Allied health NDIS providers must face facts, and make painful – but necessary

Drova has released its NDIS Provider Outlook report for 2025. The report looks at the sector as a whole. But it contains several sobering facts and helpful ideas for allied health NDIS providers looking to clarify their strategic priorities:

By the numbers:

More than half of providers operated at a loss in 2023-24.
Cash reserves are down 17%, and asset sales are up.
More than 80% of provider revenue is consumed by staffing costs.
More than 75% of providers think system navigation is taking time away from service provision.
80% of staff report reform-fatigue.
More than 20% of providers are considering amalgamating with another provider or exiting the sector altogether.

Cynical times:

The Government continues to lean heavily into the “dodgy providers” narrative to justify reforms.
Economic sustainability of the scheme dominates media coverage, rather than participant choice and control, and quality of life.
Some providers and participants question the government’s sincerity on reform consultations and the co-design of services.
Governments haven’t agreed on the funding for Foundational Supports but the NDIA (with the benefit of new laws) continues to revoke and deny access to the scheme to people with disability and delay.

Tough times:

Key challenges for providers:

Ongoing financial viability.
Maintaining service quality for participants.
Regulatory and compliance uncertainties and burdens.
Recruiting, retaining, training, and managing staff.
Market consolidation (increased competition from larger providers and difficulties scaling profitably with limited resources to build systems).
Increased digital transition and cybersecurity risks.

Strategic priorities:

Rebuild financial sustainability: Conduct service profitability audits. Reduce waste. Diversify revenue streams. Focus on cash flows.
Improve participant safety and outcomes with better services: Better frameworks to track functional outcomes. Better participant feedback systems.
Improve staff engagement and retention: Better leadership. Reducing busywork/workloads. Better training. Better supervision and mentorship. Clearer career pathways. Safer workplaces.
Improve operational efficiencies and effectiveness: Better dashboards. Focused offerings (phasing out of unprofitable services). Streamlined workflows. Fewer non-staff overheads. Better financial, operations and compliance systems. More automation. More AI and other digital tools for planning, and reporting.
Strengthen compliance and governance: Better training. Standardised incident and complaints reporting. Systems to make your compliance a competitive advantage. More automation.
Scale “the right way”: Efficiency before size. Don’t add complexity without careful financial and risk modelling. Partnerships and collaborations are lower risk ways to expand compared to mergers.
Learn from the best: Map your business against high performing providers. More collaboration across provider types. Participate in industry groups for stronger advocacy, e.g. around funding reforms.

Bottom line:

As allied health NDIS providers, we help people with disabilities live better lives. But to support people well, we need to survive the reforms financially and build sustainable, well-managed, innovative and reputable businesses that attract talented people to work (and stay) with us and deliver high quality and safe services to clients (including participants). The Drova report includes many good ideas and suggestions to think through all this complexity, and is well worth a read.

Drova. (2025) NDIS Provider Outlook Report 2025

(Any errors of interpretation are, as always, my own.)