March 2018
Submission to the Joint Standing Committee on the NDIS on Market Readiness
Joint Standing Committee on the NDIS: Market Readiness The Benevolent Society
Contact: Joanne Toohey Chief Executive Officer
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The Benevolent Society Level 1, 188 Oxford St PO Box 171 Paddington NSW 2021
- About The Benevolent Society The Benevolent Society is Australia’s first charity. We’re a not-for-profit and non-religious organisation and we’ve helped individuals, families and communities achieve positive change for over 200 years. Since our earliest days, we’ve been driven by a vision of a just society where all Australians live their best lives. We support people across the lifespan, delivering services for children and families, older people, women, people with mental illness, people with disability and through community development programs. In 2017, following the acquisition of disability support services from the New South Wales Government, we now have over 700 new staff providing disability services across New South Wales to approximately 7,000 clients. The Benevolent Society is now the largest provider of specialist clinical disability services in Australia, providing clinical services including occupational therapy, physiotherapy, speech pathology, behaviour support, psychology, dietetics and nursing. We also provide support coordination services.
Snapshot The Benevolent Society is a secular non-profit organisation with 1,615 staff and 658 volunteers who, in 2016/17 worked with 54,038 clients. We deliver services from over 60 locations with support from local, state and federal governments, businesses, community partners, trusts and foundations. Our revenue in 2016/17 was $108.5 million. In 2016/17 89% of our income came from government sources. The Benevolent Society is a company limited by guarantee with an independent board.
- Overview The Benevolent Society supports the National Disability Insurance Scheme (NDIS) as it is a vital reform to help people with disability to live their best lives. We accept that there will be challenges in rolling out a scheme as transformative as the NDIS and we want to work constructively with State and Federal governments to make sure that the scheme is a success. Given the scope and scale of the NDIS, it is not surprising that there is, and should be, scrutiny of its implementation. The challenges of the scheme have been well-documented through a number of high profile recent reports including the Joint Standing Committee of the NDIS’ Progress Report in September 2017, the Productivity Commission Report on NDIS Costs released in October 2017, and the recently released Joint Standing Committee on the NDIS’ Transitional Arrangements for the NDIS released in February 2018. These reports include a number of recommendations for Federal, State and Territory Governments and for the National Disability Insurance Agency (NDIA) on how to address the issues emerging from the NDIS trial-sites and roll-out so far. The NDIA has responded to these reports and recommendations in part by introducing a number of different pathways to improve the NDIS for participants. However, it is too early to judge the success of these measures. As a result, the Terms of Reference for this inquiry cover a lot of the issues which have already been discussed in detail in the previous reports and inquiries, and the findings and recommendations of those reports remain relevant to the current inquiry.
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Response to the Terms of Reference
a) the transition to a market based system for service providers;
The Productivity Commission noted that the shift in business model from block funded to fee-for- service will be challenging for many service providers.1 The Benevolent Society recognises that the transition to a market-based system will take some adjusting to. However, we have found that the way the NDIS has been set-up has contributed to some of the challenges being faced by service providers, rather than the fact that the NDIS is a market-based system. Many of the challenges that The Benevolent Society faces will not be new to the Joint Committee as they been raised and discussed in the previous reports mentioned above. We recognise that we are not alone in facing challenges with the implementation of the NDIS and note that a range of issues have been identified, some of which are universal and some which affect smaller or larger organisations differently. We have found that some administrative issues impede the smooth transition to a market-based system. As a large organisation working across several states and territories, we need to meet different registration requirements in each jurisdiction which is time-consuming and inefficient. Also, at present the NDIS portal only enables us to register our head office address, not the address of our other sites across the jurisdiction. As a result, when potential clients search for services in their area, The Benevolent Society does not show up in their search. In this sense, some of the NDIS processes are more geared to smaller, specialist organisations which operate in a single area or jurisdiction. However, the NDIS places both administrative burdens and financial strain on organisations which smaller specialist organisations are less able to manage. In our experience, larger organisations with broader portfolios of services who are not only reliant on NDIS clients for business, and who are able to carry some measure of financial risk are better able deal with the challenges of the NDIS. In any event, the challenges faced by both large and small providers is impeding the growth in the market and threatening to undermine the success of the NDIS. The Productivity Commission noted that ‘the scale, scope and capacity of providers will need to expand substantially’ to meet the emerging needs under the NDIS.2 However, National Disability Services (NDS) has found that business confidence is down, and only 58 per cent of disability service providers are planning to increase their services.3 The NDIS price caps are an issue for many providers who are finding it difficult to continue to deliver services safely at the prices set by the NDIA (prices are discussed further under d) below). For many organisations, it is just not financially viable to deliver the services to a level which complies with safety and ethical standards under the NDIS pricing structure. NDS has found that two-thirds of service providers worry they won’t be able to provide services at NDIS prices.4 Some providers are withdrawing from providing certain supports which are not feasible financially such as respite services, advocacy and planning. Another impact is that some providers
1 Productivity Commission 2017, National Disability Insurance Scheme (NDIS) Costs, Study Report, Canberra, October 2017 p.33 2 Productivity Commission 2017, p.32 3 National Disability Services (NDS) 2017, State of the Disability Sector Report 2017, p.3 4 National Disability Services 2017, p.3
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are ‘cherry-picking’ their clients and are avoiding accepting participants with complex needs leaving people with high-level needs unable to access the services they require. To be successful, the NDIS needs a diverse market of suppliers across Australia. At present, administrative and financial issues are deterring organisations from entering and/or growing their disability services, which is impacting on the growth and development of the market to support the NDIS. The Benevolent Society supports the Joint Standing Committee’s recommendation that state and territory governments facilitate and support the registration of providers during the transition period. 5 Further observations on the NDIS pricing structure as made below.
b) participant readiness to navigate new markets;
The consumer-directed NDIS system is based on the premise that exercising choice and control will deliver the best outcome for the individual, but choice and control is only effective if individuals are able to exercise that choice and control meaningfully. The capacity of people with disability to exercise choice and control to identify and access the services that best meet their needs is varied, and the support offered to help participants is mixed. Given that over 90,000 participants had an approved NDIS Plan at 30 June 2017, and the scheme is predicted to include 460,000 participants when fully implemented,6 it is to be expected that there will be a spectrum of participant readiness to navigate the scheme. The fact that trial participants were lower than expected when compared to bilateral estimates and only 76 per cent of committed supports were used in 2015-167 suggests that some people are having trouble navigating the system. That is certainly consistent with our experience. The Productivity Commission noted that participant readiness is determined by a number of factors: individual capacity; their network of formal and informal carers; assistance provided by the NDIS; how ready the market is to find supports; and the complexity of the scheme.8 The Benevolent Society also notes that accessibility of information and digital literacy is also an issue affecting participants’ ability to navigate the system. The NDIS is based on the assumption that participants can navigate the system digitally and electronically, which in many instances is not the case. The NDIS is also heavily dependent on written communication, which is not accessible for all people with disability. There is a long way for service providers and the NDIA to go to prepare and disseminate information in a wide variety of formats and modalities to ensure it is accessible for all participants. The planning process has been a major impediment to NDIS access and participation. The problems with the planning process have been well documented and include: the use of phone planning; participants not understanding that some ‘preliminary discussions’ were actually the planning discussion; inconsistencies and/or inadequacy of funded support in plans; difficulty in getting a plan review; and long timeframe for plan reviews when they take place. The Joint Standing Committee recognises that
5 Joint Standing Committee on the National Disability Insurance Scheme (NDIS) 2018, Transitional Arrangements for the NDIS, February 2018, Recommendation 14 6 Joint Standing Committee on the NDIS 2017, Progress Report, September 2017, p.6 7 Productivity Commission 2017 8 Productivity Commission 2017.
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the quality of NDIS Plans appears to be dependent on two main factors 1) the NDIS Planner’s knowledge and expertise; and 2) the level of advocacy families and NDIS Participants can undertake and their knowledge of the disability sector.9 It has been noted that participants supported by strong advocates tend to have better plan outcomes.10 The Benevolent Society is extremely concerned about the low levels of funding for advocacy and the decision by the New South Wales government to discontinue funding for disability advocacy, given the fact that people with disability require ongoing support to navigate the NDIS. When participants get a plan some are not sure what to actually do with the information, and they often get put away in a drawer and forgotten about, which is reflected in the rates of utilisation. Many of our clients have not actually been into the portal to access their plan.
Case study one: Difficulty navigating the system
We have a client family with two plans that were issued in May 2016 but they did not access a service until December 2016 due to the complexity of navigating the system and accessing supports, including psychosocial supports for a child in the family.
Even for participants who are successfully allocated a plan, managing the plan requires ongoing skill and attention which some participants may not have the experience or capacity for. Understanding what the plan provides can also be a challenge, with many participants, who have not previously had to deal with the financial aspects of services, shocked to see the actual costs of the supports they receive. Support coordination is important to help participants with varying capabilities to manage their plan. However, we have seen massive inconsistencies in how support coordination is allocated in participants’ plans. We also note that where plans have been updated or reviewed, allocation for support coordination has been decreased in the subsequent plan. In our view, the need for support coordination does not diminish even though a participant may have been a party to the scheme for some time. The need for support coordination is ongoing, particularly given the scheme is constantly changing and evolving.
Case study 2: Inconsistent and inadequate support coordination
The Benevolent Society has one client Jane*11 whose plan includes $7,000 for support coordination and only $4,000 for services to assist ‘improved daily living’ which is where she needs the most support. In comparison, another client Barry, uses a wheelchair and has severe mental health issues and will need significant support to coordinate his services needs and implement his plan. Barry’s plan includes $90,000 for services but only $1,000 for support coordination.
The Benevolent Society, like other organisations, is looking forward to the outcomes of the NDIA’s new pathways to improve the experience of participants with the NDIS. Whilst a lot of discussions so far have focussed on improving the planning process (which is absolutely necessary), to improve participant readiness, The Benevolent Society also encourages:
9 Joint Standing Committee on the NDIS 2018, p.39 10 Joint Standing Committee on the NDIS 2018, p.40 11 * Pseudonyms have been used instead of clients actual names
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greater focus on accessibility of information on the NDIS for participants, including use of multi-modal information for participants; continued funding for disability advocacy services; consistent and continued funding for support coordination in participant plans. The Benevolent Society also supports the Joint Standing Committee’s recommendation that the NDIA ensures support coordination is adequately funded in plans to meet participants’ needs and not limited to a fixed period (Recommendation 21). 12
c) the development of the disability workforce to support the emerging
market;
It is well documented that that there will be workforce pressures across the sector to support the full roll-out of the NDIS. The NDIS workforce will need to more than double from 2014-15 to 2019- 20, which means the NDIS will need about 70,000 additional disability support care workers (or about 1 in 5 of all new jobs created in Australia over the transition period).13 NDS notes that the ‘disability workforce isn’t growing fast enough, demand for services will outpace market supply – impeding …the scale of organisational change required’.14 The median age of the sector workforce is also an issue, as there isn’t a steady stream of workers coming through to replace workers approaching retirement age. Service providers also need to continue to engage with their workforce to ensure that older workers are provided with opportunities to keep working in the sector if they wish to do so. Governments at all levels should be doing more to grow the disability sector workforce, targeting new graduates and people in traditional areas of employment which may be threatened by increasing automation who may be willing to retrain into the disability sector. However, the promise of the sector for those looking for work is being undermined by the increasing casualization of the workforce which is acting as a deterrent to attracting more staff. Staff generally do not favour casualization as it means they lack certainty and stability in their hours and income from week to week. A casual workforce is also not ideal from a provider perspective as it impacts on relationships between workers and clients which rely on trust and continuity. Training a large pool of casual staff is also a big investment for service providers. Notwithstanding it is an important issue, the issue of workforce development has not been addressed in great detail in the recent reports on the NDIS. The Productivity Commission’s detailed report on NDIS Costs only provides general recommendations around clarifying the roles of State and Federal governments relating to workforce issues and adjusting immigration policies to address NDIS workforce shortages. The Benevolent Society would like to see more robust debate and more concrete policies put in place to address the issue of attracting and retaining adequate staff to address the growing needs of the NDIS.
12 Joint Standing Committee on the NDIS 2018 13 Productivity Commission 2017, p.32 14 National Disability Services 2017, p.3
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d) the impact of pricing on the development of the market; The impact of the NDIS pricing caps on the development of the market has also been widely discussed in various recent inquiries and reports. The Joint Standing Committee has already noted that many service providers are of the view that the current NDIS pricing caps have potential to negatively impact on the capacity for providers to deliver quality services. 15 NDS reports that two-thirds of service providers worry they won’t be able to provide services at NDIS prices.16 The Productivity Commission has also been quite critical of the NDIS price caps, stating that prices should be regulated as narrowly and for the least time possible; should be more granular set at the state and territory level; evidence based; supported by clear and limited legislative authority.17 The Benevolent Society believes that the current prices under the NDIS are insufficient to cover the reasonable costs of providing the services. This is having several effects. Service providers are bearing the costs and resultant losses, in the expectation that they can cover the losses until the NDIS prices become more reflective of the actual costs of delivering the services. Although, as noted, this is only possible for larger service providers with diverse service portfolios who can carry some degree of financial risk. This is not a feasible option for smaller providers who are reliant solely on the NDIS. The price caps pose ethical dilemmas for practitioners in the sector because it is difficult to withdraw necessary services from vulnerable clients on the basis that the services are not covered, or are not adequately, covered by their clients plans, but providers cannot continue to provide services to clients which are not funded. Essentially, at present the NDIS is operating on the back of the good will of service providers. Everyone is committed to ensuring their clients are safe – but there is a limit to how long providers can and will continue to do this. The other issue with pricing caps is that there is no way for participants to differentiate services based on quality, or no incentive for providers to provide top notch service (other than professional standards, reputation and ethics). Presently, participants can get a gold standard service or a sub- standard service for the same price and given there is little information around about the standards and quality of service providers available to participants, it would be difficult for some participants to identify the difference. The Benevolent Society isn’t the only organisation raising concerns about the NDIS prices. NDS reports that low NDIS prices and uncertainty about financial sustainability are amongst the key concerns of disability service providers.18 It also found that fifty percent of service providers agree or strongly agree that they will have to reduce the quality of their services due to NDIS prices, and that sixty per cent of providers want NDIS prices which are aligned with the actual cost of supply.19
15 Joint Standing Committee on the NDIS, 2018 16 National Disability Services 2017 17 Productivity Commission 2017 p.33 18 National Disability Services 2017, p.15 19 National Disability Services 2017, p.21
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The result of the pricing issues is that service providers are either looking to discontinue some service types, or looking to get out of the sector altogether. The prices for supports such as personal care, social support, community participation, are particularly low. There is a shortage of suppliers of social supports because there is insufficient funding and the apparent expectation that these services will be provided by organisations for free. The impact of a lack of social support services would be devastating as social support is critical for people with disability, it is what improves their participation in the community and is a fundamental aspect of helping people with disability to live their best lives. The Benevolent Society notes the Productivity Commission’s observation that ‘while the price- setting mechanism is held within the NDIA, there is an incentive for it to be used to offset budget pressures’, and its recommendation that prices should be set by an independent body.20 The Benevolent Society welcomes the findings of the Independent Pricing Review conducted by McKinsey & Company. We are pleased that the NDIA has agreed in principle to all of the recommendations. Whether the overall impact of the recommendations will be enough to prevent price factors limiting the expansion of the market remains to be seen. The Independent Pricing Review reminds us that once the NDIS reaches maturity, it is intended that the market itself will set the price of supports, and it recommends trialling price deregulation in one geography or support type market.21 The Benevolent Society notes that when the price caps are removed, competition law issues which have not played a major role so far (while prices remain regulated) will be highlighted within a sector that has historically had little to do with this complex and technical area of the law. To ensure that the sector in general, and the service providers in particular, do not inadvertently breach competition law we recommend that the NDIA undertakes education for the sector on competition law relevant to the disability services sector alongside any such trial and well in advance of the removal of the price caps. This will ensure that service providers are trained to consider their activities not just commercially but also through this particular lens.
Travel costs
One of the specific NDIS prices which The Benevolent Society has repeatedly raised concerns about is travel costs. NDIA needs to address travel costs for service providers working in remote and regional services to ensure that providing services in these areas is economically viable and contributes to, and does not impede, market growth in regional and remote communities. Currently, The Benevolent Society absorbs some of the costs associated with travel to our clients in remote regions. Whilst this undermines the economic viability of providing the service, as a large not-for- profit organisation we are able to bear the costs for the good of our clients. But covering these costs long-term is not sustainable. The inadequacy of travel costs may be a deterrent for other organisations joining the market to service regional and remote clients.
Case Study 3: Insufficient travel costs The Benevolent Society provides services to a child with complex needs within a family whose needs are also very complex. The family have been unable to find a service provider in their area who can provide the support they need, so The Benevolent Society makes a 230 km round trip to support the family. Under current criteria, the annual travel claim cap would be exhausted in 3 visits but there are no other organisations nearby that can
20 Productivity Commission 2017, p.34 21 McKinsey & Company 2018, Independent Pricing Review, February 2018
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meet the family’s needs or which the family wishes to work with. As the travel costs cap is exhausted after three visits, The Benevolent Society must bear the travel costs for additional visits.
The Benevolent Society supports the Joint Committee’s recommendation that the NDIA review its operational and funding guidelines for travel to ensure NDIS participants needs are met.22 We would also like to ensure that the costs to providers are also considered in NDIA and independent reviews of NDIA pricing guidelines, particularly for travel. The Benevolent Society welcomes the recommendations in the Independent Pricing Review relating to travel costs (which includes providers able to charge for travel up to 45 minutes and allowing service providers to quote for services in isolated regions). Again, whilst welcome, whether these measures are enough to make service provision in remote areas financially viable, and whether they will contribute to growth in the market remains to be seen.
e) the role of the NDIA as a market steward; The role of NDIA as the market steward does not sit easily. NDIA has the joint role of establishing and overseeing the implementation of the scheme, whilst also trying to develop and regulate the market. The issue of pricing discussed above is a good example of NDIA’s competing roles, the NDIA sets the price for services, but those prices are seen by many as impeding the growth of the market which the NDIA is charged with developing. The Productivity Commission recommends to bolster market stewardship through better collaboration, among government, providers and the NDIA. The Benevolent Society would go further and encourage the NDIA to improve its communication with participants and providers. One of the key challenges that we face is getting clear and consistent advice from the NDIA. Often there is nobody to contact to discuss and actually work through our issues with, and if we do manage to get advice from the NDIA, we are likely to get different or conflicting advice from another representative in a subsequent discussion. Some of our clients also have trouble getting advice from the NDIA, or in some instances getting any information from their Local Area Coordinators in a timely and effective manner. The lack of communication around telephone planning, the confusion it caused participants and the impact it had on plan quality has already been well documented. The difficulties working with the NDIA to get plans reviewed has also been highlighted in a number of recent reports. We also have examples where funded supports have been reduced in plans without any notification to the service providers, which causes a range of problems for us. The Benevolent Society’s staff get frustrated trying to navigate the system with limited assistance from the NDIA, and we see the frustration in our clients who are also struggling to navigate the system with little consistent information. We can only imagine how difficult it is for some hard-to- reach participants, and for participants with complex needs with limited support, to make sense of the scheme.
22 Joint Standing Committee on the NDIS (2018), p.xi
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f) market intervention options to address thin markets, including in remote Indigenous communities;
The Joint Standing Committee recognises that thin markets will persist for the following groups of participants: people living in rural and remote areas; people with complex or very challenging behaviours; people experiencing homelessness; people involved with the criminal justice system; people from CALD backgrounds; and Aboriginal and Torres Strait Islanders. 23
The Joint Standing Committee recommends that the NDIA develop and publically release a strategy to address thin markets, but does not articulate what this may include. In providing advice on approaching thin markets to the NDIA through this review, we encourage the Joint Standing Committee to consider the following: a) adequately cover and reimburse travel costs to ensure these costs aren’t an impediment to providers operating in rural and remote areas (see full discussion of travel costs above);
b) in addition to standard responses such as block funding, we would encourage exploration of
innovative models and for the NDIA to think outside the square to address these long-
standing issues. We would like to see approaches that build the capacity of local individuals
and organisations, and which incentivise cooperation and collaboration between
organisations; and
c) strategies to attract and retain indigenous staff to disability service providers, to build the
capacity of Aboriginal and Torres Strait Islander organisations, and to encourage partnership
arrangements between indigenous and mainstream organisations to facilitate service
delivery which is culturally appropriate for Aboriginal and Torres Strait Islander people with
disability.
h) the impact of the Quality and Safeguarding Framework on the development of the market;
The Benevolent Society supports the principles which underpin the national Quality and Safeguarding Framework, as we understand that it is important that scheme participants receive the same quality of services and level of protection no matter where they live.
We note that during the transition, existing state and territory quality and safeguarding arrangements and the NDIA terms of business for registered support providers are being used. As a provider that works across several jurisdictions, The Benevolent Society is concerned that confusion and inefficiencies may result from managing compliance with existing state based and new national based compliance requirements and this confusion and inefficiency will remain until the system is standardised nationally. In effect, it is placing another administrative burden on organisations which work across jurisdictions given there are already different NDIS registration policy and practices in
23 Joint Standing Committee on NDIS 2018, p.65
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each state. These administrative issues act as a potential impediment to service providers expanding their operations beyond their existing jurisdictions, potentially limiting the development of the market.
The pressures of delivering NDIS services under existing price structures has already been discussed above. Organisations already struggling with the financial sustainability of their existing NDIS services will not be able to afford additional compliance costs within the current funding model. Ensuring that the costs of complying with the Quality and Safeguarding Framework are not a disincentive to current and potential new service providers will be crucial to ensuring that the Quality and Safeguarding Framework does not have a negative impact on market development.
[Handling note: Items g) and i) are grouped together as they both concern issues relating to housing and accommodation]
g) the provision of housing options for people with disability, with
particular reference to the impact of Specialist Disability Accommodation
(SDA) supports on the disability housing market; and
i) provider of last resort arrangements, including for crisis accommodation;
and
The shortage of general housing supplies for people with disability is a longstanding issue, and the problem becomes more acute for people requiring accommodation in times of crisis. Housing affordability is also an issue, as people with disability are often on very low incomes. The NDIS is not responsible for the provision of housing, but has started to include Specialist Disability Accommodation (SDA) in some participants plans, which is for the dwelling itself, and not to cover support costs which are covered by the NDIS (such as Supported Independent Living (SIL)).
However, in some areas of New South Wales accommodation supports for clients have broken down and NDIA is not accepting requests for help with accommodation. In some areas NDIA is often refusing to accept SIL quotes for clients with very high support needs. There is also a real gap in assistance for people coming out of custody who need help finding appropriate accommodation.
The Productivity Commission’s report on NDIS Costs and the Joint Standing Committee’s report on Transitional Arrangements for the NDIS outline the concerns raised with the lack of clarity on provider of last resort arrangements, including for crisis accommodation. The Joint Standing Committee recommends that the Australian, State and Territory governments urgently work with the NDIA to include crisis accommodation and Provider of Last Resort arrangement for housing in their respective bilateral agreements and operational plans (Recommendation 9).24
The Benevolent Society supports this recommendation. We have seen that there is currently no overall agreed, coordinated plan for participants when their placements or supports break down. Plans do not have built in flexibility so that providers cannot respond quickly to unforeseen situations such as an unexpected change to caring or living arrangements, or additional needs following a hospital visit. In times of crisis, service providers may deliver supports which are unfunded which involves financial risks to the organisation, but also ethical risks for practitioners. In
24 Joint Standing Committee on the NDIS 2018
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cases where a participant’s plan may cover the required emergency services, responding to the crisis may use up all of the allocated funding and not leave enough funds for ongoing support.
The Benevolent Society believes that there is a need for inbuilt flexibility in plans and an urgent need for more coordinated, holistic and proactive approach with participants, carers, and providers so there is a process to address crisis accommodation needs in each location.
j) any other related matters.
The Benevolent Society would like to see the NDIA provide funding for research and innovation. Practitioners in the sector and service providers are always looking for ways to deliver services for people in more efficient and effective ways. We would like to see the NDIA support these efforts with funding.
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