate retention of status quo with regular reviews to improve where necessary of course.

   The likely risks of change have been flogged to death here and elsewhere since yesterday with both clarity and also hysteria.

   The two principal concerns I have over the proposed changes which have not been discussed are:

   1. What happens in the event of insurer or reinsurer collapse? Who picks up the pieces? This is a real risk as the global insurance industry enters a period of major uncertainty. Insurers have failed in the past and will do so again.

   2. Those free marketers out there may find this one hard to believe but the local insurance industry simply does not have the experince and skills to pull this off. Yes, it may be a learned process but at what cost?

   There seems to be an awful lot of ignorance about the NZ insurance market capabilities. We are a very, very poorly performing industry that is the least professional market wihtin the western insurance world i.e. a bunch of cowboys.

   I witnessed in 1998 the pigs ear that we were all making of this ACC ‘opportunity’ and we collectievly are in no better shape today to make it the success that those keen, hope it to be.

   Before any such ACC changes could be effected it would be absolutely essential that proposed insurance market regulation overhaul be enacted. Otherwise, all (employers & employees) will be the losers.
9. Robert Cowan 9

   17 July 2008 at 1:47 pm

   Thanks for clarifying that. Its a real shame that this debate does not occur in the popular mass media, namely 6 o’clock news, morning papers, Campbell Live, Nightline etc.
10. concerned widow 10

    17 July 2008 at 1:50 pm

    does any one know what effects this change in ACC POLICY will have on “fatal injuries” causing “death” claims? while the victim was in full time employment? but where the fatal injurie was caused by an unjust attack by another person in society??
    and what are the benefits and compensation for the legal next of kin and dependents of a victim desribed in the catagory above??

    the debate on ACC and its near future policy changes have focused more on who ends up paying more compulsory fees towards its benefits and schemes? and less focus on major areas of financial concern and strain placed on the victims of death, legal immediate families and dependents??

    my point being, there will always be “money” available for resources needed to make any genuine points of policies work, but the damages and costs of a death in a family and dependents is a life time sentence to grief and pain?, and no one and nothing can ever change,or renew,or make better understanding, of that fact??
    so whats being pursued and prevented in light of ACC future or past actions regarding these facts???
11. Phil 11

    17 July 2008 at 3:08 pm

    “workers currently have democratic control over ACC”

    Can you tell me what you actually mean by that?

    Related question; Why on earth would you think that unions won’t be involved in the ‘choice’? One are you and I an agree on is that Unions are an instrumental and valuable party w.r.t. workplace safety
12. Tane 12

    17 July 2008 at 4:11 pm

    Phil, public ownership means democratic accountability. There is a minister responsible for ACC and making sure it works for Kiwis. Private ownership removes that accountability.

    Re your other question, in unionised workplaces I imagine unions will try to have a say in the choice, but ultimately it’s a matter of managerial prerogative. Unions will not be able to have a say in whether a workplace is part of a government monopoly system, because that will have been destroyed. Moreover, we have a heavily decentralised bargaining system and employment law that discourages organisation of small workplaces. As a result union membership in the private sector is as low as 12%.
13. Greg 13

    17 July 2008 at 5:22 pm

    Steve: ACC is not a natural monopoly, its a government made monopoly. If employers had choice in the insurance market the would be more than one firm willing to offer the same service. Roads, railways and electricity etc do not have this luxury. Secondly while ACC may try to provide the service efficiently in reality it will not as although ACC is government run it still has the same pressures from within the organization to increase costs (wage rises, ignoring inefficiency etc) that would not be the case if they were forced to compete on price, as they would if the workplace insurance industry was a competitive market. So the only insurer that is ‘ripping off’ workers is ACC. Why don’t we change that?
14. Felix 14

    17 July 2008 at 8:00 pm

    “while ACC may try to provide the service efficiently in reality it will not”

    It sounds like you’re discussing something very abstract when you use terms like “will not”. Why not discuss what actually happens?

    In the real world ACC has been studied and compared internationally and been found to be very efficient by those known socialist stooges Price Waterhouse Cooper.
15. Draco TB 15

    17 July 2008 at 8:33 pm

    Secondly while ACC may try to provide the service efficiently in reality it will not as although ACC is government run it still has the same pressures from within the organization to increase costs (wage rises, ignoring inefficiency etc) that would not be the case if they were forced to compete on price,

    Sorry, but the Public Choice theory has been almost completely proved wrong. Most people in the public service aren’t out to maximise their budget but to do the best they can for the public they serve for as little as possible. The evidence, provided by PWC shows this and it’s why we have one of the most, if not the most, efficient ACC scheme’s in the world.
16. weizguy 16

    17 July 2008 at 8:40 pm

    Two things we’re likely to see under this policy:

    As insurers go to the market, they’re likely to attempt to deny old claims. The last time we tried it, employers were sent a list of claims for the last few years. This list of claims was the tool that insurers would use to set premiums. At that point, a huge number of employers put in reviews to challenge whether the claims could be considered work accidents. If successful, the employee would experience one of two things. If it was personal injury by accident, they continue to be covered, but out of the public purse. If it was a gradual process injury – cover is removed (gradual process injuries are only covered if they are work related.

    You could argue that this is a good thing, but employers tend to have much better resources to fight these. I had a friend with an accepted OOS claim who was suddenly challenged once competition was introduced. She was working at a Supermarket, and was not the only person to experience this. The employer stonewalled her, refusing to talk to her about the issue, and lied about the amount of hours she’d been working. In the end, she was successful at review, but I doubt she would have if she hadn’t been a) an annoying law student, and b) very stubborn.

    There’s an even worse scenario – when two employers are arguing about which of them is responsible for the claim (not in terms of fault, but in terms of cover). Firms have the resources to fight for months, even years, about these things. All the time, the employee gets nothing.

    The second behaviour we’re likely to see is the denial of claims, entitlements, and finally, premature determination of work readiness. Accredited employers are notorious for all of these things. “Oh, you can’t work? You can do this desk job, straight away.”
17. J Mex 17

    17 July 2008 at 11:04 pm

    WTF?

    I was going to point out the obvious – Employees don’t have choice now. They won’t have any less choice if National gets in (Actually, they will have more – They may have the choice between employers with two different insurance covers). – But phil beat me to it.

    Then Tane pointed out that employees already have a choice – via “Democratic control over ACC”

    ????

    I swear, The Standard is starting to turn into a parody of itself. This is just bizarre. Having two (or many) employers with different insurance providers is somehow LESS choice for employees than having one guy in charge of one system that can only be altered if 50%+ of the voting population happen to vote in a similar way!!!

    This may sound trite, but a few of you need to actually look up the definition of the word “choice”.

    First we had the post that ‘compulsion = freedom’, now we get a post saying having one system and one system only is equal to greater choice

    Give yourselves an uppercut.
18. Swampy 18

    17 July 2008 at 11:53 pm

    Posted in one of the other threads:

    I’m just interested for someone to tell me why it is the employer’s responsibility to pay for ACC cover for their employees.

    If I want health insurance, I make my own choice and payment arrangements.

    The question of employer’s liability is amply covered by the existing OSH requirements and laws.
19. Draco TB 19

    18 July 2008 at 12:11 am

    …having one system and one system only is equal to greater choice

    I’d say that the system we have now gives us more freedom simply because it doesn’t suck us dry like it will if it’s opened up to competition. The only ‘choice’ that National are promising us is the choice of paying more for less. Not much of a choice really.
20. Felix 20

    18 July 2008 at 12:23 am

    Swampy, it’s because we aren’t trying to model our workplaces on 3rd world sweatshops.
21. J Mex 21

    18 July 2008 at 1:42 am

    “I’d say that the system we have now gives us more freedom”

    Then you would say that black is white and up is down without blinking.

    Let’s nationalise the entire insurance industry. That’ll give everyone more “freedom”, by your definition.
22. Draco TB 22

    18 July 2008 at 11:13 am

    If it could be proven to cost less and be more efficient the same way that ACC is then I would be all for it because people would have more money available to them so that they would have more freedom to do what they want. Sometimes, having a choice is restrictive due to the added costs involved.
23. J Mex 23

    18 July 2008 at 2:11 pm

    Draco, your argument is bizzare – Restricting choice is more freedom so long as it’s cheaper ???

    What type of planet are you from when you indicate that one entity, providing the option of one service, which is compulsory, is increased freedom, (because it may be cheaper)??? (for whom is unclear)

    Using your logic to its extreme, I could claim that having the government lock you up in the one large NZ jail, to which you have no choice increases freedom – So long as I can prove it is cheaper.

    Being forced to work one job, supplied by the government, would also fit your definition of freedom, so long as you were paid more money which you spend elsewhere.

    It is an absurd definition and a thought process that I, personally, find quite scary.

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