Think of a number and multiply by four.
The ACC gives people money, and so has to balance the risks of fraud, rejection of valid claims, and red tape. We get a lot of stories claiming that ACC isn’t paying people it should pay, but today’s story is about the cost of fraud.
The cost is variously described as
- $10 million (over four years)
- $1.8 million-$3.5 million (per year)
- $35.9 million (actuarial cost)
- $131 million (total future cost if it isn’t stopped)
The $131 million and $10 million numbers don’t have much going for them. There’s no particular reason to give a total over four years; an average of $2.5 million/year would have been more helpful. The $131 million includes costs into the indefinite future, but makes them look as if they are just like costs incurred now. That’s the point of the actuarial estimate, to say something sensible about the current equivalent value of future expenses.
By an interesting coincidence, the $131 million figure exceeds the actuarial estimate by about the same ratio as the headline total exceeds the annual average.
Thomas Lumley (@tslumley) is Professor of Biostatistics at the University of Auckland. His research interests include semiparametric models, survey sampling, statistical computing, foundations of statistics, and whatever methodological problems his medical collaborators come up with. He also blogs at Biased and Inefficient See all posts by Thomas Lumley »