As a new oversight report draws attention to the market stewardship of the National Disability Insurance Scheme. To prevent market failure we need actions, not just principles.
Last week the Joint-Standing Committee on the NDIS released it’s market readiness report. The report summarises many of the implementation challenges of the NDIS, which are now well documented in inquiries, media and research.
In particular, it draws attention to market stewardship – a growing area of concern. Without robust service delivery markets, the NDIS will fail to meet its goals of choice and control for people with a disability.
In particular, the committee has made recommendations about the need for clarity of roles regarding market stewardship across the major agencies – the National Disability Insurance Agency and the Department of Social Services. This is a welcome recommendation, and as the report rightly notes, while the NDIA is responsible for market stewardship it is far from the only actor to have a role in this space. While clarity around roles is an important first step, this cannot be divorced from clarity of action.
At present, what stewardship actions work best – or might be trialled – within a ‘personalised’ context such as the NDIS is unclear. Documents released from the NDIA on market stewardship set out principles for stewardship, and the goals of NDIS markets. For example, the Market Statement of Opportunity and Intent states that stewards should facilitate, monitor and observe and alter market rules.
While the goals of the market are to enable informed choice and control, improve self-directed care, and create a market where there are diverse providers who compete to deliver best outcomes. But what actions will government take to achieve these?
In a soon to be published review of effective interventions for stewarding care markets, we find that two stewardship actions have a substantial evidence base.
1. Open the data
The first is providing clear and accurate information about supply and demand. As the committee’s report notes, at present the NDIA has failed to release crucial market data. The committee calls for the NDIA to publish market data for all jurisdictions. At present, basic information about demand, plan utilisation and points of service are unclear – as was heard throughout the committee’s hearings.
2. Loosen the price controls
The second action with substantial evidence is allowing flexibility of prices. This can enable local actors to steward markets through incubation of providers, seeding innovation, and allowing local market rules which speak to the dynamics of the different ‘sub-markets’ which make up the NDIS Market. The centrally set pricing remains a serious issue within the NDIS, with 75% of providers in the Independent Pricing Review unable to provide supports at a profitable level.
The committee found that “pricing is hindering market development and growth” and “ in some instances, pricing has led to service providers discontinuing services to NDIS participants”. They recommend pricing responsibilities be shifted to an independent authority, rather than the NDIA.
Based on our research, we would suggest that as part of this shift there should be a review of the decision to have central price setting.
Overall, the recommendations of the standing committee match widespread calls from the sector and researchers alike. However, it’s time to get more specific about the actions required to prevent market failure within the NDIS.
Associate Professor Gemma Carey, Research Director, Centre for Social Impact, UNSW. Current research is on the implementation of the NDIS.
For more information on the forthcoming research mentioned in this piece, contact Gemma Carey ([email protected])
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