Reforms will lift costs, ACC warned
The Accident Compensation Corporation (ACC) is doubling its investment in a huge business transformation programme to $669 million, forecasting that will make its staff an extra 10 per cent more productive.
However, one expert has forecast the plan will ‘‘backfire’’ and lead to more injury claims that will end up costing the organisation more than it saves.
ACC chief executive Scott Pickering said a new approach to case management would see it pre-approve more treatment for less-complex injuries.
That would mean about 30 per cent of claims would be largely ‘‘selfmanaged’’ by claimants through an online portal.
Documents released under the Official Information Act did not spell out the staffing implications. But they did state that ACC expected to increase the number of claims that it processes from the current figure of 589 per full-time employee per year, to 662 by 2022.
ACC employs about 3415 staff now, so the target implies ACC would make do with about 400 fewer staff, assuming it did not face an increase in claims.
Pickering played down the job implications, saying ACC had not embarked on the project with the sole purpose of reducing headcount.
ACC would ‘‘manage and measure’’ staffing over a four-year period, during which time it might normally expect about 1000 staff to leave due to natural attrition, he said.
The state-owned insurer committed $320m to its ‘‘Shaping our Future’’ project in 2016 despite officials warning of ‘‘marginal’’ direct financial benefits.
The ‘‘whole of life’’ cost of Shaping our Future was estimated at that time at $456m.
It was expected to deliver a separate 10 per cent efficiency gain by lifting the number of claims handled per employee from 549 to about 600.
But board documents released under the Official Information Act said that ACC realised there were opportunities to go further.
Shaping our Future has now been bundled up into a broader programme of work called the ‘‘Integrated Change Investment Portfolio’’ (ICIP) which is expected to cost up to $669m by the time it is completed in 2022.
ACC is expecting the biggest single additional productivity gain from a new $38m to $58m investment in its ‘‘nextgeneration case management system’’, which is due to be completed by 2020.
ACC forecasts ICIP will leave ACC $203m better off, and Pickering said clients would spend fewer days on average receiving compensation.
However, he acknowledged that a similar claim for Shaping our Future had not yet been realised.
Dunedin barrister and researcher Warren Forster, who has represented ACC claimants, forecast ICIP would cost ACC money rather than delivering savings.
More self-management would result in more claims, and clients staying off work for longer, he said.
‘‘ACC swings like a pendulum between being generous and ‘ungenerous’. At the moment it is swinging towards being more generous, so the number of claims is going up.’’
But Forster said he was concerned about what might happen when the pendulum swung back in the opposite direction.