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| Disability service providers warn NDIS pricing could force them to shut down | Disability service providers warn NDIS pricing could force them to shut down |
| (about 7 hours later) | |
| Disability providers are warning they may be forced to shut down regional and remote services if the national disability insurance scheme’s pricing levels do not change. | Disability providers are warning they may be forced to shut down regional and remote services if the national disability insurance scheme’s pricing levels do not change. |
| Their fears have been echoed by National Disability Services, the peak body for non-government services, which says disability providers across the country are struggling to remain viable. | Their fears have been echoed by National Disability Services, the peak body for non-government services, which says disability providers across the country are struggling to remain viable. |
| Ken Baker, chief executive of the NDS, said two-thirds of disability service providers had reported to the commission that they were “very worried about their capacity to provide services at current NDIS prices”. | |
| “I think something has to give,” Baker told Guardian Australia. “The concern that I would have, is that in trying to meet those very, very tight prices, there are compromises made on quality. That inexperienced staff are being employed, instead of experienced staff. | “I think something has to give,” Baker told Guardian Australia. “The concern that I would have, is that in trying to meet those very, very tight prices, there are compromises made on quality. That inexperienced staff are being employed, instead of experienced staff. |
| “Those sorts of choices are being forced on providers. We don’t want that to happen.” | “Those sorts of choices are being forced on providers. We don’t want that to happen.” |
| Currently, the prices a disability provider can charge for NDIS services are set by the national disability insurance agency and reviewed annually, to take into account changing costs, inflation, and wage growth. | Currently, the prices a disability provider can charge for NDIS services are set by the national disability insurance agency and reviewed annually, to take into account changing costs, inflation, and wage growth. |
| To remain viable, services must find a way to operate within the confines of NDIS pricing. | To remain viable, services must find a way to operate within the confines of NDIS pricing. |
| A loading bonus of 20-25% is given to rural and remote services, but the sector says the definition of “regional and remote” is so narrow that it excludes large swathes of regional Australia. | A loading bonus of 20-25% is given to rural and remote services, but the sector says the definition of “regional and remote” is so narrow that it excludes large swathes of regional Australia. |
| The Cerebral Palsy Alliance is one provider concerned about the future of some of its regional services. It operates 55 sites across cities and in regional and rural New South Wales. | The Cerebral Palsy Alliance is one provider concerned about the future of some of its regional services. It operates 55 sites across cities and in regional and rural New South Wales. |
| Its chief executive, Rob White, said one of its sites on NSW’s south coast has already had to pause most of its therapy services. | Its chief executive, Rob White, said one of its sites on NSW’s south coast has already had to pause most of its therapy services. |
| “It is going to be much harder, under the funding model, to be providing therapy support to people in areas where there is low demand over high geographical spans of landscape, and the south coast has always been that,” White said. | “It is going to be much harder, under the funding model, to be providing therapy support to people in areas where there is low demand over high geographical spans of landscape, and the south coast has always been that,” White said. |
| “We’re great advocates for NDIS, but service providers will find it difficult to continue to fund this with their own resources. | “We’re great advocates for NDIS, but service providers will find it difficult to continue to fund this with their own resources. |
| “The more remote, the harder it gets, because the funding model is not taking that into account. And that’s going to be the case, especially for therapy services.” | “The more remote, the harder it gets, because the funding model is not taking that into account. And that’s going to be the case, especially for therapy services.” |
| Another provider in a regional area of southern NSW, which currently runs early childhood intervention services, said it was facing the possibility of shutting down altogether. | Another provider in a regional area of southern NSW, which currently runs early childhood intervention services, said it was facing the possibility of shutting down altogether. |
| The head of the provider, speaking anonymously, warned state funding was being withdrawn before NDIS funding was becoming available. “It’s creating a lot of uncertainty, we’re not sure how we’ll be able to operate in a year’s time,” the source said. | The head of the provider, speaking anonymously, warned state funding was being withdrawn before NDIS funding was becoming available. “It’s creating a lot of uncertainty, we’re not sure how we’ll be able to operate in a year’s time,” the source said. |
| “We have to look at all aspects of our services and see what we’re able to provide.” | “We have to look at all aspects of our services and see what we’re able to provide.” |
| Others warn the pricing problem is not isolated to regional Australia. | Others warn the pricing problem is not isolated to regional Australia. |
| Roland Naufal, director of Disability Services Consulting, said price levels were currently too low to sustain most existing service providers. | Roland Naufal, director of Disability Services Consulting, said price levels were currently too low to sustain most existing service providers. |
| “What I’m hearing – and we work with thousands of providers around Australia – is that some of them are really seriously struggling. Some of them may even exit the space, and some of them may be forced to close down,” Naufal said. | “What I’m hearing – and we work with thousands of providers around Australia – is that some of them are really seriously struggling. Some of them may even exit the space, and some of them may be forced to close down,” Naufal said. |
| “Some new players are coming in but they will not get to scale before the other guys get into trouble. So we’ve got a seismic issue, we’ve got a very significant portion of the sector saying ‘we can’t do this’.” | “Some new players are coming in but they will not get to scale before the other guys get into trouble. So we’ve got a seismic issue, we’ve got a very significant portion of the sector saying ‘we can’t do this’.” |
| Naufal – along with the overwhelming majority in the sector – welcomes the NDIS as a “fantastic scheme”. | Naufal – along with the overwhelming majority in the sector – welcomes the NDIS as a “fantastic scheme”. |
| But he says the planning process has “left a lot to be desired”, and says bipartisan support has limited public scrutiny of the scheme. | But he says the planning process has “left a lot to be desired”, and says bipartisan support has limited public scrutiny of the scheme. |
| The federal government commissioned an independent review into pricing in June, to be conducted by McKinsey& Company. The ultimate aim is to completely deregulate prices, once the market matures in “size, quality and innovation”. | The federal government commissioned an independent review into pricing in June, to be conducted by McKinsey& Company. The ultimate aim is to completely deregulate prices, once the market matures in “size, quality and innovation”. |
| A spokesman for the National Disability Insurance Agency said the review would consider pricing in regional and remote areas. He said the agency was aware of the challenges of delivering services in regional Australia, and pointed to the price loading allowances. | A spokesman for the National Disability Insurance Agency said the review would consider pricing in regional and remote areas. He said the agency was aware of the challenges of delivering services in regional Australia, and pointed to the price loading allowances. |
| “The pricing review, which will consider pricing in regional and remote areas, will deliver its final report to the Board by the end of this year,” the spokesman said. | “The pricing review, which will consider pricing in regional and remote areas, will deliver its final report to the Board by the end of this year,” the spokesman said. |
| “The NDIA approach to pricing balances the need for reasonable price increases for providers and keeping supports affordable for participants, including those in regional areas.” | “The NDIA approach to pricing balances the need for reasonable price increases for providers and keeping supports affordable for participants, including those in regional areas.” |
| Baker said he held faith in the review process. But he urged it to address unrealistic assumptions that were made about underlying costs of service providers. | Baker said he held faith in the review process. But he urged it to address unrealistic assumptions that were made about underlying costs of service providers. |
| For example, it assumes 95% of a disability support providers’ work hours are billable to clients. That ignores the time spent on tasks such as paperwork and travel, he said. | For example, it assumes 95% of a disability support providers’ work hours are billable to clients. That ignores the time spent on tasks such as paperwork and travel, he said. |
| “I can’t think of another occupational profession where that assumption would be made. It’s quite unrealistic,” Baker said. | “I can’t think of another occupational profession where that assumption would be made. It’s quite unrealistic,” Baker said. |
| Baker said the supply of disability services would need to double to meet demand under the NDIS, requiring services to expand at a “very ambitious rate”. | Baker said the supply of disability services would need to double to meet demand under the NDIS, requiring services to expand at a “very ambitious rate”. |
| “Unless organisations are confident that they can have enough income to invest in growth, they can’t do it,” Baker said. “I think that’s what we’re in danger of seeing, that the gap between supply and demand is going to grow.” | “Unless organisations are confident that they can have enough income to invest in growth, they can’t do it,” Baker said. “I think that’s what we’re in danger of seeing, that the gap between supply and demand is going to grow.” |
| The NDIA spokesman said the number of registered NDIS service providers grew by 28 per cent to 8968 by the end of June. But Baker said 54% of those providers were inactive. | The NDIA spokesman said the number of registered NDIS service providers grew by 28 per cent to 8968 by the end of June. But Baker said 54% of those providers were inactive. |