ACC and physiotherapy

I’m gald to see some rationality going back into what ACC funds with the Herald reporting:

Visiting the physio will cost patients at least $10-20 each time, now that the ACC has decided to cut costs.

Of course the physio never was free. It was just paid for by ACC levypayers rather than those receiving the physio.

In March, Dr Smith said that the free physiotherapy service – which was introduced in 2004 – had got out of control.

Up to $8.9 million extra had been budgeted for free physiotherapy visits in 2004, but costs had gone from $58 million per year to $139 million this financial year. …

In 2008-09, physiotherapy cost levy payers $144 million. If this were to continue, that cost would reach up to $232 million by 2013 – a figure that is unaffordable for levy payers, the ACC says.

This is not surprising. If you make something “free”, demand for it increases massively. Very very few things should be “free”. A partial subsidy tends to be far more effective as even a small part charge will deter people from needlessly accessing the “free” service.

The projected increase in levies, if no changes are made, was around $25 a week extra ACC levy for someone on the average wage. Labour let the entitlements get out of control by constantly expanding them (it even includes suicide now!) and by paring some of them back it will stop the scheme collapsing under its own weight because there is no way workers would want to be paying 5% of their wages as ACC levies.

Dr Smith said since the service became free, the number of clients in higher socio-economic areas using the service had “occurred disproportionately”.

I am not surprised again. Would be interesting to see the data behind this though.