OPINION: ACC is not broken.

Sir Geoffrey Palmer and Dick Jessup are both of the view that ACC needs major reform. There is a clear inequity where people disabled because of accident receive greater support than people disabled by illness. The heart of the problem is that it is a legal fiction that there is a clear dividing line between "accident" and "illness". When the scheme was first introduced the health system was under considerably less pressure and the difference between earnings replacement provided for those suffering from accident and those suffering from illness were not as great.

The problems identified in the Otago report all relate to the justice and transparency of decisions made deciding on the boundary between accident and illness. As a clinician it has been apparent to me that the place where that line has been drawn by ACC has varied over time usually related to political pressure about the overall cost of the scheme. As ACC attempts a tighter definition, the numbers of claims contesting their decisions will go up. If they relax the definition, the number of claims will go down.

It is important to separate out the two main benefits that ACC provides for patients when considering this.

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ACC pays the large proportion of the health costs incurred as a result of an accident. Because it is also liable for income replacement for many of these people there is an incentive for them to provide care promptly. Public hospitals provide most of the urgent care but a lot of the outpatient care is provided in private clinics. If there is an increase in demand for services then ACC automatically increases its' expenditure.

MONIQUE FORD / Fairfax NZ Rather than making large changes to ACC it might be more effective to look at the rest of the system.

By contrast expenditure on the health services caring for "illness" patients has gone backwards. The Association of Salaried Medical Specialists has reported that under the current government there has been a funding shortfall in core government health expenditure for 2016/17 compared to 2009/10 of $1.2 billion. Whilst there have been increased expenditure at each budget this has not kept up with population growth, inflation and the cost of new initiatives. An important reason for the numbers of people contesting the accident/illness decision is that the disparity between care available under ACC and care available for an illness with similar consequences has increased markedly.

ACC also pays income support and this is substantially greater than the earning support available to people with "illness". ACC pays 80 per cent of a person's income whilst they are fully unfit to work as a result of an accident after the first week. Work and Income pay a "Supported Living Payment" for those who are permanently and severely restricted in their ability to work or a "Job Seeker Support with conditions" for those with lesser severity health conditions.

As with the health costs the gap between that available following an "Accident" and that available as a result of "illness" has increased since the inception of the scheme. ACC benefits are tied to the person's income that has steadily risen with time. Work and Income Benefits are much less generous than when the ACC scheme began and for many people leave them on or below the poverty line. This increasing disparity will fuel the numbers of people wanting to contest whether they have an "accident" or an "illness".

Geoffrey Palmer says ACC is a lottery and should be "recovered and repaired".

Geoffrey Palmer suggests that the ACC scheme should be expanded to include illness. This would overcome the inequity currently present between "Accident" and "illness" and avoid the litigation costs of disputes on whether a particular case is accident or illness. There are many arguments against this proposal, most importantly the cost of levies that would be required to fund such a scheme.

However, the strongest argument is that this will just move the area of dispute. If the amount paid to people with "illness" were to be increased then anyone on a "Job Seeker Support" benefit would have a strong incentive to be classified as "ill" to receive the higher level of benefit. If we moved all the unemployed onto the higher level then all those working on the minimum wage would start thinking that they would be better off not working.

Rather than making large changes to ACC it might be more effective to look at the rest of the system and halt the growing inequities. Funding to health could be increased to bring it back to the level per capita it was in the past. We could introduce a minimum wage that was actually enough to live on and then increase the benefits to ill people to a level that brought them above the poverty line.

ACC in my view is a remarkable scheme that is much admired around the world. The Otago report has highlighted problems in the way in which disputes are handled by ACC and these need to be addressed. It would help if ACC could shift its position on what constitutes "accident" to be closer to that of the community. This would save litigation costs and improve public perception of the corporation.

However unless as a community we increase funding to our health services and insist on a livable basic minimum income (either benefit or minimum wage) then the incentive for people to dispute with ACC will remain and we will all be the poorer.

Dr Ben Gray is a GP who has worked at Newtown Union Health services for more than twenty years and works half time as a senior lecturer at the University of Otago Wellington in the primary care and general practice department.