Alignment of insurance practice with disability support | External submission

To Community Affairs Legislation Committee

Dr Maree Dyson

From

Date 31 January 2013

Topic Invited Comment: National Disability Insurance Scheme Bill

Introduction
Thank you for the invitation and opportunity to provide this commentary. 2. A National Disability Insurance Scheme is needed, the Productivity Commission

captured well the inequitable, fragmented and inefficient nature of the current

system.

No-fault insurance schemes in Australia and New Zealand have demonstrated that is possible to deliver dignified support and opportunities to achieve valued outcomes to people with significant disabilities, in a financially sustainable manner.
1. Overall I believe the Draft Bill has much to commend it in the way it proposes the

Scheme work with participants and influence the wider community.

5.  Of necessity my remarks focus on what  I perceive to be gaps and potential for

improvement.

My concerns primarily relate to areas where the Draft Bill may not be consistently and well aligned with sound insurance practice with people with disabilities.
Sound insurance practice is fundamental to the Scheme if this initiative is to deliver to the current and future generations of Australians with disabilities.
I have also raised concerns in relation to participant equity, participant wellbeing, participant outcomes and an absence of focus on evidence based practice and consequent risks to equitable decision making.
I have referenced my comments to the Draft Bill, my comments therefore need to be read with the Draft Bill in hand.

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Competence to Comment
In addition to my 25 plus years’ experience in the broader disability sector, I have significant and extensive experience in the strategic and technical development and delivery of serious injury1 no-fault insurance systems in Australia and New Zealand.
1. In these matters I have, or I am currently working with Transport Accident
Commission (TAC) Victoria, Motor Accident Authority New South Wales, Motor

Accident Insurance Board, Tasmania, WorkSafe (formerly WorkCover) Victoria,

WorkCover, South Australia, WorkCover New South Wales, the Motor Accident

Commission, South Australia and the Victorian Auditor General. Clients in the

schemes listed can be adults and/or children and/or adolescents.

12. In  particular,  I  place on  the  record my  work  with New  Zealand’s  Accident

Compensation Corporation (ACC).

Since 2007 I have worked with ACC as the strategic and technical consultant in the development and implementation of a National Serious Injury Service (NSIS) for clients with significant disabilities as a result of an accident.
Since 2007, and after more than a decade of deteriorating liability results: a. The first two years saw liabilities cease rapid escalation and delivered stability b. Since then a reduction of Scheme liabilities (actuarial releases) of the order of $1,400,000,000 ($1.4b) have been achieved.
These results have been delivered alongside improved client outcomes, in particular improved employment participation, a low dispute rate and a high degree of client satisfaction.
In an area of particular interest of mine, the assessment of needs for the purposes of funding support and interventions,1-12 I have also recently worked with experts in the mental health sector.

1 Injuries such as brain injury, spinal cord injury and injuries of like severity (multiple amputations, severe and extensive burns, blindness) that result in significant disabilities.

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Commentary 3.1 Chapter 1 Part 2-Objects and principles
Reference Section 3(1)(c) a. The Draft Bill makes provision for the payment of ‘reasonable and necessary’ expenses (various points throughout the Draft Bill).

b. The South Australian Workers Rehabilitation and Compensation Act (1986) make provision for ‘necessaryandreasonable’ expenses.

c. I regard the re-phrasing to ‘necessaryandreasonable’ as a particularly valuable as the first issue considered is whether or not the funded response proposed to a Scheme, is ‘necessary’, that is ‘isthereaneed?’

d. The second order decision (which brings into consideration of need related to the disability, people’s circumstances, appropriateness of a response, cost

effectiveness, outcomes, etc.) is then that of ‘reasonable’.

18. The Objects of the Act do not address the two most  critical objectives in  disability

insurance, being:

a. Ensuring the financial sustainability of the Scheme by delivering a sustainable rate of growth in liabilities2

b. Achieving participant outcomes in valued life roles. 19. Section (2)(b) regarding an insurance based approach addresses point 18.b above to a limited extent but statement as a principal Object is required as a transparent commitment to premium payers (taxpayers) and Scheme participants (people with disabilities) to deliver a sustainable Scheme.

At no point do the Objects or the Draft Bill in its entirety refer actually delivering results(outcomes) with Scheme participants. The Scheme aims to ‘provide’, ‘support’, ‘promote’ etc but there is no reference to outcomes.
To honour the contribution of premium payers and Scheme participants a firm commitment to outcomes is needed in the Principles and throughout the Bill.
Later in this document the operational shortcomings where there is no reference to outcomes is also addressed.

2 Given the lifelong nature of most severe disabilities the Scheme’s financial liabilities will continue to grow for some generations to come.

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Reference Section 4(2) a. This is a welcome provision in that it makes reference to people with

disabilities ‘contributing’. Formal recognition of people with disabilities as

contributing members of society is long overdue.

b. In this vein of contribution and responsibility a statement (here or elsewhere) is warranted whereby Scheme participants recognise the rights of other

participants and premium payers to a financially sustainable Scheme and agree to contribute to such sustainability (or conversely agree not to act in a way that might compromise the sustainability of the Scheme).

Reference Section 4(7) a. This provision makes reference to people with disability as having ‘…thesame rightasothermembersofAustraliansocietytopursueanygrievance.’

b. Australians broadly have a right to formal review mechanisms for a range of administrative decisions.

c. My reading of Part 6 suggests that participants will not be able to have a decision related to the quantum of funding reviewed.

d.  This  is  certainly an  effective  liability  control mechanism but does  raise

questions as to equity.

Reference Section 4(14) a. In line with my remarks regarding outcomes (refer to point 20) I would

suggest amending this to read ‘Innovation, quality, continuous improvement, contemporary best practice, research and monitoring are promoted to achieveoutcomeswithpeoplewithdisabilities’.

3.2 Part 4-Definitions

Reference Part 4-Definitions (9) ‘developmentaldelay’ a. The definition is not consistent with Australia’s position on the use of the World Health Organization’s model of function (refer point 28 and associated material below for a discussion of the World Health Organization’s model of function).

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3.3 Chapter 2-Assistance for people with disability and others

Reference Section 14(a)(ii): a. For consistency with Section 4(2) this provision should make reference to contribution; ‘(ii)participateinandcontributetosocialandeconomiclife’.

3.4 Chapter 3-Participants and their plans

Reference Section 24(1)(a) and other sections where disability is described or defined (e.g. Section 25).

a. Australia has formally adopted the World Health Organization’s model of

function13 for the purposes of describing people’s function.

b. However, the draft Bill does not use this model. c. The draft Bill is relying on terms and definitions, that while widely used in

other legislation, are inconsistent with the endorsed WHO model and indeed the Bill itself in that the definitions are not consistent with ‘contemporarybest practice’ (referred to throughout the Draft Bill).

The World Health Organization has stated that ‘The International Classification of Functioning, Disability and Health (ICF) conceptualises human functioning as multi

dimensional, comprising body functions, activities and participation. Disability

reflects problems in any of these dimensions and arises from the interactions between health conditions and environmental factors.’ (p. 758)14

Health Condition

(disorder or disease)

Body Functions & Participation

Activities

Structures (participation (activity limitation) (impairment) restriction)

Environmental

Personal Factors

Factors

Interactions of the components of the ICF (Adapted from ICF, p. 26)13

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A contemporary description of people with disabilities (including children with

developmental delay) for the purposes of the Scheme would include:

a. Evidence of the presence of a health condition b. That leads to impairments and results in substantial activity limitations and/or participation restrictions in communication, social interaction, learning,

mobility, self-care; self-management etc. as per 24(d) and (e).

Some individual advocates may argue against this approach, expressing concern that a reference to a ‘Health Condition’ will represent a return to the outmoded medical

model of disability, or that children with developmental delay will be excluded.

However:

a. Using the term ‘Health Condition’ is no more likely to generate a return to a medical model than is the use of terms such as ‘neurologicalimpairment’

b. This model was developed by WHO in an extensive consultative, testing and refinement process that included people with disabilities and their

representative organisations

c. The concept of a health condition does include developmental delay. 32. Definitions built to the World Health Organization’s model of function are

recommended as contemporary best practice and consistent with government policy

Reference Section 24(1)(a) a. My understanding of the report by the Productivity Commission was that the intent in relation to the provision of supports for people with psychiatric conditions was to include specifically and only those people with serious chronic mental illness3 rather than the far wider group of people with common mental health disorders.

b. Reference to a ‘psychiatric condition’ rather a serious chronic mental health illness carries a risk of Scheme boundary creep (that is, including more people than the target group and actuarial modelling has allowed for).

Reference Section 30 a. Fraud against the Scheme would also seem to be a reason for the CEO to revoke a person’s status as a participant.

3 Described by mental health practitioners as illnesses, such schizophrenia and bipolar disorders, which have proven to be relatively intractable to treatment and result in ongoing cognitive impairment/s and persistent psycho-social disabilities.

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Reference Section 31 a. The principles are based solely on individual participants and do not consider Scheme sustainability and, therefore, the interest of all participants (current and future).

b. Consistent with my earlier remarks regarding the Scheme Objects (refer point 18) and sound disability insurance practice, I recommend adding the following provision; ‘proposals for funding contained within plans are necessary and reasonable responses, relate directly to the needs arising from the person’s disability, are required to contribute to the achievement of goals and agreed outcomes and are the most cost effective option having regard to the achievementofparticipantoutcomesandtheimpactonSchemeliability.

c. Consideration of people’s abilities is fundamental to sound planning (strengths- based planning). I recommend an amendment requiring that abilities and capacities be considered.

Reference Section 31(h) a. For consistency with Section 4(2) this provision should make reference to contribution, (h) ‘advancetheinclusion,participationandcontributioninthe community…aspirations;and’
Reference Section 33 a. As noted there is no reference to outcomes. b. Section 33 does not include a requirement that the achievement of goals, objectives or aspirations by means of a review of outcomes will be evaluated.

c. Unless measurable outcomes are required to be included in participants’ plans and the review of the plans, there will be no evidence as to the efficacy of the Scheme at an individual, cohort or Scheme level.

Reference Section 33(5) a. Consideration of outcomes in planning and support review is fundamental

sound practice in human services generally and disability specifically.

b. Accordingly, the addition of a provision within Section 33 (5) and after (a) and (b), along the following lines is recommended ‘haveregardedtotheoutcomes achievedtodate’.

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Reference Section 33(5)(e) a. In considering only ‘wishes’ more vulnerable participants may be placed at risk. Some people with cognitive impairments will be at risk of financial

exploitation if only ‘wishes’ are taken into account and not vulnerability and the extent to which risks of exploitation are mitigated. In particular people with serious chronic mental illness can be vulnerable when acutely ill and living in the community.

b.  I ask the Committee to assure  itself that these concerns are adequately

addressed by Section 44.

Reference Section 34 a. Risks realised in personal injury schemes supporting children with disabilities suggest consideration of a more explicit statement in relation to children and young people (people age under 18) is warranted.

b. Liability risk management can be facilitated by a provision that states that the Scheme will not be liable for funding ordinary parenting responsibilities but is liable for only those additional necessary and reasonable care and support responses caused by the disability and not those as a result of the child or young person’s age.

Reference Section 34(b) a. For consistency with Section 4(2) these provisions should make reference to contribution, (b) ‘thesupportwillassist…theparticipant’ssocialandeconomic participationandcontribution.’’
Reference Section 34(c) a. In line with my remarks regarding outcomes (refer 20) amendment to this provision is recommended, ‘(c) the support represents value … both the benefitsandoutcomesachieved…alternativesupport’.
Reference Section 35(4) a. Unlike other personal injury insurance legislation the Draft Bill does not specify what the money can be spent on. Personal injury insurance legislation and associated policy typically specifies purchasable services and items that can be paid for by the insurer.

b. This is consistent with the way in which some international and local

jurisdictions have implemented individualised funding, while other jurisdictions

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have not followed this approach and spending decisions rest with the

participants.

c.  In not specifying how the money can be spent  it  is possible to see this

legislation as providing income ‘topup’ in recognition of disability and its costs, rather than providing for the funding of necessary and reasonable disability supports only.

d. It is possible to argue that either approach (specification or not of purchasable services and items) is appropriate but there are questions that arise in the absence of specification.

e.  If the Draft Bill, as  it seems to do, sits in the space of income ‘top up’, the

question then arises as to why access to funding is not required to be means tested.

f. When one then considers that Section 35(4) seems to be suggesting that some people’s access to funding will be means tested via reference to

compensation received that ‘donotspecificallyincludeanamountforthecost ofsupports’, the situation seems unfair.

g. It seems that people who have received compensation will be subject to some sort of means testing in relation to what is reasonable and yet others who may inherit, win or simply have access to considerable wealth will not be subject to such testing.

h. I request that the Committee consider this matter, particularly with reference to the possibility of certain classes of people with disabilities experiencing discrimination.

i. I would also ask the Committee to review Chapter 5 with consideration as to whether or not the burden of recovery ought to rest with the individual with a disability (or their family) or the Scheme.

j.   I  also wish  to express concern  that recovery  provisions may have the

unintended consequence of further increasing litigation or fear of litigation and promoting expensive and unnecessary defensive medical practices that serve to increase health costs.

Reference Section 35(5) a. This reads to me as a provision whereby people who have elected not to pursue a common law claim may well receive less funding than would have

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been the case had they not had the potential for a common law claim or had pursued a claim.

b. Common law actions are known to be prolonged, stressful and financially very risky.

c.  It  is surprising,  in the  light of the principles of the Draft  Bill and other

statements within the Bill, that the Scheme would penalise participants who make an informed choice not to pursue a common law action.

d.  If  the Scheme  believes  recovery  from  another  party   is  possible  and

appropriate, the legislation needs to create the capacity for the Scheme to recover monies and not place that burden on the person or the family of the person with a disability.

Reference Section 44(2)(a) a. Consistent with achieving a sustainable rate of growth in liabilities an

amendment is recommended; ‘(a) present an unreasonable risk to the participantand/ortheScheme’.

Reference Section 91 (1) a. It seems extraordinary that harm experienced or likely to be experienced by a participant as a result of the action/inaction of a nominee must be ‘severe’ before the CEO is compelled to act. A risk (defined to typical risk management

frameworks) of harm in and of itself should be sufficient reason to act,

particularly as participants are drawn from people known to be at greater risk of abuse, crime, neglect than other members of society.

3.5 Other

Evidence-based practice is internationally recognised as best practice but the Draft Bill does not call on the Scheme to ensure that it applies evidence based principles and best available evidence in the two most critical areas of eligibility to be a participant and assessment of support needs.

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Such a gap poses significant risks to Scheme liabilities and to equity of decisions made in relation to participants, in the absence of a sound evidence base decisions are ad hoc.
Conclusion Thank you for the opportunity to make this submission, I would be pleased to discuss it contents further on request.

Dr Maree Dyson, PhD.,B.App.Sci(OT), Grad.Dip(BusMgt), Grad.Dip(Erg), Cert (QA)

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References

Cairns, L., M. Dyson, S. Canobi and N. Vipond, The impact of claims management,

treatment, and rehabilitation on recovery and return to independence. International Journal of Disability Management. Available on CJO 2012 doi:10.1017/idm.2012.8,

2012(November): p. 1-5.

Dyson, M., Funding of therapy for school age children: therapy services resource

groups and unit cost.1997, Perth: Cerebral Palsy Association of Western Australia, Disability Services Commission of Western Australia, Rocky Bay Inc. .

Dyson, M., Therapy resource groups: funding for outputs and client complexity., in

Health Sciences.2000, La Trobe University.: Bundoora.

Dyson, M., Resource allocation tool scoping report.2007, Melbourne: Disability

Services Division, Department of Human Services.

Dyson, M., Investment in disability reform: the evidence base, in Investment in

disability reform, J. Walsh, S. Johnson, and M. Dyson, Editors. 2009, PricewaterhouseCoopers and Disability Services Division, Dept of Human Services: Melbourne.

Dyson, M., A nationally consistent injury insurance scheme for the catastrophically

injured: service design and delivery, risks and risk management.2009, Canberra:

Dept of Families, Health, Community Services and Indigenous Affairs,

Commonwealth of Australia.

Dyson, M., The evidence base of ACC support needs assessments and attendant care

decisions2009, Wellington, New Zealand: Accident Compensation Corporation.

Dyson, M., National assessment tools project (part one) - research and evaluate

assessment tools for a National Disability Insurance Scheme2012, Melbourne: Department of Human Services.

Dyson, M., F. Allen and S. Duckett, Profiling childhood disability: the reliability of the

Educational Needs Questionnaire. Evaluation and Program Planning, 2000. 23: p. 177-185.

Dyson, M. and L. Cairns, Predicting long term care needs for insurance management. Brain Injury, 2010. 24(3): p. 19-20.
Dyson, M. and S. Canobi, A long-term disability care and support scheme for Australia: opportunities for disability sector reform. Asian Social Work and Policy Review, 2011(5): p. 138-144.
Dyson, M., S. Duckett and F. Allen, A therapy-relevant casemix classification system for school-age children with disabilities. Archives of Physical Medicine and Rehabilitation, 2000. 81: p. 634-642.
World Health Organization, ICF: International Classification of Functioning, Disability and Health., 2001: Geneva.
ICF: international classification of functioning, disability and health 2001, Geneva: World Health Organization.

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