Time to front up on ACC

23 comments on “Time to front up on ACC ”

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1. Matthew Pilott 1

   3 July 2008 at 12:00 pm

   How can National guarantee private insurers won’t ‘cherry pick’ lucrative markets, while leaving the public insurer to insure the risky areas, marginalising and eventually ruining ACC?

   [I’m putting that in the post. SP]
2. bill brown 2

   3 July 2008 at 12:04 pm

   Good analysis on Morning Report:

   ACC Lawyer Comments on National’s Policy
3. infused 3

   3 July 2008 at 12:08 pm

   What are you saying? He has just denied it.

   [I didn’t say ACC the organisation, I said the ACC scheme. Allowing private competition is just a different way of going from a public, universial insurer to a series of private profit-making insurers. SP]
4. Monty 4

   3 July 2008 at 12:08 pm

   Mr Key does not need to answer jack from any leftist. The truth is at present Mr Key is virtually double Labour in the polls and the country is getting more and more desperate to be rid of Clark. I imagine in good time he will extol the virtures of competition, and from what I can see there will be good support for competition from the people of NZ. ACC has massive resources and the requirement not to offer a profit to Shareholders may mean that already ACC has a competitive advantage. Maybe competition will make ACC more efficient – I suspect with a National Government that may well happen by force (as all Government department will be asked to make themselves as efficient as possible)

   So what is your problem with competition? I suspect you are just ideaologically opposed to competition. ACC will remain and all New Zealanders will continue to enjoy the fundmentals of the ACC system. Certainly last time competition was introduced there were no memorable cases of someone being hard done by. Hopefully this time the competition to ACC will become entrenched.
5. Steve Pierson 5

   3 July 2008 at 12:16 pm

   Monty. Don’t you want to know the answers to these questions?
6. BeShakey 6

   3 July 2008 at 12:18 pm

   Yeh all these crazy lefties who oppose this – like Business NZ.

   Business New Zealand employment expert Paul Mackay said there was no demand for a move back to a competitive ACC market among employers “and we certainly have not argued for it”.

   “Our internal thinking is that the issues that flow from doing it probably outweigh the benefits … and the upheaval outweighs the big three for businesses, which are political certainty, financial certainty and economic stability.”
7. Matthew Pilott 7

   3 July 2008 at 12:25 pm

   SP – much of that came from Lew actually, yesterday’s thread!

   Monty – good call – the left should piss off. We shouldn’t even have a vote eh? If he doesn’t have to answer questions from the left, he’ll be surrounded by a pack of stroking sycophants and turn into a dictator, isn’t that how it starts? Your train of thought hasn’t boarded.

   Still in one way, I admire your dog-like trust in Key, not often you see that towards politicians these days.

   ACC will remain and all New Zealanders will continue to enjoy the fundmentals of the ACC system.

   How do you know that?

   How are you so sure that one of the best models in the world can be improved by exposing it to worse ones? Or don’t you care? Don’t you wonder how other insurance companies could stand to make so much money out of us? Or do you just need to look into John’s eyes, and you know everything will be alright?
8. Lew 8

   3 July 2008 at 12:31 pm

   This is an open challenge to anyone who thinks allowing private insurance providers to compete with ACC is a good idea.

   Give me sound arguments as to why the six-point schema I posited in this thread won’t come about, and I’ll concede allowing private competition to ACC might be worth introducing.

   That’s the only basis upon which I’d countenance opening up ACC to private competition: guaranteed universal in-work and out-of-work coverage at a nominal cost to end-users, in perpetuity.

   You can argue that this level of coverage isn’t a good idea if you like – but I’m not buying. What I want to determine is whether there is any hope that allowing competition won’t eventually result in the degradation of ACC and the erosion of the coverage we already have.

   It might also be worth you reading this thread from yesterday. I’m not going to bother making arguments I’ve already made.

   If none of you illustrious folks can argue this won’t happen, my hypothesis will stand: that competition is a trojan horse for eventual privatisation and the move to a US-like fault-based health and accident insurance system in which the insurance companies and the lawyers benefit, and everyone else loses.

   Have at it.

   L
9. Ed 9

   3 July 2008 at 12:43 pm

   John Key is being very slippery with this. I heard him deny this morning that he would privatise ACC. I believe him; it was the wrong question. The right question would be would he allow insurance companies to compete with ACC to provide some of the compensation guaranteed by legislation and currently provided by ACC.

   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).
10. ants 10

    3 July 2008 at 12:51 pm

    Matthew Pilot – your dog like faith in Labour is simply because you’re scared your government department job will be cut and you’ll have to learn how to survive in the real world.

    [ants. If you can’t contribute anything beyond petty (and falsely premised) insults, you can bugger off back to kiwiblog. SP]
11. Lew 11

    3 July 2008 at 12:53 pm

    ants: Classy slur, this one. Matt works for a privately and internationally-owned pillar of the international economy.

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

    L
12. Matthew Pilott 12

    3 July 2008 at 1:00 pm

    Cheers Lew – pinstripes and all… 😛
13. Monty 13

    3 July 2008 at 1:08 pm

    Thank you Ed for acknowledging that Key will not priatise ACC – just introduce competition. Like Airlines have competition, like Telecom (soon to have more with another cell phone provider coming into the market) and a host of other businesses – so why not the accident insurance market? It keeps all operators keen and makes them deliver better service and more efficient service. One can argue that businesses without competition eventually abuse that position with excessive charges, bad service arrogant attitude, and low profitability. The hall mark in fact of many government owned businesses up into the mid 1980s when Roger and Richard saved the situation by yes privatising those business. 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?

    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.
14. Steve Pierson 14

    3 July 2008 at 1:13 pm

    Monty. The second, third, and fourth questions really just restate angles of the first. But the important thing is National dosn’t have an answer to questions 1, and as they don’t (and no-one else has an answer either) one has to wonder why we would priviatise the ACC scheme.

    I’m not anti-competition, I’m pro what works and ACC works so well it is the envy of countries around the world.
15. Pascal's bookie 15

    3 July 2008 at 1:17 pm

    “what most NZers want is an efficient accident insurance scheme that delivers good service with reasonable premiums. ”

    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?
16. Vanilla Eis 16

    3 July 2008 at 1:39 pm

    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.
17. Lew 17

    3 July 2008 at 1:45 pm

    Monty: “By the way – is ACC not already run as a privatised business?”

    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
18. Swampy 18

    3 July 2008 at 7:34 pm

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

    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.
19. Draco TB 19

    3 July 2008 at 8:18 pm

    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.
20. Jills Angus Burney 20

    3 July 2008 at 9:16 pm

    Swampy you’ve obviously got no understanding of the reason ACC exists as it does. Read Hazel Armstrong’s new book “Blood on Coal”. Firstly you will learn that the National Party commissioned the Woodhouse Report in 1967. Read on and you will see the National Party accepted all three recommendations – no competition; no right to sue; and a no fault system. Secondly you would find out that the competitive system (before National voted the ACC scheme) was not good for workers or business (levy payers) and you’ll find out why.

    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.
21. Swampy 21

    3 July 2008 at 11:12 pm

    “Draco TB
    July 3, 2008 at 8:18 pm

    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.
22. Swampy 22

    3 July 2008 at 11:28 pm

    Jills Angus Burney,

    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.

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1. The Standard 2.01: Some policy coverage, too much to ask?: posted on 15 July 2008 at 11:27 am

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