ACC's $74m restructure lacks clear benefits, review finds

The benefits of a budget-blowing restructure of the way ACC manages claims are still "unclear", a return on investment by 2030 is uncertain and minor privacy breaches have nearly doubled, an internal review finds.

• This story was first published by RNZ

The $74million move to what ACC calls its 'Next Generation Case Management' was touted as a way to increase productivity, save costs, improve workloads and make the agency more client centered, but the new system has been plagued with problems since the roll out was completed in September 2020.

Last year, staff reported overwhelming caseloads and said they were "dropping like flies" from stress amid a backlog of work.

Now, an internal review of the new system completed in April and released yesterday, finds some of the planned changes are yet to be implemented, annual running costs have almost doubled to $4.6m, the return on investment may take longer than expected and the benefit to clients is still "unclear".

Despite the "teething problems" the new system was still worth the investment, ACC chief executive Megan Main said.

"We're confident that this new case management model is the right one for us. It was never going to be a quick fix, because really embedding such a change will always take time."

National Party ACC spokesperson and former ACC Minister Michael Woodhouse said the findings were "very concerning".

"I think this paints a pretty bleak picture of a project that was designed to improve case management across the ACC network and also allow claimants to manage their own claims. Those benefits are not only not being realised, but their own internal auditors are saying that there's a high degree of uncertainty about whether they will be achieved at all."

ACC's overall IT transformation, in which Next Generation Case Management was the largest and most expensive component, was supposed to reduce the "average weekly compensation days" paid to clients by 5.5 days. The new claims system was forecast to contribute a reduction of 1.25 days towards that but the review found the metric has been rising since early 2018.

It was also "extraordinary" that ACC was unable to say whether the new system was performing better than its previous one because comparable performance measures were not put in place, Woodhouse said.

"Meanwhile, the measures that they are reporting on in the internal audit report actually shows that things are going backwards," Woodhouse said.

Client and business trust in ACC was deteriorating and minor privacy breaches had almost doubled in 12 months to August 2021 to an average of 43 per month.

The "Level 1" privacy breaches were described by ACC as "minimal" where a small number of people are affected with little or no potential or actual harm.

ACC attributed the increase to a "drop in focus" from staff while the new claims system was embedding, but Woodhouse believed it was indicative of the fact that many clients, including those with sensitive claims and serious injury claims, were now managed by teams of case managers, rather than just one person.

"I think that has served to potentially undermine the benefits of this project. And I think that can increase the risk that privacy breaches occur."

A forecast that $438m of the $500m financial benefit of the new system would be achieved by 2030 was also now in doubt.

"Our view is that there is a high degree of uncertainty related to achieving this benefit by FY30," the review said.

The total cost of the project, which had already swollen from $54m to $74m, was not known because ACC was no longer counting.

"The additional cost of the continuous delivery enhancements, designed to improve benefit performance, will not be charged to the project. Therefore, the full cost of implementing the Model has not been calculated," the report said.

Physiotherapy New Zealand Chief Executive Sandra Kirby, who has been vocal about how the changes have caused problems for physios and patients, said the system worked well if it was a simple claim, but it was not set up to deal with the more complex cases, especially those managed by ACC's 'Assisted Recovery' programme, where claims were managed by teams of people rather than one case manager.

"It takes multiple calls, and because it's a call center, multiple calls is multiple contacts with different people re-explaining the case, and the decisions that are made can be quite inconsistent.

"So we still remain concerned that some people are denied the services that they need to be able to recover from injury," said Kirby.

Liz Roosendaal, a sector leader of a the Public Service Association National union that represents some ACC workers, said its members were still struggling with high workloads and an "exodus" of staff. It was surveying its members again to see whether things had improved since its survey last July.

Green Party ACC spokesperson Jan Logie said it was concerning that ACC's "corporate approach" had led to client satisfaction falling and the benefits of automation not being delivered as promised.

"We need to go back to the basics. They're saying that the non-financial benefits for clients are not yet being measured. And really, that needs to be the starting point. How is ACC serving the rehabilitation in support of people in this country? They still do not seem to have that in focus."

ACC chief executive Megan Main, who has only been in the role six months, said she was "incredibly proud" of what staff had achieved during the pandemic, which had exacerbated workloads and teething problems with the new system, but workloads were now easing.

"There are absolutely still areas of higher pressure than we want. But we're able to see those and work with our staff to try and address that through initiatives like forward recruitment where we recruit in advance when we know there's going to be workload pressures.

"I've also been really pleased to see the reported incidences of workplace stress coming down that really has been a priority for us."

"In a project of this scale there will be teething problems. One of the things that this transformation did is it set us up with modern, stable, quite flexible systems. So that we can learn as we go, we're really still understanding how to give the best support to clients."

The current average caseload for a "Supported Recovery Manager" was 49, slightly below ACC's target of 55 cases, while there was a backlog of 31,000 overdue tasks in "Assisted Recovery", though new claim volumes increased 2 percent between November and April, she said.

Main did not answer questions about concerns at the near doubling of minor privacy breaches since the new system was put in place.

"We take privacy really seriously at ACC, and that's why the board commissioned an independent review late last year, which we're really looking forward to responding to very soon."

ACC was now measuring how the new claims system was performing and it would continue to evolve as the agency better understood the needs of clients and providers, Main said. A new senior management structure had also recently been put in place and ACC was recruiting to fill those jobs.

ACC Minister Carmel Sepuloni said she was pleased to see ACC would be working to improve the claims system.

"I know the Board and Executive of ACC are committed to getting this right and ensuring both clients and staff members are better supported by the system. The report provides ACC with the information they need to make the required changes.

"The privacy part is concerning, but there is a privacy review which will be released soon. I know ACC are committed to ensuring the privacy of their clients and will be making the findings of that report public."