While the National Disability Insurance Scheme (NDIS) will have obvious flow on benefits into our local economy, there are challenges that face those operating in the Disability Sector.
Chief Executive Officer
Amicus Group Inc
From 1 May 2017 the National Disability Insurance Scheme (NDIS) will roll out across the Loddon Region, which encompasses City of Greater Bendigo and neighbouring Local Government Areas. The scheme is the largest sector reform ever seen in the provision of services for people with a disability and will drive choice and control about how and who delivers their services, into their hands.
The previous system was chronically underfunded and failing to meet the basic needs of some, with demand for scarce resources so high that some people did not receive any services at all. This will change under the NDIS system, and while the number of new people in Loddon area who will enter the scheme is only expected to increase by approximately 30%, it is anticipated that funding will be doubled, with an estimated 1000 eft new positions to be created.
While the scheme will also have obvious flow on benefits into our local economy through job creation, here in lies the first challenge that providers face. Workforce. With numbers and the skillset in scarce supply, providers will face significant difficulties meeting the increased demand for services with much of this growth occurring in the first 6 months of implementation.
Competition is another challenge that will confront all organisations in an NDIS world. Services that were formerly block funded by government will now primarily be individualised so people with a disability will be able to use funding with a high degree of flexibility and choose who they would like to provide their services and change providers if they are not satisfied.
Currently the sector is highly regulated requiring accredited and registered providers, and in our community is predominantly the domain of small to medium sized not for profit organisations. Fast forward to the NDIS and we will see entry into the local marketplace of larger state-wide and national not for profits as well as for profits, and also sole traders and non-specialist businesses. People who make the decision to self-manage their NDIS funding are able to choose providers who are not registered with the NDIS, including direct support staff with their own ABN.
The NDIS unit price framework is fixed for most service types and provides little flexibility for registered providers to reflect their actual cost of service. The current pricing structure has been a source of consistent sector concern, particularly regarding thin margins and there is strong advocacy for its deregulation. Many organisations will also struggle in their transition from state funding which is currently paid monthly in advance to payment in arrears, after the service has been provided. Although the NDIS aims to have approved payments processed within 48 hours, organisations without good financial reserves will struggle with cash flow should any significant delays be experienced cash management cycle.
Quality and cost will clearly be significant drivers in the NDIS consumer driven marketplace, and for many providers questions about the right size, shape and service offering have been at the forefront for some time. While not prevalent in Loddon across Australia there has been a rise in merger activity and an increasing interest in alternative service delivery approaches like lean management.
This environment sets the scene for some interesting market moves as providers scramble for market share to secure their viability in the early stages of NDIS implementation. But in the longer term the gains of the reform far outweigh the challenge, with NDIS participants and their families the clear beneficiaries.