Social Epidemiology Insights Into The Drivers of Change in ACC Claims Rates. The Social Production of ACC Claim Rates

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1 Social Epidemiology Insights Into The Drivers of Change in ACC Claims Rates The Social Production of ACC Claim Rates John Wren Principal Advisor ACC Research Grant Pittams ACC Research Manager

2 Key premises Well founded sociological and economic behavioural theories and evidence are available to inform understanding of the drivers of ACC Claims rates The Scheme is a social and political construct rooted in New Zealand s social dynamics Understanding this helps to understand drivers of claims rates

3 What are Sociological Insights? Systematic ideas about: How social relationships influence people s attitudes and behaviour How major social institutions affect us How we affect other individuals, groups, and organisations Involves the use of the sociological perspective and imagination respectively Alan Berger (2006 & 2010). Sociology.

4 Insights may emphasise Patterns and Predictability in social order Social Systems or Individual Actions Source of Motivation of individuals and social groups Why people / social groups act Macro or Micro social effects / interactions Patterns of Power / Resistance e.g. Economic differences, Use of Language, Gender Politics, Class Politics, Group Dynamics Everything in between

5 System and Individual Action Effects Co-payments example:

6 Impact of Policy, Legal or Operational Entitlement Decisions On Claims Volumes Extent Type of Injury Cover Least Clear Line moves up if providers and clients perceive claims are more likely to be accepted Med Fees Actual & Potential Claim Volume Potential Scope Injury / Occ Health Cover Number of Claims Weekly Comp & Serious Injury Claims respectively Line moves right as clients access treatment or providers register more claims Most Clear Extent Treatment, Rehab Services and Compensation Cover Least Clear

7 Fundamental insights informing model Consistent: seasonal fluctuations long-term patterns by type of Claim patterns vary by type of Claim macro and micro economic behavioural effects impact differently upon Type of Claim Med Fees Only Weekly Comp Other Entitlement Claims

8 Fundamental insights informing model Significant differences between the Scheme Accounts in terms of: claim volume claim proportion cost types of injury claim Small % changes can = large volumes and costs in some accounts Scheme Accounts comprise: Work Motor Vehicle Earner Non-Earner Self-employed

9 Fund Type 1,000,000 Non Earners 800, ,000 Earners 400, ,000 Work - MV

10 Basic Structure of ACC Claims

11 Basic Structure of ACC Claims: Cost vrs Volume Example: 2010 Expenditure by Claim Type $1,600 $1,400 $1,200 $1,000 $M $800 $850 Expenditure on Weekly Compensation Expenditure on Entitlements Expenditure on Med Fees $600 $400 $200 $0 $444 $479 $94 Weekly Comp Claims $76 Entitlements other than WC $324 Med Fees Only

12 WC Claims per 10,000 workers WC Claims per 10,000 workers 110 Unemployment Rises ES Changes Implementation of 'Giltrap' Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10

13 Social Dynamics ACC Research commissioned research among GPs to explore whether they had changed their behaviour in any way that may account for the reduction in GP initiated Med Fee claims. GPs were asked: Did they have an opinion as to why claim numbers may have dropped? Had they changed the way they decide whether a claim should be lodged with ACC or not? Had they noticed whether injured workers are more or less likely to take time off work on ACC and why?

14 Had GPs changed the way they certified time-off for their patients and in what ways? GP responses: 18% of GPs said they had changed the way they decide whether a claim should be lodged with ACC most attributed this to ACC tightening up on which claims are accepted and which are declined particularly those related to gradual process so why lodge a claim if it may not be accepted? The recession has impacted access to health services (due to the cost) and people are more reluctant to take time off work in case it jeopardises their job Some GPs commented that with minor injuries it wasn t worth the time or hassle filling in the paperwork

15 Social dynamics 33% felt that their patients were taking less time off work due to injury largely attributed to financial restraints and concerns about loss of jobs. 27% of GPs stated that they have changed the way they certify time off this generally reflected a shift towards encouraging gradual return to work.

16 Summary Claim rates are the same now as they were in 2001 i.e. the net growth in claims over the decade is explained by the increase in population. Changes in strategic direction are observed to be associated with changes in claim rates. Claim rates rose from 2005 until 2008 falling back to previous levels by From 2005 the focus was improved access, then from 2009 it changed to value for money. The downward trend in claim numbers has now levelled off, and in the absence of significant changes in funding or policy settings, new claims can be expected to increase gradually over time in line with population change.

17 Summary There is a time lag between turning points in economic series and claim numbers claims turned before economy in 2008 no clear economic association for some types of claims for work claims there is international evidence that lower employment leads to fewer claims Clear policy effects associated with some types of claims but not all Need to treat Med Fees differently from Weekly Comp Claims in terms of drivers of change. Plausible drivers of Med Fees Provider and Claimant Behaviour in short-term. Long term Health System change in role of service delivery Plausible Drivers of Weekly Comp are: Risk Exposure (Hours Worked) Entitlement (Policy and Legal cover decisions)

18 From Model to Policy Implication Firstly Policy-makers have to weigh two opposite effects according to their priorities. If accident prevention or better insurance coverage is a primary goal, one could increase benefits, while evaluating claims for minor and hard-to-diagnose injuries more vigorously to alleviate moral hazard effects and control costs If financial constraints are binding, policy-makers should be aware of the empirical evidence that higher benefits lead to an increase in total compensation costs (and moral hazard effects or increased inequity in entitlement access). (Lanoie. 1992:66).

19 From Model to Policy Implication Secondly investment in effective injury prevention interventions is necessary to improve the sustainability of the Scheme in the long term Thirdly operational efficiencies have a role in contributing to the cost of services and efficacy of outcome.