DISCLOSURE LOG

FOR OFFICIAL USE ONLY

A Pricing Reference Group 14 March 2019 Item 2.1

Matter for decision

Pricing Strategy

Prepared by: David Cullen, Chief Economist

1. Purpose

1.1 For the Pricing Reference Group (PRG) to endorse the Pricing Strategy for the National Disability Insurance Scheme as set out in this paper.

2. Recommendations

2.1 That PRG ENDORSE the Pricing Strategy for the National Disability Insurance Scheme at Attachment A.

3. Discussion

3.1 The supply of disability goods and services in Australia is undergoing significant reform with the phased creation, commencing from 1 July 2013, of the National Disability Insurance Scheme (NDIS). The National Disability Insurance Agency (NDIA) has responsibility for administering the NDIS, including (together with the NDIS Quality and Safeguards Commission) regulating the markets for disability goods and services.

3.2 Where possible, the NDIA utilises market mechanisms to deliver the level of supply required to meet participant demand and deliver the correct mix of goods/services, produced at market clearing (efficient) prices. Prices play an important role in coordinating this, within overall budget constraints. However, in the underdeveloped or non-existent markets, reliance on a deregulated market mechanism may not meet participant demands; may not deliver adequate supply; may not deliver the correct mix of disability supports and may not produce efficient prices. To address these issues, the NDIA has a role, as market steward, to create an efficient and sustainable marketplace through a diverse and competitive range of suppliers who are able to meet the structural changes created by a consumer driven market.

3.3 As part of its market stewardship role, the NDIA limits the prices that registered providers can charge for some supports. During transition, price controls are in place to ensure that participants receive value for money in the supports that they receive. In the short to medium term, price controls are required for some disability supports because the markets for disability goods and services is not yet fully developed. The longer-term goal of the NDIA is to remove regulatory mechanisms from the markets for disability supports. Currently, the NDIS varies its approach to the regulation of prices, depending on market conditions, between:

(a) No regulation (deregulated markets): This is typically used in cases where markets are highly competitive – for example, transport.

Pricing Strategy 2.1.1 Page 4 of 1049

Disclosure Log

FOR OFFICIAL USE ONLY

Pricing Reference Group - Item 2.1 | Date: March 14th , Year : [Year not specified]

a) The imposition of price caps: these denote an upper limit on what participants can pay for types of supports. b) Quotable Supports: in cases where suppliers provide quotations requested directly through NDIA, such as in highly specialized assistive technology services which may lack competition.

Disclosure Log

Pricing Reference Group - March 14th, Item: 2.1

price levels represent the price required to attract economic resources from other parts of the economy to expand provider supply. Transitional price levels are above sustainable price levels but should be adopted where significant expansion is needed (e.g., during an NDIS transition period). d) Price caps – Upper limits on prices used prevent potential abuse of market power.

Transitioning Market Equilibrium Prior To The NDIS Long Run Equilibrium

Figure 1 illustrates: The equilibrium prior-to-NDIS at point A, The long-run post-full roll-out demand at C; Paths taken over time as transitional pricing adapts towards efficient markets; Recognizes inefficiencies due existing agreements & needs service expansions without disrupting access.

Figure 1: Transition From Equilibrium Before NDIS Full Rollout To Post-Equilibrium

Price	Quantity
Pre-NDIS Demand	Long run Supply (––– NDIS full rollout ’)
NDIS full roll out demand	Pre-NDIS supply

To date, both participant funds and price cap settings have been aligned with longer-term efficiency goals in mind for NDIS plans. This document proposes a strategy better reflecting current inefficient supply issues while promoting increased market participation toward sustainability.

Disclosure Log

Pricing Reference Group - March 14th, Item 2.1

FOR OFFICIAL USE ONLY

MR25/01967 FOI 24/25-2242

The text below implies reductions in costs over time but expansion necessitates higher short-term medium term prices for maintaining production volumes within Disability Supports. This will serve an incentive redirecting resources towards the National Disability Insurance Scheme(NDIS). The absence price growth may lead shortages. 3.11 In longer terms efficient levels represent reasonable cost provision a support eventually best suited development plans concerned with effective appropriate supports However, in shorter mediums sustainable levels are most representative reasonableness providing support long run tends efficiency level however market matures expands price caps need maintain current attract new supply That is NDIS needs set transitional at least regarding transitional rather than sustainable and efficient levels. In brief under NDIS pricing strategy: a) Funding should be currently sustained annually increase line unit input providers (red arrow Figure). This means participants purchasing power maintained real terms Longer as transitional sustainability converge participants able purchase greater quantities fixed budgets reaping benefit improved sector’s efficiency.b) Price caps should movements of transitional levels green arrow recognize costs faced adjusting arrangements unwind established agreements encourage growth while driving efficiency Should done through explicit decreasing loading on sustainable levels Transition Support Payment(TSP about per cent clear statement expected glide path five to eight years efficient price reduction TSP Detailed ongoing monitoring markets also conducted determine whether sufficient expand supply, attract entrants competitive pressure Long competition between providers result reduced prices toward long-run efficient As market reduces toward these imposed no longer binding removal can considered At same time collection dissemination more market consumer information essential for effective future outcomes based pricing Ideally include such data quantity disability supports provided example hours care by NDIS group location could obtained linking details suppliers each payment made from NDIS support budget; b Market entrants exits;c profitability other financial metrics statements; d Supply conditions total expenditure participants locations.## Pricing Strategy - 214 Page:7/1049

DISCLOSURE LOG

FOR OFFICIAL USE ONLY

Pricing Reference Group | Date: March 14th , Year : 2019 | Item Number: item_2_point_one

Section 3.14:

Gathered supply data can assist NDIA determine caps for prices over a short-term period; enabling better-informed decision-making when considering deregulation markets medium-to-longer terms.
As transitional pricing exceeds long-run competitive equilibrium levels it may also make sense that providers participate voluntarily to collect this information as an incentive (dividend).
Providers need tools to achieve longer term efficiencies through understanding their own performance accurately comparing with peers’ performances which requires good accounting governance standards practices ability compare across providers. The NDIA & Q&SC can help via registration process requiring adoption of these standards and practices, independent benchmarking services participation in those especially where thinner market conditions exist. NDIA can incentivize such activities making access Transitional Support Payment contingent on them.

Section 3.16:

Going forward consumer outcomes should be collected published regularly enable consumers detailed view provider’s performance future moves towards outcome-based pricing. Information could include satisfaction individual supports received; options gained community engagement ease-of-market-access measuring any potential shortages empowerment level plan utilization reasons budgets not fully expended indicating undersupply.

Implementation communication

Section 4.1 The Pricing Strategy will publish NDIS website Annual Review Costs Efficiency Price Controls.

Attachment(s):

a) PRG –2090304-2_1A–NDSI Pricing Strategy

Disclosure Log

Document 2.1

National Disability Insurance Scheme - Pricing Strategy

Version Release Date: April (\text{of}~{}^{th})2019, 1

DISCLOSURE LOG

NDIS Pricing Strategy

Copyright

Copyright in the information contained in this Pricing Strategy is owned and protected by the National Disability Insurance Scheme Launch Transition Agency (National Disability Insurance Agency).

Use of National Disability Insurance Agency copyright material

The material in this report with the exception of logos, trademarks, third party material and other content as specified is licensed under Creative Commons CC NC licence version 3.0. With the exception of logos, trademarks, third party material and other content as specified, you may reproduce the material in this Pricing Strategy provided you acknowledge the National Disability Insurance Agency as the owner of all intellectual property rights to reproduced materials using ‘© National Disability Insurance Scheme Launch Transition Agency 2018’ do not use for commercial purposes Reproduction any creative commons material Price Guide subject conditions available site Creative Commons full legal code Material Terms we use NDIA - National Disability Insurance Agency NDIS - National Disability Insurance Scheme Q&SC Commission Further further pricing scheme can found at website

Disclosure Log

– page: 28 1. The Evolution of the NDIS Pricing Strategy (page: 30) Proposed Strategy – ‘Glide path’ to the new equilibrium. a) Balance efficiency and growth.(page:33 b) Assist providers, and the market, to become more efficient(page:33 c) Address information asymmetries to empower consumers(page:34 d) Measuring success(page:36 References — Page 11 of 1049 –

Disclosure Log

Table of Figures

Figure 1: Transition from equilibrium prior to the NDIS to the long-run NDIS equilibrium …
Figure 2: Transition Strategy [….] (page not specified in original text, but likely continues with page number as per other figures)
Figure 3: Employment growth in the disability support sector due to the NDIS […] (…)(…)……(…) …[.]…
Figure 4: Historical and projected increases in selected economic sectors, 1995-2023 […]
Figure 5: Transition From pre-NDIS Equilibrium To The Long Run NDIS Equilibrium […]
Figure 6: Average Price Impact Of The NDIS On Disability Services […]
Figure 7: Average Quantity Impact Of The NDIS On Disability Services […]
Figure 8: Phases OF NDIS And Pricing […]
Figure 9: Transition FROM EQUILIBRIUM PRIOR TO THE NDIS TO THE LONG RUN NDIS EQUILIBRIUM […]
Figure 10: Transition STRATEGY […]

Executive Summary

The supply of disability goods and services in Australia is undergoing significant reform with phased creation commencing on July 27th.

National Disability Insurance Scheme Agency has responsibility administering including together with Quality Safeguards Commission regulating markets disabilities.

As December some were supported by NDIS number estimated increase about . The growth market expected substantial early years NDIS Overall funding sector expected effectively double during roll scheme billion just over per cent GDP). in Where possible utilises market mechanisms deliver level supplies participant demand correct mix produced at clearing efficient prices Prices important coordinating within budget constraints However underdeveloped non-existent reliance deregulated mechanism may not meet demands; adequate supply; correct mix supports produce efficient To address these issues as market steward create an efficient sustainable marketplace through diverse competitive range suppliers able structural changes created consumer driven market As part its market stewardship role limits price controls for providers charge supports During transition ensure participants receive value money they receive In short medium term requires because markets still developing growing such attendant care Longer-term goal remove regulatory from markets disability Currently varies approach regulation depending conditions between:

No regulation (deregulated): typically used cases where highly transport.
Imposition caps: represent maximum allowable payable participants types support Approach significantly markets which are still developing growing those attendants care Quotable supports expect obtain quotations provide to the NDIA verify fair reasonable This typical case of specialised differentiated that competition assistive technology They also in cases Supported Independent Living SIL bundle quasi-outcome being purchased. These situations, greater flexibility achieve required outcomes input costs face The purpose this document is set out National Disability Insurance Scheme Pricing Strategy critical pricing play empowering people supported by exercise

DISCLOSURE LOG

NDIS Pricing Strategy

choice and control; maintaining and expanding the supply of high quality disability supports; driving efficiency and innovation in the market for those supports; and supporting the transition to a more deregulated outcomes-based approach.

The National Disability Insurance Agency currently imposes price caps on core types of support, including: a) Attendant Care Services (‘Assistance with Self-Care Activities’); b) Short Term Accommodation;and;c) Accessing community social recreational activities including group based supports. The NDIA is transitioning markets from significant demand growth towards longer-term goals such as price deregulation while improving care’s efficiency & quality during this period. It recognizes that short term stability must be maintained alongside medium-to-longer term expansion, which may require increased prices if providers cannot easily increase their capacity (price elasticity).

NDIS pricing strategy can best understand four concepts:• Efficient Price Levels – Long-run minimum production cost levels achievable through strong competition between mature firms.• Sustainable Price Levels - Current firm viability at given time points even inefficiently so ensuring stable current supplies until new entrants or exits are reduced by higher transitional costs required to attract economic resources into provider expansion where necessary due to inefficiencies like existing Enterprise Bargaining Agreements affecting long run equilibrium without disrupting service supply significantly. Figure 1 below shows pre-NSID market clearing equilibria for disability services and the post NSID longrun market clearings showing paths sustainable and transitionary price level changes over time.

Disclosure Log

NDIS Pricing Strategy

Figure 1: Transition from equilibrium prior to the NDIS to the long run NDIS equilibrium

Price	Pre-NDIS Demand


































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































clearly, the
— PAGE TEXT END —(function() {

Disclosure Log

NDIS Pricing Strategy

Price controls need to take into account efficiency and the need to expand supply. Markets for disability supports are continuing to develop, with both increases in market supplyand improvementsin productionefficiencyrequired.Whileimprovementstoproductionefficiently implyreductionstocostsinthe\longrunexpansionofmarketsupply necessitateshigher shortto mediumtermprices.Inordertomaintainande xpandproductions volumes \odfdisabilitysupports highershort-termpricesthenuredneededThis willserveas an incentive tore directth eallocationofo resources tonedisfromothersectorsineconomyWithoutpricegrowthsupplyside shortageswilllikelyexistIn longertermefficient pricelevelsarebestrepresentationoreasonablecost o f provisionofs upportandeventuallybelevel best suitedfor developmentplanswhichconcerned with efficienteffectiveappropriatesupportsHoweverintheshorttomedium term sustainable pricelvelsaresthebest representationor reason able costoprovisionosuppor In long run可持续价格水平趋向于有效价格水平。在短至中期内，随着市场成熟和扩展,需要设置足够高的价格上限以维持当前供应并吸引新供应商.也就是说，在短期到中期至少内NDIS的价格上限应考虑过渡期的定价标准而非稳定且有效的价格水准。

简言之NDIS下的价格策略需遵循两条路径:

Funding levels in plans should be set as currently at Sustainable Price Levels and increased annuallyin linewithmovementsunit input costs of providers (the red arrow Figure 7). This means that the purchasing powerof participants would bemaintained real terms.Inlongerruntransitionalandsustainable prices convergeparticipants willbe able to purchase greater quantities support for their fixed budgets reaping benefit improved efficiency sector.
Price caps should beset accordance movements transitionalpricel evels(greenarrowFigure) recognisecostsprovidersfacingadjusting new arrangements time required unwind established agreements encourage growth supply while drivingefficiencyThis done through explicit decreasing loading on sustainable pricelevels Transition Support Payment(TSP) o about10per cent clear statement market expected glide path five eight years efficientpricelevelsthrough phased reduction TSP Detailed ongoing monitoring markets also conducted determine shortterm pric increases sufficient expandsupply attractnewentrants increase competitive pressure longer term it isexpected competition between providerwill resultreductionprices towards long runefficient price Asmarketprices reduce towards\long-run-efficient-prices imposed are expected no longer binding which case removal can considered At same tim collection dissemination more market consumer information essential effective pricing future outcomes basedpricing this ideally include -marketinformation such a quantityandpricesdisabilitysupports provided example hours care by NDIS disabilitysupportgroup location these data could be obtained linking details suppliers each payment made fromNDSupportbudgets b Market entrantsexits

DISCLOSURE LOG

NDIS Pricing Strategy

profitability and other financial metrics from financial statements of providers; and d) supply conditions such as the total expenditure of participants on supports by location. The gathered supply data can assist NDIA determine pricing caps for markets deregulation decision making when considering long run competitive equilibrium prices may also oblige providers participate transitional price collection dividend To gain access transitional prices would need provide accurate responses Providers must understand their own organization accurately compare peers good accounting governance standards practices The NDIA Q&SC registration process independent services provider participation especially thinner market development better accounting governance standards practice loading Transitional Support Payment contingent activities Going forward Consumer Outcomes should collected published regular basis enable consumers detailed view provider future moves towards outcome-based pricing Information could include: a satisfaction individual supports received b employment gained engagement community c ease potential shortages d level participant empowerment e plan utilisation reasons budgets not fully expended indicate undersupply Collecting this consumer data measure performance disability support transition outcomes based pricing help identify areas in which undersupply occurring short term

DISCLOSURE LOG

MR25/01967 FOI 24/25-2242 Page 18 of 1049

Disclosure Log

Introduction

The supply of disability goods and services in Australia is undergoing significant reform with phased creation commencing on July 25th, 2013.

National Disability Insurance Scheme (NDIS)

The NDIS operated trial basis some regions between June 786–June 2016 transitioned full scheme July 2016-June 2019 (June Western Australia). The National Disability Agency has responsibility administering including Quality Safeguards Commission regulating markets disabilities. as December people ECEI program were supported NDIS number estimated increase about 475K 2020 growth market expected substantial early years NDIS Expenditure across Australian economy expected effectively double through transition full scheme $ billion just over per cent GDP) 2019/20 One principal objects one choice control participants available budgets role prices therefore very significant Prices or precisely participant choices reflect preferences relative values different types supports aggregation individual responses signals suppliers quantity mix supplies purchase power participants higher reduce budget total costs NDIS financial sustainability allocation resources possible production sectors Pricing affect providers entering upskilling right-skilling innovation models care improvement service quality outcomes Markets for disability develop operate more effective it expected that will play less interventionist role However deregulation occur at points time different may not feasible cases Currently varies approach regulation of prices:

No Regulation (deregulated): typically used highly competitive example transport
Price Caps: maximum allowable price payable by participants for types support. Used in developing growing such as attendant care
Quotable Supports: Participants obtain quotations from to provide the which verify fair reasonable Typically use case specialized differentiated supports competition assistive technology They also used situations bundle quasi-outcome purchased Providers have greater flexibility achieve required outcome input cost face

Disclosure Log

NDIS Pricing Strategy

The purpose of this document is to set out the NDIS Pricing Strategy – that is, the critical role that pricing will play in the NDIS in empowering people supported by the NDIS to exercise choice and control; maintaining and expanding the supply of high quality disability supports; driving efficiency and innovation in the market for those supports; and supporting the transition over the longer term to a more deregulated outcomes-based approach. The NDIS Pricing Strategy set out in this document is primarily concerned with those types of core supports on which the NDIA currently imposes price caps, including: a) Attendant Care Services (Assistance with Self-Care Activities); b) Short Term Accommodation;and;c) Assistance to access community,social and recreational activities,includingsupports.

The NDIA also imposes price caps on Capacity Building supports including therapy.To an extent theseprice caps have adifferent purpose operadifferently fromthosefor coresupports because thenNDISonly represents apartof themarket forthera services.Thepricing strategy fort herapyservicesis being reviewedinthe Reviewo fTherap yPricing.redacted

Disclosure Log

Current arrangements

MR25/01967 FOI 24/25-2242

Section heading: Current Arrangements (Page Title)

The establishment of the National Disability Insurance Scheme (‘NDIS’) will fundamentally transform how Australians who have qualifying disabilities purchase or are funded to purchase necessary products/services that help mitigate their activity limitations due to impairments. Historically, these were budget-capped program-based schemes primarily managed and delivered at a State/Territory level through government funding; they’ll be replaced under an insurance model jointly supported financially between federal governments across all states and territories via general taxation revenue sources as outlined within ‘National Disability Insurance Act’ legislation enacted on March 2nd, Act 2013.

The objectives for NDIS design include: a). Promoting independence in social/economic participation among people with disability per [Section(3)(a)] b). Enabling individuals living with impairment to make choices about goals & support delivery plans per [Sections(3)(b)];c). Encouraging high-quality innovative supports enabling independent lifestyles full inclusion into community life per [Section(s)(g)],d). Adopting actuarially informed insurance models for providing/disposing funds towards individualized needs based upon assessments conducted by NDIA (the governing body),e). Ensuring financial sustainability of the scheme per Section(4) The National Disability Insurance Scheme provides eligible participants access to goods and services needed directly related to disabilities. It is administered independently by Government Agency - The National Disability Insurance Agency (‘NDIA’) which determines eligibility, levels of assistance provided through participant’s personalized budget plan. Additionally, together with its Quality Safeguards Commission (‘QSC’’), it regulates markets offering products/services catering specifically toward disabled persons as well providers operating within these sectors. [Commission commenced operations on July 1st, Act. It aims at improving quality/safety standards while identifying areas needing improvement in NDIS service provision.

The Q&SC has been responsible since January first year onwards covering New South Wales & Southern Australia; will assume responsibility over Victoria/Queensland/Tasmania/Australian Capital Territory/Northern Territories from June second year onward Western Australian jurisdiction starting same month next year respectively. Its primary function involves assessing provider suitability for market participation regarding disability-related product/service offerings.

Disclosure Log

NDIS Pricing Strategy

Section 2 - Eligibility Criteria

Subsection 2-1 Participants

When the Scheme is fully rolled out, participants will meet one set criterion:

Disability Eligibility: Requires three basic requirements—specificity, permanence, substantiality—and that impairments are attributable to intellectual/cognitive/psychiatric conditions. The impairment(s) should result substantially reduced functional capacity for core activities like communication/social interaction/self-care/mobility/etc., affecting social/economic participation over lifetime if likely requiring support through scheme.
Early Intervention Eligibility: Also requires specificity/permanence but allows children with developmental delays who may benefit early intervention services which reduce future disability needs via mitigating impact on function/core activity capabilities/sustainability informal care/supports available.

DISCLOSURE LOG

Plans

Funding for a support is included in a participant’s plan if-and-only-if-the-support-is-both reasonable-and-necessary. •A support meets the reasonableness criteria if it is efficient-effective-and-appropriate.The support must represent value-for-money-in-that-the-costs-of-the-support-are-reasonable-relative-to both-benefits achieved-and-the-cost-of-alternative-suppport^3.It-must-be-or-be-like-to-be effective-and-benificial-for-the-participant-having-regard-to-current-good-practice.Finally,the-Agency-must-considerwhether-it-is-notreasonableto-expect-familiesand-carers-toprovide-thesupport,and-whetherthesuppor-would-be-moreappropriately-provided-by-other-mainstream-services. • A-suppo-r-meets-the necessity criteri-aifitwouldassistthe-partic-pant-topursuetheir goals-objectives and-aspirations includingbyfacilitating their social-economic participation,mitigatingoralleviating activity-limitationsandparticipationrestrictions associated-withtheparticipants qualifying impairment.Put simply,a sup-port would not pass thenecessity test if eitherwasnot in line with theparticipant’sgoals orifthewas addressing-an-issue not-related to th eparticipant’squalifyingimpairment(s).Supportseven when relatedt a qualifi-ing-impairm ent are also only necessaryin so far as they ar concernedwithrestoring participants toc apacitytoliveanordinarylife

Plan management If the NDIA agrees that there participant has ther requisite capacitythenthere part icip ant can self-manage their budget,in which casethey pay providers directly for servicesthat they receiveandreimbursed by-therNDIAsfromtheirpersonalisedbudget.Participantswhoare not-selfmanagingcanchoosetoappoint-and-use-someofthemoney-in-their-personalisdbudgettopayfor)aplan manager.Inthiscase,theplanmanagerpays-theproviderswho deliver-servicestotheparticipants(withthe-participantretaining-choice-ofserviceprovider)-and-is-reimbur sed-bythe-NDA fromthesup-plicant’s-budget.Allotherparticipantshave their budgets managed by -the-Agency (Agencymanaged).In this-case,thestafficant’sprovidersare paiddirectlybytheN DIA-fromthetrafficants’budgetwhilesthepartici pant-still chooses their-provid ers and-supports-that-theypurchase.Wherea providerispaid-directly-bythe NDI A—that is where funding is Agency-managed—the-provider-is required-to-be registered-withthe-NDIA-or withthe-NSDQ&SC-meetspecified-qualityandsafeguarding standards,and-agreetostandardtermsconditions ofbusiness—includingpricecaps.Theserestrictions-do-notapplyto.providers who are-paid-direc-tlybyself manag ing participants or-by-plan managers-on behalf-of part icipants.

^3The value for money test is concernedwitheffectiveness,directcostcomparisonandinvestment effects.A support must substantially improve the life stage outcomes-for-andbe-long-term benefit to,-there participant.There-must-also be no comparable supports that would achieve-the-same outcome at-a-substantially-lower cost.The-cost-comparisonmustalso take into account any likely reduction in ther-cos tofther-fundingofsupportsfor there-participant-in thelongtermthatmay-arisefromprovision o f a sup-port includingwhetherthesuppor-will increase -theparticipant’s independenceandreduce theres-plicant’s needf oreother kinds ofs upports.

Disclosure Log

NDIS Pricing Strategy

Section: Pricing

Price controls form part of broader pricing arrangements which include definitions for services subject to these rules along with payment guidelines. Legislative framework includes: a). National Disability Insurance Scheme Act (NDIS) b). Rules under this act c). Terms & Conditions for Registered Providers, d). Support Catalogue; e). Price Guide.

Subsection - Terms Of Business

All registered providers must adhere strictly within their dealings regarding participants who do not self-manage as follows:-a). Providers need comply fully according to current Agency’s pricing structure or any other applicable arrangement.b). Before delivering service prices must be declared including notice periods/cancellation terms; Participants have no obligation post declaration.c). Prices cannot exceed those set out on NDIS’ official guide.d). No cancellation fees unless specifically allowed in said guide.In addition, regardless if funding is managed directly from participant/registered provider/Agency all charges should remain consistent without additional surcharges such as credit card fees/gap payments/late penalties etc., except where explicitly stated otherwise.

Subsection-Support Catalogue

The catalogue outlines clear descriptions about every support provided by the agency through its network.

Subsection-Pricing Guide

This summary document lists price limits and associated conditions imposed upon NDIS users. It aims at assisting both parties involved.

Disclosure Log

NDIS Pricing Strategy

providers, both current and prospective, to understand the way that price controls for supports and services work in the NDIS. The NDIA sets price controls for certain NDIS supports to ensure NDIS participants obtain reasonable value from their support packages. The price limits in the Guide are the maximum prices that Registered Providers can charge NDIS participants for specific supports. There is no requirement for providers to charge at the maximum price for a given support or service. Participants and providers are free to negotiate lower prices. Price controls must be sustainable, which means that efficient providers must be able to recover the cost of delivering high quality disability supports. The NDIA takes into account market risks when setting price controls to protect against supply gaps and ensure participants receive critical supports. This is important especially in markets that are immature or where there is limited choice for participants. Over time, the need for price controls will reduce as disability support markets develop competitive tension increasingly keeps support prices at reasonable levels. Not all NDIS support items have price limits; instead this guide lists those with max prices and other rules/definitions part of NDIA’s intervention approach. Where applicable, charges cannot exceed prescribed limit per support. No additional fees like credit card surcharges allowed unless stated otherwise. When claiming it’s provider responsibility ensuring claims reflect delivered supports accurately including frequency/volume. Falsifying any aspect may lead to action against them. Providers also required accurate records subject audit anytime.

Special NDIS Pricing Arrangements

In certain circumstances edacted: s24 - irrelevant material), providers can claim expenses incurred providing services such transport/travel costs setup/cancellation related.

Market stewardship

Where possible, the NDIA utilises market mechanisms to deliver the level of supply required to meet participant demand and deliver the correct mix of goods/services produced at market clearing (efficient) prices NDIA. Prices play an important role in coordinating this within overall budget constraints. However, in presence underdeveloped or non-existent markets due imperfect asymmetric information reduced competition relying on deregulated mechanism may not meet demands; correct mix supports efficient prices.The operation which serve match suppliers consumers are affected geography including jurisdiction remoteness types services offered example daily living therapy employment supports Many NDIS operate closely related other sectors aged care employ same people sectors for instance aged workers may work support sector draw from labour education stream As result subject influences outside NDIS To address issues ndia has a market stewardship during transition competitive open markets for disability goods services As market aims create efficient sustainable marketplace through diverse range able structural changes created consumer driven It also ensure participants have choice control over their supplies providers give freedom attract innovative high quality products services sheer expansion that will be required next few years necessitates close attention development noting transition block funding approach requires careful management some markets created require form economic regulation even after complete The approaches recognises operation markets is yet mature consumers adapting new learning exercise individual needs matching providing offering service wanting supports evolving Other stakeholders vital roles expand disability support supply within NDIS progression towards deregulation markets will require barriers entering growing markets goods and services addressed turn enabling facilitating factors such as appropriate pathways to adequate levels positions training disability support workers recruitment retention of staff in the sector; b) appropriate infrastructure digital platforms industry interfaces networks Various Commonwealth state/territory government departments agencies need play key role these facilitators Expansion progress towards deregulation also require coordination with stakeholders within disability support sector themselves representative bodies.

Disclosure Log

NDIS Pricing Strategy

Section: Market Stewardship Functions (3)

Subsection A: Regulatory Entry & Participation (3A) - Providers’ Obligations:

The National Disability Insurance Agency’s (‘NDIA’ or ‘Agency’), one aspect among its broader responsibilities under the National Disability Insurance Act 1982, is focused on regulating entry into schemes provided through disability support services. This regulation ensures that providers adhere strictly within operational terms set forth as part of system rules and standards; such adherence helps protect both participants’ interests along with those involved in providing these services. Registered service providers are bound via established Terms-of-Business agreements which ensure alignment between provider objectives and participant needs; this framework is designed for individualized outcomes realization.

Disclosure Log

NDIS Pricing Strategy

regulation may also be required depending on geography, level of competition, cost factors (labour and overhead) and the type of services provided.

Geography - Remote regions relative to metropolitan areas tend to have both higher input costs due to transport costs thin labour markets etc.)and reduced competition Therefore different geographies may require different approaches regulation.
Levelofcompetition Somemarketsmayhave inherentlylowcompetition duetothesmallsizemarketorthe complexityinofferingsupportsForexampleinaustralia therearefewsuppliersguide dogsduebothcomplexitytrainingrelatively small market size The idealleveloftotalwillbedependentonthelvelldf competition Generally those with greater competition willrequirelessregulation . Costfactorslabouroverhead Highlyspecialisedorcostlylaborcapitalintensive supportsorsupportswithhighlevelssoverheadsrepresentsignificantbarriers tomarketentry Incase highly specialised or costly labor and marketswith significant barriers entry regulation maybe required inlongterm avoid monopolistic pricing Type serviceprovided Somesupporstainherently havelow levelscompetitionsuchasthosewhich representnaturalmonopolies Thetypesofereddictesthe strategyformarkeregulation Othermarketsmaybe inherent competitivessuchasthemarketttransportservices

3.2Other Market Interventions Aswell as pricecontrols NDIA canalsoimprovetheoperation of the marketyby:

Providingmardataincludingoutcomes To improve level information available marks thereforeencourage maretcompetitionNDIAbalecollectand publish markeinformation suchpricesparticular providers average prices andmarke share This assist consumers determining which supplier support they choosetherefore encourage market competition It possible NDIAn independent body funded bytheNDA collectpublish aggregate data on performance provider either collected fromprovider themselvesorfrom participants Examplesof providerperformance include satisfaction ratesparticipants change employmentratesemploymentsupportproviders Publishing some measure publically consumer choosing most valued producer encouraging competition Further itmayassist producers lowering costs benchmark organisation cost against sector averages Supporting providers tobenchmark their performanceItpossible forNDIANindependentbodyfundedbymaycollected published financial performancedataonfinancial performance provide assistance peer identify opportunities efficiency effectiveness Educatingempowering participantSDISparticipant play key role assisting transition deregulation facilitating increased supply Ensure that providers incentivised compete best service givenprice Consumers need empowered understand value receive negotiate better services provided Byeducation participants representatives area wherecanplay importantrole

Disclosure Log

NDIS Pricing Strategy

Economic and regulatory context

The National Disability Insurance Scheme’s pricing strategy must be aware of its economic environment. There are many factors that may influence prices which lie outside NDIA control: such changes to labour costs from industrial bargaining systems, or worker conditions under Enterprise Bargaining Agreements or different jurisdictions; as almost half workforce falls within EBAs these can significantly impact on scheme price; input prices also change due macroeconomic conditions elsewhere. The broader regulatory environment influences prices too: compulsory superannuation contributions for example could affect minimum standards care qualifications. This section discusses high-level dynamics transition markets disability goods/services pre-NDIS equilibrium new long run where fully rolled out represents significant shift resources Australian economy when fully rolled expected overall funding sector $22 billion per annum net increase approximately $11 billion annual expenditure prior NDIS doubling this expenditure has tangible impacts Australia’s overall macroeconomy Analysis Productivity Commission (2011) suggests one fifth jobs near term need in disability care found current employment growth far low risking shortages Raising prices would enable resources attract sectors other parts Australian economy going some way increasing supply reducing risks Figure 3 below shows estimates Dixon Cullen (2018 labor required reach market-clearing equilibrium the markets disabilities services). Moreover, such growth occurring same time substantial growth entire Health Social Assistance Sector period considerable growth those sectors see FigureAustralian Department of Jobs and Small Business(2018).

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NDIS Pricing Strategy

Figure 4: Historical and projected increases in selected economic sectors, 1995 to 2023

[Image not converted to Markdown – check the source PDF page for the actual content]

Macroeconomic modeling by Dixon et al. (2018) indicates how changes due to National Disability Insurance Scheme (NDSI) influence Australian markets’ supply-demand balance. The figure illustrates:

Market conditions before implementation (A),
Long-term outcomes post-NDSI introduction at full scale (C).

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NDIS Pricing Strategy

The macroeconomic model underlying this analysis (a national computable general equilibrium model developed by Victoria University) assumes competitive market clearing\nprices. However, currently many markets within the disability support sector where the nIDISoperates are not competitive and are subject to price regulation.“ As such, pointC together withpriceandquantitytimeseries showninFigure5 respectively doesnot represent a‘forecast’of what is actually happening int hesector.Ratherthisanalysis shows \nthelikely effectsonmarketclearingpricest quantitiesdisabilitysupportscompetitivemarkets.Given this,Figure6Figuress canbeusedto guideNDISPricing policy asmaketransitionfrompre-NDIStimesquantitieswithNDSfullyrolledout(moving frompointA point Cin Figure). Prices quantitiesshownFigures represents estimated set Market equilibrium prices quantity which minimise production cost maximise consumer utility at every transition given competitivemarkets.Ideally,NDSregulated would match thistransition path inwhichpricesrise pre-NIDS levels attract additional supply peaking approximately 14 per cent higher real prices Point B Figures start reduce towards long run competitiveequilibriumprices(approximatelypercent above real pre NDISlevelsPoint C Figur

Figure: Average Price Impact of The NDIs Disability Services

|Year| |–|-| |2016|| % Deviation From Base Case A | |2017|| 8 |B | |2018||9 || |2019||3.5% Deviation From Base Case B | |2020||10 % Deviation From BaselineC | |2021||7 | |2022||4 | |2023||2 | |2024||-

Figure: Average Quantity Impact Of The NDIS On DisablityServices

| Year | |– |- | |A | - | |2016 | redacted | |2017 |redacte d- s( )a(ii)irrelvant material \rrelevant materi aloutside the scopeofthe request or names contact details staff removed as irrelevant rather than exempt. | 2018 |redac ted-s ( )(ii)- relevan tmaterial outside th e scope o fth erequestor namecontact detailsofstaffremovedasrelev antratherthanexempt.|B | |2019 |redacted-s ()()()- relevant materia lout sidethescope of there questornamescon tactdetail sofs tafr emovedasa rel evant rath ertha n ex empt| % DeviationFromBaseCase A \( C || |Year | |–|-| |2020 |redacted-s()(())-(irelevantmateria lo utsidethescop eofthereques toname con tac tdeta ilsstaf fr emove das re lev ants ather tha ns e xempt)|C |

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NDIS Pricing Strategy

information collection and dissemination are costly, reductions to information asymmetries will assist in driving efficiency and move the sector as a whole towards the long run efficient price. Over the course of the introduction of the NDIS, equilibrium prices of disability services peak in 2019 with the increase in prices reflecting the fact that significant resources need to be redirected from other parts of the economy to meet the needs of the sector. However, in the longer term, prices decline and stabilise at a price that is still higher than previous levels, as new firms enter the sector and additional workers are trained and employed. Key points relating to the NDIS pricing strategy made by Dixon and Cullen (2018) are that the relatively fast implementation of the NDIS results in significant price pressures;⁥and doubling expenditure does not double service delivery due shorter-term supply-side constraints; Critically,ퟷhigherpricesareneededtoboth maintain currentsupplyvolumesenablegreater volumesofdisabilitysupportas this provides an incentive redirect allocationresourcesNDISother sectorsintheconomyWithoutpricegrowthsupplieside shortageswilllikelyexist Overall macroeconomic modelling shows market-clearingefficientpricesthedisabilitieservicesrise significantlyshorttermreachequilibriumapproximately

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The policy change implemented a market mechanism to allow consumers to choose aged care and support based on their own needs and preferences. Consumers were empowered to choose the setting in which care is provided “between home, community or residential settings”and typesofcareandsupport received.Under thispolicy,the Australian Government ceased regulating thenumberordistributionofservicesallowing themarketto respondtopersonaldemand.However,in situations where there does notrespond t o consumer demandor cannotrespon d ,theAustralianGovernment acts asasafetynet ensure services are available anda ccessible .Underthismodelconsumersare primarily responsible fortheir accommodationandeveryday living costs asthey have been throughout their lives.Providers determine how much they expect consum ers payforaccommodation/e very dayliving,ancare/supportcosts.TheAustrali anGover nmentthen sets publish reasonable prices it willpayonbehalf of customers whocannot affordtotally meet theirown cost s. The underlying principle offorthemarketmechanismisthatcustomerswill drive quality innovation by exercising choiceastowhich providerstheychoose.Similar ton D SISa mark et mecha nis m underlies th e Austr alian Gove rn ment approach toe ag edca re policy.Howe ver inorder to improve market efficiency price transparency and level Ofconsumer informationthemyagedCare website publishes a full list providerstheirprices features servic es offered othermarketinformation.Web site also provides comparison tools financial calculators empower consumers make informed choices in addition regulatory compliance reviews.This web sit servesimprovementarketefficiencyandencourage competition betweenproviders(Australian Department Health 2016).Inadditionpublishingmark tinformation Australian Governmentalso setspublishesreasonablepriceguides accomodation everyday liv ing costs.Price guidance varies based factors such geographical location consumer This serv limit pricess are able charge base price particular regions.

Lessons from international schemes “A number countries have implemented scheme comparable NDIS where disabled or elderly provided budgets spend chosen allocation goods services Most often these schemes focussed around provision attendant care needs individuals most variable argument self directed care strongest Among some prominent examples Germany Sweden United Kingdom”•Germany The German system Pflegegeld similar ND IS has assisted people severe disabilities since As of there were participants total mostly with physical (ENIL, •Sweden Swedish Personal Assistance created for those agebetweenof93aroundpeopleparticipatedthisscheme(EN IL Westberg 2015) UK Community Care Direct Payments Actcreated similarschemeNDIS workingage andelderly livingwithdisabilities rate uptake older however low Around participated the scheme(Ungerson 2013).

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These schemes all have commonalities:

participants receive an amount of money to spend on a combination of services and/or goods of their choosing;
budget allocations are usually benchmarked as a gross sum or hourly rate by the level of care required;
co-payments are implemented as part of the schemes although they vary; choice of those employed as carers may be at arm’s length); and e) schemes face issues with labor shortages. in general, is complex balancing various features market interventions attempt provide systems where accessible sustainable efficient.Price controlsIn pricing disability services countries discussed aim achieve similar outcomes through number difference policy approaches including:encouraging greater supply competitionremoving barriers entrythrough co payments incentivising consumers seek out which good value.In addition policies aimed performance markets outlined above these countriesalso specific needs Sweden sets flat hourly based industry minimum wages regardless requirementsinstead varying hours need Germany addresses undersupply giving suppliers access variety incentives participate essentially subsidizing United Kingdom rural areas compensating increased costs flexible funding.Supply regional variability faced UK scheme many remote price attendant highTo address this issue system varies support recipient’s disability location user local labour 2007 study found authorities most often changed direct payment increasing so recipients not cut down because prices The experiences low personal workers however it is urgent other suggesting perhaps method helps alleviate (Davey et all, 2007).The German scheme addresses labour setting relatively legal for encouraging entering sector. This has given very few in country Pflege.de(2019). Also takes further steps encourage participation Pflegengeld scheme Government grants available to cover project-related

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NDIS Pricing Strategy

expenses incurred by providers in transitioning to the scheme. As of 2006, this had been paid out in approximately (\approx)~{2}^{*}{x}{o}\left({D}{{u}}t{s},h_{e r},{B}{d}^{},{s}^{-}t{-}a,-g,t,, ight., { }{{{}}} , {{}}{{}}, ~{y} _{r}-{p} -{l}-{i}.-{m}.{ n}( ) . The German government also provides publically funded vocational retraining programs personal care workers as of $2$ (Eurofound ${ }$, 20${}$). An additional method employed by Government increase supply was publicity campaign improve image profession This response social perception work being undignified leading lack desire young Germans seek employment field ( Eurofound, 20${})$. These strategies give ability directly intervene markets without increasing supply.

Affordability There diverse range policy responses affordability issues disability schemes internationally Sweden barriers such licensing minimum qualification registration removed reduce costs and therefore market pricesof care. However this has led shortage skilled worker quality control $(E u$r o$f{o}un d,$)$ Sweden Germany allowed informal carers partners relatives friends important factor in affordabilty cheaper more widespread incidence formal care regulated than similar systems Europe In Germany participants can use proportion total budget for paid informal care addition to formal care however informal carers only receive half hourly rate Additionally if family member changes their part-time provide home care disabled relative they entitled per cent salary up two years ($\left(Eu r \mathrm{}o f_{-}\right.$ found $ackslash

floor^{3}{1},) .$ Some cases income from may tax exempt Pflege.de ,$(2{)}^{{9}} ) . Co-payments also an important feature the schemes German United Kingdom scheme co-payment received although financial difficulties waived $({ }$Eurofound ${}$,) $. UK direct payments tend less value of requiring top-up co-payments Davey et all.,(2){7}). Requiring co-payments overall government cost encourage participants seek lower providers create increased competition Conclusions Overall number faced countries stewardship goods services Examination international NDIS show that no scheme completely alleviate these issues variety policies designed incentivise supply effective workforce accessible high-quality system To increase supply such as higher minimum wages business subsidies publically-funded training schemes help alleviate constraints internationally appear assisted reducing prices driving stronger market Although these not appropriate Australian context do insight other potential options market development pricing strategy markets disability.

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NDIS Pricing Strategy

The National Disability Insurance Scheme’s pricing strategy outlined here serves as crucial guidance for transitioning its markets amidst anticipated demand growth and towards long-term objectives such as deregulation aimed at enhancing efficiency and quality care. It acknowledges challenges during this transition period: maintaining current supply levels while significantly increasing disability support availability over medium-to-long term periods are essential steps needed due increased numbers entering schemes alongwith heightened demands on existing resources, such transitions will take considerable time necessitating measures to encourage expansion among both established service-providers & new entrants alike depending upon how easily market capacity could be expanded referred price elasticity thereof may also influence longer term prices accordingly.

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NDIS Pricing Strategy

This unbundling of services also has implications for the regulation of quality. It is important to note that a distinctive feature of social services delivery is that it often involves a bundle of related services.* Successfully assisting such clients requires range to services that can either mutually reinforcing or in conflict*. Conversely, services risks undermining effectiveness provided* The deliveryof social services therefore multiple interventions one more provider.“”\rquestions bestbundle provision different providers and the range servicesto offered any one provider.Where participants purchase from number difficult ascertain which should held account when outcome sought participant are achieved.A approach been adopted Australia regulatory arrangements long term care services older people.Here single head-provider funded responsible quality service outcomes achieve.They may subcontract deliver these but regulators consumers each able hold provider failure deliver outcomesside, more will eligible receive assistance costs disability goods/services they need total demand increase.The side implications introduction Scheme not however limited aggregate demand.Consumers greater control funds expended purchasing disability goodsservicewhich efficiency expenditure better matching expenditures most valued consumer.Because wider supports available participants likely access useful them rather restricted choice traditional programs.Moreover person-centred plans efficiently allocate resources aligned with participant’s utility valuation.In general subsidiarity leads improved efficiency individualised budgets ultimate form localisation.However competitive nature market depends extent consumers make informed choices.At minimum prior choosingprovider potential must compare many at low cost observe pricequality care.On positive unlike acute medical care demand for disability is time sensitive.Potential consumers weeks months transition informal care arrangementMoreover disable services technical evaluated easily by than say surgical skills. Conversely clear variety of services offer unclear as to which might meet their needs.May also be clear about theirs features shared varying degrees other markets (e.g., legal advice).In such markets, services can face search and switching costs only learn after using the serviceby which late costly change providers.Transaction costs high especially if met insurer.Information asymmetries seriously undermine impact subsidiary.To exercise individuals require accessible accurate information.Need personalized suit individual ability choose also availability least two alternatives.

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Evolution Of The Ndis Pricing Strategy (NDIS)

Figure 7: Phases OF NDis And Pricing

The evolution of the National Disability Insurance Scheme’s (NDS) pricing strategy reflects its progression towards full roll-out.

Before Introduction: Most state governments provided block funding directly without competitive markets or consumer input leading often to ‘one size fits all’ approaches where no market forces were present due primarily to lack of demand-side competition among providers;

Trial Phase:

The trial phase introduced unit-price caps regulated through cost-plus inputs based on pre-NDS provider allocations but some well-developed sectors like transport remained unregulated as temporary measures until more mature markets could be established in their absence, as these regulations aimed at ensuring scheme functionality amidst non-existent or underdeveloped markets, preventing potential failures from inadequate prices or service offerings;

As transition progressed toward a fully operational system annual reviews adjusted initial caps indexed annually with updated costing methodologies and consultations reflecting growing participant numbers which increased supply demands necessitating price adjustments thus prompting an independent review commissioned via NDIA Board oversight in early years post-introduction;

Figure8:PhasesOfNdIsAndPricing

Phase	Description

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NDIS Pricing Strategy

conduct a trial of outcomes based pricing and move to this approach in the longer term; • aim for deregulation of markets in the long term;and • better prepare for deregulation, including through investment in infrastructure such as an online e-market. as outlinedin Figure8 above highlightedby IndependentPricingReview then DIS has challenge boostingsupplydisabilityservices providedmarket whilemaintain consumer value order dothisIndependentPricing Review recommendedNDIA continue pathto deregulate longerterm movetooutcomesbasedpricing However noted independentpricereview NDIDACURRENT clearpathtoregulat ultimately outcomebasedpricings

ProposedStrategy – ‘Glide Path’ To The New EquilibriumTheNDisPricingStrategiestbest understood terms four different conceptsof pricinglevelsrepresentlong run minimum cost production Sufficientproduction at efficient price level isonly expected be achievable langerun maturemarkets strong competition between providers sustainableprice levels represent given time average current firm viable even inefficient shortterm pricesabove or sustainablesrequired ensurecurrent supplylevels remain stable providercostsomewhat abovemostefficientlevelremainviable transitionalprice levels representgiven timenecessary attract newproviders enter market reduce exits from market Transiti onalprice lev els represent required economic resources other parts economy expandprovider suppl ytransitionalpricelev elsa bove sustai nable should only adopted where case NDIS transition period significant expansion ofsupplied require caps upper limitsprices prevent potential abuse mark powertodate, NDI Spice levels bothterms funds included participant plans andcaps have been predominantly set with longerrun efficiencylevelsin mind.

the pricing strategy proposed in this document better reflects the current situation inefficientsupply growing demand represents approach to pricing aimed maintaining increasing marketsuppl assistintransitionNDIS full rollout helping grow moremature state future cognisant need financial sustainability figure9 below showsmarket clearing equilibriumpriced quantity disability supports priorto NDIs pointAand longrun marketclearingequilibrium pricedquantitydisabilitysupports includingNDisdemandpointCillustrates paths thatsustainable pricel evel s red arrow) and trans itional price level (greenarrow will take real terms over transitionlong run market clearingequilibriumprice recognising entrenchedinefficiency providers example through existing Enterprise Bargaining Agreementsneed significantlyexpand not unnecessarily disrupt supply services people disabilities

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NDIS Pricing Strategy

Figure 9: Transition from equilibrium prior to the NDIS to the long run NDIS equilibrium

Price	Quantity
Pre-NDIS demand & Pre-NDIS full roll-out demand & Long-run (NDIS full roll-out) supply & A & C

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Balance efficiency and growth

Price controls need to take into account efficiency and the need to expand supply. Markets for disability supports continue developing with increases in market supply, improvements needed due to production efficiencies that imply cost reductions over time but necessitate higher short-term to medium term prices expansion requires this price increase incentive redirecting resources towards the National Disability Insurance Agency (NDIS) rather than other sectors without it. The longer term represents reasonable provision support levels eventually best suited development plans concerned efficient effective appropriate supports however sustainable price levels represent these same costs within a shorter timeframe until maturity expanding needs sufficient caps maintain current attract new suppliers transitional level at least set regarding not long run efficient ones brief under NDIS pricing strategy:

Funding Levels should be currently maintained annual adjustments unit input costs providers red arrow Figure 7 purchasing power participants real terms In future as transition sustainability converge greater quantities budgets benefit improved sector.
Price Caps, reflecting adjustment arrangements unwind agreements encourage growth while driving efficiency through explicit decreasing loading Transition Support Payment TSP about per cent clear statement expected glide path five eight years efficient price reduction phased ongoing monitoring markets determine whether short-term price increases have expanded supply attracted entrants increased competitive pressure. Longer competition between providers result reduced prices toward long-run efficient one As market prices reduce those imposed are no longer binding removal can considered

Assist Providers and Market Become More Efficient The NDIA collects data from observing interactions directly collecting supplier information assist monitor costs conditions profitability indicators of market competition number organizations entering exiting Currently, basic profitability collected by

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NDIS Pricing Strategy

information from market participants through a survey. However, given going optional responses not verified there is potential for this survey present inaccurate view supply conditions. to effectively monitor market condition in NDIS compulsory collections could be considered under system incentives provided their audited statements participate provider data collection process. incentives incentivised good faith participation data collection if access pricing made contingent upon providing accurate financial information. collection likely highly valuable decision as appropriateness caps readiness deregulation. The dissemination more consumer information essential effective future based pricing should include: a) quanti prices disability supports provided example hours care) group location these data obtained linking details suppliers each payment support budgets; b)m entrants exits; c)p and other metrics providers ; d)s such total expenditure on supports locations. Gathered can assist NDIA determine pricing caps short term enable better informed when considering markets long term transitional above competitive equilibrium it may also reasonable oblige providers to collect dividend’. To gain access transitional prices would need provide accurate responses). suppliers achieve efficiencies being able understand performance own organisation accurately compare peers requires accounting governance standards practices across providers The Q&SC can help by requiring adopt over time part of the registration process. Also establish independent services where thinner markets especially participating those development incentive making loading Transitional Support Payment at least that loading, contingent activities. 423 Address asymmetries empower consumers In addition supplier data, data from Scheme participants order monitor outcomes including participant

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NDIS Pricing Strategy

satisfaction rates with respect to interactions they have had directly or indirectly through their provider(s). The degree that individuals feel empowered when choosing how best suited support needs are met as well as plan utilisation rate which can indicate supply shortage. Currently participant data collection limited annual survey collecting overall satisfaction level while one-off surveys used during evaluation process going forward consumer & outcomes should regularly collect published enabling detailed view on performance of service providers future move towards outcomes-based pricing information could include: a) Satisfaction individual received; b) Outcomes employment gained engagement community); c) Ease access measuring any potential shortages); d) Level empowerment; e) Plan utilization reasons budgets not fully expended especially where these indicate undersupply). such additional consumer data collected measure longer-term transition outcome based pricing help identify areas undersupply occurring short term key recommendation Independent Pricing Review strategies decrease levels asymmetries suppliers disability supports participants specifically recommended introduction more mature market allowing comparison prices across preferred provider serve reduce current levels asymmetric markets goods services currently no requirement publically available prices charged approved providers mechanism easily compare offered multiple providers requesting quotes making contact each provider impose significant transaction costs participant a piece infrastructure reducing information asymmetry in the National Disability Insurance Scheme (NDIS), and enabling price strategy is an online tool all obliged participate potentially condition registration NDIS transitional limits such providing related serviced, level provided by Although creation e-market likely require considerable investment ongoing maintenance it placed to reduce between participants provide necessary measures reported increase competition empower exercise choice determining care would result greater price competition better informing consumers allow comparing easily publishing reasonable for deregulated may assist informed choices providers setting base’ price.

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NDIS Pricing Strategy

An example of a successful model utilised by the Australian government in similar sectors is ‘MyAgedCare’. This online tool enables users to determine: types of aged care services available; eligibility for services; contact details/locations/service offerings of providers within an area; costs associated with care; quality of different provider’s care. Similar models can apply to the NDIS reducing market inefficiencies through better dissemination of information which may cost but improve efficiency moving markets closer toward long run efficient prices.

Measuring success

In designing glide path new NDIS Pricing Strategies it’s important understand criteria indicating market maturity precipitating progress deregulation expanded supply determining pricing strategy objectives reached following indicative well-functioning supports market adequate supply strong competition between providers does not require intervention measures such as price caps:

Demand satisfied: Provider organisations enable sufficient supply fully satisfying participant demand, high levels budget utilization (participants purchase all needed support budgets) and satisfaction rates;
**Price caps are binding when markets function adequately competitively imposed NDIA transitional above minimum production will be close or at equilibrium prices rather than cap bound);
Competition results equilibriums Market prices near or reach these competitive pressures evident among providers. Outcomes-based pricing ensures that prices reflect value outcomes received participants result providing support instead supporting costs. To move towards this detailed info on participants resulting from their support is required e.g., wellbeing education workforce participation adults). Implementations improvement outcome measures necessary. collection reporting participant outcomes interim variables reliably predict longer term likely assist make informed choices regarding providers online e-market.

References

Australian Department of Health, Australian Government. Aged Care Roadmap – Aged care sector committee [PDF]. Canberra. Accessed on Australian Department of Jobs & Small Business, Australian Government. Industry Employment Projections Report for Australia in 2018 [Web page] Canberrra. http://lmip.gov.au/ davey et al., Direct Payments: National Survey of Policy and Practice [Report], London: PSSRU Unit. hpssru.ac.uk/pub/dprla.pdf deutscher bundestag, Bericht der Bundesregierung über die Ausführung der Leistungen des Persönlichen Budgets nach § 17 des Neunten Buches Sozialgesetzbuch [Document] erbeit.de/bmas/de/SharedDocs/Downloads/DE/bericht-der-bundesregierung-ueber-die-ausfuehrung-der-leistungen-des-persoenliche-budget.pdf?blob=publicationFile&v=2 dx J Cullen DJ Implementation NDIS macroeconomic impacts Presentation to the Conference Economists (2018) Centre Policy Studies Victoria University Paper forthcoming ENIL European Network Independent Living Sweden - European Network on Independent Living[PDF]. https://enil.eu/wp-content/uploads/2013/02/PA-SWEDEN.pdf Accessed 18 January 2019 ENIL European Network Independent Living Germany - European Network on Independent Living[PDF].https://enil.eu/wp-content/uploads/2013/02/PA-GERMANY.pdf. Accessed 18 Januray Eurofound European Foundation Improvement of Working Conditions More and better jobs in home-care services – Germany[PDF] . https://www.eurofound.europa.eu/sites/default/files/ef publication/field_ef document/ef_1353en6.pdf McKinsey Company, National Disability Insurance Agency independent pricing review Final Report ndia response[Web page]. https://www.ndis.gov.au/providers/independent-pricing-review#final-report-and-ndia-response NDIA National Disability Insurance Agency NDIS market approach Statement opportunity intent [Web Page] https://www.ndis.gov.au/providers/market-information#market-approach Pflege.de German Government Pfleggeld[Webpage]. hpflge.de/pflegekasse-pflegericht/ pflegeleistungen/ pclegegeld/.

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Productivity Commission, Disability Care and Support Available: https://www.pc.gov.au/inquiriescompleted/disability-support/report
Productivity Commission, Report on Government services: Volume F - Community Services. Available from:https://www.pc.gov.au/researchongoing/reportongovernment-services/2015/communityservices/download-the-volume/governmentservices-2015-volumef-community-services
Productivity Commission, National Disability Insurance Scheme(NDIS) Costs. https://www.pc.gov.au/inquiriescompletedndis-costs#report
Ungerson C., Commodified care work in European Labour Markets.European Societies, Vol(No):pp–p.
Westberg K.(Personal assistance in Sweden).Independent Living Institute.[Online] Available at:[http://www.independentliving.org/]

Pricing Strategy

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1. Purpose

2. Recommendations

3. Discussion

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Pricing Reference Group - Item 2.1 | Date: March 14th , Year : [Year not specified]

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Pricing Reference Group - March 14th, Item: 2.1

Transitioning Market Equilibrium Prior To The NDIS Long Run Equilibrium

Figure 1: Transition From Equilibrium Before NDIS Full Rollout To Post-Equilibrium

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Pricing Reference Group - March 14th, Item 2.1

FOR OFFICIAL USE ONLY

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FOR OFFICIAL USE ONLY

Pricing Reference Group | Date: March 14th , Year : 2019 | Item Number: item_2_point_one

Section 3.14:

Section 3.16:

Implementation communication

Attachment(s):

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Document 2.1

National Disability Insurance Scheme - Pricing Strategy

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NDIS Pricing Strategy

Copyright

Use of National Disability Insurance Agency copyright material

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Contents

NDIS Pricing Strategy

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Table of Figures

Executive Summary

The supply of disability goods and services in Australia is undergoing significant reform with phased creation commencing on July 27th.

National Disability Insurance Scheme Agency has responsibility administering including together with Quality Safeguards Commission regulating markets disabilities.

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Figure 1: Transition from equilibrium prior to the NDIS to the long run NDIS equilibrium

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NDIS Pricing Strategy

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NDIS Pricing Strategy

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Introduction

National Disability Insurance Scheme (NDIS)

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NDIS Pricing Strategy

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Current arrangements

Section heading: Current Arrangements (Page Title)

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NDIS Pricing Strategy

Section 2 - Eligibility Criteria

Subsection 2-1 Participants

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Plans

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NDIS Pricing Strategy

Section: Pricing

Subsection - Terms Of Business

Subsection-Support Catalogue

Subsection-Pricing Guide

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NDIS Pricing Strategy

Special NDIS Pricing Arrangements

Market stewardship

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Section: Market Stewardship Functions (3)

Subsection A: Regulatory Entry & Participation (3A) - Providers’ Obligations:

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NDIS Pricing Strategy

3.2Other Market Interventions Aswell as pricecontrols NDIA canalsoimprovetheoperation of the marketyby:

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NDIS Pricing Strategy