Hurry means worry for the NDIS, warns Productivity Commission

By Stephen Easton

Thursday June 15, 2017

Slow down speed limit sign on highway, road safety and preventing traffic accident concept.

The National Disability Insurance Scheme is not heading for a major cost blowout but the rushed rollout is leading to “poor outcomes” for participants, according to a report outlining the Productivity Commission’s current thinking on the scheme’s financial sustainability.

Rarely does one of the PC’s first drafts attract as much interest as yesterday’s position paper, which confirms the speed with which the “complex and highly valued national reform” is being rolled out is a major risk to its general “success” as well as long-term affordability.

“It has resulted in the NDIA focusing too much on meeting participant intake estimates and not enough on planning processes, supporting infrastructure and market development,” the PC reports.

“This focus is manifest in poor outcomes such as confusion for many participants about planning processes; rushed phone planning conversations; inadequate pre-planning support for participants; problems for providers with registering, pricing and receiving payment; and a lack of effective communication with both participants and providers.”

“If you must be in a hurry, then let it be according to the old adage, and hasten slowly.” — St Vincent de Paul

As The Mandarin recently noted, there is significant concern that quality outcomes are being compromised by a typically simplistic and unbalanced political focus that has made being “on time and on budget” the scheme’s overarching, if unofficial, key performance indicators.

This is among other issues with governance, disjointed collaboration across the federation, the uncertain legal definition of “reasonable and necessary” support, divergence from the “insurance principles” of the scheme and a looming shortage of service providers and workers, which are also covered by the PC study. Ultimately, the report warns, NDIS funding is limited by the public’s continued support.

“For the scheme to achieve its objectives,” in the commission’s preliminary view, “the NDIA must find a better balance between participant intake, the quality of plans, participant outcomes, and financial sustainability.”

The report acknowledges “steps are now being taken by the NDIA to better balance these aspects” including more “pre-planning, in-depth planning conversations, plan quality reporting, and more specialised training for planners” but the rushed schedule might also need to be extended. The commission is unsure “whether such a refocus can be achieved while also meeting the rollout timetable” at this stage.

National Disability Insurance Agency CEO David Bowen responded immediately to the draft paper, acknowledging an “obligation” to deliver better outcomes for people with disability. “This must be our core, unrelenting focus,” he said.

Bowen agrees that “much needs to be done to improve the planning process for participants” and re-announced that the NDIA “has been proactively engaging with participants and providers since April 2017” to that end.

“That work is progressing well, with further consultations having occurred with all key stakeholders since the 6 June commitment to deliver a much better experience for participants and providers based on an outcomes driven approach,” said Bowen.

“The board and executive management team remain unequivocally committed to getting the balance right among participant intake, plan quality and the sustainability of the scheme.”

The NDIA chief is pleased to see the PC confirm “NDIS costs are broadly on track with the NDIA’s long-term modelling” and says the cost pressures identified by its early report — higher-than-expected numbers of children entering the scheme — “are the same as those that the NDIA has acknowledged and is working to address”.

“The value of an insurance-based approach is that actions can be taken to address pressures in a timely way,” said Bowen.

The commission also sees cause for optimism, due to an “extraordinary” level of commitment from all stakeholder groups: “This is important because ‘making it work’ is not only the responsibility of the National Disability Insurance Agency (NDIA), but also that of governments, participants, families and carers, providers, and the community.”

Another “critical” factor in the quality of participant outcomes and overall financial sustainability is the need for clarity in where the NDIS ends and other services that people with disability might need to access begin.

“Some disability supports are not being provided because of unclear boundaries about the responsibilities of the different levels of government. Governments must set clearer boundaries at the operational level around ‘who supplies what’ to people with disability, and only withdraw when continuity of service is assured.”

Then there are the workforce issues: “Present policy settings are unlikely to see enough providers and workers as the scheme rolls out,” the commission warns. “Some emerging shortages need to be mitigated by better price monitoring and regulation; better tailored responses to thin markets; formal and informal carers allowed to provide more paid care; and a targeted approach to skilled migration.”

Funding arrangements themselves also need adjustment “including by allowing more flexibility around the NDIA’s operational budget and providing a pool of reserves” in the PC’s view. In-kind payments that have allowed state and territory governments to provide some of their contributions to the NDIS by transferring recent investments in the disability sector to NDIS participants must cease by the end of the transition period, the paper argues.

As well as having the potential to increase NDIS costs because in-kind transfers are often priced above market rates for services, this transitional cost-shifting threatens the project’s  “core objectives” because it restricts consumer choice:

“In practice, what this means for scheme participants is that supports in their plans are described specifically as having to be provided by a particular provider (that is, the provider engaged through in-kind arrangements).”

To “ensure that any future price settings for supports and services underpin the critical objectives of the NDIS” the NDIA has commissioned an “independent price review” from McKinsey and Co as part of its market stewardship role, according to Bowen.

“Given the extraordinary scale, pace and nature of the changes the scheme is driving, we are seeing some big challenges,” said the PC’s social policy commissioner Richard Spencer. “A key concern is the speed of the rollout and its impact on the experience of participants and providers through the planning process, plan quality and market development.”

Spencer said all governments had a role to play. “Putting the enormous goodwill behind the NDIS into action is needed now more than ever,” he added.

The PC will accept submissions on these issues until July 12 and will publish its final report in September.

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