Estimates

Comparisons with Australia

Costs calculations are derived by first estimating the total number of incidents (cases) of workplace injury and disease in 2004–05, and then applying the methodology from NOHSC¹⁸ together with the ACC and other New Zealand average cost data to estimate total costs. The first step involves estimating the number of uncompensated cases, which is addressed in the following section.

4.1 Uncompensated Cases and the “N” Matrix

A number of sources are relevant when estimating the number of uncompensated cases of work-related disease and injury in New Zealand in 2004–05.

Driscoll et at¹ estimated that, each year in New Zealand, there are:

about 700–1,000 deaths from occupational disease
about 100 deaths from occupational injury
17,000–20,000 new cases of work-related disease
about 200,000 occupational accidents resulting in ACC claims.

Australian survey data suggested that there were, in fact, many cases of occupational injuries that were not included in compensation datasets because either a linkage could not be proven, or the injuries were relatively minor and the employees reported that they did not believe they were eligible to claim, or that they believed the possible compensation was not worth the effort (or the perceived repercussions) of lodging a claim.
The literature (notably Head and Harcourt³) suggested that compensation was believed to be more generous, widely available and easily accessible in New Zealand than overseas, with a direct comparison to Australian compensation (recall Section 2.1.3).
Section 3.1.1 noted that the ACC data covered work-related claims registered, with 10–15% of claims declined or pending, and the view that this coverage was relatively comprehensive.
Another New Zealand view reflected was that compensation coverage of injuries may be better than for diseases, in terms of incidents covered.

Piecing together these pieces of information and the compensation data from the previous chapter, a matrix was derived of a “base case” scenario for 2004–05 of the number of incidents by disease and injury, cross-tabulated to severity, derived in turn from a “low” (best) case scenario and a “high” (worst) case scenario.

The low case uses the lower bounds from Driscoll et al¹ and the most positive view of the accessibility of compensation for injuries, postulating 700 deaths from occupational disease, 17,000 cases of work-related disease, 90 fatal workplace injuries and no uncompensated non-fatal workplace injuries.
The high case uses the upper bounds from Driscoll et al¹ and accessibility of compensation for injuries on par with that of Australia, postulating 1,000 deaths from occupational disease, 20,000 cases of work-related disease, 110 fatal workplace injuries and uncompensated workplace injuries estimated as a further 39% of the number of compensated injuries.¹⁸
The base case takes a mid-range of these scenarios, with 850 deaths from occupational disease, 18,500 cases of work-related disease, 100 fatal injuries and total workplace injuries estimated as the average of those of the low and high scenarios.

The conceptual approach is summarised in Table 4.1.

TABLE 4.1	Conceptual framework for estimating the number of incidents
	COMPENSATED	UNCOMPENSATED	TOTAL
Injuries	ACC data	Derived as residual	Factored up based of average of a minimum from Driscoll et al¹ and a maximum from Australian estimates
Disease	ACC data	Derived as residual	Estimated from attributable fractions¹
Total	ACC data	Vertical sum and horizontal residual	Vertical and horizontal sum

Two final points should also be made:

In estimating the severity splits for compensated injuries and diseases, the “musculoskeletal” and “other” compensated incidents were allocated 94.5% to injuries and 5.5% to disease, in line with the ratio of defined injuries to diseases. Thus instead of the 253,812 cases being allocated 220,923 to injuries, 12,817 to disease and 20,072 to “musculoskeletal and other”, they were simply allocated 239,894 to injury and 13,918 to disease.
In addition, the non-fatal severity splits for uncompensated injuries and diseases were allocated in the same proportions as the compensated ones, which may tend to err on the conservative side, which is desirable when evidence is lacking.

The resulting estimate of the total number of incidents in 2004–05 is 305,150 (256,894 to 353,407), with the severity and injury/disease sub-categorisations estimated as shown in Table 4.2.

Comparisons with Australia

These findings suggest that, in New Zealand, the number of compensated workplace incidents is about 83% of the total, compared to 69% in Australia, which bears out the general view that, across the board, access to compensation is relatively good.

However, excluding the relatively large number of the least severe incidents in both countries reveals that only 81% of the remaining incidents are compensated in New Zealand, compared to 87% in Australia, which also seems to bear out the anecdotes (eg, in relation to relatively poor access to compensation for more severe conditions such as cancer). Moreover, while the estimates from Driscoll et al¹ are the best currently available, it should be noted that they appear very conservative, and thus in our view there is considerable risk that the number and proportion of uncompensated cases (particularly for disease) in New Zealand is in fact higher than the estimates presented in this report.

Moreover, in making comparisons between the two countries, it must be noted that the overall per capita rates of occupational injury and disease appear much higher in New Zealand than in Australia – some 15% of the workforce relative to around 4% per annum respectively.

TABLE 4.2	Estimated workplace incidents, by severity and disease/injury, 2004–05
TOTAL CASES		COMPENSATED	UNCOMPENSATED	TOTAL
1. Less than 7 days		230,546	45,839	276,386
2. Full return to work		15,494	3,112	18,606
3. Staged return to work		6,222	1,247	7,469
4. Partial return to work		215	44	259
5. No return/permanent disability		30	7	37
6. Fatality		64	886	950
7. Other		1,241	203	1,444
Total		253,812	51,338	305,150

INJURY
1. Less than 7 days		218,515	42,589	261,104
2. Full return to work		14,270	2,781	17,051
3. Staged return to work		5,768	1,124	6,893
4. Partial return to work		191	37	229
5. No return/permanent disability		11	2	13
6. Fatality		42	58	100
7. Other		1,097	164	1,261
Total		239,894	46,756	286,650

DISEASE
1. Less than 7 days		12,031	3,250	15,282
2. Full return to work		1,224	331	1,555
3. Staged return to work		454	123	576
4. Partial return to work		24	6	30
5. No return/permanent disability		19	5	24
6. Fatality		22	828	850
7. Other		144	39	183
Total		13,918	4,582	18,500