Postby happybaboon on Thu 18/Dec/08 11:30pm

iodi wrote:But that is only a small part of the story. Competitive businesses also have incentives to innovate - creating new products/services, improving existing products/services, improving productivity, reducing costs, etc.


Do you really want your accident insurance provider to come up with innovative reasons to tell you to fuck off when you make a claim because they want to reduce their costs?
:eh:
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Postby Kazmeistyr on Fri 19/Dec/08 1:43am

j2hyde wrote: Private accident insurance for work cover combined with legislative standards does provide strong incentive for employers to increase OSH standards in the workplace. Evidence is unequivocal on this.


Very, very true.
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Postby iodi on Fri 19/Dec/08 8:46am

j2hyde wrote: Private accident insurance for work cover combined with legislative standards does provide strong incentive for employers to increase OSH standards in the workplace. Evidence is unequivocal on this.

Yes, but would the incentives be stronger with a bit of competition?

The following is a summary of what happened when NZ accident insurance was exposed to a bit of competition in 1999:

ACC discussion paper* wrote:The Benefits of a Competitive Market

Six private providers and a state owned insurer entered the market on
1 July 1999 with dramatic reductions in premiums and significantly improved services.

While the competitive market for workplace accident insurance was only permitted to operate for nine months, spectacular results were obtained.

(a) Fewer accidents - 40% reduction in claims lodged
Accident Rate Claims Lodged
Year Ending 30.6.98 267,830 (ACC)
Year Ending 30.6.99 246,964 (ACC)
Year Ending 30.6.00 145,000 (Pvt. Insurers)

(b) Rehabilitation improved
Return to Work - ACC - Private Insurers
3 months 72% 81%
12 months 88% 97%

(c) Fewer Disputes
Referrals to Reviewer / 100,000 Claims
Year Ending 30.6.98 212
Year Ending 30.6.99 205
Year Ending 30.6.00 28

(d) Lower Premiums
The move to a competitive market saved employers $200m per annum. The ACC average premium for the year ended 30 June 1999 was $1.70 per $100 whereas under the competitive market the average fell to $1.20 per $100.

* From the ACT Party - hardly an impartial observer, but it is the best summary I could find.
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Postby iodi on Fri 19/Dec/08 8:48am

happybaboon wrote:Do you really want your accident insurance provider to come up with innovative reasons to tell you to fuck off when you make a claim because they want to reduce their costs?
:eh:

ACC still use letters delivered by mail to reject claims. Sooo last century.
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Postby neels on Fri 19/Dec/08 9:15am

It's all very well to extol the virtues of private accident cover over ACC for employers.

But with reference to the tax cut / ACC levy increase situation(giving with one hand taking with the other), would I be correct in saying that the employee levy is used to fund non work accident cover, and even if your employer opts for a private insurance provider employees do not have this option and therefore still have to pay whatever levy ACC imposes on them?
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Postby dhroadie on Fri 19/Dec/08 9:24am

iodi wrote:
dhroadie wrote:In simple terms, a private company is obliged to make money for its shareholders. A public service like ACC doesn't have to worry about profit margin, since it's Government-funded.

Therefore, it makes sense to assume private accident care will cost the consumer more, since the provider not only has to provide the care at a certain cost, but tack a bit on top so they can report a profit at the end of the financial year.


Government monopolies have little or no incentive to do those things. Instead, they focus on other priorities, like minimising embarrassment to their Ministers (though they don’t seem to be very good at that).


:huh:

I work for a Government department, guess by now I should be used to ignorant generalisations like this.
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Postby phunk on Fri 19/Dec/08 9:25am

dhroadie wrote:
iodi wrote:
dhroadie wrote:In simple terms, a private company is obliged to make money for its shareholders. A public service like ACC doesn't have to worry about profit margin, since it's Government-funded.

Therefore, it makes sense to assume private accident care will cost the consumer more, since the provider not only has to provide the care at a certain cost, but tack a bit on top so they can report a profit at the end of the financial year.


Government monopolies have little or no incentive to do those things. Instead, they focus on other priorities, like minimising embarrassment to their Ministers (though they don’t seem to be very good at that).


:huh:

I work for a Government department, guess by now I should be used to ignorant generalisations like this.


I worked for a govt department, its not an ignorant generalisation.
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Postby Joel on Fri 19/Dec/08 9:28am

i hear the statement "keep us out of the papers" a lot. So minimising embarrasement is a factor.


There is also the factor of leveraged company structure. ACC is dedicated to it's purpose, it does nothing else.. and has a completely standalone agency structure with all the overheads that go with it. ACC and efficient are not two words that go hand in hand.


IF an existing private companies got involved, they woud leverage existing company structure and assets (with some additional to cope with demand, and increased business scope).
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Postby slidecontrol on Fri 19/Dec/08 9:42am

TheRealHotKarl wrote: I blame God.


leave Eric Clapton out of this :hmmm:
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Postby iodi on Fri 19/Dec/08 9:43am

dhroadie wrote: :huh:

I work for a Government department, guess by now I should be used to ignorant generalisations like this.

Generalisation - yes.
Ignorant - no.

Have a look at the enormous literature on the relative efficiency of public vs private organisations. The literature will tell you that under appropriate circumstances competition between private businesses will generally produce outcomes that are more efficient than those produced by public (or private) monopolies.

There are, of course, situations in which public provision of products/services is the best approach. However, the evidence from the brief opening to competition of accident insurance is that it isn't one of those situations.
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Postby Tama on Fri 19/Dec/08 9:51am

I really wonder where this obsession with:
public institutions = wasteful and inefficient
private institutions = productive and efficient
comes from.

Have people really bought into the ideological bullshit that gets shovelled out of the far right that much? Or do they have a bad experience with a government department and attribute it to every facet of the government (while forgetting about being put on hold for 40 minutes by a private company when you call about sorting out a problem they have created).

Both are capable of great efficiency and both are capable of waste. The world isn't black and white and as we've seen from the late 80s and early 90s wholesale privatisation of public institutions doesn't necessarily lead to better efficiency, better service or better choice.

[edit]That was aimed at iodi's last post - just a general observation about discussions on Vorb around public vs private[/edit]
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Postby Joel on Fri 19/Dec/08 9:56am

Tama wrote: I really wonder where this obsession with:
public institutions = wasteful and inefficient
private institutions = productive and efficient
comes from.

Have people really bought into the ideological bullshit that gets shovelled out of the far right that much? Or do they have a bad experience with a government department and attribute it to every facet of the government (while forgetting about being put on hold for 40 minutes by a private company when you call about sorting out a problem they have created).

Both are capable of great efficiency and both are capable of waste. The world isn't black and white and as we've seen from the late 80s and early 90s wholesale privatisation of public institutions doesn't necessarily lead to better efficiency, better service or better choice.


i don't believe that privatisation is the solution for all problems, but there are scenarios where it is the better option. ACC i believe is one of them.

Another aspect is the govt can get it self caught where it owns a competing services (Rail) yet it is also the regulator. Where it is trying to encourage freight etc onto rail....which i agree with but i think this situation is going to end up in court.
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Postby philstar on Fri 19/Dec/08 9:59am

iodi wrote:
ACC discussion paper* wrote:The Benefits of a Competitive Market

(a) Fewer accidents - 40% reduction in claims lodged
Accident Rate Claims Lodged
Year Ending 30.6.98 267,830 (ACC)
Year Ending 30.6.99 246,964 (ACC)
Year Ending 30.6.00 145,000 (Pvt. Insurers)

* From the ACT Party - hardly an impartial observer, but it is the best summary I could find.


deliberate mis-information, I dos not state how may clams were lodges with ACC in the year ending 30.6.00.
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Postby iodi on Fri 19/Dec/08 10:04am

Tama wrote: I really wonder where this obsession with:
public institutions = wasteful and inefficient
private institutions = productive and efficient
comes from.

Have people really bought into the ideological bullshit that gets shovelled out of the far right that much? Or do they have a bad experience with a government department and attribute it to every facet of the government (while forgetting about being put on hold for 40 minutes by a private company when you call about sorting out a problem they have created).

Both are capable of great efficiency and both are capable of waste. The world isn't black and white and as we've seen from the late 80s and early 90s wholesale privatisation of public institutions doesn't necessarily lead to better efficiency, better service or better choice.

[edit]That was aimed at iodi's last post - just a general observation about discussions on Vorb around public vs private[/edit]

I am often surprised - and somewhat bemused - by the ferocity with which some people assert one extreme or the other. Yet when presented by evidence that is contrary to their assertions, the response is usually either denial or personal attack. An occasional robust counter-argument would be a better response.

Personally, I just care about what works. Sometimes that is public provision, and sometimes it is private businesses competing.
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Postby Kazmeistyr on Fri 19/Dec/08 10:16am

If we look back to rodgernomics, and why that horrible experience had to come around in the first place - this is what gives me the willies with govt owned enterprises that have a monopoly. The railways in particular, was just a big social welfare program.

However, if we look at kiwibank, which entered into the market with competition to private, it actually had the effect of making the privately owned banks reduce their rates and increase service etc. When Kiwibank was first launched, I was very sceptical and loathed that a party was using an enterprise such as this for political gain. I am delighted to be proven mistaken.

I am purely against govt. having a monopoly on an industry, as I am with private corps. having one.
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