Injury Prevention Rehabilitation and Compensation Amendment Bill (No 3) — Second Reading 
Injury Prevention Rehabilitation and Compensation Amendment Bill (No 3) — Second Reading 
[Volume:625;Page:20162] 
Injury Prevention Rehabilitation and Compensation Amendment Bill (No 3) 
Second Reading 
Hon RUTH DYSON (Minister for ACC) 
: 
 I move  
That the Injury Prevention Rehabilitation and Compensation Amendment Bill (No 3) be now read a second time 
. This 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 levied costs. The bill continues to progress towards making the scheme more responsive to claimants’ needs by simplifying cover and streamlining processes for medical misadventure by making weekly compensation entitlements for the newly self-employed fairer and by improving claimants’ access to more comprehensive social rehabilitation. 
The primary purpose of the bill is to implement the new category of treatment injury which replaces the existing medical misadventure provisions in the current Act. No longer is there a distinction between medical error and medical mishap. Claimants do not have to demonstrate error or show that their condition is both rare and severe. The new cover provisions provide that treatment injuries are simply ones that result from the treatment. Punitive faultfinding is also removed from the processes of the Accident Compensation Corporation (ACC). Instead the bill directs the organisation concerned to examine how a treatment injury occurred. This will foster a learning environment for health providers and organisations and will help to prevent adverse medical events in the future. 
Changes to the medical misadventure provisions also support claimants to make claims. The changes facilitate processes by providing for claimants to be informed of the role of the Health and Disability Commissioner in investigating complaints about the standard of care provided. The new provisions also encourage the cooperation of the health sector in participating in the claims process and to provide necessary medical reports and advice to ACC promptly. The bill helps to maintain the safety net by requiring ACC to report information to the relevant professional body if it considers that there could be a risk of harm to the public. 
These changes are the result of an excellent consultation review in which the Government worked together with key stakeholders and the public. 
I place on the record my particular thanks to my friend and colleague Lianne Dalziel for her work in setting up this review. The review was a three-stage process beginning with 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 received on the options for change. As a result a wide consensus is 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. That is the best example of high-quality public policy process and interdepartmental work I have seen. 
The bill also provides fairer methods for calculating weekly compensation for people who have moved into self-employment. Income from other work undertaken during the income year will now be factored into the calculation. This will provide more certainty for people moving into self-employment that accident compensation entitlements will be fair during that transition period. In addition the bill provides the Accident Compensation Corporation with the discretion to provide certain rehabilitation entitlements that previously have been prohibited by the legislation. This will help seriously injured claimants lead independent lives by enabling greater individualised responses to their needs. 
During the consultation process the Health Committee received 163 submissions on the bill. Many submissions expressed support for the amendments to the medical misadventure provisions with many commenting favourably on the removal of the current faultfinding role of the Accident Compensation Corporation the potential for faster resolution of claims and the extension of rehabilitation and compensation to all those who have a treatment injury. Many submissions also noted that the new provisions relating to treatment injuries will operate more fairly and will bring personal injury from medical incidents into line with other injuries covered by the scheme. 
The bill returns to the House with a small number of technical amendments relating to treatment injury. Amendment to the definition by replacing the phrase “personal injury caused by treatment or treatment injury” with the single term “treatment injury” will prevent any misapprehension that there are two types of cover. Also the exclusion provisions for treatment injury and to whom the existing medical misadventure will continue to apply will be clarified. 
I have already released Supplementary Order Paper 348 which sets out further amendments that I intend to move in the Committee stage. This includes an amendment to clarify the policy intent around funding attribution of claim costs for work-related gradual process disease or infection from the ACC employers account and an amendment to provide for later decisions about which account will fund lump-sum compensation for permanent impairment caused by gradual process disease or infection. The Supplementary Order Paper also includes minor technical amendments to existing parts of the bill such as allowing the movement of the definitions of treatment providers and health professionals out of the legislation and into regulations to occur singularly or in groups in order to ensure administrative efficiency given the timing of the bill; allowing the 2005 levy regulations to be amended without the usual consultation process to include private domestic workers in the employers account in respect of levies; clarifying that the provisions for calculating weekly earnings for self-employed and shareholder employees apply to claims for weekly compensation on or after 1 June this year; specifying that the provisions that allow ACC the discretion to provide entitlements where that is not permitted under current legislation have no retrospective effect; and in allowing those parts of the bill that are currently scheduled to take effect on 1 April 2005 to come into effect later. 
I appreciate the work done by the Health Committee and I welcome its report. I particularly thank all those involved in the preparation of this bill and those who took the time to make submissions. I commend the bill’s progress to the House. 
KATHERINE RICH (National) 
: 
 The National Party supports this bill but I must say with some reservations. On hearing the Minister speak just now I can say there are a lot of things we agree with in relation to that Minister. The National Party believes in a fair system of accident insurance. We believe in a comprehensive system of accident insurance and we also believe in an equitable system for accident insurance. But where we differ from the Government of course is in the area of choice. We believe that New Zealanders should have a choice of insurer. We believe that New Zealanders should have the ability to make decisions about who provides accident insurance for their businesses and organisations and that is what we do not have in this legislation. We have choice removed from a very important part of New Zealand life. 
The National Party has always supported a no-fault system for accident insurance like most within this House. Since 1974 that system has been the way of providing accident insurance within this country. But we have seen the removal of choice for many businesses so that they do not have any ability to go out and identify which organisations would provide them the best services for accident cover injury prevention and things like that. 
We continue to support this bill because it makes an important change to the accident compensation system in the area of medical misadventure. The system we had in the past required people who were victims of injuries as a result of medical treatment to find fault in the first instance but then also to prove who was culpable before they were able to access cover. Often that process was very time-consuming and difficult for all involved and the faultfinding investigative systems that had to be put in place did not work well either for the medical profession or for those people facing injuries. I think there is a smoothing in this legislation—an introduction of the same standards for medical misadventure that we have seen in other areas in respect of accidents. This bill will allow people who have suffered from unexpected injuries as a result of their treatments to have the same standard of cover as any other New Zealander who has had a workplace accident. So we support the no-fault system and we support the changes that have been made to the medical misadventure area. 
I suppose that many members on this side of the House will have faced a number of constituency problems and concerns in this particular area so we will go on from here by ensuring that those people will not have to go through a very difficult process of trying to find fault with the medical profession before they have the same standard of cover. That is not to say that we will not continue to look for fault where fault needs to be found. If the issue is to do with medical negligence or is the result of poor practice that will still be picked up on and investigated. But the issue in the legislation is that those people will be able to get cover for their injuries under the same circumstances as other New Zealanders who have faced more easily defined accidents such as falling off ladders etc. 
In terms of this bill a lot of the changes are very technical changes but in the bill there is a key difference between the parties—a really defining issue between the National Party and the Labour Party. National is a party that believes in choice that believes that the private sector should have the ability to provide certain services where they can be of value and that believes that the State is not necessarily the only provider that can supply this kind of service. Certainly in the area of accident prevention education the State is not the only provider that can undertake that sort of educative process. 
We believe that it is important to have a system whereby all New Zealand workers are covered—and not just covered but where everybody is covered fairly in the event of accidents taking place that do not allow them to continue to work. We believe there is a comprehensive system that covers a wide range of accidents and injuries that face all sorts of New Zealanders in the various vocations they are involved in. We also believe in a system that provides cover in a very cost-effective way and rehabilitation in the event that those accidents take place. 
But one of the things we believe in which goes further and which the Labour Party has a closed mind to is the idea that employers should be able to choose their insurers just as they make decisions in every other aspect of their businesses. There is no reason that the State has to have a monopoly on the accident insurance area. It does not have a monopoly in other areas of insurance and it does not have a monopoly in other areas that the Government is not involved in with regard to accidents. 
So in this case we think that there are opportunities for choice. This party stands on the side of choice and we believe that when it comes to provision for New Zealanders people working and people who face all sorts of accidents in their various vocational areas there are different solutions in the accident compensation area. I think that the Accident Compensation Corporation goes a long way to provide many good programmes when it comes to the education of our people but it is not the only source of preventive education. It can not be the only source for accident insurance but I think that the Government certainly has the blinkers on when it comes to this area of insurance. The Government feels in this case—and I think it is ideology that is driving the Government—that it has to dominate this area. This Government nationalised a lot of businesses that had invested in the area of accident insurance. It basically went in and marched over Kiwi businesses that had gone into the accident insurance area and that were or early indications showed that they were doing a very good job. 
In terms of where to from here we have some reservations about some of the technical details which we will go into during the Committee stage of this bill. But I think that what we will see from the speeches that follow will be a demonstration of whether parties are in favour of New Zealanders making choices about their own lives or whether we have the nanny State Government-knows-best idea coming from the Labour Government and we will have no choice and no ability to make business decisions. The Government will provide one option which will be the only option. So there will be very little room for innovation in this accident insurance area. 
STEVE CHADWICK (Labour—Rotorua) 
: 
 I am delighted to speak to this bill and I would like to personally congratulate the Hon Ruth Dyson as the Minister for ACC. This is the third bill on accident compensation that we have had since we came into Government in 1999 and it is beginning to reshape the whole of accident compensation to those Woodhouse founding principles that we really believed in. Those principles were about community responsibility through education and awareness of reduction of injury and comprehensive entitlement—and we mean comprehensive entitlement. I wonder whether the previous speaker who talked about the principle of choice of insurer is aware of the HIH debacle in Australia where insurance went belly-up and left people with no cover whatsoever. That is the risk that we are not prepared to take. 
Real compensation is a big issue for us. This bill starts to deal with the issues of real compensation and it does allow for administrative efficiency. The administrative efficiency forms around the principle where practitioners and claimants themselves used to have to talk about fault and “rare and severe” medical injuries. As constituent MPs we dealt with desperate accident compensation claimants who were waiting sometimes years until they achieved entitlement to accident compensation while they waited for reports from specialists and reports from hospital providers. The gap was simply too long and all of us felt that. This bill is now taking away the definition of “rare and severe” injury and replacing it with a definition of “treatment injury”. It is something that medical practitioners and public health service providers are absolutely delighted about. 
This result comes about as the Minister has said because of a very robust consultation phase. We talked to providers of health-care services. We talked to clinicians who found it particularly difficult and did feel that they were being punished for having to prove that they had not done anything wrong during a course of treatment. That requirement has gone now and with the no-fault approach and the treatment injury provision in this bill clinicians do not need to hide or duck for cover and they do not need to call Sedgwick’s Ltd or their indemnity insurers to seek advice about whether they should have admitted liability even though they knew that something catastrophic had happened with the outcome for a patient. Now they feel so much happier about this treatment injury provision. It takes away that punitive environment that prevailed in the health field. 
Peter Brown 
: For 5 years. 
STEVE CHADWICK 
: No—it was for at least 10 years because I used to deal with all the complaints against practitioners that came to our district health board or our Crown health enterprise. The poor old practitioners used to hide in fear. They used to bring their lawyer to a meeting when we were simply talking about what went wrong whether we could avoid it happening in the future and what we needed to do to systems and education in order to prevent that catastrophe happening again—even if it was something as simple as joining up anaesthetic systems so that they worked efficiently. We could not get practitioners to come to an environment that was legally safe and that did not lead through a pathway through the courts. Now there is an environment where they feel that they can participate in continuous improvement. That also links into the Health Practitioners Competence Assurance Act which was passed in 2003. This bill adds on to building an environment where clinicians feel that they are valued and that they can speak up quickly when an error occurs and where patients can receive due and appropriate compensation for their injury. 
This is a marvellous bill and as a select committee we all agreed on it. There were some minor technical amendments that we did not agree on. I was very happy to see a definition of “acupuncturist” come into this bill although other parties felt a bit differently about that. I thank those members on the Health Committee who know about health. Dr Paul Hutchison knows about that environment in which he used to have to practise and in which he was very nervous about anything going wrong and then wondering where to go to receive professional support as a practitioner. It was nice to have his support there and I thank the member. I thank the other members of the committee such as Heather Roy who also knows a lot about health systems management in this country. I think that we worked very well as a committee. I would also like to thank the committee clerk and supporters of our committee work which went very smoothly. 
The Supplementary Order Paper was released by the Minister very early so there were no surprises. That is how this Minister has dealt with accident compensation issues and injury prevention issues. I am sure that we will see more improvements made in the future so that we achieve a robust publicly funded system. 
BARBARA STEWART (NZ First) 
: 
 On behalf of New Zealand First I rise to speak in support of the Injury Prevention Rehabilitation and Compensation Amendment Bill (No 3). New Zealand First believes that there needs to be a stronger insurance component in accident compensation legislation and that claims and compensation for medical misadventure needs to be monitored to ensure that claimants are treated fairly. We believe that the process definitely needed to be streamlined. The system needs to be fair and equitable and to have a no-fault component because it takes away the punitive environment that has reigned previously. Nobody expects to go to hospital for an operation and then leave hospital with a totally different injury as a result of his or her treatment. We are very aware that that can happen. Under the current system a claimant is expected to prove fault by a medical professional who then has to be found to be at fault in order for any compensation to be considered or awarded. This is a very lengthy process and it does not work well at all. We want to see compensation awarded when and if it is needed. 
We realise too that this is a very significant bill with a significant cost for New Zealand and for New Zealanders. Accident compensation is already hugely costly to everyone although we are very aware that the Accident Compensation Corporation (ACC) itself has significant investments right throughout New Zealand. It is to be hoped that this bill does not increase the costs again to businesses and to the self-employed. We do not want to see the costs associated with this legislation being greater than those already anticipated by the Government. I know that the Department of Labour has calculated that the costs will increase by $8.6 million annually and that there will be a one-off transitional cost of $12 million. So we do not want to see those costs skyrocket. 
We are pleased to see that this bill does specify a general no-fault approach to accident compensation for treatment injuries because this is a big step forward. At the Health Committee we heard from many submitters who were totally dissatisfied with the ACC and with the treatment that they had received from the ACC when they were trying to establish a claim of medical misadventure. In most cases the claimants just gave up and did not proceed further. They basically put it into the too-hard basket. The long delays in the process and the stress suffered by the claimant and by the practitioner can be very negative. It is not pleasant to hear stories of people going into hospital with high hopes of having an injury corrected and then coming home with something far worse or more debilitating. Hopefully this bill will assist many of those people. 
The accident compensation law has not been very helpful in the past. It has actually stopped professionals from learning from the mistakes made because of the blame emphasis that previously existed. We believe it is absolutely vital that health professionals be very proactive that they demonstrate that their organisations take the provision of very high-quality service seriously and that when they identify any faults—as inevitably they will—they act very promptly to rectify them. 
We will be most interested in the day-to-day management of the new section 33. We will be watching that area with interest because this section defines “treatment” with the broadest possible scope. It includes treatment diagnosis and even the decision not to provide treatment in a timely manner. So potentially any situation where a health professional fails to diagnose a condition immediately and correctly and then to treat it correctly could be construed as treatment resulting in a treatment injury. That could even apply perhaps to the non-treatment of the thousands of people waiting for elective surgery throughout this country. 
The new section 32(2)(c) effectively ensures that there is no fault on the part of the district health boards as it excludes from the definition of “personal injury caused by treatment or treatment injury” “personal injury that is solely attributable to a resource allocation decision:”. This is the area where all the debates will arise. 
The 26 February issue of the 
 Listener 
 gave two very good examples that fit into this category. Two women went to the doctor for an examination. In one case the doctor’s diagnosis missed the woman’s malignant tumour and her surgery was delayed for 6 months. If as a result of the delay some treatment injury occurs she will be entitled to compensation. In the second example the woman’s doctor identified a tumour but because of resource shortages she waited 6 months for treatment—about three times longer than is recommended. In this instance the woman has no compensation entitlement because of the legislation’s resource shortfall exemption although this woman had exactly the same treatment experience as the other. There is no mechanism under this new scheme to compensate the victim for such a failure or to assess the competence of the manager who fails. Nor has there been in the past an incentive to improve managerial performance. 
The question of what is a result of a resource allocation decision is a very grey area and we can see why. It is a very technical area that we would like to discuss further in the Committee stage. Where will this end? We can see that lawyers and litigators will be very tempted to take many such cases into the courts and to fight them long and hard. It is really to be hoped that after the new scheme has been put into place the Government will take the next step of investigating how it can remove this unfair resource exemption clause from the legislation as eventually this does need to occur. Any injury that is caused by a failure of resources should be considered a treatment injury and should also be covered under this legislation. 
We would also like to see the acupuncture groups in New Zealand agree on a unified professional body to represent their professional standards so that they can come under the Health Practitioners Competence Assurance Act. We discussed this aspect throughout the select committee process. That really has to happen. 
This bill is a step in the right direction and New Zealand First does support its going to the Committee of the whole House. We want to see a better outcome for patients who are disadvantaged by medical misadventure. We want to make the system more streamlined we want to see a better outcome for these people and we want to see doctors actually learning by means of the no-fault component of the legislation. 
HEATHER ROY (ACT) 
: 
 ACT New Zealand opposes the passage of the Injury Prevention Rehabilitation and Compensation Amendment Bill (No 3) for a variety of reasons which I will go into in a moment. First I will just say a word about the select committee process. It was very rigorous although a disproportionate number of the submissions heard came from the various acupuncture groups. There are four main groups in the country. Although many of the groups are working together very well and productively some are not entering into discussions as we would perhaps hope they might. It would be encouraging to see the discussions continue and to see those groups form a united front and as the previous speaker said come to be regarded as one body under the Health Practitioners Competence Assurance Act. I think that that would be to the benefit of everyone. As I said the bulk of the submissions came from the acupuncture groups and this took up a huge amount of the time for the submission process. 
As other members have outlined the bill relates to quite a few technical amendments to the original Act but the main reason for bringing this amendment bill before the House was to make changes to the medical misadventure provisions. ACT agrees that in theory the proposed changes to the medical misadventure provisions in the original Act are a good thing. But there will be many unintended consequences I think that have not been investigated fully and that will lead in particular to costing the country a good deal of money. ACT is concerned about the increased costs that will result from the removal of the rarity and severity definitions in relation to medical misadventure and about the likely increase in levies for the earners and non-earners accounts. At the moment they roughly share the cost of producing the funding for people who claim accident compensation. 
The Department of Labour gave us a lot of information. Some of it was about the cost of the bill. As the previous speaker said it is estimated that an annual cost of $8.69 million will arise from the changes to the original Act in this amendment bill with a one-off transitional cost of $12 million. Accident Compensation Corporation (ACC) actuaries estimated that in relation to these changes the ACC would accept around 1000 additional treatment injury claims each year with an average fully-funded cost of approximately $9000 per claim. That is where the $8.69 million increase in funding that the Department of Labour told us about comes from. However I have had representations from various health providers who are involved in the scheme as it exists at the moment. 
It was interesting to hear the Minister say there was a high level of satisfaction among medical practitioners about this. Certainly the ones who came to see me not just one or two but quite a substantial group were very concerned about the increase in costs they fear will result from this legislation. I think it is important that we look realistically at the costs to the country. The Department of Labour itself admitted that it would be very difficult to predict the increase in numbers of claims and their costs despite the fact that the ACC actuaries have in fact given us a rough estimate. The department said that it was very very difficult to try to estimate these things. 
The new definition of treatment injury could stimulate a large increase in the number of claims after the bill comes into being including unlimited retrospective claims for treatment injury as long as a previous claim has not been lodged with the ACC. That is something that I think no other member has raised yet—the retrospective nature that can occur. We believe that claims will be made for conditions that are not foreseeable and are not the fault of any party involved but rather the unintended but statistically predictable consequence of normal treatment. That is an issue that the medical practitioners have raised too. Normal treatment is very difficult to define. So there may well be those consequences. 
We are not arguing that ACC coverage should depend on fault but when the scheme is operating at the boundary between sickness and accident—and I will talk about that in a moment—the scheme will be vulnerable. It will be in the interests of patients and health providers to classify complaints as treatment injury. It is just human nature for everybody to want a good outcome for the patients; both the patients themselves and their health providers. When grey areas exist and there is no clear definition the boundaries suddenly become unclear and it is often easy to convince oneself whether patient or professional that somebody qualifies when perhaps the person should not. The removal of the disciplines could mean that the boundary will in practice depend on highly subjective decisions or even—sadly I might say—to some collusion. There is no provision within the bill as it stands at the moment to prevent that. So there may be some collusion with and loss in the integrity of the scheme. I believe that is something that nobody in the House would want to see. 
One of the main reasons ACT is opposing the passage of this bill is the division of treatment and that its funding depends on whether a condition is in fact due to injury or to illness. This is problematic. Anybody who has worked in a hospital setting and I think in particular of orthopaedic wards will know the difficulties that exist and the unfairness—the unfairness that New Zealanders do dislike—that exists between those with an injury and those with an illness. I can think of my own days of working in orthopaedic wards when I would have two patients lying side by side. One would be an older person who had worked right through from a young age had been a productive member of society and paid taxes but because he or she suffered from osteoarthritis and needed a hip replacement was not eligible for accident compensation. In the next bed there was frequently a young fellow who had had a motor vehicle or motorbike accident often of his own causing. There they lay side by side with completely different circumstances but often the same condition yet only one was eligible for compensation Although accident compensation has many benefits and largely removes litigation from the whole equation this unfairness between injury and illness exists in this country. ACT has always contended that accident-based insurance schemes are a very fair way of getting around this problem. 
I would like to back up the point made by the previous National Party speaker that choice is actually very important with regard to accident compensation. ACT contends that choice of insurer for both individuals and employers is imperative to the success of the scheme as it stands. If the scheme were extended beyond that it would manage to get around that barrier between injury and illness. We would like to see a return to the choice that existed for that brief period of 9 months in 1999. Of course when the Labour Government swept into power it swiftly changed the provisions. That was a shame because really it could only be considered as an experiment. There was not time for the changes to be totally absorbed by the medical area. That choice and the competition it provided both to employers and to workers was a very good thing. We saw a drop in the number of accidents and by and large a drop in the amount of claims. That was for the good. We believe that the private sector should be able to compete for this insurance cover. 
So to sum up ACT New Zealand does not support this bill although we acknowledge that the changes to medical misadventure provisions in the original Act in theory look good but we worry about the cost to the taxpayer and we worry significantly about the distinction perpetuated between those people who suffer from a condition and those who suffer from an illness. That distinction is not there. 
I look forward to the Committee stage where we can explore this amendment bill in more detail particularly the proposed costs which are very difficult to estimate as the Department of Labour has said. It is unfortunate to see another Supplementary Order Paper slip in. Submissions cannot be heard on those amendments so the public will not have their say. ACT will be opposing those amendments. 
SUE KEDGLEY (Green) 
: 
 In general the Green Party like most other parties in the House supports the intention of this legislation to remove fault from the accident compensation medical misadventure provisions to simplify the scheme to make it more efficient and to move away from the punitive system that operated in the past of finding fault when reporting medical misadventure decisions. 
In the past trying to prove medical misadventure often put people through a lengthy stressful process of having to prove that the medical profession was at fault or that what had happened was rare severe and had happened in no more than 1 percent of cases. We always felt that those were extremely arbitrary criteria that were completely unfair. They resulted in very long delays for individuals who were trying to get help at a time when many of them may have been suffering significantly from incapacity and pain caused by the injury. That seemed extremely unfair. I know that it certainly put off hundreds of people—and probably thousands of people—from lodging medical misadventure claims and that it created all sorts of tensions. It created a situation whereby doctors saw every claim as a potential threat to their professional practice and that was very unfortunate. So we do congratulate the Minister on bringing about these long-needed changes to the way that the Accident Compensation Corporation (ACC) deals with medical misadventure. Now when an injury results from medical treatment or medical misadventure people will be treated in the same way as they are for other injuries and we welcome that very much. It will establish a new category for personal injury caused by treatment. 
But like the speaker from New Zealand First we are concerned that the legislation will exclude from personal injury those matters that are solely attributable to resource allocation decisions. We believe that the failure to treat a person for whatever reason should be considered to be a treatment injury and should be covered by ACC. We think it is unfair and inequitable that someone who develops an injury because he or she has not been treated properly by a medical professional is covered by this bill whereas someone who becomes ill because his or her treatment is delayed as a result of resource shortages will not be covered by the bill and will therefore be excluded from compensation under the principal Act. To give just one example of what that could mean a patient who developed a cancer because of treatment delays caused by the failure to diagnose a primary cancer would be covered by the bill soon to become legislation. However a patient who developed a cancer because appropriate treatment was unavailable due for example to a shortage of radiation therapists would not. That does seem to us to be unfair so we will be proposing an amendment to allow an injury caused by the failure to treat a person for whatever reason to be considered a treatment injury. We hope that amendment will receive support in the House. 
As the representative from ACT said there was a lot of concern about acupuncturists in terms of this bill. We continue to believe that it is inappropriate to amend the definition of acupuncturist in a bill that is about accident compensation. We strongly support acupuncturists having one scope of practice and coming under the Health Practitioners Competence Assurance Act. We are worried that the amendment to the definition of acupuncture in this bill will undermine progress in that regard and that the changed definition could effectively create two scopes of practice for acupuncturists and is therefore contrary to the spirit of the Health Practitioners Competence Assurance Act. But the Minister seems to be assuring me that our concerns will be allayed and we are absolutely delighted to hear that. 
All of us on the Health Committee were incredulous at the degree of antagonism between the different groups of acupuncturists. We could not understand why the different segments of the acupuncture profession could not work together resolve their differences and put acupuncture under one particular scope of practice and under the Health Practitioners Competence Assurance Act. Given that acupuncturists as a profession have been trying to get statutory regulation for over a decade we were deeply disappointed that our amendment to allow acupuncture to be put under the scope of the Health Practitioners Competence Assurance Act was turned down in this House. I think it was only New Zealand First that supported that amendment. 
Hon Annette King 
: They weren’t agreed though. That was the problem. 
SUE KEDGLEY 
: The Minister of Health is saying that the concern at the time—a concern of all of us—was the lack of consensus within the profession. We are absolutely delighted if the Minister is assuring us—and maybe she will just confirm this later on—that there is now agreement within the profession to have one scope of practice and to be brought under the Health Practitioners Competence Assurance Act. 
I want to correct for the record a statement in the Green Party’s minority report on the bill. We stated in our minority report that we were “… concerned that the New Zealand Acupuncture Standards Authority offers only a local diploma not one that is national in scope.” We were genuinely confused about that—as in fact most of the committee was because the whole thing became thoroughly confusing. We acknowledge that the New Zealand Acupuncture Standards Authority is just an authority and that the Auckland University of Technology offers the course and administers it even if the personnel involved in both bodies are I think more or less the same. 
We had considered proposing a further amendment because we were so concerned about ensuring there would be one scope of practice for acupuncture and that there would not be in effect two scopes of practice because of this bill. However because of the assurance of the Minister we will no longer seek to make an amendment to that effect. Instead we say how pleased we are that we have finally reached this resolution—and I am sure the whole select committee is because the issue took up a huge amount of time and I think all of us were sick of it and could not comprehend why the two different groups could not sit down and reach a resolution. It is good news that a resolution has been reached. 
Finally we are concerned that an amendment to clause 52(2) of schedule 1 of the principal Act would mean that anyone who has suffered a gradual process injury before April 2002 would not be entitled to lump-sum compensation no matter how clear-cut or apparently justified his or her claim was. Given that gradual process injuries normally have a long period of latency we believe that it is totally unfair to set an arbitrary cut-off date before which such injuries will not be covered and we will seek to make an amendment to that when the bill comes before the Committee of the whole House. 
Other than that we are very pleased with the bill. We think it is a great step forward. It will simplify things and remove some of the climate of fear whereby doctors were always worried that a medical misadventure claim would be brought against them. It is a very stressful business to try to prove over long periods of time that something was a medical injury that happened only to less than 1 percent of cases. All of that was frankly foolish and we are delighted that this bill will change that. We are very pleased to support the bill. 
JUDY TURNER (Deputy Leader—United Future) 
: 
 I rise on behalf of United Future to speak in support of the Injury Prevention Rehabilitation and Compensation Amendment Bill (No 3). It is a bill that seeks to tidy up the medical misadventure provisions of the Act so that these provisions become consistent with the rest of the accident compensation scheme. Currently we have two categories of injury: medical error and medical mishap. This is confusing and unhelpful because the current provisions are predicated on establishing blame in regard to the practitioner or the health provider involved. 
The problem that this creates is that Accident Compensation Corporation (ACC) clients have had lengthy waits for the process of blame to be settled. Once that was established their claim was able to go ahead but that process took considerable time. 
With the Health Practitioners Competence Assurance Act and the work of the Office of the Health and Disability Commissioner—including the fact that the Health Practitioners Competence Assurance Act strengthened the ability for hospitals for instance to run safe quality assurance activities for their staff—we believe that health professionals are now well able to be held to account for their competency and their practice and there is now no need for ACC clients to have to suffer in a climate of uncertainty. This means that they can get on with securing the treatment and the rehabilitation they need. 
It has been important for us to make sure that the term “treatment injury” is carefully defined so that it does not end up having unintended applications. We can understand for instance that when people go for surgery there are intended injuries by way of a surgeon’s blade. We have to be careful to differentiate very clearly between injuries that were intended for the ongoing good of the patient and unintended injuries. Over the last couple of years the media has been full of stories about people who have had tubes pieces of metal swabs and all sorts of things left inside them during surgery with the ongoing obvious complications that that has meant for patients. So it was very important for us and we did take some time to make sure we got the definition and the terminology correct. 
The bill also gives additional flexibility to ACC in terms of using its discretion to provide additional entitlements. In relation to decisions in these areas where there is quite a bit of flexibility I can anticipate some angst as claimants compare notes and try to determine why one person has received discretionary payments rehabilitation services or equipment of some kind and somebody else has not. I suspect that the outworking of this provision will need to be closely monitored because it is unable to be reviewed or challenged. 
There is also a change to the way in which weekly contributions are calculated for the self-employed. What will happen is that all sources of income over the previous 52 weeks leading up to the injury will be considered. That is particularly good news for newly self-employed people who often found themselves assessed against the low income their new business was making and really out of pocket and unable to survive on what ACC could pay them. So that is a really positive move. 
Other speakers have mentioned the issue of acupuncturists. It was intended that the definition of acupuncturist would be extended so that a greater range of providers could be registered with ACC and able to claim accident compensation payments. The problem that developed was that the new group being included was not recognised by the groups currently recognised as accident compensation providers. 
The Minister has reassured us that all is well and near completion and I hope she is right because what concerned me a little bit with this bill was that there was an attempt and I do not think it was intentional to use this bill to achieve an outcome that was really only possible under the Health Practitioners Competence Assurance Act. It is not an easy thing to come to terms with. For instance we were given briefings about the number of organisations that currently consider themselves acupuncturists the number of practitioners that each group has registered with it and the kinds of qualifications each group requires. The range is quite considerable and I can see the problems the group was having. However I do believe that it is definitely the job of the Health Practitioners Competence Assurance Act which has set up the legal mechanism so that any health practitioner group can become registered to find commonality between the different disciplines within their own discipline and put out a set of qualifications and scopes of practice that they will recognise. 
There seem to have been some real problems in the ability of acupuncturists to work together and if they are making headway on this then we are very very pleased. Often when one is a spokesperson for another party in health one asks oneself: “If I were the Minister of Health or the Minister for ACC what would I do about such an issue?”. I have to say that the frustration I felt on that matter was that I wondered why we were providing accident compensation for practitioners who had not yet reached some sort of agreement under the Health Practitioners Competence Assurance Act. If this is about to resolve itself then that is great but I would like to give acupuncturists a time frame and say: “If you cannot reach agreement and come under the Health Practitioners Competence Assurance Act by a set date you are no longer entitled to be an ACC registered practitioner.” 
I suspect that the financial incentive would mean that they would very quickly find some common ground and would get their act together. We are talking about putting patients at risk if we are allowing people who are not competent to practice. We are talking about inserting needles into people’s bodies as a treatment and if they get that wrong they could create a whole set of other problems. It is really important that we call for this group to get their act together. Certainly I was concerned that there was an opportunity for this legislation to act in a counter-productive way to the recently passed very good Health Practitioners Competence Assurance Act. 
We are very keen and very happy to support the second reading of this bill. We look forward to the Committee stage and working through the Supplementary Order Paper of the Minister and those proposed by other members on the committee. I congratulate those who have worked with us on the Health Committee on this matter. I think we worked extremely well on this bill. There was a genuinely good intention around the table to get it right. We look forward to its passage. 
Hon PAREKURA HOROMIA (Minister of Maori Affairs) 
: 
 I rise to support this well-endowed bill. It certainly is an improvement in relation to access to accident compensation. We have heard people wax lyrical at length about how people who have been attending counselling sessions at the Accident Compensation Corporation get frustrated. The bill speeds up cover decisions and encourages a culture of learning and improvement amongst health professionals. It reduces delays—not that there are many—and it improves patients’ safety. But I think the key issue I want to bring to members’ notice is that this is the third accident compensation bill since this great Labour Government has been in Parliament. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 Thank you for the opportunity to speak on this Injury Prevention Rehabilitation and Compensation Amendment Bill (No 3). I must compliment Parekura Horomia on his very short speech. It was excellent because of its shortness I believe. 
The National Party will support this bill because of the clear difficulties with the current regime of medical mishap and medical error which is unfortunately very confusing and unfair on patients. However we do have reservations about this bill and those that are particularly important are the financial ones. I see Dr Cullen over there representing this lackadaisical Labour Government which does not care about quality health spending and which we know has great worries about lack of productivity in the health sphere. Here we have another bill on accident compensation—the third one as was said by Parekura Horomia—brought in by the Labour Government and it did not even have ready a financial impact statement. Since then during the select committee process we had a rough stab at how much it will cost. The stab is about $10 million. I predict that the cost will be considerably more than that. Once again we have a Labour Government that is just not worried about quality spending of scarce health dollars. Nevertheless I must say that the select committee worked well under the chairperson Steve Chadwick. Essentially its members were in agreement as to the need to pass this bill. 
It is important to talk about the other reservations that we as a National Party do have about the State monopoly of accident compensation which provides little choice. There is no doubt that when the legislation came in in 1998 that allowed choice of provision premiums came down rehabilitation efforts were increased enormously and efforts at prevention in a whole range of fields were markedly improved and fortunately that caused the Accident Compensation Corporation to take notice and improve. But undoubtedly as with all State monopolies there is every chance that with time it will become once again inefficient. There is no doubt that by its nature there is no individual risk rating. The monopoly tends to conceal real incentives and it also tends to conceal real problems. 
However I think most New Zealanders have accepted the loss of the right to sue although as a constituent MP I find that among the most poignant—and not infrequent—submissions I get are those from people who have had a terrible time with the Accident Compensation Corporation. They have had horrendous injuries and unfortunately the provisions that are available do not cover them fairly. It does happen time and time again. However I think there is consensus in New Zealand that the system prior to 1974 was a lottery. As I understand it something like 5 percent of those who were injured and went through the courts finally came up with an award and it was years and years later before they did. In modern-day Boston for instance I understand that people who are subject to this sort of accident go through a legal lottery. The figure is about 5 percent but the difference is that the payouts are ridiculously out of perspective—often in the tens of millions of dollars. There is no doubt that worldwide accident insurance has gone berserk. I understand that Rugby School was seriously thinking of stopping the boys from playing rugby because of the fear of being sued by parents for accidents that their boys might suffer. 
There is no doubt that in New Zealand we have agreed that a no-fault scheme does on the whole with the checks and balances produce a workable system that is reasonable. But there are occasions when because of the fact there is no right to sue gross injustices do occur. I think it would be very useful in the future for parties to think about how we can address those rare and exceptional circumstances where an unfairness happens. 
I note that the Government’s review on this bill did not include the private sector. The Insurance Council was not asked for a submission; nor were other individual insurers from the private sector. However there were a large number of submitters and there was wide agreement that these provisions should be addressed. 
A couple of points are worthwhile mentioning. Firstly medical mishap criteria are arbitrary and often bear little relationship to the circumstances of the patient resulting in claimants unfairly missing out on cover; and secondly the medical error criteria require it to be established that an individual practitioner or organisation is at fault and that is clearly at odds with the no-fault system. I know that in my own practice there were quite crazy anomalies in this respect. If for instance during the course of a hysterectomy ureters were damaged or injured which is not unusual and if the practitioner had a rate of injury of less than 1 percent it would be regarded as a rare event and the patient could seek compensation through the accident compensation system. If on the other hand the practitioner had a high rate of injury then the patient could not seek compensation. Clearly two patients side by side can be treated differently by the system and that has to be sorted out. 
I note however that the review of the medical misadventure provisions noted that the Accident Compensation Corporation cover decision and the requirement that the corporation must report individual practitioners involved in accepted medical error cover claims as well as patterns of medical mishap claims to the relevant registration authority resulted in health practitioners’ reluctance to participate in the claims process. With the new Health Practitioners Competence Assurance Bill this will not happen so often. What is hugely important however if the medical error option is taken away is that the professions take on the responsibility to ensure that they are very vigilant with their quality assurance regimes with their continuous quality improvement and that they participate in them extraordinarily vigilantly. Just recently the New Zealand Orthopaedic Association produced an excellent report of all the morbidity that had occurred with hip operations over the last 5 years. This was an excellent example of a profession being prepared to take on quality assurance on a continued basis and going into the future. If this bill is to work well it is very important that pressure is maintained on the professions to continue with high standards. 
I must say that the acupuncturists are in a bit of a shambles. I agree entirely with Judy Turner that it is up to them to organise themselves into a unified body that takes on a professional attitude towards quality assurance towards education and towards being a collegial organisation that can be addressed by the competence assurance legislation. 
Yes National members do support this bill but with some reservations. It does address some important areas of medial mishap and error that have been unfortunate for patients right around New Zealand. 
JILL PETTIS (Labour—Whanganui) 
: 
 I am pleased to take a very brief call on this bill. The debate this afternoon has been interesting and very constructive but I do want to point out to the House that since the Accident Compensation Corporation regained its monopoly it has reduced levies. Accident compensation is an area that sometimes attracts a lot of misinformation in the reporting of it. I do not know why Opposition members want to put out incorrectly worded press statements but never mind; that is their wont. The average composite levy now stands at $1.21 which means that under the system in New Zealand it is still less than half the cost of the average levy in the Australian private system. So our accident compensation levies are very attractive compared with those of our nearest neighbours. Of course we did not suffer the dreadful situation caused by the collapse of HIH in Australia which left many people uninsured. Many of us remember the disaster that befell many innocent people in Australia upon the collapse of that company. So competition privatisation is not always able to deliver the nirvana that some people like to promise. 
This is a good bill. It is the third accident compensation bill since Labour has been the Government and we continue to make excellent progress. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I have to respond to the honourable member who has just resumed her seat. She gloated on what the Government has done in terms of accident compensation. I can tell members that it has taken a backward step in quite some significant measure. If she does not believe me she should talk to a few accident victims to see whether they think accident compensation is the be-all and end-all that she seems to think it is. 
I have to tell the honourable member that if an employer wants to get fixed-income insurance for his or her employees or a self-employed person wants to get fixed-income insurance the corporation will tell them to go and talk to the private sector. 
I would like to respond to a few of the comments that my colleagues in other parties have made. First of all I say to the Greens—are they still here? 
Keith Locke 
: Yes. 
PETER BROWN 
: Oh they are. If the Greens are serious about producing a clause to rectify the situation that arises when a patient is not treated because of lack of resource—in other words the patient does not get treatment in hospital or by a doctor and gets worse—and if the Greens are serious about wanting to produce a clause to make that a treatment injury then I am pretty confident in saying that New Zealand First would look at it in a realistic manner. My colleague Barbara Stewart raised the matter in her contribution earlier and the Greens obviously have taken it up. They have said they will produce a clause that will address the issue and we would look at it fairly reasonably. 
I thought Judy Turner particularly towards the end of her speech made some very good remarks about acupuncturists. I wrote them down; I thought they were very relevant points. She said they should be getting their act together if they want to be covered by accident compensation. That sits very comfortably with me. I have not discussed it with my colleagues but I am almost certain it would sit comfortably with them. But why does not United Future take a lead on this? They are propping up the Government. Why do they not say to the Government that this is a worthwhile action to take? Let us get the thing done. We should not stand here and make hollow noises to the House. I have to say that that sat comfortably with me; I think the member should show a little bit more gumption and go along and put a bit more pressure on the Government to do something along those lines. 
I am absolutely disappointed by ACT and National. They have put dollars ahead of patients. Heather Roy said that this will cost $8.6 million annually— 
Heather Roy 
: I never said that. 
PETER BROWN 
: The member gave the impression that it would cost a lot more than that—I think she referred to transitional costs of $12 million. The National Party spokesperson made reference to a $10 million cost. I was not on the Health Committee so I do not know but I presume that it will cost somewhere along those lines as indicated by the Department of Labour. ACT and National seem to think that it will cost more. 
The ACT member said she had spoken to some doctors medical clinicians or what have you. I have not—not on this bill—but I have spoken to a few patients and accident victims who have gone through the hospital system and have come out much the worse for wear because of an accident that occurred in hospital. One lady in particular who came to see me—I knew her some years before when she was fit and well—could hardly walk. She is permanently on drugs and she said that that was a result of a stuff-up—my words—in hospital. 
I can tell members that if we get people like that then we should have legislation like this. The sad thing about this legislation is that it should have come into being 5 years ago when the Government came into power and changed the accident compensation legislation. It should have ensured then not now in 2005 that medical misadventure was encompassed by the legislation. 
At that time New Zealand First put a strong case to Government Ministers to address this sort of issue. It is a very serious issue. As I understand it a person working in a hospital is covered by accident compensation legislation but patients going in are not—until this bill goes through. They have to prove medical error or medical mishap and quite often they are much the worse for wear and do not have the ability wherewithal and goodness knows what else they need to prove that there has been a stuff-up in a hospital as a result of some medical treatment. 
This legislation pleases me no end. There is still much to do on accident compensation. I take the point that the honourable member from the National Party made that the Accident Compensation Corporation (ACC) has a monopoly. I think he said that it is not very flexible. I add that it has little or no discretionary power in dealing with individual patients and that it fails in many respects to deal with social issues. 
There needs to be a degree of competition in the system. Competition breeds efficiency cost-effectiveness and initiative. There needs to be some form of competition in the ACC’s workplace insurance regime. New Zealand First will in its policies be releasing in due course exactly how that can be achieved. 
I just want to spend a few moments talking about Supplementary Order Paper 365 because I am quite intrigued by it. I received it only today. It states in the explanatory note that it will “provide for funds in the Employers’ Account Residual Claims Account and Self-Employed Work Account to be applied to meet the costs of entitlements for certain personal injury caused by work-related gradual process disease or infection:”. I thought: “Great stuff! We are actually recognising a person who has had an accident but who is then told by the doctor that the backache or whatever has happened because he or she has arthritis or some other such disease that the patient did not know he or she had until the accident happened.” I thought that this bill was meant to cover that. But then I noted that new clause 28A applies when the employment task giving rise “to that personal injury was performed or occurred before 1 July 1999;”. That is before the Government came into power. That is 6 years ago. The funding for this has come about in the last few years yet it will apply only to people who had their accident 6 years ago. 
There is something wrong there. This Supplementary Order Paper should have gone to a select committee for that very reason. New Zealand First will support it because again we recognise it as a move in the right direction but it is not enough. There are people suffering badly as a result of an accident and it adds insult to injury to find out that they are not covered because of gradual process or something like that. They cannot work so they lose their income. When it is taken into account that the legislation the Government passed in 2000 provides for compensation for a person injured whilst committing a crime the House will understand why New Zealand First gets so het up about these sorts of loopholes in legislation. New Zealand First supports this bill. 
A party vote was called for on the question  
That the amendments recommended by the Health Committee by majority be agreed to. 
Ayes 111 
New Zealand Labour 51; New Zealand National 27; New Zealand First 13; Green Party 9; United Future 8; Progressive 2; Maori Party 1. 
Noes 8 
ACT New Zealand 8. 
Question agreed to. 
A party vote was called for on the question  
That the Injury Prevention Rehabilitation and Compensation Amendment Bill (No 3) be now read a second time.  
Ayes 111 
New Zealand Labour 51; New Zealand National 27; New Zealand First 13; Green Party 9; United Future 8; Progressive 2; Maori Party 1. 
Noes 8 
ACT New Zealand 8. 
Bill read a second time.