Minutes of the meeting of the Board of the Accident Compensation Corporation held at
ACC Boardroom, Level 11, PwC Tower, 188 Quay Street, Auckland on Thursday, 30 May
2019 at 9.00 am.
Present
Dame Paula Rebstock
Chair
Ms Anita Mazzoleni
Member
Mr James Mil er
Temporary Deputy Chairperson
Ms Kristy McDonald QC
Member
(until 4.15 pm)
Mr David May
Member
(until 4.10 pm)
Ms Leona Murphy
Member
(until 4.10 pm)
Dr Tracey Batten
Member
Mr John Brabazon
Member
In attendance
Mr Scott Pickering
Chief Executive
Mr Mike Tully
Chief Operating Officer
Mr Peter Fletcher
Chief Technology & Transformation Officer
Ms Deborah Roche
Chief Governance Officer
Mr Herwig Raubal **
Chief Actuarial and Risk Officer
Mr John Healy
Chief Financial Officer
Ms Emma Powell
Chief Customer Officer
Ms Sharon Champness
Chief Talent Officer
Mr Paul Dyer
Advisor Investments
9(2)(a)
Executive Advisor
9(2)(a)
Head of Health and Safety Systems
9(2)(a)
Strategic Advisor
9(2)(a)
Manager Corporate Secretariat
9(2)(a)
Associate Company Secretary
9(2)(a)
General Counsel and Company Secretary
9(2)(a)
Senior Associate Company Secretary
** Attended via videoconference
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Procedural Business
Apologies
There were no apologies received for the meeting.
Register of Members’ Conflicts of Interest Arising
CONFIRMED: The Board reviewed the Register of Members’ Conflicts of Interest Arising and
confirmed that it was not aware of any other matters (including matters reported to, and decisions
made by, the Board at this Meeting) which would require disclosure.
Committee Updates
Investment Committee
Mr Mil er updated the Board on the key matters from the Investment Committee (BIC) meeting that
had been held on 29 May 2019:
• The fund was down by 17 basis points for the month.
• Management was hiring a new small cap manager.
• The Kiwi Group Holdings Ltd valuation would be undertaken by Deloitte.
• A proposed investments exclusion of companies in the firearms industry was recommended for
Board approval. The BIC had approved changes to the Investment Guidelines to include that
exclusion.
The Board discussed the overall Year End position which would be under benchmark, although the
actual result was stil not bad. The Board noted, however, that the OCL had increased and would
increase again.
It had been signalled during the BIC meeting that there might be a further $2-3 billion added to the
deficit as a result of Treasury’s assumption changes. The Chair of the Board Risk Assurance and
Audit Committee (RAAC) noted that she had brought forward the timing of external legal advice on
the going concern statement the Board was required to sign off.
RESOLVED: The ACC Board resolved to:
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Approve the exclusion of all companies in the semi-automatic firearms industry from investment.
Risk Assurance and Audit Committee
Ms Mazzoleni updated the Board on the key matters from the RAAC meeting that had been held
on 29 May 2019:
• 9(2)(a)
from EY had attended the meeting; this was his last year as auditor.
9(2)(a)
would take over from 9(2)(a)
. The Audit plan and ESCO ratings had
been discussed.
• The Committee had had a robust discussion on the level of fees in the Audit Proposal letter
(which was continued by the Board). The RAAC Chair noted that the increases in costs had
been benchmarked across the public sector by the OAG and they did seem appropriate. The
Board confirmed that it accepted the Audit fee increases. However, it would seriously consider
its options when the contract was up for renewal again.
• The risk management mitigation report had been considered—the Risk Office had made the
mitigations tighter and a risk reset shortly would improve the tightness again.
• A risk culture survey would take place with selected staff and Board Members over the next
three months.
• The Committee had considered a paper on cyber security in ACC’s third-party providers. The
Committee had requested that cyber security expertise be provided to assist with the
fund manager performance due diligence process.
• The Committee had received an update from Integrity Services and had requested that the
external and internal reviews be split out for the next update to the Committee.
• The OAG report into complaints was to be closed off by the next RAAC meeting.
• The Committee had considered an internal assurance review on injury prevention (IP).
• The Committee had considered next year’s Internal Assurance Plan and had requested
linkages to recurring themes and internal assurance findings.
• The Health Sector Strategy (HSS) IQA had been discussed and the Committee had noted its
disappointed that no Management response was included. The Committee understood that
Management would be undertaking significant work over the next couple of months, and a
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paper would be coming to the Board later in 2019. Ms Mazzoleni had asked the EY team to
interface with that work so there would be no issues with assurance.
The RAAC Chair drew the Board’s attention to hard copies of EY’s Portfolio Assurance report and
ICIP Status Update report which had been tabled for the Board. She noted the recurrent theme in
ICIP of not tracking the changes to projects.
The Board had a wide-ranging discussion on the HSS, resourcing, and the wider health sector. A
Board Member reported on having received feedback on the HSS from a large private surgical
facility, that the strategy was very good and was heading in the right direction, but that the
slowness of getting anything moving was frustrating.
Board Only Session
Chief Executive’s Report
Items raised by Mr Pickering were:
• Client Payments 1 – update
• NGCM - phase 3 consultation update
• Independent rehabilitation review update
• Staff engagement survey process and update
• US/Canada/Sydney – verbal update of trip meetings and next steps
• Hamilton Real Estate update.
Operational Reporting
4.1. (a) ICIP Reporting
Mr Fletcher summarised the report, focusing on four areas:
• Client Payments—Progress had been positive since go-live two weeks previously. Some
small problems had been corrected, including some issues with the exchange of data with
Inland Revenue. Over next two weeks’ usage of the system would ramp up.
• Analytics—On 18 May 2019, a significant milestone had been reached with core system
data from MFP having been successfully loaded into the Analytics datalake.
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• Next Generation Case Management (NGCM)—The code for NGCM was completed in mid-
May. ACC was currently well placed for the release of NGCM in August 2019.
• The positive tone of the ICIP report—With the exception of the HSS which was now
receiving Management attention, the Portfolio was in a more positive position than in
previous months.
The Board congratulated the team on the portfolio’s tremendous progress.
Mr Fletcher responded to a Board query regarding the timing of the benefits. He explained that,
overall, Management was stil feeling confident that ACC would achieve the overall benefits to
which it had committed. Some benefits had moved around, and other benefits relating to Analytics
had increased as opportunities from the platform were recognised. It was possible that some of the
green ratings should be amber in terms of the timing. However, Management was satisfied that the
portfolio was stil on track to deliver.
In response to Mr Fletcher’s reference to the commitment of the benefit of a 5.5 days’ reduction in
weekly compensation (WC) (as set out in the recommendations in the paper), after Board
discussion of the point, the Board requested that both the active claims basis and the exit basis be
reported, as the Board did not want to lose the existing baseline.
In response to a Board query, Mr Fletcher confirmed that Management now had greater
confidence in architecture.
RESOLVED: The ACC Board resolved to:
(a)
Note the ICIP Report
ICIP Benefits
(b)
Note the estimated 5.5 day reduction target resulting from more effective case
management is calculated on an ‘exit’ claims basis. The baseline of 97 days is equivalent
to the previous baseline on the ‘active’ claims basis. The exit claims basis has been used
by the NGCM project since its Launch Pad trial and has also been used in enterprise
reporting since August 2018.
(c)
Note that Management would report on both the active claims basis and the exit claims
basis.
(d)
Note the $75 mil ion per annum target expected through reduced pressure and expenditure
on healthcare relates to non-weekly compensation claims cost reduction. Any weekly
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compensation benefit delivered by the Health Services Strategy wil contribute towards the
5.5 day reduction in weekly compensation days paid target.
(e)
Approve moving the overall claim per resource baseline from 541 claims per resource to
532 claims per resource, as NGCM has identified a portion of staff (approximately 55) who
are classified as temporary but wil be transitioned to FTE as part of NGCM rollout.
Because these temporary staff have always existed but were not captured in the baseline, it
is proposed to add them into the baseline.
(f)
Note on the basis of approval of Resolution (d), Management wil update the reference in
paragraph 45(b) in the ICIP cabinet paper (attached at Agenda Item 6.5), to reflect the
change to the overall claims per resource baseline to 532 claims per resource.
Investments Technology
(g)
Note the Investments Technology Issues – Remediation Report.
(b) Performance Report
(b)
Claims Costs report
Mr Healy explained the significant increase in the OCL which was now estimated to be above $50
billion. This figure had taken into account the Treasury’s expected changes to its assumptions. The
Board discussed the impact of the interest rate assumptions on the solvency of the Accounts.
The Board Chair requested that updated figures be provided to her for her meeting with the
Minister on Tuesday 4 June, and also provided to the Board.
The Board asked Management to consider what else ACC could do to focus on the problem, and
suggested looking at claims leakage, at a case level rather than at the portfolio level.
(c)
Operational and Financial Performance report
Mr Healy introduced the report, explaining that the big issues in the report related to the financial
impact of interest rates. Board discussion focused on the following:
• The automation issues for classifying injuries affecting the Motor Vehicle Account. Mr Healy
explained that good progress had been made for this issue to be resolved by June 2019.
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• The the Investor Confidence Rating element of ‘asset performance’ changing from a rating of
8/10 to 2/10. Mr Healy explained that the assessment itself had changed drastically. Mr Healy
had challenged some of the lowered ratings but had been unable to move the officials’ views.
• The deficit, and the concern that areas of focus around WC had not resulted in a release of the
OCL strain which was now in the range of $650 mil ion to $900 million. Mr Raubal explained
that Management would be presenting draft results in either June or July.
• The phishing incident referred to in the report. Mr Fletcher explained that it had had no
negative impact. However, it was an area of increasing activity.
• The Level 3 privacy breach which had been previously reported to the Board. Ms Roche
explained where Management was up to in managing the breach, including that the Privacy
team was working closely with the Privacy Commissioner and anticipated a comment in his
Annual Report. In response to a Board a query regarding whether ACC would contact the
affected clients, Ms Roche suggested waiting for the work with the Privacy Commissioner to
complete. In response to a Board query as to whether the breach should have been picked up
in the legislative compliance review, Ms Roche explained that the Privacy team had reported
the issue through that process.
• Progress on the three Service Agreement initiatives relating to ‘
We actively make it easier for
others to work with us”, the June 2019 target dates for which would not be met. The Board
highlighted that Management needed to set realistic targets in the Service Agreement.
RESOLVED: The ACC Board resolved to:
(a)
Note the Claims Cost Report.
(b)
Note the Operational and Financial Performance Report and two pages il ustrating ACC’s
OCL and investment position.
(c)
Note ACC’s provisional Investor Confidence Rating result.
Presentations
Scheme Performance Comparison
Mr Tully introduced the presentation. Key points from the presentation were:
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• Overall, ACC had been working well with the three overseas schemes in sharing data and
insights.
• The other schemes did not report on rehabilitation duration rates.
• There were three motivators for the other schemes—decision timeliness, reviews / litigation,
and client satisfaction. The schemes were all different, with ACC being the most
comprehensive.
The Board’s discussion focussed on the following:
• Whether ACC could learn from the overseas scheme’s very high confidence score.
Mr Pickering explained how the scheme partnered with the private sector. Management was
looking to borrow from this model and build a work programme around it.
• Whether it was possible to show how economically efficient ACC was in comparison to the
overseas organisations, as it would help to paint a picture in telling business customers that
ACC presented good value for money.
• Claims growth. Mr Tully explained that all three schemes were also struggling with this issue,
and all were doing similar work.
• Whether ACC’s mediation and dispute resolution resources were taking on board modern
thinking about behavioural economics in mediation. Mr Tully would look into this.
• How the other schemes were funded. Mr Tully explained that they were levy funded. One of
the scheme set its own levies, and therefore was not politicised as ACC was.
• The extent to which the comparison information might be shared with the Minister or officials. It
was agreed that, if it were used, it would be anonymised. Mr Tully would ask permission of the
schemes in advance of any sharing.
RESOLVED: The ACC Board resolved to:
(a)
Note that Management has obtained comparative data and information showing the
performance of ACC as against that of three similar overseas schemes.
(b)
Note the key common measures where data was available indicate that ACC is performing
well.
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(c)
Note the better performing schemes across the key measures were ACC and Workplace
Safety and Insurance Board of Ontario, Canada.
(d)
Note most schemes have experienced significant claims growth in the past two years.
(e)
Note Workplace Safety and Insurance Board operates with legislation that gives them the
right to place a client back with their current employer or a similar one.
(f)
Note this comparative data wil be shared with L.E.K Consulting who have been engaged to
conduct an independent rereview of ACC’s overarching approach to rehabilitation systems,
performance measure and benchmark comparisons.
Implications of a Low Discount Rate Environment
Mr Raubal introduced the presentation. An updated hardcopy of the presentation was provided to
the Board prior to the commencement of the meeting. Mr Raubal explained that interest rates had
fallen quite significantly and were trending down, and that there were two key responses
available—asset allocation and funding targets. He was seeking the Board’s feedback and
direction on these two responses.
Mr Dyer took the Board through the first part of the presentation, and explained the background to
the low discount rate environment. Board discussion focused on the following:
• The way the market appeared to be responding to geopolitical risks. Mr Dyer explained that the
market’s behaviour indicated a belief that something would go wrong, and this was highlighted
by the flight to sovereign debt. Inflation was the factor that ACC should be watching.
• Whether ACC Investments had done everything possible to mitigate this risk. Mr Dyer
explained that taking on more swaps might help, but it was difficult to find counterparties to
take on the exposure.
• The organisation’s risk appetite regarding strategic asset allocation to higher equities. Mr Dyer
responded that it was entirely dependent on how much equity risk ACC was wil ing to take, as
there was a trade-off between the volatility of financial results and subsequent flow through to
levies, against the risk premium ACC earns. Assets were very expensive and were unlikely to
be sustainable at these levels.
• The Treasury’s likely views on this macro-economic picture.
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Mr Raubal queried how the Board wanted to think about full funding levels. He took the Board
through the rest of the presentation, noting that if the existing policy was strictly pursued, higher
and higher levies would need to be collected to maintain the solvency targets. Mr Raubal
presented three possible responses—
• keeping the policy as is but lengthening the timeframe to reach the solvency target;
• de-emphasise the funding adjustment by multiplying by some factor between 1 and 0;
• changing the solvency target directly.
Mr Raubal explained that de-emphasising the funding adjustment was the easiest to explain and to
calculate out of the three options. The underlying levy ACC collects would be based on the new
year costs. If this was the approach taken, the Board and Management would have to hope that
Treasury would understand and agree. Board discussion focused on the following:
• Whether Management could explore what other funds were doing to mitigate this risk. Mr Dyer
responded that there were not many similar funds with which to compare ACC since it was a
statutory monopoly. In his view, other funds were simply ignoring the issue.
• Treasury’s two-yearly change to the nominal long term interest rate, which ACC had
consistently viewed as being held too high.
• The likely political view of the options, and how to lead the conversation with Treasury.
• Whether ACC should be thinking differently about the solvency targets. Investment returns
needed to be higher than the growth rate in liability. However, the situation now was the
opposite. The Board suggested that the organisation should not hit a panic button, as the
Crown and the Board had other options available.
• Whether ACC should consider moving to a Pay As You Go model, at least for a period of time.
Mr Dyer explained that while that might be an option for a period, it was not a long-term
solution. Instead, the focus should be on new year costs and letting the solvency take a hit.
Mr Raubal explained that that was stil the fully funded model. The Board agreed that this was
the best option.
• The one-off event of interest rates dropping from 5% to 1%.
• Treasury’s focus for the funding policy review. Mr Raubal responded that Treasury was
focusing around the edges of the policy—largely around the solvency targets and some
administrative matters. Treasury had come on-board with the 10-year horizon.
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• Treasury’s level of awareness of the risks ACC faced. Mr Raubal suggested the conversation
with Treasury should be around the risk and how to manage it through investments and the
funding policy targets. Mr Dyer re-iterated that the status quo was the right position, but that
instead of rigidly applying the levy adjustments to meet the solvency target, solvency should be
used as a shock-absorber.
The Board emphasised the sensitive nature of the presentation and discussion.
ACTION: Management to provide an update, covering off the various Accounts and what would
happen if, in addition to the discount rates, there was a global shock.
RESOLVED: The ACC Board resolved to:
Note the implications of ACC operating in a low discount rate environment.
Board Papers
Customer Dissatisfaction and Escalated Complaints Reporting – Quarter 3
2018/19
Ms Powell summarised the paper, highlighting how the report had evolved since February 2019. It
now included information about root causes, and gave visibility of more severe complaints. It did
not yet include sensitive claims, but the future reports would. The quarter had seen a reduction in
the number of complaints escalated to the Resolutions Team. Customer service and the attitude of
the person the customer was working with were key to both the positive and the negative
experiences, along with timeliness of payments and clarity of entitlements decisions.
In response to a Board query regarding whether the 391 complaints referred to in the report was
the total number of complaints escalated, or the total number of complaints across the business,
Ms Powell clarified that it was the former, except that information was based on ‘dissatisfaction’
which may or may not relate to an actual complaint. Ms Powel added that she did not have the
total number of dissatisfactions, as they are notified through different forums. There was work in
train to introduce a single webform to collect data in a more systematic way.
In response to further Board queries, Ms Powell explained that—
• there was no data yet as to whether there were specific cohorts of high-complainers, nor
whether a common thread in complaints was regarding consistency of experience across the
health system and ACC.
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• ACC was looking at health insights and intelligence functions. The introduction of patient
reported outcome and experience measures would shed light on what was happening between
the client and the provider.
Ms Powell reported on the client experience with having complaints resolved. She confirmed that
the data indicated 77% of clients were dissatisfied with the complaints process.
The Board congratulated Ms Powell on the report.
ACTIONS: Management to—
• Provide the total number of complaints received, the total number of complainants, and the
total number escalated, as well as clarify the terminology for future reports.
• Provide more information on the long-tail cases for resolution beyond the 91% resolved
within seven days.
RESOLVED: The ACC Board resolved to:
(a)
Note the following 11 key insight themes contained within the Quarter 3 2018/19 Customer
Dissatisfaction and Escalated Complaints report:
i. Escalated complaint numbers decreased by 19%.
ii. The demographic make-up of complaints does not differ from the demographic make-up
of all Clients.
iii. The location of complainants also mirrors where all Clients come from.
iv. Challenges arising from the need for an initial diagnosis is driving complaints.
v. Customer service is the number one reason for escalated customer complaints.
vi. Staff attitude, communication, ease and fairness are the key drivers of customer
dissatisfaction expressed through Heartbeat.
vii. ACC staff attitude is the key driver of customer satisfaction expressed through
Heartbeat, with 34% of satisfied customers attributing this in some way to staff attitude.
viii.
28 complaints were found to contain a breach of the Code of ACC Claimants’
Rights.
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ix. 91% of escalated complaints were resolved within targeted timeframes.
x. 100% of Heartbeat cases were resolved within targeted timeframes.
xi. Satisfaction with ACC’s response to escalated complaints is low.
(b)
Note that there were ten severity 2 and zero severity 3 escalated customer complaint cases
during the third quarter, and that Management has taken the appropriate actions (outlined
in Appendix 2, Board Dossier of Escalated Complaints – Quarter 3 2018/19) to address
them. This analysis excludes complaints arising from Clients with sensitive claims. Quarter
4’s report wil include the sensitive claims analysis.
Analytics 2.0 Update and Contingency Request
The Board had considered the paper in Board only time. In response to a Board query, Mr Raubal
agreed to update the Board at a future meeting on the increased benefits from Analytics.
RESOLVED: The ACC Board resolved to:
(a)
Note the total funding required to complete full delivery of the Analytics 2.0 Project remains
at the level approved by the Board in November 2018, being $32.5 mil ion (which includes
total contingency of $11.4 mil ion, of which $9.7 mil ion has been used) over the financial
years 2016/17 – 2019/20.
(b)
Note the delivery timeframe needs to be extended by two months, from 30 June 2019 to 30
August 2019 to enable completion of the Project.
(c)
Note the Medical Fees Payments system was successfully loaded into the Analytics
platform on 19 May 2019.
(d)
Note the benefits profile of the Project has been revised to $250 mil ion from FY2019/20 to
FY2029/30.
(e)
Note progress since the November 2018 Business Case, including:
i. The infrastructure that comprises the Analytics Platform has been delivered.
ii. ACC’s data transformation engines have been developed and tested successfully
iii. Information Product development is underway
iv. Use cases for Fraud, Waste and Abuse detection have been defined.
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(f)
Note that since November 2018 several Project challenges have meant that only three of
the six core data sources (EoS, MFP, and Pathway) wil be delivered by the end of June
2019.These challenges include:
i. Resource contention with other projects including remediation, Payments, and Next
Generation Case Management.
ii. Defects identified with some core platform components, which have since been
resolved.
(g)
Note that Guidewire, Oracle Financials, and Experience Rating data are stil to be loaded
into the platform, to deliver the full scope of the project.
(h)
Note that extending the delivery phase of the Project wil enable delivery of data from ACCs
core systems.
(i)
Note that other options were considered, prior to requesting access to contingency,
including reducing scope to delivering the platform without data, but that this was
discounted due to the limited business value of the platform alone.
(j)
Approve a time extension to the Project of two months, to 30 August 2019 to enable
completion of loading the six data source systems into the Platform.
(k)
Approve the drawdown of the full remaining contingency funding, of $1.7 mil ion.
Health and Disability System Review – draft submission on health boundaries
The Board thanked 9(2)(a)
and Ms Roche for a very good paper, noting how well it identified
the position. The question remained how far to go in terms of addressing the boundary issues and
suggesting changes to address them. Ms Roche explained that her discussions with the Review
Panel indicated that the Panel was stil thinking at a very high level about national and local
planning, and was not at the detailed boundary level.
The Board had a wide-ranging discussion on the boundary issues, noting that changes could have
severe implications for the OCL. The Board used degeneration as an example ($220 million to
$800 million impact on the OCL), noting that care was required when the costs and full implications
were not known. The Board also discussed themes of ageism and fairness in the system, whether
an exemption from the Commerce Act should be sought, and the implications of changing the
queues in the health system by prioritising elective surgery over acute care.
The Board Chair and Dr Batten would sign off the amended submission, but it was to be provided
to the whole Board.
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RESOLVED: The ACC Board resolved to:
(a)
Note that the Terms of Reference of the Health and Disability System Review include
consideration of the interface between ACC and the rest of the health system.
(b)
Note the attached draft submission to the Health and Disability System Review Panel
(submission) provides an introduction to ACC and describes ACC’s unique role in the
health system.
(c)
Agree that ACC presents the submission to the Health and Disability Review Panel.
(d)
Delegate authority to the Board Chair and Dr Batten to sign off:
i. The final form of the submission; and
ii. the presentation of the submission on behalf of ACC to the Health and Disability System
Review Panel.
Degenerative conditions within the Accident Compensation scheme
Ms Roche summarised the paper, and highlighted the following three matters:
• Operational changes and the extent to which communication with providers could resolve
unhappiness in the system (managing expectations). The Board suggested that ACC’s
approach was inconsistent. If providers had clarity on what ACC could and could not cover,
they would be more supportive. Providing feedback to the referrer when ACC rejected a claim
would help significantly. In response to a Board query as to why ACC did not provide statistics
to providers to show how their referrals related to their peers’, 9(2)(a)
agreed to check how
quickly this could be implemented. The Board also asked whether the 6-24 month timeframe
referred to in the Appendix for resolving operational changes could be narrowed down further.
• Legislation Change – the Board left this discussion for a later date.
• Working together with DHBs to manage workflow. The Board discussed that, while it seemed
attractive, in practice there were quite different levels of care between the entitlement system
of ACC and the rationed care in the general health system.
The Board asked Management to consider how much angst would be removed from the system if
all the operational changes proposed in the Appendix to the paper were resolved: if 90%, then
there was the solution; if 10%, then it left a lot more to be done. Ms Roche responded that
interviews with providers indicated that if access to elective surgery in the health system was
better, a lot of the issue would go away.
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ACTIONS: Management to—
• Provide an update on the progress of the operational improvements at a future Board
meeting.
• Provide an update on progress with Degeneration to a future Board meeting.
RESOLVED: The ACC Board resolved to:
(a)
Note Our clients and providers have reported challenges with ACC’s approach to the
provision of entitlements for the consequences of degenerative conditions.
(b)
Note ACC has conducted inquiries and analysis to better understand the problems faced
by clients and providers, and explored opportunities to address the feedback we have
received.
(c)
Note Existing legislative settings do not enable cover to be provided for injuries caused by
pre-existing degenerative conditions, however we have explored a range of possible
legislative changes.
(d)
Note we have also identified changes that would improve the experience of clients and
providers. A number of initiatives are planned or already underway, including those within
the Integrated Change Investment Portfolio.
ACC’s June 2019 Integrated Change Investment Portfolio Progress Update
Ms Roche introduced the paper, explaining that it was an update of the previous Cabinet paper.
RESOLVED: The ACC Board resolved to:
(a)
Note that Cabinet noted in ACC’s February 2019 ICIP update, that ACC would report back
to the Committee on ICIP in June 2019.
(b)
Approve the contents of the attached Cabinet paper, ACC’s June 2019 Integrated Change
Investment Portfolio Progress Update.
(c)
Note that under a recent Cabinet Office direction, all Cabinet papers are required to be
proactively released within 30 business days of the final decision being taken by Cabinet,
and therefore the attached Cabinet paper wil be proactively released onto ACC’s website,
subject to the Minister for ACC’s approval and any redactions as appropriate under the
Official Information Act 1982.
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Quarterly Risk and Compliance Report
Mr Raubal summarised the paper, and highlighted the following:
• There had been significant findings in the HSS IQA report. Management was considering those
findings and working on them.
• The Government system reviews were largely benign for ACC.
• The voice of the customer work was on-going, although it was yet to be embedded in decision
making.
• The balance sheet, the OCL strain, and questions around the organisation’s capacity.
• There were some areas of success, including social rehab hours for serious injury, and
organisational change.
In response to Board queries, Mr Raubal explained that, overall, the profile was stil on the
conservative side, but not as much as last time, and, regarding the tool ACC used for legislative
compliance, Mr Raubal noted that he thought it was ComplyWith, and that nothing significant had
come out of the latest compliance survey.
RESOLVED: The ACC Board resolved to:
Note the Quarterly Enterprise Risk and Compliance Report.
Service Agreement 2019/20 and Annual Report approach 2019
Mr Healy summarised the paper, noting that Management had had feedback from the Minister
which highlighted three areas of chal enge on the draft Service Agreement:
• Short term rehab rates: The Minister was expecting to see greater improvements in the metric.
Management expressed the view that there was no ability to deliver anything more in the near
future. Management assured the Board that the ICIP Cabinet paper explained the changes
from the original ICIP business case. The Board suggested shifting the rehab target by 0.25%
in the out-years, as the Minister had been quite generous with his response.
• Whāia te Tika: ACC did not have the data to put in KPIs for 2020, however some additional
initiatives that were already in train would be included. Tangible achievements would be able to
be demonstrated for Māori.
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• Business and Provider trust scores: The Board noted the volatility in the scores, but requested
that the target be adjusted at least to the level of the actual.
The Board discussed the reduction in WC days paid and whether this was attributable to NGCM.
Mr Healy responded that there were also BAU improvements.
Mr Healy raised for Board consideration the plan for the Annual Report, highlighting the new ESG
reporting, and the proposed IP theme. After discussing the relative merits of focusing on ACC’s
response to the Christchurch Mosque attacks, and IP, the Board agreed that IP was a very positive
story for ACC.
The Board pointed out the importance of telling the transformation story throughout the whole
report. Mr Pickering added that it was important to highlight the commitment made to investing in
staff and also that two thirds of business customers were now engaging digitally with ACC.
The Board suggested including information about ACC’s investments performance against
benchmarks. The information would need to be anonymised. Mr Healy would add this information,
if possible in the time available. He noted that the planned timing was to have the Annual Report
out by the end of September and that this was a compressed timeframe compared with last year.
In response to a Board query as to whether Mr Healy could show adjusted figures in a manner
similar to the way private market entities showed adjusted profit numbers, Mr Healy acknowledged
that that was possible—and already was done in the monthly reports to the Board.
The Board discussed financial performance and service performance and concluded that it was
important to tell both stories.
RESOLVED: The ACC Board resolved to:
(a)
Note the feedback received on the SA19/20 and management’s responses.
(b)
Note the next steps for publishing the SA19/20 which include, updating the Service
Agreement to reflect any changes in response to the Minister’s feedback and uploading to
ACC’s website by early July.
(c)
Note the management’s proposed performance messages for the annual report and
provide feedback.
(d)
Note the proposed timeline for the annual report, with a first draft to the Board in late July
2019 and presentation to the House in September/October 2019.
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Review of Remuneration and Performance Policy
The Board had considered the paper in Board only time.
RESOLVED: The ACC Board resolved to:
Approve changes to Remuneration and Performance policy.
Performance Reports
Health, Safety and Wellbeing Report
Ms Champness summarised the paper, and highlighted the fol owing:
• April was the first month in more than two years that ACC had had no recordable lost time
injuries, and each and every person who had been off with an injury was back to full work.
• As had been indicated in the Weekly Board Report, there had been two recent engagements
with WorkSafe:
o A notifiable event had occurred after a ceiling tile fell in the Hawke’s Bay office.
Management was currently undertaking a review to see whether any other buildings
needed to be checked, and the response from the landlord in question had been proactive
o WorkSafe had received an anonymous letter identifying concerns about workload and
stress in the Sensitive Claims Unit. WorkSafe had indicated that it would not investigate,
since the complaint was anonymous. Ms Champness assured the Board that Management
was working hard to improve wellbeing in the Unit, including new teams, extra leadership
and restructured work. The Board discussed ACC’s whistle-blower policy.
• Opportunities for the Board to be involved in health and safety, including judging the SafeKiwis
staff awards—which Mr Brabazon agreed to do, and taking part in the SafePlus audit—which
Dr Batten agreed to do.
RESOLVED: The ACC Board resolved to:
(a)
Note actions underway to mature our safety system, demonstrate safety leadership and
strengthen our safety culture.
(b)
Note there were no notifiable events in April 2019.
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(c)
Note the health and safety performance indicators.
Legal Report and Policy Update
(a)
Legal Report
The General Counsel summarised the report, and highlighted the following:
• The legal team was proactively managing the 9(2)(a) judicial review proceedings, and the other
cases in train were being managed well.
• The ordinary consequences test case continued to progress. Management was considering the
feasibility of introducing additional clinical evidence, if leave could be obtained from the Court
of Appeal. The Board supported putting in the additional evidence if leave could be obtained.
RESOLVED: The ACC Board resolved to:
(a)
9(2)(h)
(b)
Note the Ng ‘ordinary consequences’ Test Case continues to progress: a procedural issue
raised by the respondent has been resolved in ACC’s favour and we are exploring the
potential to adduce new evidence.
(c)
Note that in response to a request from Treasury for information on ‘Specific Financial
Risks’ we have advised we are not yet able to provide precise information about the
magnitude of cost or the likelihood of the costs resulting from the decision in the
Ng ‘ordinary consequences’ Test Case materialising but we anticipate a more than 20%
chance the OCL impact wil be more than $100 mil ion over the next five years.
(b)
Policy Update
Ms Roche presented the Report, and highlighted the following:
• There was no further update on the work being undertaken for PHAS, other than that the
people involved were very positive about ACC.
• Following the Government announcement on the implementation of the recommendations from
the Mental Health Review, Management would continue to work with ACC’s mental health
providers and update the Board if there were any material changes.
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• The General Counsel had attended the update on the Royal Commission into Abuse in State
Care and concluded that it was too early for ACC to be involved. Ms Roche would keep the
Board updated as it evolved.
• Policy Updates:
o Increase in regulated payments—there would be a required increase of 2% for most
treatment types, which had been budgeted for.
o An anomaly in dental treatment rates had been clarified, which amounted to
c.$1 million a
year, but would not have an impact on budget until 2021.
o Future-proofing work was underway with Al ied Health Professionals.
o A Ministry of Health proposal to regulate paramedics would bring them under their own
professional decision making and into the treatment injury regime.
RESOLVED: The ACC Board resolved to:
Review of regulated payments to treatment providers
(a)
Note that ACC has completed a review of the rates prescribed in the:
i. Accident Compensation (Liability to Pay or Contribute to Cost of Treatment) Regulations
2003
ii. Accident Compensation (Apportioning Entitlements for Hearing Loss) Regulations 2010.
(b)
Note that ACC wil report to the Minister on the review of regulated rates, and provide
recommendations for a Government decision on the rates.
(c)
Endorse an increase of 2.05% over two years in regulated payments for:
i. Audiology services
ii. Counsellors
iii. Dentists
iv. Combined (nurse and medical) services
v. Medical practitioners
vi. Nurses
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vii. Specialists
viii.
Acupuncturists
ix. Chiropractors
x. Occupational therapists
xi. Osteopaths
xii. Physiotherapists
xiii.
Podiatrists
xiv.
Speech therapists.
(d)
Endorse an increase of 1.72% over two years in regulated payments for hyperbaric oxygen
treatment and radiologists.
(e)
Endorse maintaining existing regulated payments for audiology equipment.
(f)
Endorse separating the current ‘specified treatment providers’ grouping in regulations, and
provide separate regulations on payment rates for acupuncturists, chiropractors,
occupational therapists, osteopaths, physiotherapists, podiatrists, and speech therapists.
(g)
Endorse removing provisions in the regulations that require funding deductions for dental
treatment, where a claimant has received previous treatment on the same tooth for a
non-accident related purpose.
Paramedic regulation
(h)
Note that ACC intends to progress the addition of paramedics as a registered health
profession under the Accident Compensation Act 2001, if Cabinet approves the regulation
of paramedics under the Health Practitioners Competence Assurance Act 2003.
Cross-government activity
(i)
Note that ACC is actively engaging in:
i. The cross-government engagement for the Mental Health Inquiry
ii. The Welfare Expert Advisory Group’s recently released Report: Whakamana Tāngata –
Restoring Dignity to Social Security in New Zealand
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iii. The Royal Commission into Abuse in State Care.
Mates & Dates
(j)
Note that Appendix 2 to this paper contains Management’s comment on blog articles in
early 2019 that were critical of ACC’s Mates & Dates healthy relationships programme for
secondary schools.
Board Administration
Minutes of Meeting held on 17 April 2019
• The Board asked for the following changes to the Minutes:
o Mr James Mil er to be referred to as the Temporary Deputy Chairperson
o Ms Mazzoleni had been absent for items 5.1 to 5.2 due to attending a funeral
o Amending paragraph 4.2 to add:
In responding to a Board query regarding ROI on
violence prevention activities, Mr Raubal confirmed he would put some figures around it for
the future
o Amending paragraph 5.1 to remove the words:
as the analysis had not provided evidence
of drugs affecting injuries
APPROVED:
the ACC Board approved the minutes of the meeting held on 17 April 2019, subject to
the changes identified above.
Schedule of Matters Arising
The Board discussed the Schedule of Matters Arising and asked that due dates be given to all
matters.
The Board
noted the Schedule of Matters Arising.
Confirmation of Decisions Made Out of Cycle
The Board discussed the out of cycle decision that had been made, noting that the Board
members had all expressed some concerns in relation to the paper, but had felt in the
circumstances it had needed to approve the paper.
RESOLVED: the ACC Board resolved to:
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Confirm the one decision made out of cycle for the period of 12 April 2019 to 23 May 2019 as
recorded in the attached Board decision Register, subject to noting the concerns that had been
expressed by Members.
Annual Work Programme
The Board considered the work programme. The Board Chair suggested that at some point the
Board should test whether there should be additional items added to the programme. The Board
Chair asked that a future Board meeting be held at one of ACC’s Branches. After discussion, it
was proposed to schedule the Dunedin office for a Spring 2019 Board meeting.
The Board also discussed inviting various stakeholders to lunch with the Board to discuss relevant
topics. The RAAC Chair noted that she had invited 9(2)(a)
from the University of
Waikato (analytics) to speak at the RAAC meeting or perhaps the Board strategy day in July, and
the Chair noted that 9(2)(a)
was attending the Board strategy day. Mr Pickering would invite
Michael Barnett to attend lunch with the Board in the coming months.
NOTED: The ACC Board
noted the annual work programme.
General Business
There was no general business.
Confirmation of Next Meeting
To be held at the ACC Boardroom, Level 7, Justice Centre, 19 Aitken Street, Wellington on
Thursday, 27 June 2019 at 9.00 am.
Closure
The meeting closed at 4.30 pm.
Approved
Chair ………………………………………………………….
Date ………………………………
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Document Outline