The National Disability Insurance Agency released its quarterly report at the end of August 2015. The report shows that the scheme now has almost 20,000 participants with $950 million committed in participant plans.
In this article we have picked out nine of the most important lessons that providers can learn from the data.
Three lessons about participants:
There are a lot of people getting support for the first time. Two out of every five participants did not receive any disability services in the past. This means that while around 60% of the participants in the NDIS were accessing a State or Commonwealth funded service prior to coming into the Scheme, 40% of participants are new to the disability system.
Lesson for providers: Marketing and brand awareness will be essential in the NDIS given that 40% of participants do not have an existing provider and will be making decisions for the first time on where they source their support.
A small number of people account for most of the money spent in the NDIS. As the Productivity Commission’s report envisioned, a small number of participants account for the majority of the NDIS’ costs. The 10% participants with the highest cost plans account for 49% of the NDIS’ funds, while the remaining 90% of participants receive 51% of NDIS funds. Although the average package cost is $33,600, there are a large number of participants with developmental delay (average cost $16,207) and participants with hearing loss, deafness and sensory disability (average cost $13,662). This compares with participants who have cerebral palsy or intellectual disability who have average packages averaging 4 times as large at $62,700 and $56,300 respectively.
Lesson for providers: One way for providers to think about their NDIS customer base is whether they are supporting the 10% of participants who are intensive users accessing almost half the NDIS funds or the 90% who are large in number but have much smaller NDIS packages.
Every trial site has fewer than expected people with packages under $10,000. Each of the trial sites has a significantly lower than expected number of low cost participants, despite the overall costs of the NDIS being on target. One possible explanation is that ‘low cost participants’ are in the scheme as expected, but start off with higher packages because of their existing unmet needs and will trend downwards over time. Another explanation is that the NDIA is not currently picking up people with low levels of need, either due to the way the scheme is being rolled out or because of an overly stringent approach to testing people’s eligibility for the NDIS.
Lesson for providers: Providers working with people with disability who require minimal support need to be aware that not all their participants may be eligible as they do not meet the NDIS’ test of “substantially reduced functional capacity”. These providers should continue to monitor where the NDIA is drawing the line of the minimal functional impairment required to become a participant in the NDIS.
The NDIA is funding early intervention supports for almost all participants. The NDIS pays for early intervention supports to reduce the lifelong cost of people to the NDIS. Currently, almost 90% of participants have some kind of early intervention support in their plan.
Lesson for providers: The high levels of early intervention funding shows that insurance thinking is at the heart of the NDIS. Successful providers will be able to show how their support can reduce a participant’s lifetime costs
Four lessons about providers:
Almost all providers only operate in one state. Around 2,000 providers are registered to provide services in the NDIS, ranging from very large not for profits through to individual therapists. Only 4% of providers operate in multiple jurisdictions, suggesting that the market remains constrained by the previous boundaries of state-based disability funding.
Lesson for providers: The trialing of the NDIS has not yet led to a large expansion of services across state boarders, but the full national roll out will provide more opportunities to scale up operations across multiple states.
Two thirds of providers are individuals are private sector businesses. A relatively large percentage of providers are individuals (35%) while there are also many private companies registered with the NDIA (28%). Around 70% of private companies and 75% of individuals are registered with the NDIS to provide allied health and equipment. In comparison disability care and support is the main focus of incorporated charities (94%) and public companies (82%).
Lesson for providers: The market profile of private versus non-profit providers remains largely stable at the moment, but providers wanting to do good market research will need to invest in more sophisticated analysis than is currently available through the NDIS’s public reporting to work out what organizations are entering the market, which organizations are growing and which are shrinking.
Many participants are self-managing some of their plan, but few fully self-manage. The percentage of participants fully self managing their plan remains very low in Victoria (0%) and New South Wales (1%), although it is very high amongst children in South Australia (12%). Despite this small number, a full 33% of participants self-manage some aspects of their plan.
Lesson for providers: Providers will need systems to invoice the NDIA for the services they deliver, but will also need to plan for participants who want to pay their own providers directly.
The Quarterly Report is available at http://www.ndis.gov.au/ndia-8th-quarterly-report