FOI 24/25-0638 DOCUMENT 11

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13% ($3.9 billion) on capacity building daily activities (therapy services).

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for therapy supports to ensure participants receive value for money, while providers strive to improve quality of service and increase efficiency.

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No changes in price limits were made for therapy supports, support coordination or plan management. Prices for capital items were increased by Consumer Price Index (CPI).

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Scheme statistics for each of the topic in scope (DSW-related supports, therapy, plan management and support coordination). The statistics include the movements in terms of participant numbers and payments made.
Analysing business dynamism of topics in scope, examining the number of provider entrants and exits as well as the general market dynamics.
Additional benchmarking analysis for therapy in terms of comparison to other government and funding schemes and private market billing rates.

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5 Therapy supports

5.1 Context

Therapy supports are important to participants and to the NDIS. They assist participants to build capacity to achieve their goals and they have the potential to reduce long term costs in the NDIS as they can support participants to improve capacity over time.

Therapy services are among the important supports available to NDIS participants. These supports are mainly delivered by Art Therapists, Audiologists, Counsellors, Developmental Educators, Dietitians, Exercise Physiologists, Music Therapists, Occupational Therapists, Orthoptists, Physiotherapists, Podiatrists, Psychologists, Rehabilitation Counsellors, Social Workers, and Speech Pathologists.

Therapy services can also be delivered by Therapy Assistants working under the delegation and direct supervision at all times of a therapist. Where a support is delivered by a therapy assistant, the therapy assistant must be covered by the professional indemnity insurance of the supervising therapist (or the therapist’s or therapy assistant’s employing provider).

Within the NDIS, most therapy is delivered under three provider registration groups:

Therapeutic Supports (0128): Provision of a mix of therapies, to assist participants aged from 7 years to apply their functional skills to improve participation and independence in daily, practical activities in areas such as language and communication, personal care, mobility and movement, interpersonal interactions and community living.
Early Intervention Supports for Early Childhood (0118): Provision of a mix of therapies, and a key worker for the family. Supports children 0-6 years with developmental delay or disability and their families to achieve better long-term outcomes, regardless of diagnosis.
Exercise Physiology & Personal Well-being Activities (0126): Physical wellbeing activities promote and encourage physical well-being, including exercise.

Therapists also deliver supports under the following registration groups:

Specialist Positive Behaviour Support (0110): Includes support items provided by allied health professionals with specialist skills in positive behaviour support including assessment and the development of a comprehensive plan that aims to reduce and manage behaviours of concern.
Custom Prostheses and Orthoses (0135): Prescription and manufacture of customised prostheses or orthoses requiring specialist skills.
Specialised Hearing Services (0119): Specialised hearing services for children and adults with complex needs.
Hearing Services (0134): Hearing services for children and adults.

There are currently 14 different therapy support items within the Capacity Building Support Categories.12 These supports can be delivered to individual participants or to groups of participants. Where supports are delivered to groups of participants the hourly price limit is divided by the number of participants in the group. Price limits do not vary according to the

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FIGURE 13: NDIS EXPENDITURE ON THERAPY SUPPORTS SINCE DECEMBER 2020 QUARTER RELATIVE TO TOTAL NDIS EXPENDITURE

Source: NDIS internal administrative data

Participants

From the 325,319 participants with a claim for therapy supports from their plan in the six months to 31 December 2022, the most common therapist support is for “Other Professionals” ($254.4 million claimed), followed by Occupational Therapists (for $280.9 million claimed) and Physiotherapy ($248.0 million). Noting participants can use and claim more than one type of therapist/therapy. A more detailed breakdown can be seen in Table 7.

The overall average payment for a participant receiving therapy supports in the six months to December 2022 was $4,988, up 8% compared to $4,617 in the same period the previous year. The average amount claimed per provider over this six-month period was $34,947, up 10% compared to the same period last year ($31,627).

TABLE 7: SCHEME EXPENDITURE BY TYPE OF THERAPY, JULY TO DECEMBER 2022

Type of Therapist	Number of Participants	Number of Providers	Total Amount Claimed
Occupational Therapists	162,532	7,279	$280.9 m
Other Professionals	179,476	25,544	$254.4 m
Early Childhood	69,250	10,362	$248.0 m
Behavioural Therapists	42,385	1,290	$207.7 m
Physiotherapists	85,965	10,249	$166.5 m
Psychologists	82,372	11,631	$138.7 m
Speech Therapists	89,033	5,896	$135.4 m
Exercise Physiologists	36,197	4,704	$64.9 m
Therapy Assistants	35,066	3,576	$35.5 m
Counsellors	20,043	4,552	$26.9 m
Dietitians	19,875	2,052	$15.9 m
Social Workers	8,101	1,356	$11.4 m
Travel	50,863	7,596	$8.9 m
Miscellaneous	4,628	2,777	$7.4 m

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Type of Therapist	Number of Participants	Number of Providers	Total Amount Claimed
Podiatrists	20,111	2,483	$6.4 m
Music Therapists	3,907	819	$5.2 m
Art Therapists	3,539	1,033	$4.2 m
Development Educators	2,132	333	$3.4 m
Orthoptists	1,206	280	$0.6 m
Rehabilitation Counsellors	443	280	$0.3 m
Audiologists	729	181	$0.3 m
TOTAL July-December 2022	325,319	46,434	$1.6 b

Source: NDIS internal administrative data

Note: Please note the above totals for number of participants and number of providers are based on unique participants and providers in this six-month period from July to December 2022. The group of “Other Professionals” delivering therapy encapsulate assessments, recommendations, and group therapies which could have been delivered by a range of therapists not otherwise listed.

This section has highlighted the growing demand of participants accessing therapy supports in the NDIS (up 14% in the six months to 31 December 2022 compared to previous year). Many of whom require access to a wide range of therapy services delivered in the NDIS to support different participant needs. As such, the NDIS requires a diverse range and stable supply of therapists to best support participants and ensure they receive quality outcomes.

Providers

As seen in Table 7 above, were 46,434 providers who claimed for therapy services in the six months to December 2022. The therapist supports with the highest number of providers claiming these supports were for “Other Professionals” (25,544), Psychologists (11,631), Professionals delivering Early Childhood supports (10,362) and Physiotherapists (10,249).

In the six months to 31 December 2022, there were 8,900 registered providers who delivered therapy services compared to 8,833 in the same period in the previous year. However, of the $1.6 billion claimed by providers in this period, $1.2 billion was made to registered providers, up from $990 million in the same period the previous year.

This, however, represents a drop in the proportion of therapy payments being made to registered providers compared to the same period in the previous year (77% compared to 72%). This was due to the number of payments being made to unregistered providers increasing from 23% to 28% across these periods. A monthly breakdown can be seen in Figure 14.

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FIGURE 14: TOTAL PAYMENTS FOR THERAPY SUPPORT ITEMS BY PROVIDER REGISTRATION, 2021 — 2022

Source: NDIS internal administrative data

In the six months to 31 December 2022, the top five types of therapists (excluding “Other Professionals”) claimed against in the NDIS, based on total payments, were Occupational Therapist ($280.9 million), Professionals delivering Early Childhood ($248.0 million), Behavioural Therapists ($207.7 million), Physiotherapists ($166.5 million) and Psychologists ($138.7 million). These five types of therapists accounted for $1.0 billion worth of claims, comprising 64%, close to two thirds of the $1.6 billion NDIS expenditure on therapy.

It should be noted that prior to 1 July 2022, many types of therapists were not categorised into individual support items and were included in the “Other Therapy” support. The breakdown of these types of therapists were not captured until after this date. Since 1 July 2022, it can be reasonably assumed that many of the supports delivered under “Other Professionals” were likely through Occupational Therapists and Speech Pathologists. The other most claimed types of therapies delivered appear to be relatively stable since December 2020 quarter. These are shown in Figure 15.

FIGURE 15: LARGEST TEN THERAPY TYPES BASED ON TOTAL PAYMENTS, OCTOBER 2020 — DECEMBER 2022

Source: NDIS internal administrative data

Note: Please note in the above chart Occupational Therapy and Speech therapy are introduced as standalone lines of supports from July 2022. Before July 2022 these lines of supports were claimed by providers under other groups of therapy without clear indicators of supports provided.

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This section has shown the increase in supply of providers delivering therapy supports to NDIS participants. However, with the growing number of NDIS participants receiving therapy supports, this may put pressure on the number of therapists needed to continue supporting NDIS participants.

5.3 Employment Statistics

On current reported data through Australian Health Practitioners Registration Agency (AHPRA), as of February 2023, the Department of Health and Aged Care’s Allied Health Factsheets Dashboard³ stated there are:

41,791 Psychologists registered with AHPRA. The number of registrations grew by 20.3% between 2017 (34,752) and 2021.
38,882 Physiotherapists registered with AHPRA in 2021, up by 25.8% from 30,916 in 2017.
26,904 Occupational Therapists registered with AHPRA. The number of registrations grew by 33.6% between 2017 (20,145) and 2021 (26,904).
5,819 Podiatrists registered with AHPRA, up by 18.8% from 4,900 in 2017.

The total number of Psychologists, Physiotherapists, Occupational Therapists and Podiatrists registered with AHPRA has grown significantly in the last five years, up 26% from 90,713 in 2017 to 113,396 in 2021, whilst those registered with AHPRA and are employed has increased by 26% from 73,350 in 2017 to 92,406 in 2021 (see Figure 16).

FIGURE 16: NUMBER OF REGISTERED THERAPISTS, 2017 TO 2021

Source: Department of Health and Aged Care

Jobs and Skills Australia (formerly known as National Skills Commission) projects employment growth of the entire Australian workforce for five years to November 2026 at 9.1%. The growth in the therapy space will continue over this period with therapists making up three of the 11 fastest growing occupations, those being Audiologists and Speech Pathologists (34.7%, close to four times the projected rate of growth of the entire Australian workforce over that period), Podiatrists (31.8%) and Physiotherapists (28.7%), as shown in Table 8.

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TABLE 8: GROWTH IN EXPENDITURE ON THERAPY BY FUNDING SOURCE, 2016-17 TO 2019-20

Occupation Code	Occupation	Employment level - November 2021	JSA Projected employment level - November 2026	JSA Projected employment growth - five years to November 2026	JSA Projected employment growth - five years to November 2026
2527	Audiologists and Speech Pathologists/Therapists	12,300	16,600	4,300	34.7%
2526	Podiatrists	6,400	8,500	2,100	31.8%
2525	Physiotherapists	32,800	42,200	9,400	28.7%
2522	Complementary Health Therapists	6,300	8,000	1,800	27.9%
2721	Counsellors	24,400	27,800	3,500	14.2%
2723	Psychologists	31,000	35,100	4,100	13.3%
2524	Occupational Therapists	23,900	25,600	1,800	7.4%
2511	Nutrition Professionals	7,900	8,500	600	7.2%

Source: Employment Projections | National Skills Commission (now Job and Skills Australia)⁴

These projections highlight strong future demand for therapists in Australia, with the NDIS being one of the contributors to this demand.

5.4 Business Dynamism

To supplement the Scheme statistics, the NDIA has analysed registered provider payment activity. That is, payments made against Agency and Plan Managed plans are considered to be made by registered providers.

Figure 17 shows the number of registered Therapy providers with the payments between June 2020 and December 2022, split by the number of half-year periods in which each provider received a payment. Half-years are defined as the six-month time intervals from January to June and July to December. As seen in Figure 17 below, 5,219 out of 12,112 (43%) registered providers have received payments in all five half-years between June 2020 and December 2022. These providers account for 92% of the total payments across the two-and-a-half-year period.

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FIGURE 17: REGISTERED THERAPY PROVIDER HALF-YEARLY PAYMENTS HISTOGRAM, JUNE 2020 — DECEMBER 2022

Source: NDIS Internal Administrative Data

To further assess the current state of the provider market, payment activities of registered providers across the two-year period from January 2021 to December 2022 were analysed. Providers with New Activity in a half-year are defined as providers with payments who did not have payments in the prior half-year. Similarly, Inactivity in the half-year is defined as providers without a payment who had payments in the prior half-year. Activity for each provider is expressed as a percentage of the total payments for that half-year (for New Activity) or prior half-year (for Inactivity). The NDIA acknowledges that this is not a perfect measure of market exits but the closest approximation given available data.

Results suggest that over the past two years, inactive registered providers in each half-year contributed to less than 0.7% of total payments. In contrast, registered providers with new activity in a half-year have contributed between 1.4% and 1.9% of total payments for that same period.

FIGURE 18: THERAPY REGISTERED PROVIDER ACTIVITY MOVEMENTS, JANUARY 2021 — DECEMBER 2022

Source: NDIS Internal Administrative Data

Further analyses indicate that on average, inactive registered providers received $4,234 in payments in the half-year prior to becoming inactive, with 84% of registered providers receiving less than $5,000 in the half-year prior to becoming inactive. In contrast, active

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registered providers received on average $107,199 of payments in each half-year period, highlighting that inactive registered providers have been claiming lesser amounts on average relative to new and existing registered providers.

5.5 Comparable Government and Funding Schemes

The NDIA conducted a comparison of therapy price limits and arrangements across other comparable public schemes. This is based on the NDIA’s calculations using information published by other schemes as at 31 March 2023; and additional information obtained directly through engagement with other schemes. The NDIA has engaged with sixteen Commonwealth and State Schemes to obtain their therapy pricing as comparison to NDIS limits.

The main MBS items for allied health have a scheduled fee of $65.85 per 20 minutes session. This equates to an effective hourly rate of $197.55 which is slightly higher than the NDIS hourly price limit. Note, the Commonwealth funding (MBS benefit) for the hour is $167.92, but co-payments are common in the MBS and the scheduled fee is a better estimate of the total cost of the support — or at least of the Australian Government’s public position on the appropriate cost of the support.

To calculate the effective hourly price limit, NDIA sought information about the regulated length of therapy sessions (for example, the NDIS’ price limits for therapy are per hour). Where this was not already available, this information was requested directly from other schemes. For comparability, the NDIA generally used standard or subsequent consultations where possible whilst noting many Schemes have differentiated items and/or pricing for initial consultations and standard/extended consultations.

The NDIA were able to calculate the effective hourly price where the length of a session was provided as a required length (for example, price per 20 minutes); as a required minimum length (for example, price for at least 20 minutes); or as an average session time expected based on the observed length of sessions. In all other cases, the NDIA were unable to calculate the effective hourly price, and not able to directly compare these prices, so these do not appear in Figure 19 below.

Overall, NDIS prices are in line for most types of therapies. As Figure 19 illustrates, the current NDIS price limits are broadly consistent with the effective hourly rates paid by other schemes, once proper account is taken of duration of service, co-payments and provisions for travel and consumables.

However, results this year indicate that many types of therapies have been indexed by other schemes over the past year. This appears to have put NDIS into the middle/lower range for some therapies offered by Professionals, such as Counsellors, Occupational Therapists and Rehabilitation Counsellors.

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FIGURE 19: OTHER SCHEME PRICING COMPARED TO NDIS, 2022-23

Source: Data from other schemes with NDIA internal calculations

5.6 Private Billing Rates

This section analyses a data set of 6,053 private billing rates for therapy services, including 2,857 billing rates for weekday in-room services.

The private billing dataset was compiled by the NDIA by scanning provider websites across Australia. Prices for weekend, initial and telehealth consultations were excluded from the dataset. Outliers were also removed from the dataset⁵ as well as some therapy services, including teachers, personal training, osteopathy, and therapy assistants. The billing rates were converted to effective hourly rates based on the length of consultation. Some 34% of the sample observed billing rates were from non-metropolitan areas.

Among therapy services, the top four therapists in the sample were physiotherapists (17.6%), psychologists (15.2%) and clinical psychologists (10.2%) and dietitians (10.0%). Art therapists and music therapists each accounted for less than 3% of the sample. There were at least 80 observations for each type of therapists besides Art Therapists (33). Figure 20 shows the distribution of the sample for types of therapies, some of which have widely dispersed and significant overlap in pricing.

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FIGURE 20: DISTRIBUTION OF PRVIATE BILLING RATES BY THERAPY TYPE

The geographic distribution of the sample observations was slightly skewed towards Victoria (30% of the sample) and Queensland (32%) with New South Wales underrepresented (15%). Australian Capital Territory was the only state or territory with less than 30 observations (18). Figure 21 for the distribution of private billing rates across states, which show significant overlap in dispersion and overlap. It is also clear some states and territories show multi-model distribution in pricing (i.e., Northern Territory and Tasmania), which aligns to different pricing for different therapies in the sample.

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FIGURE 21: DISTRIBUTION OF PRIVATE BILLING RATES BY STATE

Table 9 displays summary distributional statistics of the sample of private billing rates. The average effective hourly rate for weekday in-room therapists in the sample was $184 (median $185). The smallest effective hourly rate that was observed in the data set was $73 and the largest was $360.

TABLE 9: SUMMARY STATISTICS OF PRIVATE BILLING RATE SAMPLE, BY THERAPY TYPE

Type of Therapy	Count	Mean	Standard Deviation	Minimum	25th percentile	Median	75th percentile	Maximum
Art Therapists	33	$140.2	39	$73.3	$100.0	$135.0	$177.5	$216.0
Audiologists	90	$194.6	26	$156.7	$175.0	$187.5	$210.0	$240.0
Counsellors	186	$138.8	36	$75.0	$120.0	$140.0	$160.0	$220.0
Dietitians	287	$174.9	41	$80.0	$140.0	$180.0	$210.0	$280.0
Exercise Physiologists	190	$140.7	36	$73.3	$119.0	$134.2	$167.0	$227.0
Music Therapists	81	$161.1	41	$100.0	$119.0	$154.0	$194.0	$240.0
Occupational Therapists	237	$169.3	42	$75.0	$140.0	$172.0	$194.0	$264.0
Physiotherapists	502	$183.9	51	$75.0	$150.0	$180.0	$220.0	$322.0
Podiatrists	184	$168.4	55	$75.0	$130.0	$150.0	$220.4	$313.5
Psychologists	434	$212.8	47	$108.0	$189.8	$215.5	$246.5	$312.0
Psychologists – Clinical	292	$258.4	42	$150.0	$228.0	$260.4	$291.6	$360.0
Social Workers	107	$169.2	49	$93.3	$120.0	$156.2	$216.0	$312.0
Speech Pathologists	234	$169.0	36	$95.0	$140.0	$174.2	$193.3	$250.0
Total Sample	2,857	$184.4	55	$73.3	$140.0	$185.0	$220.0	$360.0

Statistical models were built for the private billing data set (see Table 10). A series of Tukey’s range tests were undertaken to group therapy types with similar private billing

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means. The test found that Audiologists, Dietitians, Music Therapists, Occupational Therapists, Physiotherapists, Podiatrists, Social Workers, Speech Pathologists (group 1 — base case) had similar means, while Counsellors, Exercise Physiologists and Art Therapists (group 2), also had similar means. The modelling began with indicator variables for each state/territory (model 1), plus a regional indicator variable (model 2) and one including the aforementioned variables and groups of therapies (model 3). Model 4 was also run that includes all states, a regional indicator and all therapy types individually, with New South Wales and Occupational Therapists as the base case. Sensitivity testing was also run on various interaction terms between the States and Territories, regional indicator and therapy types were also investigated, many of which were insginficiant.

TABLE 10: STATISTICAL MODELS OF PRIVATE BILLING RATES

Variable	(1)	(2)	(3)	(4)
Constant	193.1***	202.2***	188.9***	183.8***
Victoria	6.1	-12.1***	-8.9***	-11.0***
Queensland	-20.6***	-20.8***	-19.2***	-18.4***
South Australia	-3.3	-9.2	-10.9**	-12.4**
Western Australia	3.0	-3.4	-7.5*	-7.6*
Northern Territory	-6.0	-0.7	-6.9**	9.0*
Australian Capital Territory	12.0	2.9	-7.9	-6.5
Tasmania	8.2	12.9	19.2**	13.7*
Regional	N/A	-19.5***	-11.9***	-12.5**
Exercise Physiologists, Counsellors & Art Therapists	N/A	N/A	-34.9***	N/A
Psychologists	N/A	N/A	38.7***	44.5***
Clinical Psychologists	N/A	N/A	80.7***	85.6***
Art Therapists	N/A	N/A	N/A	-30.4***
Audiologists	N/A	N/A	N/A	25.9***
Counsellors	N/A	N/A	N/A	-32.5***
Dietitians	N/A	N/A	N/A	5.4
Exercise Physiologists	N/A	N/A	N/A	-25.3***
Music Therapists	N/A	N/A	N/A	-3.9
Physiotherapists	N/A	N/A	N/A	12.8**
Podiatrists	N/A	N/A	N/A	-1.1
Social Workers	N/A	N/A	N/A	3.5
Speech Pathologists	N/A	N/A	N/A	-1.3
Adjusted R²	0.024	0.048	0.369	0.38
F Statistic	11.03	19.04	152.8	87.9
Observations	2,857	2,857	2,857	2,857

(* = p < 0.05, ** = p < 0.01, *** = p < 0.001)

Model 3 is preferred to Model 4 as the small increase in R-squared between Model 3 and Model 4 does not adequately compensate for many variables in Model 4 being insignficant at the 5% level.

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The explanatory power of model is only 37%, which suggest that there are many other factors affecting therapy pricing that are not currently captured in the model.

The results suggests the average hourly price of $189 for the majority of therapists in New South Wales, with most other states and territories suggested to be at lower price. This suggests that the NDIS price limits are still adequate for most therapists. Results also show that price limits of non-clinical Psychologists, Counsellors and Exercise Physiologists appear on par with NDIS price limits.

5.7 Consultation feedback

The topic of therapy supports received the most feedback through public consultation, with 174 submissions out of 304 (57%) documenting concerns and commentary. Many providers suggested the biggest cost driver has been the increasing supply costs and wages. Other costs involved attracting, training, and retaining staff, as well as quality, safeguarding and compliance costs. Many participants and their representatives who responding through the consultation process suggested that they were charged more than non-NDIS clients and generally supported no further price increase at this time.

See Appendix A for more details on common themes raised in submissions to the 2022-23 APR Consultation Paper.

5.8 Recommendations

On balance, available therapy data suggest that NDIS price limits for therapy supports are currently adequate. Available evidence from comparable government and funding schemes and private market billing rates supports this.

The recommendations also consider the growing demand of NDIS participants claiming for therapy supports (17%) is being met to an extent by growth in the providers claiming for therapy supports (14%). There has been growth in several Therapy Professionals in the past few years, and further supply growth is anticipated in a number of therapists in the coming years which should assist with potential easing of workforce shortages that may exist in certain regions.

It is also evident that the therapy market is vast and diverse in nature as are the needs of NDIS participants. As the NDIS Review is currently examining non-price related solutions, the NDIA should consider structural changes to therapy pricing arrangements after any relevant recommendations from the NDIS Review.

Recommendation 6

The NDIA should not make any structural adjustment to the pricing arrangements for therapy supports at this time and should not index the price limits for therapy supports on 1 July 2023.

Recommendation 7

The NDIA should consider the structure of therapy support pricing arrangements after any relevant recommendations from the NDIS Review. This intends to better incentivise quality service provision to NDIS participants and create greater market efficiencies.

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Therapy supports

There were 173 submissions related to Therapy supports. These were received from all stakeholder groups including, providers of both therapy and other supports, plan managers and other workers/employees, participants and/or their representatives, provider peak bodies, professional bodies, an advocacy group, and a government organisation.

Providers

Many providers claim the hourly rate for therapy services has not increased for three years and the cost of living has increased significantly, resulting in a rise in operational costs, rising material costs, and other associated costs. Time spent on administration, audit and liaising with support coordinators, families, and carers of participants is under-costed, and administration costs around intake are high but not claimable. There is the added problem of staff shortages with ongoing issues in retention and recruitment across the labour market in general.

Some providers argued that they charge a higher price for NDIS participants than non-NDIS clients due to the greater complexity in assisting them. On the other hand, some claimed there is no difference between the rates charged to NDIS and non-NDIS clients. A provider stated:

Our pricing rates for NDIS participants is slightly higher when compared to non-NDIS participants $150 ph however does not consider travel and the increased complexity clients with disability versus private clientele.

Several providers who responded stated that they charge NDIS price limits for exercise physiotherapy is less than other comparable schemes and stated that the NDIS price limit should be increased in line with other types of therapies.

Varying responses were received from providers regarding the proportion of therapy revenue that is derived from NDIS compared to other funding sources, ranging from 5% to 100%. Many providers reported approximately 80-95% of their revenue comes from NDIS participants, however, there are some providers who reported lower percentages, such as 5%, 20% or 33%. Providers of children supports were amongst those that reported 100%, whilst a psychologist reported as little as 5-10% comes from NDIS funding. The range in percentages highlights the diversity of therapy supports and the different ways in which providers rely on NDIS funding to support their services. Other sources of provider’s funding include private funding, MBS, My Aged Care and iCare.

Provider Peak Bodies

A major submission on the pricing arrangements for therapy supports was received from Ability Roundtable. They provided a report from Deloitte Access Economics who, in partnership with 13 participating organisations, updated their Allied Health Cost Model. The participating organisations collectively represent around 20% of NDIS therapy supports revenue. It is important to note that the providers in this study have a significantly different cost structure to many other therapy providers, who are typically much smaller.

Their Cost Model (as at 31 December 2022) identifies the baseline costs of service delivery for therapy supports under the NDIS, with a particular focus on large clinical training organisations. The report also draws on data from the Ability Roundtable’s Allied Health benchmarking group. Figure 34 provides some detail of the cost modelling undertaken by Deloitte Access Economics.

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NDIA Board Meeting - 25 May 2023 - 9. Annual Pricing Review

2022-23 Annual Pricing Review

FIGURE 34: DELOITTE ACCESS ECONOMICS ESTIMATED COST PER HOUR OF ALLIED HEALTH SERVICES UNDER THE NDIS, 2021 (LEFT HAND SIDE) COMPARED TO 2022 (RIGHT HAND SIDE)

Source: Deloitte Access Economics estimates based on information provided by the 13 organisations surveyed

Notes: Four major allied health disciplines (excluding psychology) are the weighted average of social worker, speech pathologist, occupational therapist and physiotherapist. *2022-23 price limits are the calculated weighted average price limit for each group based on the location and allied health disciplines of organisations within the sample, using NDIS Pricing Arrangements and Price Limits 2022-23.

The key findings of the Deloitte Access Economics Report include:

At an overall level, the Cost Model shows that the fully loaded cost of service delivery in 2022 increased by approximately 3.7% for the four major allied health disciplines (excluding psychology) and 4.7% for psychology.
Labour-related costs increased by 15% for the four major allied health disciplines and 12% for psychology, primarily attributed to growth in wages and salary oncosts and investment in recruitment and training of new staff.
Overhead costs increased by 11% across all major allied health disciplines, primarily driven by growth in IT costs, HR costs and quality compliance costs.
To offset these impacts, providers found savings through operational efficiencies with improved utilisation rates, reduced spend on non-labour costs such as training and supervision, and back-office restructures.

Most providers surveyed suggest they are unable to break even as they are operating at costs above the current NDIS prices limits for therapy supports in 2022.

A peak body for early childhood intervention stated unfunded activities that are not billable include child protection referrals, involvement in subpoenas and family law court proceedings and mandatory reporting requirements.

Based on a small survey conducted by the National Disability Services (NDS), there are significant price gaps between NDIS price limits and the real costs of service delivery in various support categories. They mentioned:

The NDS State of the Sector (2022) report based on our Annual Market Survey shows that the past year has been a difficult one for providers. Operating conditions

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