Comments on: ACC’s future http://www.stephenfranks.co.nz/?p=2433 A lawyer and former politician opines on law, politics and the universe Wed, 08 Sep 2010 05:24:08 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: Jim Maclean http://www.stephenfranks.co.nz/?p=2433&cpage=1#comment-4960 Jim Maclean Sun, 01 Nov 2009 11:25:02 +0000 http://www.stephenfranks.co.nz/?p=2433#comment-4960 Finally I can find something that I disagree with Stephen on! The principle of insurance is many people paying a little so the few can receive the greater amount at the time they require it. The cost is determined by the cost of accidents plus the cost of administration. When privatized the cost is determined by accident costs, administration costs and business profit as well. The theory is that the profit motive will spur greater attention to detail and better management which will result in a lower cost overall even allowing for the extra cost (profit) otherwise involved. My experience of insurance companies over the last several decades is that in their drive for "efficiency" can all too easily turn into clever tricks to avoid paying legitimate claims in full, to deny cover to the less lucrative clients and to continually try to "cherry pick" the more lucrative ones to the general detriment of the government (taxpayer) who must pick up the tab for the rest. America's health insurance companies ferocious campaign to frighten citizens away from moving to a "public option" (as exists in virtually all other western democracies) serves I believe as a warning to where privatization can ultimately lead and the electricity "reforms" here in New Zealand put the lie once and for all to the notion that private enterprise will always do it better and cheaper. It did seem that the previous experiment with ACC privatization options had the potential for savings and better management without any real downside, but doesn't the thin end of the wedge always appear similarly innocuous? I simply do not believe private enterprise will always do a better job than a government organisation if that organisation is properly led, with good internal and external communication and well trained representatives. Finally I can find something that I disagree with Stephen on! The principle of insurance is many people paying a little so the few can receive the greater amount at the time they require it. The cost is determined by the cost of accidents plus the cost of administration. When privatized the cost is determined by accident costs, administration costs and business profit as well. The theory is that the profit motive will spur greater attention to detail and better management which will result in a lower cost overall even allowing for the extra cost (profit) otherwise involved. My experience of insurance companies over the last several decades is that in their drive for “efficiency” can all too easily turn into clever tricks to avoid paying legitimate claims in full, to deny cover to the less lucrative clients and to continually try to “cherry pick” the more lucrative ones to the general detriment of the government (taxpayer) who must pick up the tab for the rest.
America’s health insurance companies ferocious campaign to frighten citizens away from moving to a “public option” (as exists in virtually all other western democracies) serves I believe as a warning to where privatization can ultimately lead and the electricity “reforms” here in New Zealand put the lie once and for all to the notion that private enterprise will always do it better and cheaper.
It did seem that the previous experiment with ACC privatization options had the potential for savings and better management without any real downside, but doesn’t the thin end of the wedge always appear similarly innocuous?
I simply do not believe private enterprise will always do a better job than a government organisation if that organisation is properly led, with good internal and external communication and well trained representatives.

]]> By: Steve http://www.stephenfranks.co.nz/?p=2433&cpage=1#comment-4958 Steve Sun, 01 Nov 2009 06:48:39 +0000 http://www.stephenfranks.co.nz/?p=2433#comment-4958 Your blog is fascinating. But, you have not posted for fourteen days. Lift your game. Your readers appreciate your efforts. Your blog is fascinating. But, you have not posted for fourteen days.
Lift your game.
Your readers appreciate your efforts.

]]> By: Luke H http://www.stephenfranks.co.nz/?p=2433&cpage=1#comment-4956 Luke H Mon, 26 Oct 2009 21:52:05 +0000 http://www.stephenfranks.co.nz/?p=2433#comment-4956 <i>even in dropping accident rates. I don’t think there has ever been an entirely convincing explanation of that drop, because it seemed too quick to have a cause and effect relationship with the reforms.</i> I wonder that perhaps there were less fake accidents - people seem quite inclined to "throw their back out" and sponge off the state, whereas a private insurer has more of an incentive to make sure people are not malingering. Also, employers might cease to report minor accidents in case it increases their premiums. even in dropping accident rates. I don’t think there has ever been an entirely convincing explanation of that drop, because it seemed too quick to have a cause and effect relationship with the reforms.

I wonder that perhaps there were less fake accidents – people seem quite inclined to “throw their back out” and sponge off the state, whereas a private insurer has more of an incentive to make sure people are not malingering.

Also, employers might cease to report minor accidents in case it increases their premiums.

]]> By: Blog Bits | Kiwiblog http://www.stephenfranks.co.nz/?p=2433&cpage=1#comment-4955 Blog Bits | Kiwiblog Mon, 26 Oct 2009 03:02:14 +0000 http://www.stephenfranks.co.nz/?p=2433#comment-4955 [...] Stephen Franks blogs on his experiences with ACC reform. [...] [...] Stephen Franks blogs on his experiences with ACC reform. [...]

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