NDIS price review fails people with complex disability
24 April 2018
Professor David Gilchrist
The recent publication of the National Disability Insurance Scheme (NDIS) Independent Price Review, undertaken by consulting firm McKinsey, has failed to grasp the issues faced by people living with complex disability and their service providers. This has increased the risk faced by people with complex disability as they become the shock absorbers for the new system.
Since 2013 there has been great change in the disability sector. As we progress toward the roll out of the NDIS in WA, it seems that uncertainty and risk are the order of the day. Our research, including the National Performance Benchmark Study now in its third year, and our anecdotal experience reinforces this perception.
The NDIS is a critical reform that could lead to much better outcomes for many Australians and their families and supporters. However, since its inception, we have had concerns about the absence of clear policy, rigorous design and planning processes that would be expected of such a complex and significant social reform.
The NDIS has been designed primarily for those with less complex disabilities. This ‘one-size-fits-all’ approach assumes that people with disabilities are a homogenous group. But the disability community is diverse, requiring a range of strategies, structures and funding models to meet individual needs. Where the current design of the NDIS works for people, it should be preserved and supported in order that those people are not further disadvantaged.
For those people who are not well served by the current structures and processes, however, the system should be modified in order that the relatively small percentage of people with complex needs are also able to enjoy at least comparable services to those they have had up to this point—not inferior.
The pricing of services remains the single most important factor.
In June 2017, the Board of the National Disability Insurance Agency (NDIA) commissioned the Independent Price Review (IPR) and recently the Disability Services Sector was presented with ‘analysis’ which was rudimentary at best and did not undertake any statistically relevant research upon which to base any ‘contrast and comparison’ conclusions.
There are over 12,500 service providers across the country and only 45 organisations nationally were surveyed for the Independent Pricing Review. The report provides no breakdown regarding which organisations were contacted, their size, service capacity, service type or geographic locations. These are critical explanatory elements that provide both context and the rationale for the recommendations made.
In the case of service providers supporting people with complex disability, the clinical requirements of quality care are not negotiable. The methods of managing and providing quality care have been developed over years with the health and well-being of the person with complex disability at the very centre of service provision. The cost of providing this care is significant but not negotiable—clinical requirements, as part of service quality, simply must be met.
The IPR made a number of whole-of-NDIS recommendations. For instance, additional funding of between 2% and 3% was recommended for the roll-out period in order to fund the costs of organisational investment needed to respond to change. However, these amounts being offered build on an already low base which will not fix the fundamental issues of an inadequate hourly base rate and the high cost of doing business with the NDIS. Nor will they provide the much-needed capital for required infrastructure. The report notes from provider feedback that the cost of transition to the NDIS is in the order of 1.5% of total annual expenditure as it currently stands . This cost of transition can escalate quickly towards $millions for organisations that provide complex disability supports and services. The loss of working capital will eventually threaten sustainability.
The McKinsey Report combined with the “in principle” acceptance of all 25 recommendations by the National Disability Insurance Agency Board are likely to result in potential consequences such as market failure for service providers across the nation; especially those in rural and remote areas and those supporting people with complex disabilities. The pricing structure will lead to the creation of an underclass of disability support workers as we move to highly casualised employment, minimal training, unpaid hours of work and the inability for people to earn a basic living wage. Given the need for a strong market to meet NDIS targets, the current conditions will not incentivise providers to grow. But, most importantly, the impact of a poorly constructed and ill-thought out NDIS will be borne by those Australians with complex disability as they act as the shock absorbers of the new system.
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