ACC exacting too high a price: critics

By GEOFF CUMMING

The warning bells began sounding in 1996 when the spectre of privatisation of ACC arose.

Employers dismayed by 20 per cent levy increases and wider dissatisfaction with the accident compensation scheme called for a return to private accident insurance and put ACC on the election-year agenda.

Act leader Richard Prebble was among those flagging ACC's $7 billion "unfunded liabilities" bill for ongoing and future claims.

He said 32,000 people receiving compensation for at least five years had originally gone off work with a back problem or strain.

Shortly after that, the corporation announced it would introduce work-capacity tests, a process by which long-term claimants could be judged fit to come off ACC.

About the same time, it took aim at spiralling claims for occupational overuse syndrome, warning doctors to be more specific about the causes of injuries.

And the National-led Government promised to bring levies down by exposing ACC to competition.

Since then, the corporation has achieved a dramatic turnaround in numbers receiving compensation for longer than 12 months and managed to cut premiums in successive years.

ACC spokesman Richard Ninness says the reversal reflects improved management of claims at the "front end" and a greater commitment to rehabilitation.

"The whole idea is that people get the best assistance as quickly as possible. They don't go through any social dislocation, they don't go through dislocation from the workplace."

In the past, that was not the case and many people simply sat on ACC for long periods without any serious attempts at rehabilitation.

"You can fall into a lifestyle that isn't conducive to your leaving it."

Nowadays, expectations are clearly set so claimants understand that ACC will work with them to rehabilitate them, Mr Ninness says.

"It's the best outcome for them, the best outcome for society and what that means at the end is it's actually cheaper. Across the board over the last few years New Zealanders will have saved over $500 million in the premiums they are paying to ACC.

"That's not because we are being meaner with money - it's actually because we are doing the upfront job a hell of a lot better than before."

But legions of critics portray an organisation hellbent on cost-cutting, with an avowed commitment to "exiting" claimants as quickly as possible from the scheme. They also say commitment to rehabilitation remains token.

Denise Ferris is one who feels battle-scarred from her contact with ACC. The Auckland naturopath suffered partial paralysis and memory loss after a fall which damaged her spine while in Sydney on business late last year.

Despite medical evidence, she says she struck a case manager who seemed not to believe her.

"The way he spoke to me - I call it carping, undermining me. At the end of the conversation, after screaming down the phone at me, he would always say, 'I'm only trying to help you, Denise'."

The worst incident was when she was in National Women's Hospital, about to have surgery for internal bleeding.

Her case manager tried to stop the operation, believing she was in for orthopaedic surgery on her back.

ACC says her memory loss and medical complications contributed to misunderstandings and the case manager was replaced at her request.

The Mangere woman says that at one point she was expected to catch two buses to a rehabilitation clinic in Pt Chevalier, despite being in a wheelchair. She is unimpressed with ACC's commitment to rehabilitation.

But the issue causing greatest ructions among accident victims is ACC's commitment to reducing its "residual tail" of claimants on weekly compo for more than 12 months.

Accident compensation law specialists say the cost-cutting drive has seen thousands re-enter the workforce in menial jobs, vastly at odds with the skills and earnings they enjoyed before their injury.

This flies in the face of the original scheme's founding concept that an injured worker suffering continued effects from an injury would be compensated at the rate of 80 per cent of pre-accident earnings.

Lawyers cite dozens of examples of long-term claimants, often highly paid professionals, who lost their entitlement on the basis that they could work as car-park attendants, ticket counters or community workers.

Whether a job actually exists and whether the pay compares with their pre-accident earnings no longer matter to ACC, which says it is simply enforcing rules Parliament set.

Christchurch lawyer Garry Wakefield says many former claimants with serious incapacities go on to sickness or invalid benefits and are forced to move to cheaper accommodation.

"We are talking about people who have lost their careers and incomes being booted off ACC. They are lost souls, their marriages destroyed and their homes sold. Sure, there were some who sat on ACC for too long, but they are punishing many genuine cases because of those few."

Mr Wakefield and other ACC specialists accuse the corporation of exploiting divided medical opinion over the causes of back pain and occupational overuse injuries.

Its legislation restricts cover to specific "event" injuries and excludes cover for injuries caused by gradual processes and ageing. Law changes in 1992 and 1998 have narrowed the range of injuries qualifying for compensation and the corporation says it has little discretion.

Mr Wakefield tells of a policeman who was accidentally shot. ACC initially covered him for the injury but ruled that the post-traumatic stress disorder that followed was not caused by the physical wound. "He led his life at risk on the public's behalf. Now he works as a groundsman and has had to sell his house."

Auckland barman Kevin Davis was denied compensation on similar grounds. Post-traumatic stress disorder has left him unable to work for 16 months after he was caught up in successive armed robberies at Richardson's Tavern in Mt Roskill.

During one, his arm was stood on, causing nerve damage, but a review officer found the physical injury was not sufficient cause of the mental trauma.

In this subjective environment, the corporation's reliance on the hand-picked specialists it pays to provide second opinions has fuelled accusations of bias.

"These specialists receive $800 to $1200 for writing a report," said one advocate. "Of course they are going to give the corporation the ammunition it needs."

Medical specialists strongly reject such charges. But judicial misgivings about the use of on-tap experts surfaced in a district court appeal decision in September.

Judge Arthur Middleton expressed concern at ACC's use of second opinions where it suspected that medical certificates were being "unreasonably extended."

"Does that mean that a direction to a 'tame' provider will produce the required report to enable an 'exit' to be made?" Judge Middleton said. "It certainly has that appearance and it would follow that the 'appropriate provider' would be suitably recompensed."

A retired medical expert who worked for ACC says the corporation seizes on evidence of degenerative conditions of the spine to remove cover for people with long-term back injuries.

"They will say the pain has nothing to do with the accident but that the ageing process has damaged tissues, or a disc.

"But a specialist can find evidence of degeneration by taking x-rays of perfectly healthy people in their 40s and 50s who aren't experiencing any back pain."

Mr Ninness says ACC was set up to cover injury.

With back pain, people now routinely have an MRI scan, which gives doctors a far better idea of whether there is an injury.

"With many it isn't because they are injured but because they have a degenerative illness, which is excluded from ACC cover."

Occupational overuse is another area where cover depends on the cause of the pain being significantly linked to a specific cause.

"OOS is a catch-phrase term," says Mr Ninness. "There is no diagnosis of it."

Dozens of OOS claimants have had their cover revoked or refused since a consensus meeting of medical experts, invited by ACC, in February 1998. After medical review, their condition has been redefined as fibromyalgia, or chronic generalised pain syndrome, a condition excluded from ACC cover.

Dunedin law school teaching fellow Judith Ferguson has looked into 24 court decisions, most concerning OOS, and most of which reinstated the cover. She reports that in chronic pain cases there are now clear teams of experts lined up on each side.

"What has developed is a battle between the experts on a matter of medical opinion which seems to have less and less to do with the individual cases and more to do with political positioning."

Judges have occasionally disagreed with the findings of ACC assessors that people are capable of doing specific jobs. But they say the legislation prevents them from overruling the expert assessments.

Meatworkers Union advocate Maevis Watson represented a Blenheim shearer who lost his ACC after the work-capacity process found him capable of working for 30 hours a week as a photographer.

"This man could hardly stand up," says Maevis Watson. "The judge agreed he did not have the capacity to work but found that ACC was bound to accept the findings of the occupational and medical assessments."

But hundreds of cases never reach the courts. Says one former ACC insider: "Most people confronted with [reassessment] just curl up and say, 'I've got no rights'."

Mr Ninness says the comparatively small number of review cases and appeals reflects a high level of satisfaction with the service.

And, he says, most of the people crying foul after losing their entitlement have been on ACC for many years.

* NEXT: How work capacity tests are done.

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E-mail our reporter: Geoff Cumming