The case involved a number of parents of disabled adult children who claimed that the Ministry of Health discriminated against them, by not paying them for services for which it would pay outside carer. For more detail see http://www.eastonbh.ac.nz/?p=1396 . My role was a very small one dealing with the costs.
Keywords: Health; Social Policy;
I. My name is Brian Henry Easton. I am an independent scholar based in Wellington, working in the areas of economics, statistics, public policy and history.
II. I have been asked by the Director of Human Rights Proceedings, who is acting on behalf of nine named plaintiffs and others affected by the Ministry of Health policy not to allow payment to family caregivers, to respond to the statements of evidence presented by the Ministry of Health for this hearing by way of an evaluation of the financial and public policy implications if the Plaintiff’s case were to be successful.
III. In preparing this evidence, I have been provided with most of the plaintiffs’ and the defendant’s evidence to be given to the Tribunal and the 3rd amended Statement of Claim and Statement of Reply to the 2nd Amended Statement of Claim.
IV. I am Fellow of the Royal Statistical Society and a member of the Royal Society of New Zealand, both of which have codes of professional ethics to which I adhere. These codes complement the Code of Conduct for expert witnesses of the High Court, which I also follow.
My Background
V. Over the years I have worked in many areas which are relevant to this evidence, including the evaluation of health care services (I was on the International Working Party on the Social Costs of Drug Abuse which led to a WHO report), distributional economics (including social security), and public policy analysis. Among the relevant public agencies I have worked for are the Accident Compensation Corporation, the Ministry of Health, and the Ministry of Social Development (and/or their predecessors). Details are in my full Curriculum Vitae, which is available on request.
VI. I have degrees in mathematics and economics from the University of Canterbury and Victoria University of Wellington. My senior degree is a D.Sc. from the University of Canterbury. I am a Fellow of the Royal Statistical Society, a Charted Statistician and a Distinguished Fellow of the New Zealand Association of Economists.
VII. Before I was an independent scholar, I was Director of the N. Z. Institute of Economic Research when it was the premier centre of applied economics in New Zealand. I have also held teaching or research positions at the Auckland University of Technology, Georgetown University, Harvard University, the Institute of Development Studies at Brighton, Massey University, the National Institute of Economic and Social Research, the University of Auckland, the University of Canterbury, the University of Melbourne, the University of Sussex, and Victoria University of Wellington.
VIII. I am currently an associate of the Stout Research Centre at Victoria University of Wellington, an adjunct professor of the Centre for Public Policy at the Auckland University of Technology, an honorary fellow of Social and Health Outcomes, Research and Evaluation at Massey University, and an honorary research fellow of the Wellington School of Medicine of the University of Otago. I am on the Prime Minister’s Growth and Innovation Advisory Board, and this year I am the J. D. Stout Fellow. (Past fellowships are listed in my Curriculum Vitae.)
IX. When introducing myself to the Tribunal, I would like to add a little of my whakapapa. My father, Harold (Harry) Easton, was a psycho-paediatric nurse at the Templeton Hospital and Training School for over twenty years until his retirement. Dad was not an enthusiast for deinstitutionalisation, the policy of the late 1980s which has led eventually to this hearing. But I have no doubt that, had it happened on his watch, he would have given the same professionalism, commitment, generosity, kindliness and the respect for all human beings which he gave to those he looked after, and which he practised throughout his life. I would do my father less than justice if I were not offering the same to this Tribunal.
My Understanding of the Issue Under Consideration
X. I have read the evidence to be presented to the Tribunal including the Claim by the Plaintiffs and the Reply by the Crown.
XI. I am struck that there is no common agreement among those who have provided evidence as to the fundamental issues of the case. It is therefore necessary for me to set out my understanding. I eschew the legal aspects of the case (although I have read the law and some related decisions), and focus on it in a public policy framework as follows.
XII. The Ministry of Health will not pay family members to provide the support services it provides to disabled adults. (The approved exceptions appear to be so rare that for practical purposes it is may be treated as a blanket prohibition.)
XIII. The Plaintiff’s case is that such a policy is unnecessarily discriminatory and in breach of human rights legislation. The Plaintiff parents say that they should have the opportunity to provide the paid disability support services which their adult child has been assessed as requiring. Additionally the Plaintiff parents argue that on the occasions they provide the services which are designated for paid non-family providers, but which for various reasons, are not provided, they should be paid for providing them. Those Plaintiffs who are adults with very high disability support needs say that they should have the opportunity to choose a family member to provide them with their paid disability support services.
XIV. Some of the Ministry evidence I have read seems to be based on the premise that the Plaintiffs are asking for a payment for their ‘reasonable care’, the phrase used by Ms Davis when explaining the policy framework. It is ‘ based on the expectation that in general families will provide a reasonable level of support for their disabled family member, so that the assistance will step in only where the needed in addition to this support.’ (Para 19). She does not define the term ‘reasonable’, but I take it she means that it is reasonable for the family to provide the services without remuneration.
XV. My understanding of the Plaintiff’s claim before this Tribunal is that they are not asking for payment for reasonable care. This case is about the provision of care for which it would be not reasonable to expect the family to provide without remuneration. In my opinion some of the evidence provided by crown witnesses does not make this distinction.
XVI. In my evidence I shall assume that the basic policy framework of Ministry of Health (and other government agencies with responsibilities for the provision of services to the community of disabled persons) does not change.
XVII. In my opinion the effect of a ruling from the Human Rights Review Tribunal that the blanket prohibition on family members being paid to provide the Ministry funded disability support services is inconsistent with s 19 of the New Zealand Bill of Rights Act, would result in the following essentially marginal changes within the framework.
– family members would be able to be paid providers of the Ministry funded support services;
– family members would be renumerated at the same rate as non-family care-givers.
– where the non-family support fails to be provided, the family members who provides it would be remunerated at the same rate.
XVIII. My conclusion is that the result of a Tribunal finding favourable to the Plaintiffs is that the cost to the Ministry of Health would be negligible, other than in so far it would expose failures in the current delivery of the support which the existing policy envisages. I was also unable to identify any other public policy concerns arising from the change.
The Data Base
XIX. Given my task is to estimate the costs of a Tribunal finding favourable to the plaintiffs, it is necessary to construct a data base. In his evidence, Mr de Raad provides one which I shall largely draw upon.
XX. His database is an amalgam of a surveys disability surveys from Statistics New Zealand (para 26) and Ministry of Health expenditure data (para 29).
XXI. The Statistics New Zealand 2006 Disability Survey is based on two surveys:, the Household Disability Survey 2006 and the Disability Survey of Residential Facilities 2006.
XXII. . I observe that the Cabinet Paper Improving Long-term Disability Supports: Maintaining Momentum similarly observes ‘While agencies are each making improvements to their data , they have yet to develop or adopt standard cross-sectoral data definitions on disability matters. … It is therefore difficult to gather and analyse disability supports data routinely across agencies …’ (para 21) 1 The data bases only fail to cohere, but they are incomplete. This gives little comfort that we have a seamless disability service.
Disability in the Statistics New Zealand surveys is defined as follows:
A disability is any self-perceived limitation in activity resulting from a long-term condition or health problem; lasting or expected to last six months or more and not completely eliminated by an assistive device.
More details:
A functional concept of disability was used in these surveys:
” . any restriction or lack (resulting from impairment) of ability to perform an activity in the manner or within the range considered normal for a human being.” (WHO)
XXIII. This is the World Health Organisation (WHO) definition … Using this concept, a disability was defined as any limitation in activity resulting from a long-term condition or health problem. The focus was, therefore, not on identifying the nature of the disorder or disabling condition, but rather the limitation resulting from it.
People were not considered as having a disability if an assistive device (such as glasses) completely eliminated their limitation. A concept of time was included as an additional filter; the disability must have lasted or be expected to last for six months or more.
Disability was determined by responses to a series of questions that assessed difficulties performing certain day-to-day activities. Answers reflected respondents’ own perception of their situation and were, therefore, subjective..
XXIV. The data provided was categorised by severity of disability. This was defined in the 2006 Survey as
Support level is a measure of the level of support required for people with disability. Respondents were classified as having ‘low’, ‘medium’ or ‘high’ support needs based on their need for assistance and/or special equipment relating to their disability. Those with a ‘medium’ support needs used, or had an unmet need for, some type of assistive device, aid or equipment. Those with a ‘high’ support needs received daily assistance with tasks such as bathing, preparing meals etc. In the 2001 Disability Survey this was called ‘severity’ with the categories ‘mild’, ‘moderate’ or ‘severe’.
XXV. The 2001 terminology was defined as follows:
Severity [as] a measure of the intensity and extent of the disability of the respondent. Respondents have been assigned a rating of either ‘mild’, ‘moderate’ or ‘severe’ based on their need for assistance and/or special equipment relating to their disability. Those with ‘moderate’ disabilities use, or have an unmet need for, some type of assistive device, aid or equipment. Those with ‘severe’ disabilities receive daily assistance with tasks such as bathing, preparing meals etc.
XXVI. The Survey reports the following for those under 65 whose disabilities are not due to ageing or injury. (Although the plaintiff s are concerned with the adult disabled, like Mr de Raad I have included children under the age of 15, on the basis that any Tribunal decision is likely also to apply to them.)
Table 1: Number of Disabled People by Age, Level of Disability and Support Service, 2006
| Degree of Disability | No or Minimal External support | Funded Home Based support | Residential Care | Total |
| Mild |
127,200 |
|
|
127,200 |
| Moderate |
123,100 |
3,200 |
100 |
126,400 |
| Severe |
30,200 |
7,200 |
1,000 |
38,400 |
| Total |
280,400 |
10,500 |
1,100 |
292,000 |
Notes: Under 65 only. Disabilities are not due to aging or injury.
Sources: 2006 Disability Survey (see also Table 1 of de Raad’s evidence).
Mr de Raad also supplies estimates based on Ministry of Health data.
Table 2: Number of Ministry of Health Clients Disabled People by Age, Severity and Service Intensity, 2006
| Degree of Disability | Low Use non-Residential | High Use non-Residential | Residential | Total |
| Mild |
3,985 |
|
|
3,985 |
| Moderate |
3,750 |
3,297 |
|
7,047 |
| Severe |
969 |
7,203 |
6,888 |
15.060 |
| Total |
8,704 |
10,500 |
6,888 |
26,092 |
Notes: Under 65 only. Severity level is calibrated based on data from HDS and DSFR.
Sources: Table 2 of de Raad’s evidence..
I. There are major discrepancies between the two tables which probably cannot be explained definitions or by Mr de Raad’s construction. Suppose we treat the Statistics New Zealand survey as reasonably accurate. Then
– The Ministry of Health considers it is servicing in residential care about 6 times as many people under the age of 65 as the Statistics New Zealand found in their survey. (This may reflect different definitions of residential care. For instance the Ministry may treat a community living in a flat under supervision as residential while Statistics New Zealand may not.))
– It would appear that there is a substantial number of those with severe disability – perhaps over 23,000 – who the Ministry seems to be aware of.
– The majority of the missing is group appear to be without minimal or any external support (although this arise from the way Mr de Raad has constructed his table).
– There are even greater numbers – perhaps 120,000 – of those with a moderate disability who are not receiving any Ministry of Health support.
II. It may be useful to repeat at this point the Statistics New Zealand definitions
-Those with a ‘medium’ support needs used, or had an unmet need for, some type of assistive device, aid or equipment. Those with a ‘high’ support needs received daily assistance with tasks such as bathing, preparing meals etc. (See my para 25).
III. The implication is that many people with moderate severity will not appear in this table. Ms Davis estimates says that there are approximately 30,000 disabled people using Ministry funded services provided under the disability support services framework’, which is a figure similar to the 26,000 in Table 2. She adds that ‘[t]his does not include those who use only the equipment modification services’.
IV. The discrepancy between the estimates of those with severe disability cannot be so easily explained. Presumably some of those not being supported by the Ministry are receiving support from family and friends or voluntary agencies or another government agency (such as the DHB, or Work and Income New Zealand).
V. An alternative possibility is the Statistics New Zealand survey is based on subjective self-categorisation, here there is a tendency to overstate needs relative to what an objective assessment might conclude. Such a conclusion is more consistent with common sense. Were the widespread discrepancy between the tables the result of the failure to provide support, any such failure could not be simply the Ministry’s but the entire primary health care service which would appear – if the SNZ estimates are consistent with the Ministry definitions – failing to make aware those they serve of the Ministry support services available to them.
VI. It is not necessary for this case to reconcile the tabulations for the purposes of this claim. Suppose the Ministry of Health is failing to identify large numbers who are entitled to its support services. That is clearly a matter of public policy concern, but it is not the focus of the claim which is about those who are in existing receipt of support.
VII. In the event that the Tribunal’s decision were to encourage others in need to apply for their support entitlements, then while this may be fiscally expensive, this reflects neither a change in the policy framework nor the Tribunal’s decision but a reduction in the failure of delivery coverage within the framework
VIII. Therefore my subsequent analysis will be based upon the Ministry of Health tabulation (Table 2) and I refer only to the Statistics New Zealand tabulation (Table 1) when Mr de Raad uses it.
The Cost to the Ministry of Health of the Claim
IX. Mr de Raad identifies four possible responses if the family of the disabled are paid on a basis similar to other service providers. I shall follow his categorisation.
Switching Care-givers
X. Some families with disabled people which currently have a non-family provider would choose to have a family one. Mr de Raad rightly concludes that whatever proportion takes this option, the cost to the Ministry would be negligible, since it would simply be swapping one paid provider for another. (paras 34.1 and 41-48).
Residential Clients
XI. There are (about 7000) disabled people who currently live in residential care. Ms Davis points out that the ‘critical point [for moving into residential care] is usually around night care. The person may need a lot of support during the night, which their family can no longer provider safely.’ (para 95) She goes on that the Ministry simply cannot afford to fund permanent night time care for individuals in their own home.’ (para 96) She adds the ‘other tipping point can be where the person needs to be lifted or needs to be supervised constantly.’ (para 97) I think it would be fair to assume that she intends that the sentiment expressed in paragraph 96 also applies to paragraph 97.
XII. Mr de Raad suggests that if the family was paid for the care, some would be taken home. He sets a range of $0m to $243.3m for this possibility. The higher cost is because residential care is considerably cheaper than home care because of economies of scale. (para 34.4 and 62-73). In my view the upper limit is far too high.
XIII. It assumes that this switch would happen to up to 50% of residential clients. Mr de Raad offers no evidence for the proportion that might switch, and I too have been unable to find any which might enlighten us. I would make but two comments.
XIV. First, anecdotally (and consistent with the evidence of Susan Atkinson and Linda Stoneham), in my experience families do not put a family member into a residential care lightly, and rarely is finance a major factor. In both these cases care-giver health was the catalyst. In my experience the situation described by Ms Davis (my para 38) are typical – the tipping point is reached when the family can no longer cope.
XV. Hence, I am extremely sceptical that were the financial situation more favourable, the factors determining the family decision would have changed sufficiently dramatically to reverse the decision. The 50% figure seems unreasonably high. It is evident from a description of the caring work carried out by the plaintiff parents that it is extremely demanding and common sense (and some of their experiences) suggests hat many families simply do not have the physical or emotional resources to do it.
XVI. Second, Mr de Raad assumes a higher rate of compensation for the family which takes the member back from residential care than for the care in the residential home. His paragraph 65 suggests $495 per day, or over $180,000 a year. This is because the care-giver in the home is looking after more people than a family care-giver looking after a single person. (Incidentally, Mr de Raad seems to ignore the lower capital costs of home care.)
XVII. In practice it is highly unlikely that the state would fund home care at more than three times the residential care rate. As Ms Davis says such a policy would be beyond the ability of the state to afford it.’ Nor are the plaintiffs asking for such a policy.
XVIII. Standard public policy principles (and common sense) would normally recommend setting a home care rate comparable to (not exceeding) the per capita residential care rate (perhaps allowing for capital and other items). The principle would be that if the family can and is willing to do the task at the same cost as the state, then it should be able to, although as I have conjectured it seems unlikely that many would take this option.
XIX. Were this comparable funding regime adopted, the cost to the state of transferring the care of a disabled person from the state to their family would be negligible.
High Use non-Residential Clients Seeking More Funding Support
XX. Mr De Raad, considers the category of ‘High Use Non-Residential Clients Seeking More Funding Support’ which amounts to 10,500 people and which costs about $86.7m p.a. Outlays on those judged with moderate disability average $4,749 p.a per person and those with severe disability $9,988 p.a per person. (paras 34.2 and 49-50 and tables 2, 3, 4).
XXI. He points out that they ‘also receive some care from [unpaid] intermediate family members in preference to more care from [paid] outsiders’ and ‘the policy change is likely to induce [sic] those clients to seek funding for that unpaid care.’. I take it he means that the family members are already carrying out caring tasks including those which Ms Davis defined as ‘reasonable’ and would expect, under the policy if implemented, to be paid for those tasks.
XXII. However, that is not the Plaintiff’s claim. They are asking only that they reimbursed for the services they provide when the Ministry of Health support services fail to provide them, when in the terminology of Ms Davis, they provide an ‘not-reasonable’ level of support. (para 19).
XXIII. The cost of this reimbursement is difficult to estimate as we do not know how often the state provided support services fail.
XXIV. According to Mr de Raad’s Table 3, the total cost of the currently supplied services are $86.7m p.a.. Suppose that the support services fail to function 10 percent of the time. In that case the annual reimbursement to family members for covering the failure would be $9.6m making a total outlay of $96.3m ($96.3m X .9 = $86.7m).
XXV. That figure averaged across 10,500 families (see my Table 2) amounts $917 p.a. or $17.65 a week per family, although there would be considerable variation between families. Noting that Mr de Raad reports that pay rates for non-family support are as high as $24.20 (para 43) this quantum would amount to less than an average of one hour per week.
XXVI. Suppose that the hourly rate of pay was $24.20 In this case the cost to the Ministry to provide its support services when it fails amounts to an annual aggregate of $13.2m. (13.2 = 24/17.65 X 9.63).
XXVII. I have set out the relevant calculations, so that if there are more precise estimates of the failure rate, the Tribunal can calculate the relevant cost. Alternatively, if the Tribunal requests, I am happy to do the calculation in supplementary evidence.
XXVIII. I should emphasise that the 10 percent and 1 hour per week figures are illustrative, and I would welcome a more precise figure.
XXIX. I will return to the question of the extent to which these, which reflect a failure to provide services according to the existing policy framework, in the conclusion when I review the aggregate costs of this policy.
XXX. Mr de Raad, using a policy assumptions which the Plaintiffs are not advocating, proposes a cost range under this head of $8.7m to $78.0m p.a. It is clear that in terms of the Plaintiff’s claim the upper bound is far too high, and that – if the delivery failures are low (say less than 5 percent) – the lower bound is too high also.
Responses by Clients Currently Receiving No of Minimal Services.
XXXI. . Mr De Raad reports 271,696 disabled people aged 0-64 were not receiving any funded support, including 29,321 with severe disabilities. These figures come from his (and my) Tables 1 and 2. For instance, 29,321 is approximately equal to the 37,400 which Statistics New Zealand estimates are the 37,400 people under the age of 65 who have severe difficulties not due to age or injury and are not in residential care (Table 1) less the 8,172 who are currently covered by the Ministry of Health’s support programs (Table 2).2 (para 34.4 and 51-61)
Mr De Raad again argues that if the Plaintiffs are successful, then up to 90 percent of the 29,000 odd of the severe disabled would apply for the support services and then arrange for the family to fund them. That means he judges there are as many as 26,400 of the disabled who are eligible for the Ministry of Health support services on the criteria of the current policy framework, but are not receiving them. If he is right that is a terrible indictment of the Ministry since it would imply their service was providing for less than a quarter of their target population.
XXXII. In my experience a program is thought to be doing very badly if it covers only three quarters of the target population. Therefore to illustrate the general principle I propose to take this 75% coverage ration as a worse case scenario. This means that there are 2700 disabled who are eligible but are not in receipt of support services. (8172 = .75 X {8172+2724}) .
XXXIII. (Regrettably this assumption implies that 300 would receive low use non-residential support and 2400 would receive high-use non-residential support, whereas common sense suggests the balance is likely to be the other way around, since those in greater need are more likely to apply for coverage. This mechanical assumption means any estimate I derive will be on the high side.)
XXXIV. The cost of the better coverage is $25.0m per year. (25.0 = {1-.75}/{.75} X {$2.0m + $71.9m}, the latter figures coming from Mr De Raad’s Table 3). Recall this is a worse case scenario in terms of the likely Ministry of Health failure, and is an overestimate in terms of its mechanical allocation between low-use and high-use care.)
XXXV. We also need to estimate the effect of the failure to deliver support to the additional covered. Using the parameters of the previous section, the estimates would be $3.2 p.a. (for the 10 percent assumption) or $4.4m p.a. (for the one hour a week assumption.), that is in proportion to the additional spending.
XXXVI. Mr de Raad, using policy assumptions which the Plaintiffs are not advocating, proposes a cost range under this head of $11.4m to $271.7m p.a. It is clear that in terms of the Plaintiff’s claim his upper bound is far too high.
Total Costs
Using Mr de Raad’s categories we get the following aggregate cost
Switching Care-givers
Negligible
Residential Clients
Negligible
High Use non-Residential Clients Seeking More Funding Support
$9.6m to $13.2m p.a.
(Depends on delivery failure assumptions)
Responses by Clients Currently Receiving No or Minimal Services.
<$25.0m p.a plus
(Worst case scenario)
$3.2.m to $4.4m
(Same assumptions as previous category)
XXXVII. This suggests the total cost to the Ministry would be less than, say, $40m a year, and possibly much less.
XXXVIII. Before considering the wider government implications it is necessary to consider whether this is a cost of the Tribunal deciding for the Plaintiffs or whether it should be attributed to other factors.
XXXIX. For the costs do not arise from the Tribunal’s decision per se. They reflect a failure of the implementation of existing policy. It is possible that as a result of the decision more people will identify their entitlements but that should not affect the judgement of the human rights involved. In other words, we need to separate out the Human Rights case from the public policy issue that there appears (according yo Mr de Raad) to have been a failure to deliver a service to all those for whom it is entitled.
XL. If the Tribunal’s decision were to reduce delivery failure within the existing policy framework, thereby improving coverage, that would appear to be a happy outcome.
The Costs to the Government
XLI. This claim specifically involves the Ministry of Health, but there may be knock-on affects on other government agencies including the District Health Board and the Accident Compensation Corporation. No evidence has been presented to demonstrate this will happen, although Mr de Raad hazards that ‘the impact [on DHBs] could be at least as great as the impact on the Ministry of Health funded services, and potentially up to twice as much again in terms of increased costs.’ (para 17) Unfortunately he gives no indication from where he got his guesstimates.
XLII. I would make two observations. First, the DHB support may explain some of the inconsistencies between the two data bases. In which Mr de Raad’s figures involve double counting.
XLIII. Second, it seems likely that the analysis I have given of the Ministry of Health costs applies broadly to the District Health Board ones. If they do, then the costs to them of the Tribunal findings are negligible, except as insofar they result in a better coverage of existing policy.
XLIV. The same is likely to apply for any additional costs to the Accident Compensation Corporation from any Tribunal decision favourable to the Plaintiffs. .
XLV. . I observe there is a case for reducing any cost estimates to the government as a whole by about 20 percent for the income tax the parents will pay on any earnings.3.This offset arises where the family care-giver is not in the workforce. It does not apply to non-family care-givers because they are already in the workforce and it is usual to assume that insofar as the family care-giver replaces them, they will take up employment elsewhere.
XLVI. This may be seem a little paradoxical, but it reflects the particularities that family members are unlikely to withdraw from the paid workforce, on receipt of the payments which the scheme offers them, which for many will be low. In any case many of the recipients would not be in the paid workforce. On the other hand a non-family support person is servicing a number of clients, and is an active member of the paid workforce, who will look for more work if any of their current clients are supported in the future by family members.
XLVII. Ms Dwyer is exactly wrong when she cautions against the policy because of the aging of baby boomers. (para 61) The proposed policy will release non-family care-givers for caring for the elderly. I add that it would be most unfortunate if policy was designed to privilege the elderly at the cost of the younger disabled. Great
XLVIII. In summary, the previous section estimated that under various assumptions, a favourable decision to the plaintiffs might be associated with additional outlays which could cost the government as much as $40m, or $32m net of additional income tax receipts. Additionally Mr de Raad suggests the figure be doubled for a parallel response to outlays by DHBs, although he gives no indication of where he got his twice figure and he may be double-counting.
XLIX. In any case, all this expenditure is a response to increasing the coverage of the scheme, reflecting a failure of the current delivery provisions, rather than any significant change in the policy. and should not be attributed to any Tribunal decision, per se.
L. If, nevertheless, the Tribunal may wish to take this sum into account in making its decision. Unless further evidence is provided, the amount (of say $32m-$64m p.a.) should be taken as a maximum net fiscal cost; the likely outurn would be less.
LI. In my opinion, and experience, such a sum is within the normal fiscal parameters of the annual budget policies, and therefore is not sufficiently large to trigger a defence that fiscal reasons for the policy cause it to be a justified limitation on the right to be free from discrimination.
LII. . In coming to this judgement, I am aware that in a typical year there is a additional government spending available for new policy. In the 2008 budget the amount available for new funding on health activities amounted to $750m in the 2008/9 year.4 Under the current policy framework I would expect similar amounts in each of future years. Thus the $32m, (possibly $64m), but probably much less, is a one-off small proportion of the new spending on health in any year and it would not exclude other substantial health initiatives.
LIII. In any case, the additional spending is the consequence of existing, not new, policy.
Quality Consideration
LIV. It is proper to ask whether the policy modification, whatever the cause, will improve the quality of the government spending.
Improved Coverage
LV. Improving delivery coverage of existing policy must surely be an improvement in quality.
Quality of Care
LVI. There will be an increased proportion of support services provided by family members. I have looked at the evidence of Ms Dwyer, Mr Gourley and Dr Watson all of whom address the issue to some degree. Ms Dwyer’s evidence, in particular, and Ms Butler for the plaintiffs, cite research that suggests that generally many of the disabled are more satisfied by family provision than by outside provision. This suggests that there will be an improvement in the quality of care if as a result of the Tribunal’s decision, more of the support is provided by family members.
LVII. All three witnesses argue, however, that their experience and the available evidence, does not justify the payment to family members for caring for their disabled relative. I did not find their explanations compelling. for they largely seem to be attached to the end of the evidence, rather than develop organically out of it.
LVIII. But rather than demonstrate this, I observe that the conclusion is irrelevant to the Plaintiffs’ case. They are not asking for payment for all their caring services – which are the concerns of the three witnesses – they are asking that they be allowed to be provided the additional support services specified by the Ministry of Health as required by their relative’s well being, and that when they do so, they be paid at standard Ministry rates.
LIX. In any case there is a major weakness in the conclusions. Public policy analysis is not about arguing this or that option is not perfect – perfect policies do not exist. It is about comparing the merits of two imperfect policies. None of the three witnesses make such a comparison. It is evident from the Plaintiff’s evidence that sometimes the outside support has been less than intended. The public policy issue is the degree that the less-than-perfect family support will be superior to the less-than-perfect outside support. On the witness evidence I have read it is hard not to conclude that in many cases it will be.
LX. Thus whatever the conclusion that three expert witnesses come to about paying for all care, and irrespective how it is related to the rest of witnesses’ evidence, or that it fails to compare with the alternatives, their conclusions are not relevant.
LXI. What is relevant to the quality issue is that insofar as they address it, the witnesses’ evidence supports the conclusion that usually a family member gives as good or better care of a disabled person than an outsider.
Increased Choice for the Disabled.
LXII. It is public policy to give the disabled as much choice as in practical. A blanket prohibition against family care-givers reduces that choice.
Alignment of Incentives
LXIII. Currently when the outside care-giver fails to deliver the required support (and instead it is provided free by the family member), the Ministry saves the expenditure. This has the unfortunate consequence that the incentives are for the Ministry not to deliver the support to meet an acknowledged need. In my experience of officials, such a saving rarely over-rules their professionalism and commitment to those in need. Even so, as far as possible financial incentives should align with those characteristics.
LXIV. In this respect it is also important to note that the direct supply of the provider services are a layer removed from officials, being done by agencies created in the community for this purpose and where, as such, on the ground budget operational pressures may have more bite. I note the reply statement of Peter Atkinson in para 6 wondering what happened to the under-spending and a cynic wondering if a bonus scheme was operating for agencies who didn’t spend their allocation.
LXV. If the Ministry had to pay family members who act as backup when the outside support fails the disabled person there would be a better alignment of incentives.
Conclusion
LXVI. In summary there would be three quality gains if family members were permitted to provide the Ministry of Health assessed support and were paid for it:
– better delivery coverage ;
– better quality of care;
-increased choice for the disabled;
– better alignment between the financials and professional delivery.
Overall Conclusion
LXVII. I have tried to assist the Tribunal by setting out the modification to practices which would occur if they rule in favour of the Plaintiffs.
LXVIII. The modification would not be great and the framework would remain intact.
LXIX. I have also shown that despite the lack of good data, the fiscal costs of the modification are modest relative to additional spending on health care, and they are almost entirely due to improved coverage of delivery under existing the existing policy framework, rather than a consequence of the modification per se.
LXX. I have also pointed out that there will be quality gains from this modification.
LXXI. I conclude that in my opinion there are no obvious detrimental fiscal or public policy consequences to the government of amending policy to allow family members to be paid.
Signed : Brian Easton
Date
<>1 Office of the Minister for Disability Issues (n.d. but August 2007 or later) http://www.odi.govt.nz/documents/what-we-do/2008-march-cabinet-paper-disability-supports.doc2 There is a small discrepancy between Mr De Raad’s figure and mine of 103 which probably reflects differences in the way we treat the SNZ estimates of those in residential care.
3 The 20% is a compromise between the 19½% of the standard income tax rate, the 15% where the low income tax rate applies, and the much higher effective tax rates which apply if a beneficiary earns more that $80 a week.
4 The easiest source for this figure is the Budget 2008 Minister’s Executive Summary, p. 8.