Injury Prevention Rehabilitation and Compensation Amendment Bill (No 3) — First Reading 
Injury Prevention Rehabilitation and Compensation Amendment Bill (No 3) — First Reading 
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Injury Prevention Rehabilitation and Compensation Amendment Bill (No 3) 
First Reading 
Hon CHRIS CARTER (Minister of Conservation) 
 on behalf of the 
 Minister for ACC 
: I move  
That the Injury Prevention Rehabilitation and Compensation Amendment Bill (No 3) be now read a first time. 
 At the moment I intend to move that the Health Committee consider the bill. 
Over 3 years ago the Injury Prevention Rehabilitation and Compensation Bill was introduced. This became the Injury Prevention Rehabilitation and Compensation Act which provides a fair and sustainable scheme for minimising both the overall incidence and the impact of injury in the community. One of the key goals of the Act is make the scheme more responsive to the needs of claimants. This amendment bill continues to progress this goal principally through changes to the existing medical misadventure provisions. 
Following the introduction of the Act a major review of the medical misadventure provisions was undertaken. A new category of treatment injury was proposed to replace the existing medical misadventure provisions. The primary purpose of this bill is to implement those changes. The new category will remove the requirement to find fault as is the case with some claimants for medical misadventure or to prove that a medical injury is rare and severe as is the case with other claims for medical misadventure before a patient is entitled to accident compensation cover. This approach is more consistent with the no-fault nature of the scheme. As a result of these changes more people will be eligible for cover and outcomes for claimants will be considerably improved. 
The bill also makes changes to the Accident Compensation Corporation’s reporting provisions for treatment of injury. The aim of these changes is to build a partnership between the Accident Compensation Corporation and the health sector that moves away from the punitive system of finding fault in reporting medical misadventure cover decisions and encourages learning initiatives when things go wrong while still protecting public safety. This partnership will gain the cooperation of the health sector to participate in the claims process which will aid fairer outcomes for claimants. 
Currently the Accident Compensation Corporation has a legislative requirement to report medical error to the relevant professional body and to the Health and Disability Commissioner. This will no longer be required under the new provisions. Instead the Accident Compensation Corporation will report information to the relevant professional body if it considers that there could be a risk of harm to the public. This is consistent with recent changes introduced by the Health Practitioners Competence Assurance Act 2003. The Accident Compensation Corporation will also be required to inform claimants of the role of the Health and Disability Commissioner in investigating complaints and the standard of care provided. 
It should be noted that the new definition of “treatment injury” will not cover all medical injuries. Injuries that are an anticipated or necessary part or consequence of treatment such as surgical incision and those that result from a patient’s underlying health condition will not be covered; nor will there be cover just because the desired results were not achieved. 
These changes are the result of an excellent consultation review in which the Government worked in partnership with key stakeholders and with the public. I would like to take this opportunity to thank my colleague Lianne Dalziel for her work in setting up this review. The review was a three-stage process beginning with the discussion of the issues with stakeholder groups then public consultation on the issues and possible solutions followed by further consultation with stakeholder groups as a result of the feedback from submissions on the options for change. As a result there is wide consensus held on the direction that the new provisions provide from almost all those involved in the process including health practitioners medico-legal experts claimants and others. 
The bill also includes a number of secondary issues operational improvements and technical changes aimed at making the scheme more responsive to the needs of claimants. For example the bill provides the Accident Compensation Corporation with the discretion to provide certain rehabilitation entitlements such as for the payment of attendant care for a claimant who is overseas and requires care beyond the 28 days provided in the legislation. The bill also provides fairer methods for calculating weekly compensation for people who move into self-employment by factoring into the calculation income from other work undertaken during the income year. 
The bill builds on the framework provided by the existing legislation providing a fair comprehensive and equitable accident compensation scheme that is responsive to the needs of claimants while maintaining a responsible approach to fiscal and levy costs. The Government is committed to providing strong public services. Creating a fair and simple accident compensation scheme that reduces the incidence and impact of personal injury is our overall goal. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 National will support this bill but with considerable reservations both regarding the substance of the bill which is basically about medical misadventure and regarding some of the miscellaneous additions the Minister has mustered into this amendment. National does remain deeply and legitimately concerned that under this Labour Government the Accident Compensation Corporation is a State-run monopoly that provides little choice. By its very nature where there is no individual risk rating it tends to conceal real incentives and to conceal real problems. I have heard from many many upset constituents over the last few years that they do not have the right to sue in New Zealand apart of course from in the area of gross negligence where clearly it is right and proper for that right to be retained. 
National has supported a no-fault system in New Zealand since 1974 largely because it recognises the huge practical problems that occurred when claims relating to accidents went through the courts. Back in 1974 it was recognised that delays would often take years and then at the end of that time only a small proportion of claimants would in actual fact be compensated. Even in modern-day Boston it is said that only 5 percent of accident claimants at the end of a long trail are indeed compensated. The average time taken is usually 5 years and the compensation itself is hugely distorted by very high figures which cause the insurance premiums to be very high in the US. 
But I am concerned that the Government’s review which was carried out over 2 years although wide did not consult the private sector. It certainly did not consult the New Zealand Insurance Council or individual insurers such as QBE. There was as I say wide agreement about this review which identified the following. Firstly the medical mishap criteria are arbitrary often bearing little relation to the circumstances of the patient and resulting in claimants unfairly missing out on cover. Secondly the medical error criteria require it to be established that an individual practitioner or organisation is at fault which is clearly at odds with a no-fault system. There are some obvious anomalies with regard to that. For instance in my practice if I had snipped a ureter by mistake while carrying out a hysterectomy and if it was regarded as a rare and severe event with an incidence of less than 1 percent then the patient would be compensated. If however an individual had an unfortunate experience that occurred more than 1 percent of times then that person would not be compensated because it would not be deemed to be rare and severe. Clearly that is quite an anomaly and it should be sorted out. 
I note that the review of the medical misadventure provisions noted that the accident compensation cover decision and the requirement that the Accident Compensation Corporation must report individual practitioners involved in accepted medical error claims as well as patterns of medical mishap claims to the relevant registration authority results in health practitioners’ reluctance to participate in the claim process. That is of huge practical importance as well. The long delays with the process and the stress both on the claimant and on the practitioner is enormous and can sometimes be very negative. However it is hugely important if this process is to be put in place that individual practitioners do take responsibility for their shortcomings and that a process is in place to allow a free and frank discussion of adverse incidents—of how they can be prevented in the future and of how processes at all levels could be improved. It is absolutely necessary both on behalf of the public and on behalf of health practitioners to participate in continuous quality assurance programmes to aspire to best-practice guidelines and for provider organisations to develop accreditation programmes. Undoubtedly the reputation of professional providers depends on them fully participating in such programmes. Not to do so will earn public mistrust and disrespect. 
I also note that the reporting requirements similarly move the Accident Compensation Corporation from having a fault-finding role to one that captures information for the injury prevention purpose of the accident compensation scheme and therefore aligns the role of the corporation with its orientation and expertise. If there is a determination by the Accident Compensation Corporation that there is a risk of harm to the public the corporation will be required to report that risk and other relevant information to the person or authority with responsibility for safety in that area. That is a significant change. Again I say it is absolutely vital that health professionals move proactively to demonstrate that their organisations take the provision of the highest-quality services extremely seriously and that they act quickly to rectify faults when they are identified. I note that “treatment injury” itself will not cover injuries that are anticipated as part of or as a consequence of treatment such as a surgical incision. But there will be a big grey area there. Any practising surgeon will know that all sorts of things can happen to surgical incisions and there will be questions as to whether they were a treatment incident or whether they were a part of the normal process. There will be disputes and that is to be predicted. 
It is of concern that the Government has provided no impact statement in this bill. I learnt in the select committee that this legislation is likely to cost about $10 million to the public in terms of increased levies. I think it is quite appalling that the Labour Government has failed to bring in an estimation of that cost. I believe that the one it did provide to me is likely to be unreliable. It is hugely important that the Government faces up to the reality of what this significant bill will cost the Accident Compensation Corporation. Right now the medical misadventure account covers injuries from any unexpected outcomes of medical or surgical procedures that were properly carried out and it is funded from the earners and the non-earners accounts. The levy costs in total about $106 million and the claims liability is about $383 million. It is important that those figures are kept in mind. I note the way that the sponsor of this bill the Hon Ruth Dyson has absolutely omitted to include the financial aspects of this bill which are all-important. The accident compensation scheme is hugely costly to New Zealand—in the order of over $2 billion. Yet the Minister says that these changes will cost only $10 million. The cost of accident compensation is extremely important. It is also important to realise that 70 percent of treatments are carried out by public providers and therefore increased levies will fall on the providers in district health boards as well as on those in private practice. 
It is also to be remembered that it is the patient who has the accident and in a private individual situation patients would be individually risk rated. But at the same time the doctor could be sued through the malpractice system. 
LIANNE DALZIEL (Labour—Christchurch East) 
: 
 Nothing could make me happier than to take a very brief call in this debate to welcome the introduction of the Injury Prevention Rehabilitation and Compensation Amendment Bill (No 3). As a former Minister for ACC I was able to begin a process that has now ended up with the bill that is in front of the House today. The process I began was to establish a working-party to look at the issue of medical misadventure. For the brief period that I was the Minister I was deeply concerned to try to address an anomaly that had bothered me for a number of years. Bill Birch of course was a significant distraction to the issues of accident compensation in the 1990s when he set about destroying our accident compensation scheme with the 1991 amendments— 
Hon Harry Duynhoven 
: On top of many other things. 
LIANNE DALZIEL 
: On top of many other things as my colleague points out. But also in addition the previous Government decided to privatise big chunks of accident compensation. So we have had the opportunity to restore accident compensation to the public system that it was before the 1990s and to ensure that New Zealanders would benefit as they have from having a public accident compensation scheme. The public scheme has protected ordinary New Zealanders from the dramatically increased cost of insurance premiums all around the world since the events of September 11. This country has been protected from those increases because this Government has made sure that we have a public scheme that works in the interests of all people. 
This legislation will get rid of an anomaly that has bothered me and other members of the Labour Party for a long time. We will have a scheme in place to ensure that when an injury results from medical treatment people are treated in the same way as they would be treated if their particular injury had occurred in any other circumstance. If the injury occurs in a hospital setting at the general practitioner’s rooms or when people are being treated by a registered health professional they have to prove that either the health professional was at fault—and this is in a no-fault scheme—or the condition or the injury that arose as a result of the medical treatment was both rare and severe. It had to meet one of the two tests—either that there was fault or that the result was rare or severe. The difficulty with that particular set of tests is that a number of people who suffered their injuries as a result of medical treatment have had to go through a very in-depth process of either showing that their medical professional was at fault or showing that what happened to them was both rare and severe. Even if something dreadful had happened if it was relatively common it was something that they had to carry as their own risk. Yet somebody who gets behind the wheel of a car without putting on the seatbelt is entitled to have all of his or her treatment costs met even though that person knows the risk is that the extent of any injury will be far greater than if he or she had put on the seatbelt. Why was medical misadventure singled out in that way? I still have not heard a good enough reason for that. 
I am very pleased to see this bill in the House today. I congratulate the Hon Ruth Dyson. I think she has done a tremendous job and continues to do a tremendous job as the best Minister for ACC that this country has ever had. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I am impressed by the former Minister’s speech. I thought she gave a very good speech and covered the facts very well. But what she did not tell the House was that 5 years ago when the Labour Party first came to power and wanted to renationalise accident compensation New Zealand First made representations to that member and the current Minister at the same time in the same room and told them to do something about medical misadventure. 
Lianne Dalziel 
: I wasn’t the Minister then. 
PETER BROWN 
: Yes I sat with the member— 
Lianne Dalziel 
: I wasn’t the Minister 5 years ago. 
PETER BROWN 
: The member sat in the same room alongside Ruth Dyson. We had a cup of coffee and I told the member how concerned New Zealand First was about not introducing medical misadventure. I tried to introduce it into the accident compensation legislation and everybody voted it down—everybody. 
Lianne Dalziel 
: I wasn’t the Minister. 
PETER BROWN 
: The member was not the Minister but she was in the loop. 
It is an absolute disgrace that it has taken 5 years for this bill to get to the House. I personally am delighted with this bill and my colleagues are very very pleased indeed. I am delighted because I have been the New Zealand First spokesperson on accident compensation for quite some time and I have had to listen to case after case of accident victims who have suffered at the hands of doctors hospitals or whatever—and it makes sad listening. I am certain that Sue Bradford will agree with me that it is not pleasant to hear the stories of people who go into hospital to get something fixed and come out a damn sight worse than when they went in. 
I am pleased to see this legislation come to pass but the honourable former Minister who had that portfolio for only 6 months said that she instigated this review 2 years ago—a review that told us exactly what we knew. It told us no more than we already knew 5 years ago. Nevertheless we are pleased that the bill has finally got to the House although we are not overly convinced it will do everything it should. We will be fighting at the select committee to make it more all-embracing. For example will it cover mental illness? Does anybody know? Will a person who is wrongly diagnosed with a mental illness be covered by this? Will the Accident Compensation Corporation front up to any sort of damage that results from or is caused by people with mental illness? It will not. Do members over there— 
Steve Chadwick 
: It’s about medical injury. 
PETER BROWN 
: It is about doctors making mistakes and if a doctor makes a mistake with a mentally ill person will this measure cover it? It will not. Should it cover it? We think it should. Given that the Government has sat on its hands for 5 long years before starting to do anything will the legislation be in any way retrospective? I think that the answer is no. 
Steve Chadwick 
: This is about medical injury. 
PETER BROWN 
: I say to the honourable member who is shouting out across the House in a most undignified manner that that is not good enough. There have been many cases in the last few years of medical misadventure. For those who do not quite understand it I point out that medical misadventure embraces medical mishap and medical error. 
Steve Chadwick 
: It tidies those up. 
PETER BROWN 
: It tidies them up but will it in any way be retrospective? 
Steve Chadwick 
: No never. 
PETER BROWN 
: No it will start on the day it starts. 
Steve Chadwick 
: A line in the sand. 
PETER BROWN 
: I thought the member had more heart more compassion. New Zealand First is a party of compassionate people. We feel for accident victims. We certainly listen to them. Can we fix this? Yes we can and we will endeavour to get a degree of fair retrospectivity into this bill. 
Sue Bradford 
: Is your party going to use that again in the next election? 
PETER BROWN 
: I think we might. Clearly it has impressed members here so I think we might. But by the time the next election arrives we might well have fixed everything. One never knows. This measure is a reasonable attempt to fix some concerns about accident compensation. We want to recognise that and give the Government some acknowledgment. The fact that it has taken 5 years for the bill to get here is by the by certainly in its books. This bill goes on to address a number of other things. 
Steve Chadwick 
: That member needs chelation therapy. 
PETER BROWN 
: I am glad the honourable member raised it! I tell her that I have spoken to a number of people who have had chelation therapy and not one of them speaks ill of the system. 
Barbara Stewart 
: Will the ACC pay for it? 
PETER BROWN 
: That is a good question. I want the Minister of Health— 
Darren Hughes 
: We could do a whip around. 
PETER BROWN 
: The members over there think it is a joke. I tell them that when people have chelation therapy for potential heart problems or whatever they do not think it is funny at all. I suggest to those members that there might be more in the system—more in chelation therapy—than that member over there gives it credit for. I would like the Minister of Health who is a forward-thinking Minister to instigate some sort of trial of that system. That is all I am asking for and I will attempt from time to time in this House to get her to recognise it. 
For a few minutes I will tell the House about a lady a Mrs Karen Griffen from Whakatane who had what one might call a very innocuous accident—she ate a pineapple lump. I can see that Judy Turner knows of the case. She came to see me some time ago. Eating a pineapple lump nearly killed her. The doctors did not know how to treat her and neither did the hospitals. They virtually said she was a head case and that she should go home. She felt she was nearly dying. 
 I will read some extracts from this article. Karen Griffen claims that doctors at the hospital refused to treat her when she was critically ill dismissed her illness as psychological and sent her home to die. Finally a local general practitioner fixed it after all the anguish this lady went through. But will this bill fix this situation in the future for someone else? Mrs Griffen is OK now I am pleased to tell the House as far as I am aware. But will this bill fix that? No it will not. 
Steve Chadwick 
: It was ingestion of a pineapple lump. It was not an injury. 
PETER BROWN 
: I tell the member that if someone is nearly dying they do not care whether it is because of the ingestion of a pineapple lump or something else. The doctors did not diagnose it correctly and she suffered hugely as a result. I would tell that member Steve Chadwick to show a little bit more compassion. We should look at the width of this type of injury if one likes and see whether we can cover more people rather than just confining it to a few. This is a good opportunity for the House to look at it in a positive manner. 
Steve Chadwick 
: Do an amendment. 
PETER BROWN 
: I will put forward an amendment if necessary. 
Darren Hughes 
: A pineapple amendment! 
PETER BROWN 
: That man makes a joke of it. The young fellow has a lifetime in front of him and he makes a joke of a lady who nearly died as a result of a fairly innocent type of thing. I think the member should hang his head in shame. 
If I have one disappointment it is that this bill will go to the Health Committee. That is a disappointment because I will not be on that select committee and I have taken an interest in accident compensation for quite some time. But I have a very able colleague who will keep the Government members in line. She is a very compassionate lady and she will ensure that this bill is modified to suit New Zealanders. Another part of me is actually pleased that the bill is going to the Health Committee because I know that that committee can handle it promptly and we can get this bill passed promptly whereas the Transport and Industrial Relations Committee—where the bill should probably go—is bogged down with other work. So part of me is pleased about where this bill is going and part of me is disappointed. New Zealand First is pleased to see this bill come to the House and we will certainly support its referral to select committee. I seek leave to table the article. 
Document by leave laid on the Table of the House. 
SUE BRADFORD (Green) 
: 
 The key component of this bill constitutes a significant and positive reform in the way the Accident Compensation Corporation deals with medical misadventure cases and on that basis the Green Party will be voting for it to go to the select committee today. 
For many years there have been huge problems for anyone trying to make a compensation claim under the medical misadventure provisions as thousands of injured people can testify. As well as all those people whose claims are turned down I believe there are even more who have never filed a claim because of the evident hopelessness of getting anywhere given the stringent conditions that are applied. The present system has also created tensions and difficulties within the practice of medicine with doctors seeing every claim as a potential threat to their personal and professional future. This has not been useful at a time when the health system is finally beginning to learn that it would be better if the sector could learn honestly from mistakes and slippages made rather than putting the emphasis on allocating blame and protecting individuals from legal action. 
Before I go any further with medical misadventure and other aspects of this bill however I would like to deal with the potentially controversial subject of acupuncturists. One important aspect of the legislation in front of us this afternoon is that it amends the definition of acupuncturist in terms of who can treat people under accident compensation legislation. The proposal is to extend the definition of acupuncturists to include members of the New Zealand Acupuncture Standards Authority who have a health professional qualification and either a 1-year full-time postgraduate qualification in acupuncture or a level 7 diploma in acupuncture. At present only members of the New Zealand Register of Acupuncturists are eligible for accident compensation treatment payments. I understand that the New Zealand Register of Acupuncturists is bringing legal action against the Government because of the Government’s move to expand the pool of professional acupuncturists eligible for accident compensation payments. The Green Party intends to carry out its own further investigations into this issue and our ongoing support for the bill is dependent on working towards a reasonable outcome in this area which we hope will be satisfactory for all concerned. 
I turn now to the medical misadventure provisions of this legislation. The Green Party is as I said earlier delighted to see that at last there will be an end to the anomaly in which medical misadventure was the exception to the otherwise no-fault nature of the accident compensation scheme. Currently cover for medical misadventure is restricted by section 32 of the Injury Prevention Rehabilitation and Compensation Act 2001 to what is defined as medical mishap medical error and the transmission of infection caused originally by medical misadventure. At the moment medical mishap is seen as an adverse consequence of treatment that is severe and rare. 
We believe that this has given rise to situations of serious injustice over and over again. There are many examples but I will give just two. In district court cases in 1998 and 2000 the court upheld decisions to decline cover for medical mishap in cases of the severe back condition arachnoiditis caused by a myelogram dye test. The Accident Compensation Corporation had relied on the incidence of arachnoiditis not being a sufficiently rare outcome of the myelogram procedure to meet the test for medical mishap to deny claimants access to income compensation. As a result of the Accident Compensation Corporation declining cover backed up by the court people whose lives had been ruined by a genuine medical mishap were denied accident compensation support and of course on top of that were eligible only for sickness or invalids benefits if they did not have a partner earning during the relevant period. The use of the severity and rarity criteria has meant that arbitrary and unjust decisions have been applied to many claims. The sooner we can bring an end to this parlous situation the better. 
The second subset of medical misadventure is medical error. This is currently defined roughly speaking as personal injury resulting from the failure of a registered health professional or organisation to provide treatment at a standard of care and skill that could be reasonably expected in the circumstances. There are significant difficulties with this from the point of view of injured people. The principles behind this are totally at odds with the no-fault basis for the rest of the accident compensation scheme. 
 Health professionals are often reluctant to cooperate in determining claims because of the possibly significant and deleterious consequences to them personally. This concept of medical error is markedly out of step with a sensible and structural approach to solving problems within the health system. On top of that those types of claims can often involve massive delays of up to 9 months or more for the unfortunate individuals who are trying to get help at a time when they may well be suffering significant pain and incapacity. 
The proposal in this bill to replace cover for personal injury caused by medical misadventure by personal injury caused by treatment from 1 February next year will help to address most of those anomalies and the Green Party welcomes that change. However within that area we do have one or two concerns that we hope might be dealt with during the process of select committee consideration. First of all there is a proposition within the bill that will exclude from cover personal injury that is solely attributable to a resource allocation decision. To give one example of what this might mean the provision could be applied to someone who is denied accident compensation cover when the recurrence of a metastatic cancer that is caused by delays in the provision of radiation therapy for a primary cancer occurs solely because there are not enough radiation therapists or equipment to carry out the treatment in a timely manner. Unfortunately that is a very real kind of situation in New Zealand at present and we would like to see the bill amended to remove that exclusion at least for injuries of such severity that they currently qualify as medical mishaps—for example those causing death hospitalisation for more than 14 days or significant disability for more than 28 days. 
Secondly The Green Party has concerns about the time limit on making decisions on claims of medical misadventure. At the moment the maximum time limit for the corporation to make a decision on a claim is 9 months and that is retained in the new bill. That time limit has been a major concern for claimants who are kept in limbo often with no support at all for lengthy periods. The Green Party is keen to see the bill amended so that the Accident Compensation Corporation will be allowed a shorter time limit to process claims. 
I move now to one or two other features of this bill. We welcome the amendment to provide discretion for the Accident Compensation Corporation to provide entitlements in areas where it is currently not liable to do so. Current legislative restrictions mean that the Accident Compensation Corporation is prevented from granting discretionary entitlements even when it clearly would be beneficial to both the claimant and the corporation to do so. Examples include the 3-year limit placed on vocational rehabilitation and the 28-day limit on the provision of attendant care while outside New Zealand. However quite strangely the new bill takes away with the same hand that gives with its proposal to exclude such discretionary decisions from the review and appeal process. The Green Party will oppose any of the Accident Compensation Corporation’s decisions being protected from an application for review or an appeal by a claimant. That is especially important given that there are already very limited rights of review in this area. 
Finally there are a number of other fairly minor reforms to accident compensation in this bill that the Green Party does support. Those are for example amendments relating to cover for mental injury due to sexual abuse prior to 1 July 1992 changes to the definition of earnings as an employee and an amendment to the definition of “accident” which corrects a rather strange anomaly resulting from certain court decisions. 
This is a bill whose overarching purpose is well overdue and I hope the select committee process will allow members to improve it where it is not quite right. I congratulate the Minister on her persistence in bringing about long-needed changes to the way in which the Accident Compensation Corporation deals with medical misadventure and I look forward to hearing what submitters have to say. 
HEATHER ROY (ACT) 
: 
 The Injury Prevention Rehabilitation and Compensation Amendment Bill (No 3) appears to be a series of amendments tidying up Accident Compensation Corporation anomalies that exist at present. The key measure of course is the new regime for treatment injuries. It is interesting to have a quick look through the explanatory note where the Government states that its aim “moves away from the punitive system of finding medical error and reporting medical misadventure cover decisions: gains the co-operation of the health sector to participate in the claim process to support claimants to make claims … : supports and acts as a catalyst for quality/learning initiatives in the health sector:” and “helps maintain the safety net through reporting cases …”. 
All of these are very worthy and I think that not a person in this Chamber would disagree with them. In my mind the question is in practice how all of those points will be achieved. It is a good start to try to deal with the difficulties around medical mishaps. The definitions which include “error” and “rare and severe” criteria will be replaced with a definition of “personal injury caused by treatment” or as it is referred to throughout the bill the newly defined “treatment injury”. That is a step in the right direction. 
Madam Chair I am just finding it a little difficult to concentrate with the conversations happening around me. 
Madam DEPUTY SPEAKER 
: Can I say to members—please can the member be seated—it is very difficult for members to hear. 
HEATHER ROY 
: I think that given the Accident Compensation Corporation’s “no fault” approach to accident compensation it is very logical to deal with these things. Some time ago when these changes were first mooted I made some statements. I think that for too long there has been an incentive for patients to find fault with the performance of our medical professionals—I will come on to the flip side of that coin in a moment. A separation of guilt and compensation and a fairer system of medical misadventure assessment is long overdue. Under our current system a claimant is expected to prove fault by a health professional who then has to be found culpable in order for compensation to be awarded. That has provided in the past a tempting financial incentive for a patient to prove that his or her health professional has erred. That obviously is unacceptable and there should be no such incentive in a fair system. Changes are definitely needed to ensure that anyone seeking medical compensation does so but not frivolously. 
The Minister has said on many occasions that people who should be entitled to compensation have been missing out when it comes to medical misadventure. It is very important that there is some sort of balance in this regard. ACT has maintained for quite some time that the fairest and most efficient way to deal with this matter is to establish an insurance-based scheme that should be open to competition including involvement from the private sector. This would ensure that while deserving patients are compensated our health professionals are not left open to illegitimate claims. 
Going back briefly to what the Government intends in this legislation it talks about supporting and acting as a catalyst for quality learning initiatives in the health sector and I believe that that comes back directly to protected quality assurance provisions for all health professionals. Those have been seen for many years and have developed well over the past decade amongst the medical profession and that profession has been including other health professionals as time has gone on and other health professionals have also developed their own good-quality quality assurance programmes. 
The Health Practitioners Competence Assurance Act which is due to come into force in September provided a lot of discussion around this point. At the beginning many of us on the select committee were very unhappy with the provisions for the protection of quality assurance programmes. Those concerns have in the main been dealt with and certainly the medical profession and many of the other health professionals’ bodies have now decided that they can operate well with them. But what we want to establish is an environment where health professionals feel they are able to get together with a degree of protection and discuss mistakes that have been made in a no-blame environment and learn from the experiences of those who have been in such positions themselves. 
Before I move forward much further I would like to talk a little about the accident compensation scheme generally and again these are points that are pertinent to this legislation although they do cover the whole of the scheme. ACT has always been unhappy that injuries caused by accident are covered for compensation but illness is not. Those of us who have worked in the medical profession do not have to look very far to find examples. In fact if one wanders into any orthopaedic ward in the country in either private hospitals or public one will often see two patients in beds side by side. One might be somebody who is perhaps in his or her 60s who through no fault of his or her own has developed osteoarthritis and requires surgery for a joint replacement. It is not uncommon to find in the next bed a young person who might have had a motorbike accident—frequently caused by that person’s own mistake—and because it was an accident that person is covered for compensation. Those of us who have worked in that situation often observe the injustice those two separate injuries present despite the fact that they receive similar treatment and the patients have similar health needs. New Zealanders deserve a health system that deals with those two categories requiring medical treatment in the same way. Many people seem to have given up on creating that fair kind of system but it is achievable by using insurance-based schemes. 
For a brief period of course in 1999 we did have a glimmer of hope about achieving that type of system. Competition was introduced into the market and the private sector was allowed to tender alongside the public. The choice that was presented to the employers for the employers account in this regard is something that ACT is certainly committed to achieving again. 
But if I turn back to the bill I find it does appear logical to align “treatment injuries”—as the new definition will be—with the general no-fault approach to accident compensation. But ACT would like to highlight some potential problems. 
The bill tries to define treatment injury so as to exclude the particular injury or complaint itself. Some might say that that is logical but for others it would signal a creeping extension of the accident compensation scheme to cover sickness and ill health and I do not think that is the intention of this legislation at all. But in trying to define it issues do arise. The new section 32(2) proposed to be inserted into the Injury Prevention Rehabilitation and Compensation Act by clause 13 describes the sorts of things that are not considered personal injuries and there is a list. They include the underlying condition. They also include anything that might arise from a logical progression of the condition or treatment if it is an anticipated part of the treatment and may include known side effects as an example. But then the new section 33 defines “treatment” extremely widely. It includes treatment diagnosis and even the decision not to give treatment or to not provide treatment in a timely manner. Potentially any situation where a health professional fails to immediately and correctly diagnose a condition and correctly treat it could be construed as a treatment leading to a treatment injury. That could even apply perhaps to the non-treatment of the thousands of people on waiting lists for elective services. 
But going back to the new section 32(2)(c) that paragraph lets the Government off the hook by excluding from the definition of personal injury caused by treatment or treatment injury “personal injury that is solely attributable to a resource allocation decision:” and this is where the waters suddenly become very murky. The lack of treatment or failure to provide treatment is defined as a treatment—so far so good. But what if the injury is not solely attributable to a resource allocation decision? What if that is only 90 percent of the reason for the injury? So here I think and my concern is raised that this opens up the grey area for lawyers and litigation that has been discussed by some other members. There is a grey area in what is a result of a resource allocation decision and a grey area as to whether and to what extent any treatment is an anticipated part of treatment. It would seem that conflicting medical opinions will be all that is required to show that some doubt exists as to the cause of any injury. I too like Dr Hutchison would like to highlight that there is no regulatory impact statement with this bill and we will be raising that at the select committee. 
JUDY TURNER (United Future) 
: 
 I rise on behalf of United Future to support the referral of the Injury Prevention Rehabilitation and Compensation Amendment Bill (No 3) through to the select committee stage. As a consequence of a recent review initiated by the Government this bill is primarily designed to change the way in which medical misadventure claims are covered by the accident compensation scheme. Such claims fall into two categories: medical error which covers the failure of a health professional or organisation to observe a certain standard of care and medical mishap which covers adverse consequences of treatment. But perhaps the most significant amendment in this bill is that it removes the distinction between the two and replaces them with a definition of “personal injury caused by treatment”. Medical misadventure claims now cost about $47 million a year and the changes are estimated to cost an extra $8.69 million because the new definition of “treatment injury” does broaden the scope of claims. 
Amongst the present criteria for a successful medical mishap claim is the requirement that the injury needs to be both rare and severe which means that it must occur in no more than 1 percent of cases and in some cases requires at least another 14 days of treatment. Such criteria are too arbitrary often bearing little relationship to the circumstances of patients and resulting in a significant number of claimants unfairly missing out on cover. It probably comes as little surprise to learn that since the medical misadventure system was introduced in 1992 60 percent of claims have been declined for failing to meet the criteria. 
In terms of establishing medical error the current criteria mean establishing that an individual practitioner or organisation is at fault. That has always been inconsistent with the no-fault ethos of the accident compensation scheme. The removal of the distinction between error and mishap under this bill and the new focus on personal injury caused by treatment directs the Accident Compensation Corporation to examine the injury that results not whether someone is to blame for it. 
In addition the current requirement that the corporation must establish responsibility and report individual practitioners involved in medical error claims to the relevant registration authority has resulted in reluctance to participate in the claims process on the part of health practitioners. As a result the resolution of claims is often delayed or hindered and it is the person who is injured who suffers as a result whether medical error is established or not. 
It is expected that practitioners will be more receptive to an accident compensation claim investigation if they know that it is focused more squarely on ascertaining whether the patient is eligible for assistance rather than determining where the fault lies. That raises the question of who has responsibility that those who make medical errors are investigated. Under the bill the Accident Compensation Corporation will have a clear obligation to inform claimants of their ability to complain about treatment injury and of the role of the Health and Disability Commissioner. If the corporation decides there is a risk of harm to the public as a result of information it collects in order to process claims then it must report the information to the agency that has statutory responsibilities for addressing and determining competency issues such as the Director-General of Health. That is entirely consistent with the corporation’s injury prevention role. 
It is also fair to point out that the mechanisms for dealing with practitioner competence have developed significantly since the medical misadventure scheme began. Since the establishment in 1996 of the Health and Disability Commissioner to resolve patients’ complaints and accountability concerns there has been a fourfold decrease in the number of practitioners facing disciplinary hearings. District health boards have improved systems in place to monitor and address issues arising from adverse medical events and the passage of the Health Practitioners Competence Assurance Act last year created a single regulatory framework for health professionals. 
Perhaps the key area of concern for United Future is that the bill may not go far enough to ensure that incidents of treatment injury are fully investigated. That is not to say that that should be the responsibility of the Accident Compensation Corporation as we accept the position that that is not the intent of the scheme nor is it where the corporation’s expertise lies. But we do need to make absolutely sure that some other entity steps into the breach and it needs to be aware of what is going on when it does so. This House is all too familiar with one common cause of most incidents of systemic failure: the lack of inter-agency coordination. Perhaps the examples that spring most readily to mind are those tragic instances where the agencies involved in child protection have failed to work together to ensure the safety of abused and neglected children. 
I am concerned that the desire to put the Accident Compensation Corporation at arm’s length from investigations into staff competence could lead to a situation whereby the risk of further injuries is not adequately communicated to those who have responsibility for practitioner competence and conduct. For example what is the threshold for action in a situation in which the Accident Compensation Corporation decides it should pass on information that it collects in the course of processing claims that suggests there is a risk of harm to the public? Does the corporation wait until it is aware of repeated instances of error or does it act only when it considers the problems to be systemic rather than simply accidental? And are there such things as accidents or on the other hand is there a danger that the reporting requirements that remain will still lead to reluctance from health practitioners to participate in the claims process if they feel they will be reported to their professional body? Those are certainly issues that the committee will need to focus on when considering the bill. But at this stage we are very happy for it to enter the process and we will support the first reading. 
STEVE CHADWICK (Labour—Rotorua) 
: 
 I take a short call to say that I am delighted the bill will be referred to the Health Committee which is a very able committee due to its membership across the parties and which will be able to consider this bill thoroughly. The one aspect of the bill that I think is very exciting is the removal of the “fault” or “rare and severe” test that is currently required by the Accident Compensation Corporation. It has been a stumbling block and has meant that patients have not been able to get their full entitlement for compensation quickly because the high threshold for rare and severe conditions has had to have been tested out. There are many other aspects of this bill that are very very positive. It is the third accident compensation bill of this Government and I look forward to considering it in the Health Committee. 
JUDITH COLLINS (National—Clevedon) 
: 
 I too will take just a short call on this bill. The previous speaker for the National Party Dr Paul Hutchison summed up this bill very well. There are a couple of little issues I would like to highlight. The previous speaker Steve Chadwick has just commented on the “fault / no fault” provision and the difficulty with medical misadventure. Certainly in our electorates we find that one of the biggest complaints of members of the public is that they do not understand why the different attitude in relation to medical misadventure exists. 
 But of course that is the nature of accident compensation; it is never going to please anyone in the first place. In many ways it is trying to deal with a situation and say that there is no fault when actually a lot of people feel that there is a certain amount of fault—particularly if one happens to be the victim of a drunk driver. It is very difficult to tell that person there is no fault and it is even more difficult to explain why somebody who hurt a knee in a driving accident in which that person happened to be drunk and caused the accident should get instant medical treatment on a knee while a World War II veteran has to linger for years and years and is basically left to die because the veteran cannot get an operation. I would certainly be very happy to see a situation where the veterans of this country get treated with the same respect as the drunk drivers. 
In essence we are supporting the referral of this bill to the Health Committee. We have of course some concerns as Dr Hutchison has outlined but we will try with the Government and the other parties to get this bill in good order. I note that it is the third accident compensation bill that this Government has put up in the last 5 years and it does beg the question of when it is going to get it right. 
BARBARA STEWART (NZ First) 
: 
 On behalf of New Zealand First I rise to support the Injury Prevention Rehabilitation and Compensation Amendment Bill (No 3) being referred to the Health Committee. The previous speaker from New Zealand First summed it up very well. As my colleague Peter Brown said New Zealand First has been pushing for this legislation for many years. I think he mentioned the figure of 5 years which is a long time. We are very aware too that many people in New Zealand have been waiting for this legislation particularly those suffering from medical misadventure. Nobody wants to go into hospital for an operation and to come out with another condition that he or she never went in with. 
It is a very important bill. We are looking forward to those people who are affected by the bill having some input at the select committee stage. As my colleague Peter Brown pointed out there are some aspects of the legislation that New Zealand First is most interested in and we want to ensure that this bill is correct. It is a significant bill and the issue is costly for New Zealand so it does need to be correct. We are very aware that there are a number of anomalies in the Act. We are pleased to see too that some of the definitions have been updated in line with other legislation particularly when it comes to the word “accident” where we see that the bill clarifies that twisting movements are now included in the definition of “accident” rather than just the purely vertical physical movements that were in the previous legislation. 
We definitely do not want to see people missing out on compensation when they should be receiving it for medical misadventure. So on behalf of New Zealand First I say that we will be most interested to see this bill come into the select committee process and to ensure that it is correct. We will be supporting this bill’s referral to the select committee. 
Bill read a first time and referred to theHealth Committee.referred to Health Committee