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Category: Market Failure

05/03/2026

Coles and ‘The Market’

5 March 2026

Currently the ACCC is suing Coles over misleading advertising as their promotion logo ‘Down, Down’ was to show customers cheap goods, but some of these had previously had big rises, so that overall they had not fallen, or not fallen much.

When I did Economics 101 a long time ago, the first chapter of the book was about the perfect market, modelled on a European medieval village where each Saturday all the farmers came to the square and sold their produce to the villagers. The farmers all competed with each other, and could not really take their produce home. The villagers had just enough money, so chose wisely which products to buy. The farmers could not raise their prices more than the other farmers and knew roughly how much to bring, and the villagers had complete knowledge of the products that they were buying.

All the other chapters in the book were about how the market was distorted by cartels, oligopolies, innovation, scarcity, lack of knowledge, regulation and doubtless a few other factors that I have forgotten.

In the simple medieval world, people spent all their money on necessities and made rational decisions. Now, a huge percentage of our expenditure is discretionary. Some people are battling to afford food, clothes, services and rent, particularly the last two, which have been badly affected by poor government policies over many years.

But the main area of interest to marketers is the people with discretionary income. Will they buy a branded product, believing it is better or more prestigious? The ‘science’ of marketing at an individual level is a branch of psychology- working out motivations. A marketer told me that people make decisions with their emotions, then justify them intellectually afterwards. This is true and it follows that the model of the rational villager is simply not what happens.

Big decisions, like moving to a more expensive suburb, buying a prestigious brand car taking an expensive holiday, or upgrading to a more expensive seat class, are a combination of emotional and rational; you want this and you can afford that.

Airlines and some accommodations are interesting. If you try to buy an airline ticket online and fall off, when you go back a few minutes later, the fare you had is no longer there. Did it really get sold in that moment, or did the airline find out who you were and up the fare? Fares can vary wildly. I tried to catch a train from Stockholm to a northern Swedish city and the price varied almost tenfold depending on what time I wanted to travel. Were they just trying to even the load, or was there some gross profiteering there?

Some supermarkets charge more in richer suburbs than poorer ones. The products are the same. Presumably the rents in the expensive suburbs are more, but how much is that per item? When Aldi came, I was amazed that the total cost of groceries was about 30% lower than the Coles/Woolworths duopoly. The range of products is less, but it is a big gap. The duopoly lowered their prices on things that are easy to remember like milk and bread and made a great play of the fact that these were price-competitive, but frankly, most of the rest of the wasn’t and isn’t.

At least some good folk have kept a record of what was actually charged and when and it seems in Coles ‘Down, Down’ sometimes means ‘Up, Up’.

Years ago in the BUGA UP days (early 1980s) when they had an ‘Advertising Standards Council’ and you complained to it, absurd claims were dismissed as ‘puffery’ that no one believed, so of course it was OK to make them. When the heat from BUGA UP and the consumers went off, the Advertising Standards Council simply disappeared and the nonsense continues unabated, (not that it ever was abated). The ACCC (Aust. Consumers and Competition Commission) seems either to have collected the data or has had it collected for them, so is able to take action at last.

It might be noted that government-owned Sydney Markets at Flemington had cheap stalls and most retailers and the public went there to buy their groceries. Liberal Premier Nick Greiner privatised the markets, putting the stalls up for sale based on their turnover. This created a huge overhead for the stallholders, who naturally had to buy their spaces for large sums. All the market prices naturally had to rise, and the big supermarkets by-passed the markets, buying direct from the farmers and squeezing their prices down. This was a significant move from the previous free market, done so that the NSW government could flog off as asset. The duopoply and buying power of the supermarkets further distort the price structures.

Allan Fels was a former head of the ACCC and has written the piece below in the SMH of 4/3/26. Late in the article he mentions one of the technologies that already exists, which is people simply visiting supermarkets, picking what they want and leaving, having been identified by face recognition and charged as per their card on a database. An idea that he foreshadows is digital pricing, where the goods do not have a price, but the price can be set for each individual customer, presumably based on their profile. Currently, there are loyalty schemes that collect our appearances, personal details, locations, shopping habits, and credit details. Free apps want access to our contacts lists and photos, so our friends are all linked together, and now technology companies listen to our conversations and can scan our emails. All this data is saleable for marketing, security or anything else. Presumably, as we come out of our future supermarkets with no prices on the goods, no checkout and no dockets but the bill visible on our phones, we can compare what we paid with strangers in the street, and see what their prices were compared to our own. Then a bevy of lawyers can make a fortune arguing with the supermarkets who will allege that were not ripping some customers off, they were subsidising the poor ones.

It’s a Brave New World.

https://www.smh.com.au/business/consumer-affairs/our-supermarket-duopoly-needs-to-tell-not-just-the-truth-but-the-whole-truth-20260303-p5o6yk.html

04/03/2026

Aged Care- An Opinion

4 March 2026

I work as a GP and have some interest in aged care.
Much of the accommodation in the aged care sector is driven by real estate development in a corporate model. You sell your house. We sell you a broom cupboard for roughly the same price and promise a dodgy nursing home thereafter and some of the money going to your offspring when you die.

Now there is huge amount of ‘bed block’ in public hospitals because the families who will inherit the houses do not want this deal, so the house is not sold and the oldie in hospital has nowhere to go- hence the bed block. A geriatrician told me about this problem, which of course leads on to ambulance ramping at the other end. It is also a Federal-State issue as the services outside hospitals are mostly Federally funded, while the public hospitals are State funded.

The latest problem is the Federal government’s effort to shift costs back to the patients. It is part of the major problem in the whole health system in Australia, each player, Federal govt, State Govts, Insurers and patients try to shift the costs to someone else, without caring about the total cost.
Clearly home help is needed with a lot of different levels of needs and services. Corporates have moved in and the services tend to be very expensive. Some years ago I knew a man down the street, now deceased, who wanted a couple of hours cleaning a week. The company told him he had to have a minimum of 4hrs per week at $60 an hour. The lady who actually did it was paid $21 per hour.

In 2000, Kevin Rudd asked for submissions for a thing called ‘Vision 2020’,which was an ‘ideas workshop’. I wrote a submission saying that a government registration and insurance system was needed so that individuals could find other individuals to offer services without the middleman. I never even got a reply from Rudd.

Andrew Leigh is Minister for Competition, but it seems that the government is following the Howard line of opening up the disability sector to ‘for profit’ providers. AirTasker seems one of the few groups trying to link service providers with those who need services. Obviously there needs to be websites where people are rated, as happens for restaurants or accommodation.

If the government were pushed to have a registration website where people could put the services that they offer and their CVs, and pay a registration and insurance fee, it would be the basis for service delivery. Naturally there would be some crooks exploiting it, who would have to be identified when they were rated and then excluded by some sort of regulatory body, but overall most people would do the right thing, and the huge margins that some providers are charging would be non-competitive and would cease. The corporate providers say that they are needed for quality control, rostering etc, but their costs are often profiteering. ‘The market’ will fill any gap, but this is really a welfare issue that needs a cooperative approach, which tends to be lacking in Australian health planning.

12/10/2025

Vehicle to Grid electric power is being discussed at last!

12 October 2025

Those following EV sales figures may be cheered up by a recent article stating that Hyundia, Kia, BYD and other EV manufacturers are exploring how EV batteries can be used to store electricity and top up the grid at peak times, earning power bill credits for their owners.

This has been possible for a long time, and one can only wonder if the existing big players in the electricity market have been delaying progress to keep prices high and let them develop their own batteries. Note that the energy companies are now doing deals with the car companies- I guess that was the reason for the delay- they want some of the money. They are pontificating on what was obvious years ago, as if they are Santa Claus.

Whether this article in the SMH on 25/9/25 means that there has been real progress remains ot be seen, but another recent article n Carsguide of 11/10/25 says that BYD is overtaking Tesla in sales and may bring new cheaper models including the Seagull (Atto 3), which might sell for as little as $25,000 before on-road costs. I had read in the financial pages that the Seagull costs as little as $US10,000 (which is about $A15,500) overseas so we can only wait to see what price we get.

Turning your EV into a giant battery is a step closer

By Nick Toscano SMH 25 September

Hyundai, Kia, BYD and other major automakers are exploring how batteries in electric vehicles can be used to store surplus renewable energy and top up Australia’s electrical grid at critical times, earning power bill credits for their owners.

In one of the biggest trials of its kind in Australia so far, power supplier AGL has begun working with car manufacturers to test technologies that could turn plugged-in electric vehicles into “two-way energy sources”, ready to inject rapid discharges to keep the grid stable and smooth out swings in supply and demand.

Connecting an electric car to a bidirectional charger, so its battery can feed the grid in peak periods, could be a powerful tool to support decarbonisation of Australia’s electricity system as it shifts from coal to less predictable sources such as wind and solar, energy companies say.

It could also make it more appealing for Australians to make the switch to electric vehicles by giving owners the ability to earn money from selling power in their batteries back to the grid, offsetting their higher upfront cost compared with traditional petrol cars.

The Climate Change Authority calculates that every second light vehicle sold over the next decade must be electric for the Albanese government to meet its new 2035 emissions-reduction target. However, achieving that goal may prove difficult due to a recent slowdown in electric car sales and persistent worries about the cost of living.

To unlock electric vehicles’ full potential, their owners should think about them not just as cars, but as “home batteries on wheels”, said Renae Gasmier, AGL’s head of innovation and strategy.

Electric car batteries, typically several times larger than household batteries, can store enough energy to comfortably power the average home for around three days, she said. But adding vehicle-to-grid functionality could deliver even greater benefits, enabling the battery to be charged when electricity prices are low and renewable energy is plentiful, and using that energy to power the owner’s home or export surplus power back to the grid.

AGL said its trial, launched in Melbourne on Wednesday, would bring together electricity distribution and network service providers, electric vehicle equipment suppliers and carmakers including Hyundai, Kia, BYD and Zeekr. Other automakers are in talks with AGL about the program but are yet to sign on.

The trial will assess the level of potential savings consumers could expect from using vehicle-to-grid functionality and seek to ease concerns that bidirectional charging may wear on car batteries, causing them to degrade more quickly.

Kia Australia chief executive Damien Meredith said bidirectional electric vehicle charging was a “game-changer”.

“Amid cost-of-living pressures, this unlocks the potential for Kia EV owners to transform their cars into mobile energy assets,” Meredith said.

Other energy companies are also pursuing similar initiatives. Amber Electric, a retailer that enables customers to buy and sell electricity at wholesale prices, launched a vehicle-to-grid trial last year with funding from the Australian Renewable Energy Agency. Some participants in the trial were said to have earned hundreds of dollars in credits a month after feeding power back to the grid at times when prices were spiking.

Origin Energy, the largest Australian power and gas retailer, is building its own new retail offering around vehicle-to-grid technology.

The company this week said it had teamed up with BYD and StarCharge for a trial in which participants would receive a BYD Atto 3 subscription, a vehicle-to-grid bidirectional charger and access to a free charging tariff.

09/10/2025

Presentation to the NSW Workers Compensation Inquiry

I presented to the NSW Law and Justice Committee into Workers Compensation on Tuesday 7 October.

The Inquiry is a result of the NSW Government’s efforts to reduce the cost of psychological injury by cutting eligibility. They could not get it through the Upper House, hence it was sent to the inquiry.

It is at https://www.youtube.com/watch?v=ocavXF-Kd0U

My swearing in is at 6.28 and evidence at 6.33 and following.

28/09/2025

Submission to the NSW Parliamentary Inquiry into Compulsory Third Party (CTP= Motor Accident) Insurance

There is an inquiry into some types of legislation every Parliamentary term.
It tends to be routine. There are calls for submissions, but no publicity and usually vested interests merely state their positions.
In this case insurance for people injured in Motor Vehicles is under the Law and Justice Committee rather than the health-orientated Social Issues Committee, which shows the government’s priority; keeping the premiums down rather than actually making the insurance companies treat people fairly.
Here are the Terms of Reference- submissions are accepted until 7 October 2025.
https://www.parliament.nsw.gov.au/lcdocs/inquiries/3131/Terms%20of%20Reference%20-%202025%20Review%20of%20the%20Compulsory%20Third%20Party%20insurance%20scheme.pdf
Here is my submission to the inquiry, with suggestions as to what need to be done.

‘Transparent Competition and Fair Go for NTDs Needed in CTP’
A Submission to NSW CTP Inquiry September 2025

I very much welcome this Inquiry and would be happy to appear before your Committee to elaborate on and/or to clarify any other questions that you may have. I also have patients who would be more than willing to give evidence, some of whom would have difficulty doing this is in writing, but would be able to speak to the Committee.
I am a medical practitioner (GP) with a special interest and expertise in Workers Compensation (WC) and Compulsory Third Party (CTP) insurance since 1983. I have a current practice of at least 100 patients. Many of my patients are from socioeconomically disadvantaged or NESB backgrounds with the worst jobs and the highest injury rates.
My initial qualifications were in medicine and I am a Fellow the Royal College of Surgeons of England and have a Master’s degree in Applied Science in Occupational Health from UNSW. I had considerable experience in intensive care medicine and became active in the anti-tobacco movement because I realised that prevention was better and cheaper than cure. As an Australian Democrat MLC, 1998-2007, I initiated consequential inquiries into DOCS (now Dept. of Community Services), and Mental Health.
Thus, I understand health policy at both a political and coal-face level. The key problem is that the major unstated policy of our fragmented health system is that the main objective for each participant group, Federal government, State Governments, insurers and Patients is to minimise their costs without regard to the total cost of the system. This is especially true in the Workers Comp and CTP area. There is theoretical competition in the CTP area between insurers, but it is not real competition as consumers are not able to tell which insurers give them a better deal and are left to judge by the TV ads. What happens in practice is that the insurers delay, deny and dispute claims, so that patient will go elsewhere for treatment. Claims with ongoing problems are classified as ‘minor injuries’. This means that if treatment is delayed for 6 months, the insurers are free from further liability. The tactic is therefore to accept the claim, but deny investigations, so that the diagnosis can be disputed and treatment not initiated. Since there is no penalty for denials and disputes, the worst that can happen to insurers is they are compelled to do the treatment that they should have paid for, months or even years before, given the glacial pace of the legal system. It is likely that insurers have calculated that if a high percentage of denials are successful, even if they lose a few they are still better off financially with a ‘denial’ policy.
Insurers also produce ‘Injury Management Plans’ which might be considered farcical. They are 5 pages long on thick paper (clogging up any paper-filing system that retains them). They take absolutely no notice of the NTD’s diagnosis on the Certificates of Capacity and merely state the insurer’s medical code names for what they have accepted liability for. The IMPs then state the responsibilities of all parties as they would have them understood, with the obligations of the patients to do as they are told by the insurer, the NTDs to provide certificates and ;input’ to the Management plans, which remain the prerogative of the insurers. Their obligation to pay for ‘reasonable and necessary’ treatments seems neglected. I have had patients with very serious leg injuries after falls, who also sustained back or neck injuries in the falls. The leg injuries got all the attention in the EDs at the time, but the back injuries were what stopped them working in the medium term. Yet the insurer would not acknowledge liability for these contemporaneous injuries and maintained that they must have happened at a later date, as if this would happen as they convalesced with their legs up. The injuries may miss scrutiny because EDs concentrate on the most serious immediate problem and the strong pain killers given may mask other injuries. What needs to happen is that the insurers must either accept the diagnoses on the NTDs certificates or have it disputed through a medical panel immediately. The IMPs could be thought of as a complete waste of medical time, but NTDs are paid $100 to read and accept them (easy money) and they serve to reinforce the insurers’ right to ignore diagnoses that they may have to pay to treat later and reinforce their right to have the final say on management.
Most GPs do not dispute the denials and some Rehabilitation practitioners engaged by the insurers see the insurers as the client rather than the patient, push the patient back to work when they are not yet ready and try to bully the GPs to do the same. I have had two insurer-hired Rehab companies tell patients to change their GPs when the GPs did not do where they wanted.
The system of using Independent Medical Examiners (IMEs) by insurers has to be changed. These IMEs have a strong financial interest in coming to clinical assessments that favour insurers. Medical problems are minimised or attributed to age or other factors that were completely unnoticed until the date of the accident. Their assessments very frequently result in treatment denials or withdrawal of liability for diagnoses with consequent withdrawal of benefits. The impecunious patient then appeals to a lawyer, who arranges another IME, a dispute results and the PIC has to sort it out with yet another IME. This delay is immensely detrimental to the patient’s finances, psychological state and often their long-term outlook. A better system would be to have the insurers obliged to pay the NTDs management plan or appeal to a Medical panel. The ideal would be a medical panel chosen by the relevant college without insurer input, so that it is a medical decision what is ‘reasonable and necessary’ treatment. An alternative that might save time would be an IME agreed by both insurer and the patient’s lawyer, but most patients do not have lawyers, and obviously it is better if they do not need them.
It might be noted that the legal system redress processes are so slow that in many cases the damage is often irreparable before they even have a hearing. My disadvantaged patients are often paid in cash and have less than 3 weeks before they are unable to pay for food and rent. The time taken by insurers to approve cases and Nominated Treating Doctors (NTD) requests is extremely destructive to patients. The denial of a large percentage of treatment requests is not monitored by the State Insurance Regulatory Authority (SIRA), despite my request for them to do so, and my providing evidence to them that up to 61% of treatment requests are denied. I have had a number of patients who have been strung along with treatment denials for over 5 years; my longest who actually won was 14 years.
Delays are allowed in the NSW legislation. My own statistics for CTP, which I gave to the Hayne Royal Commission on Financial Services showed that in an unacceptably large percentage of cases treatments were denied by insurers. NRMA was the worst at 61%, Allianz at 43%, QBE 36% and Suncorp (GIO and AAMI) at 19%. Another source, which I am not at liberty to disclose, had a sample size 10 larger than mine, with similar results. These figures were from 2016, but I do not believe the situation has changed significantly. It might be noted that insurers have ‘accepted’ a very high percentage of the claims, but then refuse the treatment of these claims without this being noted or sanctioned by SIRA. It seems that SIRA functions as a senior insurance clerk to minimise payouts, but not in any way as a patient advocate. Our CTP system, which started as a means of getting top rate care motor accident victims in NSW, is now examined in terms of ‘the impact of the bill on cost and economic conditions’. It is significant that it is the hands of the Law and Justice committee rather than the any health-related committee. If our current situation is viewed merely as a cost to be minimised by the insurers, employers and NSW Government, we can only expect to see ever-declining health outcomes for my patients and our NSW community. It seems that there has been an immense influence into the systems of algorithm-generated management plans and US input so that CTP and WC systems are training and preparing for the days when insurance companies decide what treatments will be done, and doctors do what they are permitted to do by insurers. I first encountered this in 1983 when discussing treatments with American doctors at a conference. While all the non-US doctors discussed the subject in terms of optimum drugs and protocols, the US doctors talked about what they were allowed to do in terms of individual patient’s insurance schemes. It is now normal there and coming here by stealth.
The best way to save costs is to optimise treatment. Generally this means empowering GPs, who are the Nominated Treating Doctors (NTDs) actually to do their jobs without insurer delays and denials. It might be noted that GPs do not make any money from investigations or referrals. There may also be an insurer prejudice against GPs, on the assumption that if an accident were serious it would go to an Emergency Department (ED). While it is true that serious accidents usually go to EDs, whiplash injuries and back pain are very common after non-fatal accidents and the problems from these may be ongoing for years, which is presumably why insurers do not want them investigated.
It would appear from an NTD medical perspective that treatments are still denied according to either an algorithm or a protocol to save money, and these algorithms or protocols are presumably based on statistics. The point about medical practice is that every case is an individual and that probability is not certainty. Every case is individual and must be assessed on its merits. Insurer decisions must be transparent, and if they are made by a computer algorithm or protocol these must be made transparent for a medical discussion, not merely a financial one.
It must be acknowledged that the current system is immensely adversarial. The insurance clerks who are responsible for cases are somewhat pretentiously called ‘case managers’, which of course should be the role of the NTD. They are rotated frequently, and it must be asked why this is. The suspicion is that they must not be allowed to become too close to the ‘clients’, i.e. patients that they are managing. They use first names in all their correspondence, but only the first initial of their surnames, presumably so that they can remain anonymous as they refuse reasonable treatments of those who absolutely need them. . One would have thought that they would be proud to have their names on their work as all health professionals are, but in practice, this is the land of ‘deny, delay and dispute’ rather than that of Help.
The medical notes are so available as to make ‘medical confidentiality’ a farce, yet insurer records are entirely opaque, protected by ‘legal privilege’. So while the NTD have to justify any decision or even a long consultation, insurers do not have the same rules applied to them. NTDs are often not even informed of treatment denials- their correspondence is with the patient. Insurers seek to replace NTD medical management with insurance clerk management. Phone inquiries from NTDs are difficult and calls are not returned more often than not. Calls are recorded supposedly for ‘training and quality purposes’, but I have had experience where the questions asked by the case manager were clearly written by lawyer as a cross examination, so I am now reluctant to answer questions or have the conversations recorded. Interestingly most insurance clerks are unable to turn off the recording. Some offer to ‘delete it later’- clearly an unacceptable alternative. Liaison between insurers and employers also seems to be poor, communication being via rehabilitation professionals late in the case management. If the doctors’ records are to be available for perusal and judgement, then the insurers’ cases records should be similarly available for subpoena. Perhaps the reasons for unconscionable delays might be elucidated.
Two non-medical aspects are worthy of the Committee’s attention:
1. The CTP system now has some degree of wage substitution, which is a good and necessary thing. However, many students and migrant workers are paid in cash for at least part of their work. When they are injured the wage substitution only encompasses the part that was taxed. Currently employers are happy to understate incomes to keep their premiums lower and insurers are happy to accept these low numbers as it lessens their payout. The victims need to have their incomes maintained and should be assessed by what they had received, though this naturally has practical problems.
2. Police should be required to make a report in all accidents that are reported to them, and note that the accident took place, who was in the wrong and some degree of the severity of the accident. I have had people with significant whiplash injury denied compensation because the insurer considered that he dent in the bumper bar was not deep enough and have had people significantly injured where the other party denied that the accident took place at all. A person made racist slurs and deliberately ran into another car (which caused immense psychological injury).
(There is also some fraud where independent assessors hugely overstate the damage done to cars and repairers do needless repairs, sometimes buying ‘courtesy cars’ which they loan to the owners and charge the insurers exorbitant hire charges to pay off the courtesy cars. Naturally this scam affects insurers rather than my patients, but attention needs to be given to accreditation of assessors. This is a motor accident matter, but not a CTP matter. Having police attend would also make this less likely).
The solutions for the Medical management of CTP are:
1. To recognise that the problem of the CTP system is that it is a dysfunctional medical insurance system which minimises short-term treatment costs, which perpetuates the medical problems while maximising the administrative, investigative, medical reassessment and legal costs. The delays adversely affect outcomes. Improving treatment should be the first step in lessening costs;
2. To put the NTDs at the centre of the system, allowing them to organise treatments as happens with all other forms of health insurance. This needs to be mandated by law or regulation or insurers will not do it.
a. NTDs should be able to order the same investigations, referrals or treatment that are reasonable and standard in private practice, and the insurers should be obliged to pay for them as any other health insurance fund does. Appeals against this by insurers should be to a panel of doctors appointed by the specialist colleges. It might be noted that published protocols for emergency department management of cases require immensely more investigations than are suggested by GP NTDs.
b. NTDs should choose the rehabilitation professionals. If insurers feel that rehab is needed, they could suggest this to the NTDs;
c. NTDs should be notified of approvals or denials of medical investigations or treatments at the same time as the patient, and be able to comment on these and appeal the decisions.
d. NTDs should be given copies of the reports of IMEs (Independent Medical Examiners) used by either insurers or defendant or plaintiff lawyers within a week of their being received by the insurer or lawyer, and be given an opportunity either to use the opinion for the patient’s benefit, or to respond to it.
3. To have a significant treating doctor input to the management of iCare and SIRA, both at an administrative and a case management level;
4. To make SIRA collect and make public figures on treatment delays and denials from all insurers;
5. To make SIRA a true regulator that acts for patients and sanctions insurers for unreasonable decisions. Sanctions for unreasonable treatment denials should be able to be initiated by plaintiff solicitors and ruled in the Personal Injuries Tribunal to lessen treatment denials; and finally
6. To make insurer case records as transparent as medical records are, so that the basis of decisions and their timeliness and origins are transparent and accountable.
7. To make insurer algorithms transparent and vetted by specialist colleges, who may be asked to prepare their own algorithms or flow diagrams for common conditions, so that what is ‘reasonable and necessary’ will be disputed less. This must be done by Medical Colleges without insurer input, as it might be noted that the whiplash guidelines were made by a SIRA committee which had insurer input but no input from emergency physicians or neurosurgeons, the two specialties that had the most interest in the outcome.
This is a complex area and I would be willing to appear and answer any question that the Committee might have on the working of the CTP scheme and possible alternative systems.
I attach two Appendices from my submission to the Hayne Royal Commission:
First, a 2- week survey of my patients to show the extent of insurer interference in reasonable and necessary treatments (Appendix 2);
Secondly, figures for radiology and specialist referral denials by insurers (Appendix 4).

Yours sincerely,

Dr Arthur Chesterfield-Evans M.B, B.S., F.R.C.S. (Eng.), M.Appl.Sci. (OHS), M.Pol.Econ.
636 New Canterbury Rd, Hurlstone Park 2193
0419 428 019 (m)

30/07/2025

‘Delay, Deny, Defend’; A Submission to NSW Workers Compensation Inquiry July 2025

22 July 2025

I very much welcome this Inquiry and would be happy to appear before your Committee to elaborate on and/or to clarify any other questions that you may have. I also have patients who would be more than willing to give evidence. I am a medical practitioner (GP) with a special interest and expertise in Workers Compensation (WC) and Compulsory Third Party (CTP) insurance since 1983. I have a current practice of at least 100 patients including a number with PTSD or stress related to workplace psychological trauma. Many of my patients are from socioeconomically disadvantaged or NESB backgrounds with the worst jobs and the highest injury rates.

My initial qualifications were in medicine and I am a Fellow the Royal College of Surgeons of England and have a Master’s degree in Applied Science in Occupational Health from UNSW. I had considerable experience in intensive care medicine and became active in the anti-tobacco movement because I realised that prevention was better and cheaper than cure. As an Australian Democrat MLC, 1998-2007, I initiated consequential inquiries into DOCS (now Dept. of Community Services), and Mental Health.

The key lesson from our successful tobacco campaign and those inquiries, and those since, is that money spent at the end-stage will not produce the most effective, efficient and equitable results. It is like having the only health services as intensive care units – no matter how much money is expended, no effective improvement will be produced, and costs will only be saved by reducing services, naturally leaving some people untreated, thus generating additional pain and suffering, as a consequence of shifting costs elsewhere. It would be tragic if this were to be the case with WC in NSW at the current time.

I am currently treating at least 6 long-term workplace psychological trauma patients where timely industrial relations (IR) interventions would have resolved the situation far more quickly, effectively and cheaply, had adequate advocacy been available. The chance of these workers’ compensation cases returning to work is
now frankly poor despite the fact that they have had the best psychological and psychiatric attention.

It might be noted that the legal system processes are so slow that in psychological cases the damage is often irreparable before they even have a hearing. My disadvantaged patients are often paid in cash and have less than 3 weeks before they are unable to pay for food and rent. In my extensive experience the time taken by insurers to approve cases and Nominated Treating Doctors (NTDs) requests is extremely destructive to patients. The denial of a large percentage of treatment requests is not monitored by the State Insurance Regulatory Authority (SIRA), despite my request for them to do so, and my providing evidence to them that up to 61% of treatment requests are denied. I have had a number of patients who have been strung along with
treatment denials for over 5 years; my longest was 14 years. (While it took 14 Years for my Workers Comp. patient to have back surgery approved, by then he was reluctant to return to work (RTW) as he feared being re-injured).

The UnitedHealthCare insurance executive who was gunned down in New York had the words, ‘Delay, Deny, Depose’ [sic] written on the cartridges from the fatal shots, a corruption of the title of the book, ‘Delay, Deny, Defend’, which critiqued the US health insurance industry. It has been reported that about 33% of the cases
were denied by his Company, one of the biggest health insurers in the USA. Delays are allowed in the NSW legislation. The percentage of denials of NTD treatment requests and the delay of approvals is not monitored, despite my requests for same. My own statistics for CTP, which I gave to the Hayne Royal Commission on Financial Services showed that in an unacceptably large percentage of cases treatments were denied by insurers. NRMA was the worst at 61%, Allianz at 43%, QBE 36% and Suncorp (GIO and AAMI) at 19%. Another source, which I am not at liberty to disclose had a sample size 10 larger than mine, with similar results. These figures were from 2016, but I do not believe the situation has changed significantly. It might be noted that
insurers have accepted a very high percentage of the claims, but then refuse the treatment of these claims without this being noted or sanctioned by the State Insurance Regulatory Authority (SIRA). It seems that SIRA functions as a senior insurance clerk to
minimise payouts, but not in any way as a patient advocate. Our Workers Comp system, which started as a means of getting top rate care for injured workers in NSW, is now examined in terms of ‘the impact of the bill on cost and economic conditions’. If our current situation is viewed merely as a cost to be minimised by the
insurers, employers and NSW Government, we can only expect to see ever-declining health outcomes for my patients and our NSW community. The best way to save costs is to optimise treatment.

You may be aware that John Nagle, the Ex-CEO of iCare was sanctioned for his use of algorithms. It would appear from an NTD medical perspective that treatments are still denied according to either an algorithm or a protocol to save money, and with no sanctions and so few disputed it is economically advantageous for insurers to deny on any pretext. The system is immensely adversarial. The medical notes are so available as to make ‘medical confidentiality’ a farce, yet insurer records are entirely opaque, protected by ‘legal privilege’. So while the NTDs have to justify any decision or even a long consultation, insurers do not have the same rule applied to them. Rehabilitation companies are chosen by insurers so that most of them see their client as the
insurer, rather than the patient. The ‘case managers’ (i.e. insurance clerks) who rotate frequently, try to use first name terms, but will not give their surnames as the callous messages that they have to deliver might put them in physical danger. NTDs are often not even informed of treatment denials- their correspondence is with the patient. Insurers seek to replace NTD medical management with insurance clerk management. Phone inquiries from NTDs are difficult and calls are not returned more often than not. Liaison between insurers and
employers also seems to be poor, communication being via rehabilitation professionals late in the case management.

Given my extensive medical knowledge and experience the solutions are:

1. To recognise that many of the Psychological workplace problems could be solved by a better IR disputes system. Perhaps doctors could directly refer for IR mediation in such cases;

2. To recognise that the problem of the WC system is that it is a dysfunctional medical insurance system which minimises short-term treatment costs, which perpetuates the medical problems while
maximising the administrative, investigative, medical reassessment and legal costs. The delays adversely affect outcomes. Improving treatment should be the first step in lessening costs;

3. To put the NTDs at the centre of the system, allowing them to organise treatments as happens with all other forms of health insurance. NTDs should also choose the rehabilitation professionals;

4. To have a significant treating doctor input to the management of iCare and SIRA, both at an administrative and a case management level;

5. To make SIRA collect and make public figures on treatment delays and denials from all insurers;

6. To make SIRA a true regulator that acts for patients and sanctions insurers for unreasonable decisions. Sanctions for unreasonable treatment denials should be able to be initiated by plaintiff solicitors and ruled in the Personal Injuries Tribunal to lessen treatment denials; and finally

7. To make insurer case records as transparent as medical records are, so that the basis of decisions and their timeliness and origins are transparent and accountable.

I attach two Appendices from my submission to the Hayne Royal Commission:

First, a 2- week survey of my patients to show the extent of insurer interference in reasonable and necessary treatments (Appendix 2);

Secondly, figures for radiology and specialist referral denials by insurers (Appendix 4).

Yours sincerely,
Dr Arthur Chesterfield-Evans M.B, B.S., F.R.C.S. (Eng.), M.Appl.Sci. (OHS), M.Pol.Econ.

27/01/2025

NDIS and Health System in Crisis- what is the answer?

27 January 2025

The health system has been in crisis for years and now NDIS is the same.
State and Federal governments are locked in crisis talks, and now the NDIS is over budget and looking to ‘transfer services’ to other parts of the health system.
Why does all this go on, and what is the solution?
The short answer is that there are many sources of health funding and the main policy objective of all of them is to transfer the cost to someone else, and if they are a private source, to maximise the profit.
This ‘transfer costs’ imperative means that no one is concerned about the overall cost, merely their bit of it.
The major players are still the State and Federal government. In simple terms the States look after the hospitals and the Federal government looks after non-hospital services.
Medicare is being starved and pays less and less to doctors relative to inflation. The private health funds pay what they have to, the CTP (Motor Accidents) and Workers comp systems are either private or use a private model and pay as little as they can get away with and the patient pays the gap, unless they decide that private health insurance is not worth the money, which in most cases is true, and get a bit of Medicare and pay the rest.

Examples of cost shifting are easy to find. The Federal government has let Medicare rebates to GP fall to 46% of the AMA fee. It was 85% when Medicare started, so many doctors simply don’t bulk bill and charge a fee. So people go to the Emergency Departments that are free, but funded by the States. A visit to the ED is 6x more expensive than a GP visit, but the Federal government has shifted the cost to the States, so they don’t care. When you go to the ED and get a script, the hospital used to give you all the drug course. Now they give you a few tablets and a script for a pharmacy outside. The script was needless, and generates the costs of the trip to the pharmacy, the pharmacists fee, the PBS Federal government contribution and the patients script fee. A lot of wasted time and money, but the State saved a bit. When you went to the ED, you used to be followed up in a hospital outpatient clinic where the consultant was paid a sessional fee and oversaw registrars checking the cases and learning. You could also just book and go to a specialist clinic. These have largely been stopped to save the State money. Now you go to the specialists’ rooms and the State saves money, but the total cost per visit is much more.

If you look at the overall efficiency of health systems, Medicare as a universal system has overheads of about 5% counting the cost of collecting tax generally. Private health insurance overheads in Australia are about 12%, Workers comp 30% and CTP over 40%. These figures are approximate and very hard to get, because the dogma is that competition drives down prices, when clearly the system is more efficient if there is a single paying entity. Interestingly, the Productivity Commission made no attempt to quantify these overheads when it looked at the cost of the health system- you may ask why. The point is if you take out profits, which are the same as overheads from the patients’ point of view, and make everyone eligible, you do not have to have armies of insurance doctors, investigators, lawyers and tribunals to see if the insurer has to pay or if it can be dumped on Medicare and the patient.
As far as foreign people using the system are concerned, universal Medicare for people living in Australia is administratively simple, and the cost of treating tourists who have accidents is cheaper than policing the whole system. Enforcement has quite high costs.

In terms of the cost of insurance, US schemes vary from 12-35%R, with the high costs ones being most profitable as they police payouts more thoroughly and naturally refuse more treatments. Note that the CEO of Unitedhealthcare in the US was recently shot, with the words ‘deny’ and ‘delay’ on the cartridges used. Surveys have shown that 36% of people in the US have had a claim denied. Claims are accepted here, but in a survey of my patients 60% of my scans and referrals of CTP patients were denied by NRMA. i.e, We accept the claim, but deny the treatment.

What Is needed is a universal system, free at the point of delivery.
What about over-servicing? The current system makes trivial problems of people with money more important than major problems of people without money. Underservicing is the major problem with ambulance ramping at EDs and long waiting lists.
In a universal system, which doctor is doing what is immediately accessible, with comparisons to every other doctor doing similar work. It is just a matter of checking up on the statistical outliers.

The problem is simple. The major political parties are given donations by private health interests to let Medicare die. Combine this with the Federal/State rivalry that makes cooperation very difficult and a reluctance to collect tax and you have the recipe for an ongoing mess.

The NDIS is an even bigger mess. It is a privatised unsupervised welfare system that arbitrarily gives out money and is subject to massive rorting.

The welfare system that looked after people with disabilities, both congenital and acquired by age or circumstance had grown up historically in institutions that were fossilised in their activities and underfunded to prevent expansion or innovation. People with disabled children looked after them with whatever support they could find. As these disabled cohorts reached middle age, their parents, who were old, were worried about what would happen when they died and wanted to lock in funding for their adult children before they died. They were an articulate lobby group with real problems and were quick to point out the flaws in the existing systems. They visited institutions that had no vacancies and thought that they had put their names on waiting lists. But no central list existed, and the institutions tended to give their beds to whoever came first when a death created a vacancy. ‘Just give us a package, and we will decide how to spend it’ was the parents’ cry. But then NDIS experts came in and interviewed people and gave away ‘packages’ based on an interview. A new layer of experts was created. District nurses or others who might have been able to think of more innovative or flexible options, or who could judge who in their area needed more than someone else had no input. People with real disabilities were given money, but did not know how to assess providers, so dodgy operators snapped up the packages, delivering dubious benefits. The government had no serious regulation or control system. Now the cost of NDIS has blown out, so the solution is to narrow eligibility and force people off the NDIS and onto other parts of the health system. Sound familiar? People with disabilities and their relatives are naturally worried; and rightly so. The lack of these services was why the NDIS was created. The answer is to have universal services. Set a standard, make it available and police quality in the system. Private interests may have a place, but there is no need for profits, non-profit organisations have been the mainstay of providers for years. For profit providers tend to cut costs, which in practical terms means either services or wages or both to concentrate on shareholder returns. The best way to allocate resources optimally is to empower the people actually doing the job, who also have the advantage of being able to see relative needs as they go about their routine work.

An interesting tome on the subject is ‘The Political Economy of Health Care’ by Julian Tudor-Hart, which looked at the changes in the British National Health System from when it started as an idealist post-war initiative run by those working in it with management overheads of about 0.5%, to when it was fully bureaucratised with overheads of about 36%. He was also responsible for the ‘’Inverse care law’ which is the principle that the availability of good medical or social care tends to vary inversely with the need of the population served. This inverse care law operates more completely where medical care is most exposed to market forces, and less so where such exposure is reduced.

The key point of that people have been taught that governments are hopeless and that you should pay as little tax as possible, so instead of good universal services being developed, a market has developed which is on its way to an American system.. People all agree that the US has the worst system in the developed world at delivering health care. But they overlook the fact that the US health system is the world’s best at turning sickness into money. That is what it was designed to do and that is why it is sustained and maintained. The same drivers are all here.

Note the Federal/State bickering in the article below (and weep).

My recipe for change is to have a Swiss style of government where the people can initiate binding referenda on governments and could simply answer a question like ‘Do you want to pay 5% more tax to have a universal health and welfare system?’ If a question like this got up against the doomsayers, we might have a chance. But of course the change to the constitution to get the referenda in the Swiss model is almost impossible to achieve, the Swiss having been discarded when the Australian Constitution was written in about 1900.

www.thesaturdaypaper.com.au/news/politics/2025/01/25/exclusive-albanese-shut-down-hospital-talks-pressure-states?utm_campaign=SharedArticle&utm_source=share&utm_medium=link&utm_term=VT5jI6Zo&token=Z3cA3Py

15/12/2024

Banks Charging $3 a withdrawal- the logical end of capitalist thinking?

11 December 2024
Once upon a time banks functioned to store your money safely giving you some interest for the use of it or lending it to you for a bit more interest.
Then the government made a quick buck by selling the bank to people who had the money to buy shares.
Then the concentration of wealth changed so that most of the money was held by fewer people. And technology changed and the people with the most money used the new higher tech ways of banking.
And then there was less profit in the little people.
And the accounting changed, the CEO salaries went from several tens of multiples of the normal people’s salaries to hundreds of times. But they had to show results to the shareholders to justify this.
So they closed most of the branches and replaced them by Automatic Teller Machines to save all those rents and staff salaries.
And they decided that even to stock the ATMs was too expensive so they put fees on them to use them, but they got criticised for that, so they lessened the number of ATMs, which saved even more.
A few people actually still wanted to go to the few branches left and wait until they could get to the reduced service, but the accountants said that the return on capital to the shareholders from this aspect of operations was not as much as the returns on internet transactions. Clearly the shareholders wanted ‘user pays’ in every aspect of the business so the banks decided to make these little folk pay a fee to get their own money, as had been so successful with the ATMs.
And no one even commented that the function of banks was to provide a service of looking after people’s money, the question was really how to ensure that the shareholders’ returns could be maintained.
And they all lived happily ever after.
THE END

15/12/2024

Nuclear Power

13 December 2024
In the Nuclear power ‘debate’ Dutton is using the exact words of a nuclear power lobbyist who I heard at a Royal Society meeting last year. He says in essence that all the other countries have nuclear, so we need it too, which is silly in that we have far more renewable energy than they do.

So the message is the that Liberals have given in to the nuclear lobby, because of course a couple of nuclear power plants are necessary for the AUKUS submarines, though both Liberal and Labor have been carefully avoiding this fact, as they know that the Australian people currently do not support either nuclear power or AUKUS submarines and they want to get us to accept it all in two bites rather than one.

The hasty inquiry into nuclear energy, which I flagged last month conspicuously did not have the AUKUS submarines mentioned in the their terms of reference despite the fact that in discussions about the AUKUS submarines it was mentioned that Australia will need two nuclear reactors larger than the Lucas Heights one, and a lot more trained nuclear scientists and technicians. Labor just wants the Committee to find nuclear electricity unnecessary and criticise the Liberals.

The sad reality of our two party duopoly is that when one side is voted out, the other comes in with all the policies it wants to bring in. So if you dump Albanese because he did not do much and you think Dutton can help (not a view I support), you get nuclear whether you wanted it or not.

In countries such as Germany , where Winston Churchill wrote the constitution so that no single party could ever get a majority, they have to get coalitions so that each issue has to get considered on its merits. It is not a winner takes all and gives all the policies of whichever lobby group has been successful lately. It seems that the Teals are the only hope; the thin Teal line holding democracy

26/11/2024

Social Media Ban misses the point- it’s about Algorithms

25 November 2024

Social media is not a fixed thing to be either accepted or banned.

I was surprised to find my son in favour of a ban, thinking it would stop communications between kids. He assured me that with groups able to be formed easily on WhatsApp, kids could still exchange whatever social relationships or information they liked.

It got me thinking about why social media might be harmful. Presumably kids can gang up more easily as they can all see what others write, just as minority groups can find and reinforce each other for good or ill. But this would also be a problem on WhatsApp.

The key point was one that I made a few posts ago. The object of social media is to keep people online so that they will see the advertising and make money for the social media owner. The way that this is done is to put people in touch with people like them or who believe things like them, particularly if their views are unusual. It is also helpful to upset or disturb people as while they are stimulated they will stay online.

The converse of this is that calming people down, or giving them sensible information has no financial advantage.

What viewers get in their feed is determined by algorithms, which are AI (Artificial Intelligence). These algorithms could be set to give good o]knowledge to anyone who asked for it or was open to it. Google searches often give a series of ads where someone paid to be the first thing found in the search, followed by a ‘top pops’ of replies or hits. It could rate the academic reliability of knowledge sources and give greater weight to more credible sources.

The same principles apply to social media. It is about what the object of the algorithm is, and thus what content it favours and directs.

Algorithms are of course ‘commercial in confidence’ which is code for ‘making money and therefore unable to be accessed or interfered with’. In other words, making money is more important than any social distortions or effects are merely tough luck for those affected.
But it seems to me that a more intelligent approach is needed to social media.

It’s about algorithms stupid!

www.change.org/p/oppose-australia-s-proposed-social-media-ban-for-under-16s