NDIS: Productivity Commission assessment summary | KPMG | AU

NDIS: Productivity Commission assessment summary

NDIS: Productivity Commission assessment summary

In its final report to government after a year-long inquiry, the Productivity Commission published on 19 October 2017 what is the most comprehensive assessment of the NDIS to date.

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The Commission’s report is timely in its assessment of the challenges facing the scheme as it proceeds through the transition phase. The report contains forty four recommendations in all to improve the efficiency and effectiveness of the scheme in meeting the needs of people with a disability and to support the scheme’s future sustainability as it moves to full implementation.

The Commission notes the current timetable for implementation of the NDIS is extremely ambitious and that based on progress to date, the original timeframes are unlikely to be achieved. The Commission calls for governments to work together to start planning for a changed timetable.

Below is a summary of the key findings from the Commission’s report.

Key findings

Participants, their families, governments and organisations providing supports will welcome the finding that NDIS costs are broadly on track with long-term modelling.

Significant challenges, including emerging cost pressures, however, were identified through the independent assessment.

The Commission identified three implementation priorities to bridge the concept-to-practice gap and to ensure the NDIS scheme is successfully rolled out:

  • ensuring quality planning, which is fundamental to participant outcomes
  • developing the disability market and workforce, which is foundational to increasing current supply to meet expected demand
  • clarifying roles and responsibilities, which is necessary to create a clearer service interface.

Key insights

  • The Commission’s report found that NDIS costs are broadly on track with long-term modelling but there are significant challenges including emerging cost pressures particularly associated with higher numbers of child participants than expected (almost half of all participants enrolled to date are children aged under 14). However, these are being offset by lower levels of utilisation at this stage of the scheme’s roll-out which has meant the scheme has come under budget. Benefits for participants are also evident from the trial with many participants able to access more services and exercise greater choice and control.
  • The Commission notes that considerable work remains to ensure that good assessment and planning processes are used by the National Disability Insurance Agency (NDIA) with a shift now needed from a focus on quantity to quality. This is a priority so that participant supports are identified and funded, and there is predictability in terms of market needs and service areas that require further development.
  • There are opportunities for government to take a more holistic market stewardship approach and to address the short- and long-term workforce needs of the NDIS through detailed planning processes and innovative policy options.
  • The Commission has emphasised the importance of governments employing more innovative and direct interventions to increase workforce supply. This is critical given its findings that the workforce is not growing fast enough and that some regions will need to triple their current workforce to meet projected demand.
  • The Commission has called for independent price monitoring and regulation to ensure that pricing for disability services supports market development and strikes the right balance between pricing that encourages sufficient supply from providers while at the same time ensuring people with disability can optimise their purchasing power.
  • According to the Commission, the boundaries, roles and responsibilities that govern service interfaces across the whole system can be further clarified, which will ensure the NDIS operates with mainstream and other disability services in an efficient and cost effective way. It raises particular concerns about the availability of mainstream mental health services and the importance of ensuring that people who are not eligible for the NDIS are still able to access the services they need.
  • Maintaining the extraordinarily high levels of goodwill and commitment noted by the Commission will be key to dealing with the challenges currently being experienced and ensuring the scheme’s ongoing success of one of the most ambitious, complex and worthwhile social reforms ever attempted in this country.

Ensuring quality planning

Since the NDIS commenced, there has been a strong focus on meeting participant intake estimates. A greater emphasis is needed on quality planning, including pre-planning, in-depth planning conversations, plan quality reporting, and specialised training for planners.

Assessment and planning processes are fundamental to participant outcomes given they determine the content of individualised plans and what supports will be funded by the NDIS. Assessment and planning processes are also used to track the progress of participants in achieving their personal goals and aspirations.

“At full scheme, about 475,000 people with disability will receive individualised supports through the NDIS, at an estimated annual cost of $22 billion. The final design of the full scheme must draw on the lessons learnt from the transition phase – better quality planning with participants, ongoing market and workforce development and clearer service interfaces will be key to the long-term sustainability of the NDIS.”

Assessment and planning processes have a direct bearing on what costs are incurred in the scheme, the predictability of scheme costs and the overall integrity of the scheme. Good planning is therefore essential for the success of the NDIS and its long-term sustainability.

Assessment and planning processes are also foundational to participant outcomes because they impact:

  • outcomes, benefits and equity – poor planning processes can mean that scheme participants are allocated supports that are not right for them; this in turn can mean the benefits of the scheme, including better life outcomes for participants, are not fully realised
  • costs associated with reviews – poor planning processes can result in increased requests for plan reviews, which adds to the workload of planners and causes stress on participants and providers
  • market development – plans specify what supports will be funded, which in turn encourages certain types of supports to be supplied in the market; poor participant planning can send the wrong signals to the market about what services are needed
  • certainty about costs – poor planning processes add uncertainty about scheme costs as they increase the variance in the value of support packages as well as the underutilisation of plans, for example if supports are budgeted for which the participant does not need or use.

Developing the disability market and workforce

Significant growth in the number of disability service providers and the disability care workforce will be required to meet the expected level of need at full scheme.

The Commission notes that strong government stewardship of the NDIS market will be central to facilitating the significant growth in supply required. This includes the design, oversight, management and regulation of the market for disability supports. The complexity of this task cannot be underestimated given that coordination and cooperation by multiple governments is often needed.

Government has put to use a number of controls to date to facilitate the timely creation and development of the disability support market, including:

  • regulation – such as price setting and provider registration
  • models of service provision – including government commissioning or provision of services in thin markets, and under provider of last resort arrangements
  • information provision to the market – particularly to participants and providers
  • managing transitions and implementation – including the withdrawal of government service provision.

The approach to date has employed a continuum of market interventions, from ‘light touch’ to more intensive actions.

There are opportunities to take a more holistic stewardship approach, including by:

  • Clarifying responsibilities for market stewardship – although the NDIA is designated as the market steward, all governments take actions that affect market outcomes and so have some responsibility for market stewardship. –Clear, specific and practical delineation of market stewardship roles, including individual and joint responses, will ensure there are transparent and accountable market development responsibilities.
  • Collection of more specific market data – timely, disaggregated and forward-looking market data, including feedback from market participants, will enable greater flexibility, evaluation and refinement of market stewardship responses.
  • More effective government collaboration – collaboration and cooperation is important as NDIS participants need to access both NDIS and mainstream services. There are lessons that can be learned from other sectors and their approaches to addressing market development, for example in aged care. Greater collaboration between governments, particularly with other care sectors and mainstream services – such as employment, education and transport – would be beneficial.

Like the NDIS market, the disability care workforce will need to grow to meet the increased demand. The scale of this growth is so significant it is predicted that about 1 in 5 new jobs (net) to be created in Australia over the NDIS transition period will need to be in disability care.

A number of challenges have been identified in growing the disability workforce, including:

  • the effect of price caps for NDIS supports on wage growth
  • finding carers to meet high participant demand at particular times of the day
  • ensuring there are enough qualified carers to provide a reasonable quality of care, including allied health professionals
  • increasing rates of retirement of workers from the sector as they age
  • regional challenges including that the workforce will need to triple or even more to meet demand in some areas.

Short- and medium-term responses to address workforce shortages over the transition period can include:

  • taking advantage of the preference of many workers in the disability care sector to work more hours
  • using a targeted approach to immigration to address persistent skill shortages
  • trialling different approaches to help fund volunteer organisations to provide participant supports.

Any workforce shortages are a risk to the scheme and a significant effort will be required to understand the characteristics and needs of the future disability care workforce, develop the size and scope of the workforce, and implement innovative policy options to ensure that future workforce requirements are met.

Clarifying roles and responsibilities

Effective interfaces between the NDIS, other disability services and mainstream services are essential for good outcomes for participants and the sustainability of the scheme.

People with disability, and their families and carers, rely on a wide range of services for their care needs and to maintain the quality of their lives. For the NDIS to work efficiently and effectively, the interface between the scheme and other services needs to be as seamless as possible.

The Bilateral Agreements between governments delineate responsibilities for services to be provided by the NDIS and mainstream services. While it is still too early to identify service gaps, there are emerging issues in a number of areas, including justice, emergency, transport and mental health services.

Efforts to clarify the boundaries and service roles and responsibilities will be important to ensure the system as a whole is operating in an efficient and cost effective way.

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