Private sector can’t compete with ACC

Written By: - Date published: 12:04 pm, February 27th, 2012 - 35 comments
Categories: ACC, capitalism - Tags:

Government documents from last year reveal a plan to make ACC boost its levies and pay the government a dividend so that private insurers can compete. But that wasn’t enough. Now, the plan seems to be to exclude ACC from workplace injury insurance altogether.

Private insurers just can’t offer cover as cheap as ACC can. They have to pay all those lawyers and admin staff focused on denying payouts and shareholders clamouring for profit.

So the Nats’ solution is to deny us the cheap option so that private, foreign-owned insurers, can make a buck off us.

What’s the point in this exercise again? I thought it was about bringing in private sector efficiencies? Seems like the opposite is happening. This isn’t about the country’s good – this is about profit for National’s donors on the Insurance Council.

[Update: since the time of writing, Key had said ACC won’t be excluded from workplace insurance. But they’re going to have to tie ACC’s hands behind its back somehow if they want private insurers in the market – as it stands they don’t have a hope of providing comprehensive cover as cheaply as ACC. Anything the Nats do to ACC to let private insurers compete will mean higher levies for you and me]

35 comments on “Private sector can’t compete with ACC”

  1. vto 1

    Why the fuck are these dumb-arses so hell bent on getting private providers when it is so bleedingly obvious that the private providers can only provide a more expensive insurance?

    Isn’t it about time they admitted that the govt-provided ACC model is the cheapest and best available?

    I mean, seriously, what is their rationale? Because, just like foreign land sales and asset sales, it is entirely absent. Absentminded is what this lot are. The Absentminded Government.

    • Draco T Bastard 1.1

      Why the fuck are these dumb-arses so hell bent on getting private providers when it is so bleedingly obvious that the private providers can only provide a more expensive insurance?

      They’re not “dumb-arses”, what they’re trying for is more wealth transfer to the rich. They really don’t care about how much it costs everybody else.

  2. Unbelievable that the ACT Party received only 1% support from voters yet wields such power over National to bring about substantial change to our ACC and Education systems. Something smells strongly of fish…
    http://localbodies-bsprout.blogspot.co.nz/2012/02/acts-influence-over-acc-education.html

    • Draco T Bastard 2.1

      National wanted this as well. Act really isn’t the tail wagging the dog.

      • Dave Kennedy 2.1.1

        Hi Draco, if you read my blog this is exactly what I’m saying. Both policies were not a focus of ACT’s election Campaign, National is just using them as a front for policies they know will be controversial. That’s why I referred to the smell of fish, honesty is lacking here.

  3. NickS 3

    /facepalm

    How hard is it for the right to understand that the choice they argue for is usually a non-choice on the basis of cost/benefit?

    And that if they want to do anything to ACC, how about cutting off the funding for alt.med crap, like acupuncture and otherwise just let ACC do it’s thing, as it’s well equipped to operate independently, especially if it’s complaint systems were better funded.

    • Colonial Viper 3.1

      And that if they want to do anything to ACC, how about cutting off the funding for alt.med crap, like acupuncture

      let’s see what the NZ Association of Medical Accupuncturists have to say about that, shall we? BTW their members are all qualified, licensed NZ medical practitioners.

      • NickS 3.1.1

        http://scienceblogs.com/insolence/2008/12/yet_another_acupuncture_metaanalysis_gar.php

        Look into the well of science (mainly the links in the second paragraph), and see the truth of acupuncture, that it is no better statistically than a placebo. An expensive placebo that involves having needles inserted into you on the basis of traditional nonsense, that has no statistically significant impact on treatment results if used or not.

        Also, medicine in the west and middle east long ago threw of “traditional” knowledge as they began to sanity check it, and yet today we treat TCM, various “traditional” medicines* or alt.med** with far too much respect, instead of the steely scepticism it deserves.

        And I’ve got no respect what so ever for doctors who engage and support such blatant bullshit, when they have the education to sanity check it.

        __________________________________
        *some have effects, but statistics are counter-intuitive so oft they don’t, and can be mixed with all sorts of shit, like lead
        **basic recipe: make shit up with conviction and put a price on it. Chances are gullible people will buy it and social networks will do the rest. Especially if you snagged a celebrity.

  4. Have you considered what I have said before that the Private Insurance Industry has not got the time or energy to re-enter ACC.
    With Christchurch claims implinging on their staff, time and energy for many years to come they will concentrate their future where best needed. They have enough problems to handle as it is to ensure the best results for all the sad earthquake losses.
    ps. am a retired Insurance Comnpany ceo with strong future insurance input.

  5. Paul Campbell 5

    I run a (very) small business – change costs money – if I have to spend hours searching for an ACC alternative I’ll waste a bunch of time and time is money, basically ANY alternate insurance would have to be about half the price of ACC to make it worth my while to spend time on switching – this is a bone for the big boys

  6. vto 6

    HELLOOOOO….!

    HELLO? Hello? Is there anyone out there who can explain the benefit of having private ACC providers?

    Anyone?

    John Key even perhaps?

    Anyone will do. Just need to someone to explain these benefits. Because nobody has. Nobody. Not even gosman is brave enough to try this one….

    • grumpy 6.1

      No, sorry, can’t help you with that one.

      But ACC is so stuffed, who would know the difference. Private insurers couldn’t do much worse.

      The idea of comprehensive “no fault” insurance, in consideration for which we gave up the right to sue, is only a shadow of what it should be.

      • Draco T Bastard 6.1.1

        But ACC is so stuffed…

        It’s not perfect, we’re all fallible after all, but it’s not stuffed. In fact, it’s biggest problem seems to be this government and its attempts to make ACC look stuffed.

        • grumpy 6.1.1.1

          I can see the point in ACC but do you really think our health system would be so buggered if we could sue the bastards who are killing people?

          Why can’t we sue bastards like Douggie Graham? Good old fashioned bankruptcy looming in their faces might make some of these irresponsible fat cats think twice.

          • insider 6.1.1.1.1

            You can sue people who injure you while committing a crime, so it’s not so black and white

          • Draco T Bastard 6.1.1.1.2

            ACC isn’t the health system. Suing people doesn’t help as the majority of people can’t afford to take others to court and so we have regulations and standards that are applied via government bureaucracy (it’s cheaper and gets applied, in theory, evenly).

          • Colonial Viper 6.1.1.1.3

            I can see the point in ACC but do you really think our health system would be so buggered if we could sue the bastards who are killing people?

            Except all you get then is defensive medicine and the experience in the States has shown that medical misadventure is still huge despite lawsuits coming out the ears.

            The main winners: lawyers.

      • Matt 6.1.2

        What did Churchill say about democracy, something like it’s the worst form of government except for all the other ones?

        ACC isn’t perfect – what is – but it just happens to be incredibly good compared to other systems.

    • insider 6.2

      One general criticism I’ve heard with ACC is that it doesn’t encourage smaller companies to adequately manage safety. They see it as cheap insurance and if someone gets hurt, well that’s the price of business, and the smearing (excuse phrase) effect of ACC costs means they won’t wear the direct cost of the injuries they cause. Private providers might be more focussed, maybe?

      The big potential advantage would be choice and the opportunity that might provide for rates reductions as specialist providers emerge to match the market, eg like you have with car, fire, rural, commercial property. The key thing though is to protect employees and improve safety performance in NZ workplaces. A more effective cost/benefit link might incentivise some employers to do better.

      • Matt 6.2.1

        “ACC is so inexpensive that it does not adequately discourage injuries. Vote National!”

        • insider 6.2.1.1

          “it’s ok for employees to be hurt because we have maintained a cheap insurance scheme for bosses no matte what the cost. VOte LAbour!”

      • ACC Literate 6.2.2

        For the 2012 financial year (1 April 2011 – 31 March 2012) onwards, ACC has introduced a No Claims Discount service for smaller employers/self-employed people. As long as you have filed over ACC’s full-time minimum for the experience period (for the 2012 financial year this is 2007 – 2009 for Self-Employed and 2008 – 2010 for companies) you will have this as part of your invoices. Companies/Self-Employed people that have not had claims during the experience period will receive a 10% discount on their work levy, while those that have had fatal claims or claims over a certain amount of days will receive a 10% loading. Larger businesses are subject to something called Experience Rating which can give much higher discounts and loadings but is much more complicated. This information is all available at the ACC website.

        So, yeah, encouragement to manage safety enough for you?

        • insider 6.2.2.1

          Thanks for the update. i’ve got to say that a 10% loading for a fatality doesn’t seem much of an incentive, especially when it is a fatal OR any other injury. If I crash my car they drop my no claims bonus and that can add 30%.

      • Vicky32 6.2.3

        The big potential advantage would be choice and the opportunity that might provide for rates reductions as specialist providers emerge to match the market, eg like you have with car, fire, rural, commercial property. The key thing though is to protect employees and improve safety performance in NZ workplaces. A more effective cost/benefit link might incentivise some employers to do better.

        The big problem is that private providers won’t cover some jobs! The Herald investigated this the last time the Nats wanted ACC demolished in favour of private companies. The Herald approached all insurance companies and asked them to provide quotes to cover different occupations. Crane drivers etc – no insurance company would cover them. Full stop. Not for any amount of money.

        • insider 6.2.3.1

          IS that because ACC means they have no experience doing it so aren’t able to price it or they wouldn’t do it full stop, ever? It’s hard to believe they wouldn’t in a more open market. Most of them are international companies so must be insuring crane drivers somewhere.

  7. Draco T Bastard 7

    One general criticism I’ve heard with ACC is that it doesn’t encourage smaller companies to adequately manage safety.

    There’s a reason why we have OSH.

    The big potential advantage would be choice and the opportunity that might provide for rates reductions…

    More delusional tripe.

    Competition costs more as it increases the amount of duplication in management, requires inter-company agreements and, for insurance, decreases the spread of the risk pushing up premiums.

    • insider 7.1

      Are you saying competeiton costs more in this market or in general, because the latter doesn’t gel with what you’ve said about non utility competition (though I could be misremembering and getting you mixed up with others)

  8. DH 8

    I’m comfortably convinced that all this manouvering on ACC is aimed at an eventual goal of thieving it & selling it off cheap to vested interests. For the private investor ACC is the jewel in the crown of all state assets. SOEs are valuable but they’re still just assets whereas ACC has massive cash reserves and cash is still king.

    The work account alone has $5billion in cash and private insurers know they could loot at least $1billion in cold hard cash out of it simply by taking a less conservative actuarial approach to the outstanding claims liability.

    In 2011 ACC had a total nett worth of minus $6.7billion despite having $18billion in cash reserves and this Govt could flog it off dirt cheap & still claim to be doing well out of it by removing deficit from the books. It’s ripe for the plucking.

  9. feijoa 9

    Employers are going to get screwed. They need to apply some pressure on their friends, the National Party. Nothing like a bit of good infighting on the right

  10. Vicky32 10

    “It’s the ‘get a job not pregnant’ era” says Hil’ry Berry, in a tone that I hear  as spiteful and triumphant. Honestly, 3 News are so predictable, but it still makes me angry.
    Metiria gets a chance to talk, but Jacinda Ardern is cut off in mid-word. Patrick Gower creams his jeans, as does Fatty Garner, at the promise of as Gower put it “More reforms to come”…
    ‘Yoof’ are not to get their benefits directly, but will get their bills paid by WINZ – wonderful.

  11. Foreign Waka 11

    This is no longer about getting people back to work, making the workplace safer and compensate to allow the injured to recover without constant stress. Oh no, we can’t have that the far right says, people HAVE to be scared, so much so that they soil there pants just thinking about claiming. As for the right to sue:
    From an article posted on this website http://www.radionz.co.nz/news/political/34464/acc-bill-%27risks-reintroducing-right-to-sue%27
    “One of the primary tenets of the Accident Compensation Corporation (ACC) system is that New Zealanders are covered for accidents and forgo the right to sue”
    Singling out certain types of injury means that it was clear at the time (2009) that lawyers will have a field day and getting most of the moneys that suppose to go to the injured.
    Fits neatly with the widow purse snatcher image, I say.

  12. Kevin 12

    ACC has a monopoly situation in the marketplace and has over time become arrogant and conceited towards claimants. In addition to that their procedures have become overly bureaucratic and consequently corrupt. In recent years managers have defrauded the organisation as well as placing millions of dollars in questionable investments. At times ACC have behaved like a quasi merchant bank, treating claimants like scum.
    Competiton is well overdue in the injury prevention/ treatment market, and a complete shakeup and restructuring of ACC is also well overdue.

    • Matt 12.1

      Yep, private insurance companies, world renown bastions of fairness, good faith and efficiency to the rescue. Just look at all the success stories!

      Crazy nonsense much?

    • Foreign Waka 12.2

      Hi Kevin – theoretically you could argue that any sector, government or none could do with an occasional shakeup. And really that is what the regular instigated restructuring does that is being instigated everywhere. However, NZ only has a limited pool of people and executives. Those who have been found wanting are getting “restructured” but funny that, they seem to reappear in some other function again. So really, in the end it is just a lot of wasted money and it would be fairer, more honest and certainly a loyalty catcher if any company, private or public would concentrate on the basics and introduce some good old fashion integrity into the business. Lots of great verses on the wall with all the intentions will not do it really. Management has to truly “walk the talk”. As for ACC, well this kind of affliction is most likely also true for that organization. This does not mean that you have to cut your nose despite the face. Of cause ACC has a monopoly, so has WINZ or any other agency paid for by the taxpayer. I personally don’t mind having a concept of a collective (oh that dirty word!) for social services in place as these services are mostly for people who are down and out. To say that this is the time when competition is needed can only spring from a mind that is callous and greedy and cannot convince me that any of the real people with their needs is in any way crossing the mind when making this suggestion.

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