Clients feel pain of ACC cuts

Kevin Norwood, 49, who has become partially deaf through work but was turned down for ACC funding for a hearing aid. Photo / Steven McNicholl

Physiotherapy claims paid for by ACC have slumped by nearly a quarter, reflecting the social insurer's sharp cut backs in health treatment - at a time when New Zealand's rate of injuries is continuing to climb.

The Government-directed strike at cover by the Accident Compensation Corporation has borne rich financial fruit at the Crown-owned entity, with a 6 per cent drop in spending on claims in the June year.

ACC chairman John Judge, controversially appointed last year during what the Opposition asserted were exaggerated claims of a financial crisis at the corporation, has trumpeted its $2.5 billion surplus for the last financial year.

"This means that rather than the $12.8 billion net liability at the start of this financial year," he writes in the 2009/10 annual report, "the Scheme now has a $10.3 billion net liability. This is a remarkable turnaround and a real credit to all of ACC's staff."

He might have - but didn't - give credit to senior official Phil Riley, whose 2009 work on the corporation's ideological shift, from "social insurer" to "insurer", from interventionism to safety-net provider, coincided with a large shift of long-term recipients of ACC's weekly compensation to Government welfare benefits.

This shift involved 1956 people in the latest June year, up from 764 two years earlier, according to official figures supplied to Greens MP Kevin Hague.

This increase of nearly 1200 people moving from long-stay compo to welfare nearly matched the reduction - highlighted by ACC - in its tally of long-stay compo claimants in 2009/10. The tally stood at around 13,100 in June, down from a peak of about 14,400 at this time last year.

More cuts are coming.

ACC has promised the Government it will slash the number receiving weekly compensation long-term by at least a further 1150 people by next June.

Denise Powell, the head of claimants support group ACClaim Otago, said many long-term claimants who were bumped off the system ended up not getting even a welfare benefit because their partner worked.

"It's certainly having a huge impact psychologically on quite a few of our members. We've had several people who have had suicide attempts relating to the pressure they have been put under."

In healthcare, the most noticeable reductions have been in GP care and physiotherapy - because these are numerically and financially the biggest sectors funded by ACC (although these patients are generally levied a co-payment).

Paid physio claims reduced by 23 per cent in the year to September, after ACC ended the free-to-the-patient system that ran at many physio practices last November. Patients now generally face a physio co-payment of around $17 for a first consultation covered by ACC.

But some of the greatest misery for rejected patients is likely to be in the elective surgery category and especially in shoulder surgery, where a new, hard-nosed policy has forced many on to public hospital waiting lists.

Others will have paid privately or turned to their private health insurer.

Advocates and lawyers who represent aggrieved ACC claimants say they noticed a big increase in rejections of surgery applications last year and a consequent increase in the number of cases being taken through the review process.

Reviews shot up last year to 9182, from just under 6000 the year before - and the number of claimants whose review applications succeeded rose at the same rate, according to Government figures supplied to Labour.

The proportion of surgery claims that were rejected rose to 20 per cent last year, from 12 per cent the year before.

Nelson-based advocate David Wadsworth, of Access Support Services, said, "It tells us their decision-making is flawed. Once they have made a decision, no matter what evidence we provide, they won't change their decision."

Previously ACC had often backed down when given strong evidence its decision was wrong.

"We believe, especially in terms of surgery, that they are playing a numbers game. Only so many people will have the wherewithal to go through the review process."

This view is also held by Christchurch orthopaedic surgeon Gary Hooper, the president of the Orthopaedic Association. He said ACC was turning many older people down simply because they were older, which was taken to indicate their condition was largely related to wear and tear and ageing, rather than an injury.

He cited a patient turned down for shoulder surgery after he grabbed at a railing when a ladder slipped while he was painting his house. The rotator cuff tendon was torn, a condition which can cause pain and decreased function.

It has a more than 90 per cent chance of cure if repaired surgically, but if left, the tear can increase in size and become inoperable. The patient was 87, but Mr Hooper said he "looks about 60 - physiologically he's about 60". ACC said he had underlying changes in his shoulder.

"There's nothing on any radiology investigations that support that contention.

"The primary reason he was turned down is that he's 87."

A leading shoulder and elbow surgeon, Khalid Mohammed, said entitlement to rotator cuff surgery was a difficult area to define because the tendon was subject to wear and tear and ageing.

ACC legislation specifically withholds cover for injuries that are "wholly or substantially" - usually taken to mean "largely" - caused by ageing.

A member of a group of surgeons negotiating with ACC to resolve the shoulder cover difficulties, Mohammed undertook a comprehensive review of scientific studies to determine the reliability of x-ray and other imaging results which had been used in deciding whether shoulder changes were in fact longstanding or degenerative.

"Sometimes certain imaging findings ... have been used as evidence to decline a case which I feel should have entitlement.

"My article was to look at the validity of those findings in detail."

The results? "There are some findings on imaging studies that do indicate that there have been significant problems for a long period of time.

"And there are other findings that in the past have been suggested as associated with a degenerative process which do not, in effect, have any accurate or relevant bearing on that."

He had given his findings to ACC and believed they had produced a change.

"I feel there has been some improvements ... in the decline rate decreasing recently for shoulders."

There are also concerns about the scope of practice of some of the medical practitioners ACC relies on for advice to determine cover, partly because surgery has become so highly sub-specialised. Often these opinions are just two sentences long.

Mr Wadsworth said many of the ACC-sourced medical opinions that had been used to reject his clients' claims looked very similar to each other.

"There's one particular one that keeps coming up ... He was writing one-line opinions.

"He was almost cut-and-pasting from one to another - the same opinion and changing the person's name and maybe one or two words."

The Government quietly acknowledged that ACC's tightening up on surgery approvals would shift patients on to public hospital waiting lists.

In the Budget this year, Health Minister Tony Ryall announced "an extra $59.5 million for elective surgery over the next four years", and that public hospitals had done even better than he had asked at increasing their volumes of elective surgery.

But it later emerged in a Ryall cabinet paper that $40 million of the money was to cater for patients being declined by ACC and who were now causing "increasing waiting times" on public hospital lists.

Subsequently, officials have expressed uncertainty about the size of this ACC to public hospital shift.

One area in which ACC has partially backed down is on claims by victims of sexual abuse.

Following an outcry, the corporation in August announced that although the restrictions it introduced last year were in line with its legislation, it acknowledged this had "exposed gaps" in services and it would provide extra support.

Labour's ACC spokesman David Parker said the corporation had become too tough.

"The tough attitude in terms of saying no and expecting people to fight for their rights seems to have become more prevalent."

But ACC Minister Nick Smith said the Government had had little choice but to pull ACC, which it viewed as a social insurance scheme, back from its "slippage" since 2004.

It had to balance the costs of ACC to business, households and motorist with the rights of genuine accident victims.

"There was a 57 per cent increase in claim costs from 2004 to 2008, five times the rate of inflation. That was unsustainable."

He said this had been masked under Labour by the booming share and property markets, which had given ACC a misplaced complacency over ballooning claims growth.

Long-term weekly compensation claimant numbers were back down to their 2005 level.

Physio claims went from 373,000 in 2004, to 477,000 in 2008, and with the re-expansion of patient part-charges, this was expected to drop back to about 390,000 this year.

"If you look at elective surgery, the number ... this year is more than in 2005 and 2006, but those numbers increased by 30 per cent.

"The very clear instructions I have given to ACC are that they need to meet their costs when they clearly are an accident, but they should not be allowing drift from other public or social services such as Welfare or Health into ACC."

Review numbers had risen from roughly around 600 cases a month, to 800, "a small increase".

But ACC was winning a large majority, and this was virtually unchanged.

ACC'S ELECTIVE SURGERY BILL

In the latest six-month period, ACC paid for:

* 2385 fewer operations than it did two years ago.

* January-June 2008: 20,679 operations

* January-June 2010: 18,294 operations

* Reduction: 11 per cent