NDIS 2.0: we have to talk about the Scheme

What follows is a very expanded version of the notes I made for myself for my participation in a panel discussion with the wonderful Kate Macrae (CEO, Able Australia) and Dr Aviva Beecher Kelk (Consultant and Co-founder of Clickability) on the first day of the Where to From Here? National conference run by Disability Services Consulting (DSC).

The conference, which was held online this year, attracted around 1,500 registrants from across the Australian disability sector. And in case you’re wondering, yes, the conference acronym has another, less polite meaning to reflect the year the sector has just been through!

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One of the most influential management thinkers of the last century, W. Edwards Deming, once said, ‘It is not necessary to change. Survival is not mandatory’.

It is undeniable that the NDIS needs to change to ensure it is eventually capable of reaching its potential as the disability services scheme recommended by the Productivity Commission back in August 2011 to support future generations of Australians.

The purpose of this article is to outline just some of the issues the Scheme, and therefore people with disability, families and carers, and providers face. In doing so, I take it as a given that this has been a challenging decade for the disability sector, one in which it has been compelled to remodel itself to embrace the concept of consumer driven choice and control under the National Disability Insurance Scheme (NDIS). The closest another sector has so far got to this adopting this model is probably the Australian aged care sector under the My Aged Care model.

Do we really have a single market for disability services?

Under the NDIS, we have historically referred to ‘the disability services market’. But the fact is, and we all know it, disability services are provided, not in a single national market, but invariably via hundreds of localised or regional markets. This is an issue recognised by the National Disability Insurance Agency, but which remains a long way from sensible resolution, particularly in remote and very remote parts of Australia.

It’s not a free or even open market

And in referring to ‘markets for disability services’, it’s too easy to fall for the assumption that we are talking about an open or free market (I know because I was picked up on this point by another speaker at a forum back in 2016!). These markets feature heavily regulated and capped service prices with some loadings for working in remote and very remote Australia (40 and 50 per cent respectively). The exception to this is where an NDIS participant self-manages their supports and can negotiate (up or down) on service prices with unregistered provider(s) of their services. But this does not mean that the agreed price must be realistic, only that it must be agreed.

And it can lead to exploitation

I am aware of situations in which the worker providing a service has limited training and experience and has been engaged by a self-managing participant or their support network for less than half the hourly minimum wage. Is this the way to deliver positive outcomes under the NDIS whilst ensuring future Scheme viability? I think this question is entirely rhetorical!

There is an array of challenges demanding new thinking

Meanwhile, as these market design and pricing issues remain unresolved or works in progress, disability service providers and people, whether they are well-established or new start-ups, and therefore their clients, continue to face a huge array of challenges.

A Disability Royal Commission with teeth

Over the next 12 months, providers will continue to be put under the microscope by the Disability Royal Commission as it goes about it work, work which I would argue should lead to significant recommendations for systemic change for the sector and the provision of services (and funding to deliver all of it).

A National Workforce Strategy but implementation?

We will see the roll-out of the National Workforce Strategy, straddling 3 sectors – disability, aged care and veterans’ affairs – but which unfortunately appears to make no reference to the important issue of wages and conditions for workers performing often difficult and important work in what is still a ‘gendered’ workforce (what a wonderful euphemism that is!). There must be a question as to whether the release of the NWS may also be a stalking horse for the Federal Government to establish a regulator to regulate across all 3 sectors. If this is what is eventually proposed, all 3 sectors and their respective peak bodies, may wish to consider how they can best work together to ensure we have a Modern Regulator on the beat, one which understands and has experience of the work being done in each sector, and the importance of an educative, transparent approach to regulation, underpinned by a strong enforcement arm capable of being applied when necessary.

A Modern Award that is finally handed down

We will see the finalisation of the Modern Award Case and a decision by the Fair Work Commission which will likely have significant implications for different provider business models (travel time and broken shifts are just 2 of the areas of some controversy) and for, hopefully, increased flexibility for providers in supporting participant choice and control.

Pricing and decision-making

We will finally see a formal Price Review by the Agency (in March 2022), but one which nevertheless will likely be influenced heavily by the recently released Disability Support Worker Costs Model. This means the same unrealistic assumptions we saw in the last version of the Model. This includes reliance upon the 25th percentile of providers as the basis for setting prices for a wide array of services, which is just plain wrong as far as I’m concerned.

What we are unlikely to see is the Federal Government agreeing to appoint an Independent Price Regulator for the Scheme, which is unfortunate given the conflict-of-interest issues which inevitably arise in the Agency’s Board being responsible for the setting of prices whilst being accountable for of its other financial KPIs as well.

Changes at the top

Speaking of the Agency’s Board, we will apparently see 7 new director appointments which, by definition, will change the Agency’s governance and possibly its culture. This is an opportunity for the Government to appoint people with disability to the Board. It is also an opportunity to appoint more directors who understand what a social insurance scheme is. These opportunities should be embraced with both hands by the Minister.

Employment supports with interest

With the release of the Agency’s revised Participant Employment Strategy, the Boston Consulting Group’s Report and its 52 recommendations on Disability Employment Services (DES) and the roll-out of the New Employment Services Model, commencing from June 2022, we can expect to see a lot of activity, including from many ‘new players’ in the ‘employment supports’ space. I would be very surprised if these new entrants do not include large international employment support providers (and will this result in a renewed focus on mergers & acquisitions in the sector?). And I would be just as surprised if we don’t see new and innovative approaches to the provision of employment opportunities for people with disability in this country, including from organisations not regarded as traditional providers of these services (hint: we are starting to see this already).

Housing and Living Policy in a bubble

With ongoing issues around the housing/land bubble in many parts of Australia, we will need to see some innovative policy development, to ensure people with disability are able to get access to housing options they need, and providers which own and operate legacy stock are being supported to transition out of it appropriately. Expect to see more of the ILO, ‘shared management’ and 2/3-bedroom options and less of the ‘5-bedroom SDA options’ over the next couple of years (and I don’t think I could be accused of being Nostradamus-like in making this prediction!). Expect also to see a move away from legacy SIL models of support, provided we can get the policy settings to support such a transition right.

Getting Early Childhood supports right

With the ‘new participant’ focus pivoting from those coming into the NDIS from the old state systems and towards those who have never accessed disability services before (including infants and children we can expect to see more policy ‘energy’ being put into how to support this cohort of people with disability in ways that, over time, minimise their need to rely on more expensive tertiary supports later in life (as would be expected in a real social insurance scheme). This, in turn, may place more pressure on providers to enunciate the outcomes their clients are achieving, and the links to these outcomes with the services they are providing (a difficult task, no doubt). This then may lead to a substantive conversation on what ‘pay for performance’ models of funding could look like.

A National Disability Strategy but who will pay?

This calendar year should see Australian Governments sign off on the next 10-year National Disability Strategy. This Strategy has got to be clear in holding not just the Federal Government but the States and Territories, to account for any commitments that are made by them under the NDS, including funding they will dedicate to delivering on these commitments and mechanisms for reporting through parliaments. The release of the revised Strategy must see an end to the ridiculous claims we hear far too often from the States/Territories that because they have contributed 40 per cent of the funding for the NDIS, that’s where their responsibility for supporting people with disability ends. This was never what they agreed to under the Bilateral Agreements they struck with the Federal Government for the funding of the NDIS in the first place. It is also contrary to what they have agreed to under the NDS.

NDIS 2.0

And as importantly as any of the issues I’ve discussed in this paper, people with disability, families and carers and providers, as well as those who advise them (we’re all on this together!) need to take opportunities offered by the impending Federal Election and a heightened community focus on disability and disability services, to craft and advocate for a vision of what ‘NDIS 2.0’ could look like, including future eligibility and assessment criteria, planning processes, pricing policies and so on.

These will not be easy conversations for the sector, however they will be critical, because it is undeniable that the current NDIS model NDIS is not the one recommended by the Productivity Commission. Moreover, the NDIS is not currently a model of social insurance which is self-sustaining over a lifetime and capable of meeting the needs of NDIS participants. Instead, it continues to be a triennially funded government agency not dissimilar to Services Australia, Medibank or Centrelink, all of which are transactional service models. And that is precisely what the NDIS was not supposed to be!

Giving the ‘insurance approach’ a go

Governments continue to trumpet that the Scheme is underpinned by an ‘insurance approach’. This is not correct, and they need to understand what the phrase means. It does not mean, for example, that, like a corporate insurance company, the NDIS should fund only the lowest price for services, even if this means the services are not what is needed by a participant. The concept of ‘value for money’ under the NDIS Act has 2 elements: ‘value’ and not just ‘money’. An insurance approach, properly implemented, should mean that even if the upfront cost of providing a particular service is very significant, a decision as to its value should be informed by evidence-based projections of the likely impact on the life of an NDIS participant, over their lifetime. This is what social insurance schemes have actuaries for.

The NDIS and the supports provided by the disability sector for people with disability, whether or not they are NDIS participants, is a critical discussion for our nation given that around a quarter of us self-identify as having a disability and this percentage is only going to increase with an ageing population.

The NDIS is there for all of us. We should commit now to working out how to get together to agree on how it should be redesigned.

?David Moody

Director, Management Governance Australia

Management Goverance Australia - Management Governance Australia (mg-australia.com.au)