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Business Nz there submission

#1 User is offline   doppelganger 

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Posted 06 March 2005 - 06:54 PM

Submission
by
Business NZ
to the
Health Select Committee
on the
Injury Prevention, Rehabilitation and Compensation Amendment Bill (No.3)
24 September 2004

P0 Box 1925
Wellington
Ph:04 496 6555
Fax: 04 496 6550
  • INTRODUCTION
    • Encompassing four regional business organisations (Employers' & Manufacturers' Association (Northern), Employers' & Manufacturers' Association (Central), Canterbury Employers' Chamber of Commerce, and the Otago-Southland Employers' Association, Business New Zealand is New Zealand's largest business advocacy body. Together with its 56-member Affiliated Industries Group (AIG), which comprises most of New Zealand's national industry associations, Business New Zealand is able to tap into the views of over 76,000 employers and businesses, ranging from the smallest to the largest and reflecting the make-up of the New Zealand economy.
    • In addition to advocacy on behalf of enterprise, Business New Zealand contributes to Governmental and tripartite working parties and international bodies including the ILO, the International Organisation of Employers and the Business and Industry Advisory Council to the OECD.
    • Business New Zealand's key goal is the implementation of policies that would see New Zealand retain a first world national income and regain a place in the top ten of the OECD (a high comparative OECD growth ranking is the most robust indicator of a country's ability to deliver quality health, education, superannuation and other social services). It is widely acknowledged that consistent, sustainable growth well in excess of 4% per capita per year would be required to achieve this goal in the medium term.
    • Business New Zealand welcomes the opportunity to comment on the Injury Prevention, Rehabilitation and Compensation Amendment Bill (No 3) ('the Bill'), recognising the good intentions behind the proposed extension of the current Act's scope of cover. However, caution must be counselled against too wide an expansion of existing accident compensation, particularly in view of the Government's commitment (as expressed in the Principal Act) to a "fair and sustainable" ACC scheme. Given that the outcome of medical treatment is far from certain (it has been well said that medicine is an art, not a science) and that individual perceptions of what medical treatment can achieve are often unrealistic, the consequence of the proposed expansion of medical misadventure coverage is likely to be an increase in costs to earners and taxpayers considerably in excess of those anticipated. This point is underlined by the omission from the Bill's explanatory note of any statement of likely cost increases both in respect to actual compliance - in terms of increased administrative and levy costs - and in terms of compensation and other expenses that may become payable. The absence of both a compliance cost and a regulatory impact statement is the more regrettable given the potential for cost escalation inherent in the Bill.

  • RECOMMENDATIONS
    • That, while the new test for medical misadventure is supported, ACC
      must be vigilant about applying the new threshold for medical
      misadventure cases to ensure the expansion of cover is sustainable.
    • That six months after the amendment Act's commencement, a proper assessment be done of its regulatory impact and whether the Act has or will generate an extra levy impost. If such an increase has occurred or is likely to occur, ways of improving outcomes should be suggested and acted on.
    • That ACC be required to manage its new discretion to provide entitlements other than in accordance with Regulations or the Act to avoid the inconsistent and excessive cost increases that the exercise of a discretion can create.
    • That the other proposed changes, including those to calculation of weekly compensation for the self-employed, are supported.

  • DISCUSSION
    • Business New Zealand's chief concern with the Bill lies in the potential created (despite the fact that in general the principal Act defines personal injury as physical injury) for a movement from accident compensation per se to the provision of funding for at least some illnesses resulting from medical treatment.
    • The removal of medical error together with the removal of the medical mishap provision (particularly the rarity element) will undoubtedly result in a far greater number of claims on the ACC scheme for medical treatment injuries than has been the case for many years. Business New Zealand is concerned that a robust analysis of the expected increase should be carried out.
    • The explanatory note observes that not requiring ACC to make findings of fault is consistent with the no-fault nature of the scheme generally. However, it is apparent from what is proposed that the Bill does not completely remove ACC from its fault-finding role. The continued existence of the fault-finding element is evidenced by the obligation placed on ACC to inform claimants of the role of the Health and Disability Commissioner and to report any risk of harm to the public to the person or authority responsible for patient safety in the area in question.
    • To remove the fault element and the 1% rarity limitation is to remove checks and balances that have gone some way to contain a compensation scheme that has at times threatened to expand to an unsustainable degree. The change of the scope of cover will therefore need to be closely monitored.
    • If there is no physical injury there should be no cover. However, where damage results from treatment, that damage will often manifest itself as some form of illness rather than as something in the nature of a strain or sprain (the examples of physical injury provided in section 26 of the principal Act).
    • The Bill is likely to encourage arguments to the effect that in the particular circumstances, illness arising from treatment (iatrogenic illness) does constitute a, physical injury - the more so as illnesses by their nature are typified by physical symptoms.
    • latrogenic illnesses are an increasing phenomenon of modern medical treatment and it can therefore be expected that the Bill's medical misadventure provisions, if enacted in their present form, will lead - in time, if not immediately - to an exponential growth in medical treatment claims and an inevitable widening of compensation coverage.
    • Therefore, as increased claims and associated costs seem inevitable, Business New Zealand proposes that after six months ACC carry out a review of any claims' increase or potential increase and take necessary preventative steps so as to ensure a reduction in the level of claims.
    • Another difficulty can be foreseen as a consequence of including oral ingestion of fungus in the definition of "accident" (clause 10, new section 25 (2)(ba)). Again the issue is potential expansion. It could be argued that there is no clear distinction to be made between the oral ingestion of a fungus and the inadvertent oral ingestion of peanuts if the person in question is an allergy sufferer. Caution will need to be exercised to ensure that expansion of coverage does not occur by analogy.
    • Business New Zealand offers cautious support for the new section 68 (clause
      20), allowing the Corporation to exercise its discretion to provide extra entitlements or payments. However, although the ability to exercise discretion is supported, this will need to be carefully managed to avoid inconsistent application and excessive cost increases through arbitrary case management, and possibly the creation a type of ex gratia system of entitlement.
    • Business New Zealand supports the changes to the method of calculating earnings for the recently self-employed set out in clause 38 of Schedule I in substitution for existing clause 38.

  • CONCLUSION
    • Business New Zealand does not oppose the bill but requests that ACC administers the expansion of cover cautiously.
    • It is therefore proposed that six months after the amendment Act's commencement, a proper assessment be done of its regulatory impact and whether it has or will generate an extra levy impost. If such an increase has occurred or is likely to occur, ways of improving outcomes should be suggested and acted on.
    • ACC should also regard the extension to discretionary spending as exceptional and that it should treat it as such.
    • Business New Zealand supports the changes to the self-employment weekly compensation calculations and the other technical modifications of the Act.

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#2 User is offline   MG 

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Posted 07 March 2005 - 09:37 AM

Self-serving, right-wing claptrap.
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