Impacts on Viability and Ability to Help Vulnerable People Achieve Better Quality of Life | External submission

Whole Family Health

382 Great Western Hwy, St Marys NSW 2760 — parking and entry via Sainsbury St (at rear) theteam@wholefamilyhealth.com.au — 02 9833 3363

RESPONSE TO PROPOSED 2018-2019 NDIS PRICE GUIDE

Impacts on the Viability of our Service and Ability to Help

Vulnerable People Achieve Better Quality of Life

Business Description:

We are a family-owned multidisciplinary allied health practice that opened in St Marys, NSW in 2017 in response to the introduction of the NDIS. We chose the low socioeconomic area of St Marys for our location because we passionately believe that where you live shouldn’t determine the quality of service that you can access, and we understand that the historical economic impacts of disability mean that a large number of people with disabilities live in areas like ours.

Our current range of services includes physiotherapy, occupational therapy, speech therapy, psychology, counselling, hydrotherapy, animal-assisted therapy and plan management. We have several other registration groups pending our recent Third Party Verification audit.

In fitting out our practice, we invested in innovative, world-class facilities, including suspension equipment for early childhood early intervention, class 4 laser, underwater treadmill, hyperbaric oxygen chamber and whole body vibration units.

We have attracted a superior team of allied health professionals; many of our staff have two or even three university degrees. We have invested heavily in further developing our staff’s professional skills to ensure that we can continue to innovate in the services we provide and respond to the changing needs of our clients.

We have submitted two applications for the Disability Sector Scale-Up Grants to further innovate by installing a therapy pool and therapy truck — we are committed to supporting, long-term, people with disabilities and their families, both in our community and beyond.

We presently employ 29 people and serve over 100 NDIS participants. Until the release of the proposed 2018-2019 NDIS Price Guide, we were planning to continue to rapidly expand our services to help as many families as possible.

Should the Price Guide be implemented as proposed, we will suffer a 37% cut in fees for the majority of our services. As we operate at less than a 7% profit margin (on a good month), our service will become unviable, risking the employment of 29 dedicated, hardworking individuals and the quality of care of over 100 NDIS participants. The impacts this would have on the families of our staff, participants and owners would be devastating.

IPR Premises and Rebuttal:

That fees for “comparable” schemes are adequate for the services provided to NDIS participants:

The DVA fees for allied health standard consultations have not been increased since 2013. In the intervening 5 years, wages and rental costs have increased and inflation has also increased other business costs.
- Wages have increased by 17% under the MA000027 Health Professionals and Support Services Award 2010, from $42.55 per hour (plus superannuation and leave loading) for an experienced physiotherapist on the top award rate in 2013 (http://paycheck.fwo.gov.au/PayCheckPlus.aspx?redirect=no) to $51.46 now (https://calculate.fairwork.gov.au/CheckPay/Summary). These increases in wages don’t even factor in that, with each year of experience, therapists progress up the pay scale levels; the true increase in wages costs is actually much higher.
- Commercial rental agreements typically include a 4% or CPI increase per year, whichever is higher. Our current rent (including GST) is $11,500 per month, meaning it would have been $9,200 per month when the DVA prices were set.
- Inflation was 7.4% between 2013 and 2017 (most recent year available) according to the Reserve Bank of Australia (https://www.rba.gov.au/calculator/annualDecimal.html).
- In 2013, when the DVA fees were set, our business at the time charged $88 (including 10% admin fee) for a standard physiotherapy consultation (https://www.dss.gov.au/our-responsibilities/disability-and-carers/program- services/for-people-with-disability/better-start-for-children-with-disability- initiative/service-providers/the-collier-turner-consortium) which was not only higher than the current NDIS rate, it was also 39% higher than the current DVA fee (https://www.dva.gov.au/sites/default/files/files/providers/physio.pdf).
- By 2015, when the NDIS was introduced in our area, our business at the time charged $96.25 for a standard physiotherapy consultation (https://www.dss.gov.au/our- responsibilities/disability-and-carers/program-services/for-people-with- disability/better-start-for-children-with-disability-initiative/spring-forward-family- centre) or 52% higher than the current DVA fee of $63.30 for a standard consultation.
- Additionally, NDIS clients do not fit well into the standard appointment lengths that DVA clients do. As a general rule, we argue that an injury can be treated in a shorter consultation time than a disability, even though only one body part may be “disabled” or “injured”. It is therefore common for DVA clients to be treated in 20- minute consultations, but NDIS participants in 30-minute or one-hour consultations. This converts the DVA physiotherapy price to $189.90 per hour.
The SIRA fee for a standard physiotherapy consultation in NSW is equivalent to $239.10 per hour ($79.70 each) or 36% higher than the current NDIS rate.
Even the Medicare rebate for allied health services provided under Chronic Disease Management Programs (which has been frozen at $52.95 per standard consult for many years) equates to $158.85 per hour, but practitioners are allowed to charge a gap to match their standard rates, rather than provide their services at a loss.
The reality is that services for clients with a disability take longer to provide than those with an injury. Things like transfers in and out of cars or wheelchairs for those with physical disabilities or transitioning from one activity to another for those with disabilities like autism all take therapists extra skill and time compared to most of the conditions covered by the DVA, SIRA or Medicare fees. This means that fewer consults can be carried out per hour, making schemes like DVA and SIRA more profitable than the NDIS.
Conclusion: this premise is false. The reality is that other scheme fees have been underquoted in the IPR and have been too low for at least the two decades that our owners

have been working in the field and that it is common practice for practitioners to discount their fees for such clients.

Although this is feasible in practices that have a large number of self-funded or private health insurance clients, purpose-built disability practices like ours do not have the ability to share the burden of the scheme across other client types.

That it is feasible for practices like ours to remain viable with a 37% cut to the fee for our most common services:

We purpose-built our disability-specific facilities based on feasibility models derived from the 2015-16 Price Guide under the reasonable assumption that the fees for our most common clients would remain reasonably static or rise with CPI.
Our practice hasn’t been open for a year yet, meaning that our debt levels are still too high to be able to absorb any reduction in fees per service.
Our set-up costs have been a lot higher than those of a regular practice that treats DVA or SIRA clients. We have invested in innovative, disability-specific equipment including:
- $15,000+ for suspension equipment;
- $5,000 for a neurological plinth;
- $2,500 for a tilt table;
- $1,800 for a hoist;
- $18,000 for a hyperbaric oxygen chamber;
- $26,400 for a class 4 laser;
- $104,000 for an underwater treadmill.
We also have higher costs in the assessment of our clients than those of other schemes. For example, a standardized assessment that is used to evaluate autism cost us around $5,000. In opening our practice, we spent around $20,000 on standardized assessments and we have ongoing costs to administer these assessments as we need to purchase new record booklets for each person assessed.
The ATO benchmarking app (https://www.ato.gov.au/Business/Small-business- benchmarks/) puts our expenses at 93.8% of turnover, which is higher than the industry average of 71-84% (https://www.ato.gov.au/business/small-business-benchmarks/in- detail/benchmarks-by-industry/health-care-and-personal-services/physiotherapy- services/).
A profit margin of less than 7% does not leave room for saving for contingencies like the Christmas close or equipment failure, let alone a drop in income of 37% on our most common service.
The ATO benchmarking indicates that the ratio for wages to turnover for businesses our size in our industry should be 39-50%. Ours is 73% and we only pay award wages. This means that we are operating an incredibly lean business model and clearly shows that we do not have the capacity to absorb a 37% cut in income.
The ATO benchmarking also indicates that our rent to turnover ratio should be in the range of 7-10%. Ours is 14%. We took on an expensive lease for a large facility because we are dedicated to providing world-class therapy to members of the community whose lives are impacted by disability.

Conclusion: this premise is false. Our service will immediately become unprofitable. We will not be able to afford to continue providing services to NDIS participants, despite this being the main reason we opened in the first place.

That lower fees will enable providers like us to attract and retain experienced, skilled, innovative staff:

The proposed fees make no differentiation between physiotherapists, speech pathologists and occupational therapists with a 4-year undergraduate degree versus those with additional Masters and even PhD degrees. Our team has 9 Masters and 1 PhD degree between us.
Although our highly-skilled team currently works for award wages, several have reduced their hours from full-time to part-time to take roles with higher pay rates so they can afford to keep working with us. Over time, we will not be able to retain these highly skilled staff if we don’t pay above award.
We need to invest in the professional development of our staff if we are to continue innovating and will not be able to afford to pay for courses and workshops if our fees are reduced.
We also need to supervise and mentor our junior staff so that they gain the appropriate skills and experience to deal with the complexity of our participants’ cases. This means that, effectively, we have to pay more than one staff member to do one staff member’s job. It therefore ends up being more expensive to hire less experienced staff than ones that can work independently.
At the proposed fee of $110/hr for Tier 1 participants, we are required to pay our most experienced therapists 51%, i.e. more than the ATO industry benchmark of 39-50%. The IPR has recommended increasing some prices in order to get more experienced and skilled staff, yet by reducing fees to levels that are actually lower than SIRA or DVA fees, the regulators are ensuring that experienced staff with multiple degrees aren’t affordable for employers.
Our team could have all chosen to earn better money in a private practice in a better socioeconomic area, but we all passionately believe that it’s the right thing to do to make gold standard facilities and staff available to those doubly disadvantaged by disability and demographics.
Conclusion: this premise is false. We will be locked in a cycle of new graduates who will be of increasingly poor quality as experienced staff who could otherwise provide mentoring move on to more highly paying jobs.

That reducing the fees for psychological services at practices like ours will allow us to continue to provide this service:

Although the proposed drop to $160/hr for a registered psychologist is a smaller drop than that for our other services, it is still a reduction that we can’t afford. It has proven particularly difficult to attract psychologists to our area, even though the demand for psychology is high.
Conclusion: this premise is false. The same reasons apply as for the premise above.

That scrapping the current travel calculator and yearly cap will make travelling to participants more viable:

Although this would appear, on the face of it, to be an improvement, more information is required:
- Is the new fee going to be at different rates for different participants’ levels of complexity?

Is there going to be a new cap introduced?
Does the wording of “up to 20mins of travel between participants” mean that return journeys to the practice will not be covered?
We would encourage the regulators to consider that, even in metropolitan areas, long commutes can occur. These can be due to:
- Traffic;
- Children requiring school visits at Special Purpose schools more than 20 minutes from the practice.
- Conclusion: more information is needed.

That “increasing” cancellation fees to 90% of the new (lower) therapy rate if the cancellation occurs after 3pm the day prior to the appointment will improve service viability:

Although the recognition that appointment cancellations have a significant impact on the viability of services like ours is a huge improvement to the current funding model, the proposed solution doesn’t necessarily solve the problem. For example:
- Most of our participants’ cancellations occur before 3pm and, with the current cap of 2 hours per year scrapped, our service would be worse off under the new system;
- The participants we help tend to cancel because they have long-lasting flare ups or prolonged admissions to hospital as a result of their disabilities, meaning that they may have to cancel several consecutive appointments, but we would only be able to apply the new cancellation fee to the first and only IF they advised us after 3pm the day before.
- Although the IPR rightly points out that these cancelled spots could be filled by other participants, this is actually quite difficult to do because:
  - many participants have other appointments to attend;
  - it is more difficult and takes more time for most participants to travel to appointments, especially those made on short notice;
  - many of our participants have an autism spectrum disorder which makes it particularly difficult for them to cope with changes to routines and attend unexpected appointments.
If providers aren’t allowed to charge cancellation fees as per most service industries (e.g. within 24-48hrs) then there is a risk that they will refuse to work with participants who need to cancel a lot of appointments, because the economic impact not being paid for cancelled services risks their business’ viability.
Conclusion: more information and consideration is needed. We are not optimistic about this well-intentioned premise.

That the changes to reporting will improve the system:

The current system allows reports to be written at the standard rate of $175.57 and the proposed tier system would mean that different reports are written at different rates, unless a new, standardized “report rate” was introduced. We know of no other profession that charges different clients different rates for the same activity – more complex reports take longer to write; having them written at different rates would only result in “two bites of the cherry” and increased administrative complexity which would make it even more expensive to provide services.

If reports are only to be submitted “as required by the NDIA”, it raises the possibility of mismanagement should a LAC or planner choose not to require a report when a plan is due for renewal. The current system ensures accountability by requiring reports every 6 months; it is easy to determine if goals have been achieved or if there have been barriers to treatment that mean that funding should be extended for the next plan.
At present, providers can bill for reports written to support participants seeking an unscheduled review of their plan. If the providers are not allowed to charge for reporting unless it is required by the NDIA, participants face going in to reviews without the documentary evidence they need to advocate for the funding they need.
In our case, we commonly have participants approach us close to the expiry of their plans, asking us to assess them and write reports because they have been unable to access services prior to their plan ending. These participants wish to provide evidence for renewed funding and an explanation of barriers to treatment, but the proposed changes would not allow this unless specifically requested by the NDIA. Should budgetary constraints need to be made, it is possible that the NDIA would not allow such reports to be written.
Conclusion: this premise is false. Rather than improve the system, it opens opportunities for the rights of NDIS participants to be abused.

That providers can utilize workers at 90% or above and spend as little as 3-5 minutes per hour writing clinical notes:

The industry standard for allied health therapists working in disability is closer to 75% utilization. Significant time is required to prepare for sessions as treating even the most simple disability is more complex than treating people who don’t have a disability. There tends to be more variation from planned treatment each session when treating someone with a disability than someone without.
As a result of the complexity of work in disability, therapists tend to take closer to 5-10 minutes per hour of therapy to write their clinical notes and spend more time in case conferences planning multidisciplinary care than we do when working with people who don’t have a disability.
Compassion fatigue is another important consideration for therapists working in the disability sector. Staff need time to debrief, recharge and pace themselves so they don’t burn out.
Conclusion: this premise is false. Utilizing workers above 75% leads to burn-out which, in turn, destabilizes the workforce serving a group of people who very much rely on stability and predictability to manage e.g. their symptoms of autism, and to ensure that goals are met without having to take time to build rapport with a new therapist.

Other considerations:

Although we are a “for profit” practice, we are not in it “for the money”. We are in it for the love of helping families affected by disability achieve the very best possible quality of life. We are in it because we care and want to help our society become more equitable and inclusive. We are in it because we understand that increased participation in the community of people with disabilities and their families results in:

Lower long-term costs for the government (due to increased skills and resulting independence);

A stronger economy as participants are able to achieve things they couldn’t before the NDIS, including getting a job, paying taxes and spending money at local businesses that they previously couldn’t access.

Further, practices like ours charge at the maximum rate allowed in the current Price Guide because that is what it costs us to deliver our services. When allied health team members like ours have typically spent far more time at university and help members of our society far more profoundly than most other professions, why should we not be able to be remunerated to at least the same standard? For example, a typical call-out fee for a plumber is estimated at between $75- $95+GST and an hourly billing rate applies at approximately $130-$140+GST (https://www.plumbingcosts.com.au/how-much-do-plumbers-charge-1)). Mechanics are billed at approximately $150 per hour (http://www.mechanicbuddy.com.au/mechanic-work-what-you-can-expect-to-pay)), while the average cost of a lawyer is approximately $350 per hour (https://www.gotocourt.com.au/legal-news/how-much-will-a-lawyer-cost/)). Why should allied health professionals be paid less than other service industry workers like mechanics, plumbers and lawyers?

One of our biggest concerns about the recommendations is the potential for inequity created by classing participants into three different levels of complexity of physical disability and two different levels of complexity of cognitive disability. The economic reality of having fees for therapy cut is that practices will need to prioritise those clients for whom they can earn the highest possible fee in order to break even. The current system of having the same fee for all levels of disability retains equity while also ensuring that those with higher needs receive more — their plans simply have more therapy hours funded and there is no reason to swap from this system to the proposed one, other than to save money and pit therapists and participants against each other.

The separating of participants into levels 1, 2 and 3 also seems to assume that each provider only sees one “type” of participant for the majority of sessions — the logic seems to be that people with higher needs pay more because they cost more to treat. So in our case, we have ensured we have the highest possible quality service and have bought the best equipment necessary for providing therapy to people with level 3 disabilities. Under the new system, only people classified as level 3 would actually pay for that service and facilities (albeit at lower than market rates, as explained above), but people classified as level 1 or 2 would still benefit from it — if such equipment and expertise is in the building anyway, the level 1 and 2 participants get to benefit from it without paying as much for it. This is another example of the discriminatory nature of the proposed changes that are bound to be challenged legally should the current plans be implemented.

Further, who will get to decide which level a participant belongs in and what will their qualifications be? Will the NDIS pay the same or different rates for both therapies? Has the IPR considered those participants who might be at one level physically and another level cognitively? Or, more complicated still, those participants with Autism Spectrum Disorders who have two different levels of disability according to the DSM-V criteria? How will “multi-level” participants be funded and how will the impacts to administrative time (and therefore costs of providing services) be managed?

By creating a hierarchy of Levels of disability, there is effectively a disincentive created to get participants to achieve good results. For example, some of the children we work with would qualify as Level 2 when we meet them, but as the result of therapy, they would drop to a Level 1, because their behaviour improves so much. However, disability is a very dynamic thing in children and with less funding in their following plan, it would be easy for them to regress or have their behaviour symptoms relapse if they had their supports removed.

The hierarchy of Levels of disability also ignores the fact that we put the same degree of effort into our Level 1 participants as we do our Level 3s. We still have to prepare materials for the therapy session, no matter the Level of disability; we still spend countless unpaid hours advocating for them; we still need to research a rare disability whether it results in less or more complex levels of disability; we still need to discuss their cases as part of providing multi-disciplinary therapy to them, regardless of the complexity of their disability.

We have received suggestions that we diversify the type of client we see at our practice, to help minimise the impact of the proposed changes on our viability. However, we are a purpose-built disability-specific practice that is located in a socioeconomically disadvantaged area. We chose our location because people with disabilities have historically had lower rates of engagement in the paid workforce and we wanted them to be able to easily access our service. Other funding models, e.g. the Better Start Initiative, have been phased out of our area when the NDIS was rolled out, and getting a Chronic Disease Management Plan only provides them with 5 sessions of therapy a year — nothing that will make a long-term difference to their quality of life. Without the option of diversifying our funding, we would need to try diversifying the type of patients we treat. However, our set-up is disability-specific, so we would need to invest in “non-disability” equipment to diversify our market — something we can’t afford to do at such short notice if we are earning 37% less on our most common service.

As a disability-specific practice in a low socio-economic area, the vast majority of our participants are agency managed. This means that it’s not possible for us to charge genuine market rates by seeing more people with self-managed plans — most of our participants are poorly educated, have limited financial literacy and are already overloaded with the number of appointments they need to help manage their disabilities, to be able to entertain the thought of swapping to self-managed.

The Six National Disability Standards

Early in March, our team undertook Third Party Verification against the National Disability Standards, a process which cost us over $5,000 in auditing fees. We fail to see how the proposed changes comply with the Standards.

Rights
- Participants have the right to choice and control over their lives and plans. By cutting therapy fees, the NDIA will be reducing choice and therefore control for participants around the country.
- Participants also have the right to live a dignified life with the very best quality of life possible. Several of the participants we serve haven’t had therapy for 15 to 20 years prior to the NDIS rolling out. They were largely unemployed and unable to live a fulfilling life. Their parents were worried about what would happen to them when the parents die. Now, however, even in the short amount of time they’ve been having therapy, they are working towards plans to get a job and live a healthier, more fulfilling lifestyle. These participants have the right to achieve these goals.
Service Management
- Participants have the right to access well-managed services who provide transparency as to their processes. We are doing this daily for our participants, yet the fundamental methodology of the IPR has not been transparent. The reality is that the “comparable” schemes are not comparable, due to the enormously different client

populations, and the hourly rates derived have been underestimated, generally by one-third.

Service Access
- ALL participants have the right to be able to access high quality, evidence-based therapy services that don’t favour one participant over another. Yet, by creating different classes of participants based on the “severity” of their disability, it is going to be much harder for participants with a lower classification to access services as easily as those with higher paying disability classifications. Further, if the choice of providers shrinks due to many businesses becoming unviable, participants will have even more difficulty accessing services. Typically, people with “less severe” disabilities have the most potential to become tax-payers. If they can’t access services to achieve that potential in the first place, the feasibility of the NDIS will be ruined.
Participation and Inclusion
- ALL people with disabilities have the right to participate in meaningful lives. The NDIS has, until now, given them support to achieve a better quality of life. Better inclusion of people with disabilities in the community leads to other benefits, such as themselves and their family members being able to contribute economically to society through higher employment rates. Better ability to participate also helps to reduce secondary costs, such as mental health conditions due to loneliness and poor self-esteem.
Complaints and Follow-up
- ALL people with disabilities have the right to complain about the services they are receiving. However, many of them do not have the education or skill to complain themselves. It is up to people like us — their therapists who care about them so deeply that we are willing to work with them for award wages (plus many more unpaid hours) — to advocate for them.
Individual Outcomes
- ALL people with disabilities have the right to have their therapy plans individualized for them. By steering the market towards less time to reflect on progress and modify treatments as a result, practitioners will find that they are unable to individualise therapy programs as much as they currently are, especially if group rates turn out to be more profitable for providers than one-on-one therapy.

Other Options for Cost Cutting:

Instead of cutting therapy fees, which makes up so little of the total expenditure of the NDIS in the first place, there are many other ways that are easily implemented that would make the scheme more cost-efficient. Examples include:

Add the ability to monitor the progress of Assistive Technology requests to the Portal. This would stop participants and providers having to spend hours on the 1800 800 110 and in turn free up the time of the 1800 800 110 staff;
Restrict the types of “therapies” that self-managed Capacity Building funding can be spent on. Quality, evidence-based services like ours have had to undergo expensive and time- consuming third-party verification, only to be rewarded with a huge cut in fees for most of our services. However, unregistered providers can provide a variety of “therapies” that are not evidence based to the vulnerable self-managed market;
Have plan-managed payment requests go through the portal, instead of providers having to spend time sending invoices to multiple places. Plan-managed participants could have a

‘sub-portal’ activated where the plan manager could then check and approve invoices prior to payment;

Improve further the provider payment team. Despite contacting them, we still have outstanding invoices from May last year and this costs us more in interest payments on our overdraft, which means we need to charge higher fees to remain viable;
Improve the speed of Assistive Technology provision. We have examples of equipment taking so long to provide that the participants no longer fit it, or where capacity building is delayed because participants are waiting over 6 months for necessary equipment;
Allow participants and their existing therapists the opportunity to feedback on a draft copy of their next plan, in order to minimize the number of unscheduled reviews required when the issued plans are not what was agreed was reasonable and necessary at the planning meeting;
Investigate reports of fraud or other wrong-doing thoroughly, so that funds are not wasted.

Conclusion:

Since the concept was first introduced, the NDIA rhetoric has been about providing people with disabilities choice and control and ensuring a stable base of innovative providers to achieve the scheme’s goals. The proposed changes to the 2018-2019 Price Guide will have grave impacts on providers like us. We understand that a commitment has been made to fully fund the NDIS and, as such, a gap cannot be introduced to allow providers to charge market rates for their services. We see the only other option is to urge you to please reconsider the proposed 2018-2019 NDIS Price Guide and fund the scheme appropriately.

As mentioned above, our own practice has just completed a Third Party Verification audit during which we demonstrated our commitment to the six National Standards for disability services. We are therefore a quality service that listens to the feedback of our stakeholders. We urge you to do the same for your stakeholders.

Sincerely,

Dr Helen Nicholson BPhty, MAnSt, PhD — Physiotherapist

Managing Director