Thursday, June 21, 2012

Bad incentives

Its been apparent for a long time that ACC has a goal of throwing people off ACC and onto benefits. And now we have the proof: a performance pay scheme which explicitly rewards staff for cutting long-term claims:

ACC staff were paid bonuses for cutting long-term claimants' entitlements, Green Party MP Kevin Hague says.

Documents released under the Official Information Act show staff were set targets of ending payments to long-term claimants within certain time periods.


The "exit targets" identified in the documents formed part of the key performance indicators that managers and staff must meet in order to qualify for remuneration bonuses.

As well as specific targets for reducing the number of days claimants were paid, staff were expected to achieve a "net change in long-term pool" claimants and keep the social rehabilitation spend within budget.

Pretty obviously, this gives staff a direct financial incentive to cut claims regardless of their merits. And that is a very poor incentive for any claims-management organisation to have.

Its clear now that like WINZ in the 90's, ACC's culture is absolutely toxic. That needs to change. And the best way to start is to sack the managers who established this perverse incentive system.