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Blood from a stone: What allied health NDIS providers can do to improve their lot

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Allied health providers in the NDIS space are struggling. Some are reducing or ceasing work with NDIS participants; and others are shutting down. Stress across the sector is palpable.

Costs increase, but NDIS price limits remain frozen. Governments tell us to do more with less, but the head of our Productivity Commission appears to think that it will always be difficult to increase our productivity because we are labour intensive, and that we’re a drag on Australia’s overall economic growth. In the press, and on social media, ethical providers continue to be lumped together with providers alleged to have ripped off participants and/or underpaid workers. 

It’s grim. 

I’m a realist. Like Joseph Tussman, I think that everything in life is easier to navigate if you identify how the world really works and then align with those realities. Fair or not, the pricing decision is a reality. Inflation is a reality. Anti-provider sentiment from influential voices in government and the media is a reality. Ongoing uncertainties about NDIS sustainability, regulation, and reforms are realities, and will remain that way for some time yet.   

So what can we do to keep going? 

There is no magic bullet. But, to get some perspective and ideas from outside the industry, I’ve been reading research and white papers. This week, Working Future: The Australian Government’s White Paper on Jobs and Opportunities, caught my eye. 

I learned some useful things:

  • Economy-wide productivity growth is slowing: Since the mid-2000s, productivity growth has slowed in Australia. Australian businesses – especially in the services sector – have been slower to adopt new technologies and processes than businesses overseas. This is a big challenge if we want to maintain wages and living standards. 
  • Our sector is growing: Our sector – the care and support economy – is expected to grow by 22% by 2033. The sector includes the work of child carers, child care centre managers, early childhood educators, education aides, welfare support workers, personal care workers, nursing support, diversional therapists, enrolled and mothercraft nurses, Indigenous health workers, social professionals, registered nurses, nutritional professionals, occupational therapists, physiotherapists, podiatrists, audiologists, speech pathologists, nurse managers, and health and welfare service managers.
  • We employ a lot of people: The healthcare and social assistance economy is the fastest growing part of the labour market. We represent about 10% of Australia’s workforce, and this growth is expected to continue.  
  • Our sector needs to improve its employment practices: Across the care sector, staff turnover is too high, probably due to a range of factors including uneven service quality, pay (including gendered undervaluation of work in female-dominated industries where women make up 76.5% of the workforce), work conditions in some settings, relatively high rates of casual employees (28%), too many workers working multiple jobs, and unclear career progression opportunities. 
  • Our sector needs to improve its training practices: Healthcare and social assistance have the highest prevalence of workplace training in the economy, probably because ongoing training is required as part of occupational accreditation. However, time and financial constraints are barriers to quality training for both providers and workers. Some providers are ambivalent about investing in staff skills and training because of high worker turnover. (This is short-sighted, to say the least.)
  • Our workers have other options: Within the sector, different providers demand similar skills and compete for the same workers. But different sub-sectors (e.g, childcare, health, the NDIS, aged care, veterans’ care) are accessed, funded and regulated differently. If one sub-sector becomes dysfunctional or uneconomic, many of our workers have other options – in and outside the sector. So, too, do many providers.

Clear-eyed choices 

If we accept these realities – and we must – providers have three main options:

  1. Shut down NDIS activities altogether and do something more (economically) productive – whether in the sector or elsewhere. (This would not be a good outcome for NDIS participants, especially in rural and remote areas.) 
  2. Reduce NDIS work and work more with other client groups not subject to price controls to offset the losses made on NDIS-funded work.
  3. Stay focused on NDIS-funded work and become more productive to re-establish margins and stay in business. 

If we choose options 2 or 3, we need to raise our productivity. But, given all the constraints, how?

Ideas

In the White Paper, the Government makes a number of suggestions for employers to ‘reignite’ productivity, including that we:

  • increase our management capabilities (currently relatively limited on average, compared to US firms, for example);
  • adopt “innovative work practices…better models of care and support and best practice processes and techniques”;
  • invest more in people and technology to change our models of care and to increase our clients’ choice and control and access to support, including in regional areas with thin markets (e.g. through telehealth);
  • improve our mixes of staff, qualifications and skills;
  • make more efficient use of existing resources by allowing staff to deliver multidisciplinary care;
  • train workers to use robots, automation tech and/or AI to allow workers to focus on higher value activities (e.g., problem-solving, interpersonal and non-routine tasks), and to access and process information, complete mod-level professional writing tasks, make decisions, and undertake admin tasks more efficiently; and
  • accept that ‘firm exits’ (i.e. businesses shutting down) are something that is necessary and perhaps (from the Government’s perspective) desirable to free up workers and capital to move to more productive businesses. 

Many of these suggestions lack specificity. Almost all require investment and additional risk-taking, which is hard to stomach in the current economic environment.

It’s clear from the White Paper that the Federal Government knows that it’s always been difficult to achieve productivity gains in our sector. If we want to improve provider productivity across the system, we need the Government to step up, too, to revisit policy settings on training, occupational licensing, skilled migration, and ‘knowledge translation’ collaborations between businesses, universities and government institutions. We need regulatory certainty (something sorely lacking at present) and harmonisation across sectors and States to resolve inconsistent rules, reduce red tape and admin busy work, and remove barriers to worker mobility (e.g. by consolidating worker screening regimes). 

The NDIS and the care and support sector as a whole are complex adaptive systems. They are made up of individuals who have freedom to act in ways that are not always totally predictable. The actions of governments, regulators, providers, workers and NDIS participants are interconnected: one group’s actions can change the system for everyone else, potentially in unexpected ways.

Bottom line

Ethical providers need to do something if we want to continue to provide high level care to NDIS participants while investing in our workers and staying in business. 

We need all the good ideas we can get.

Further reading:

Working Future: The Australian Government’s White Paper on Jobs and Opportunities | Treasury.gov.au

How will allied health NDIS providers survive? Some difficult choices ahead

Therapy Support Providers: Frozen pricing limits and shorter notice cancellation rules. What was the NDIA thinking?

How will allied health NDIS providers survive? Some difficult choices ahead

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If you are a private allied health business owner who works with NDIS participants – you should take a look at the Deloitte Access Economics report about NDIS price limits for therapy supports and the Ability Roundtable 2023-24 Annual Price Review Submission about Therapy Supports.  

Both are harrowing reads for occupational therapists, speech pathologists, physiotherapists, social workers, and other allied health businesses. They suggest that most of the bigger, NDIS-registered allied health therapy businesses operate at – or below – break-even point against NDIS price limits. For the 2024-25 financial year, the Ability Roundtable has projected a median loss (net margin) of -14.2% for larger registered providers of therapy supports.  

For registered and unregistered NDIS providers, the real costs of providing therapy supports to participants are often underestimated, including by many allied health business owners. Costs include:

  1. staff base wages and salary oncosts (e.g. annual leave, personal leave, public holiday leave, long service leave, and parental leave, superannuation, workers compensation insurance); 
  2. costs of supervision, training, professional development, and accreditation;
  3. non-billable (but necessary) activity costs, like non-billable client, travel and cancellation time;
  4. service delivery overheads, including occupancy costs (e.g. rent and electricity), motor vehicle fleet costs, specialised equipment, IT costs (e.g. laptops and software), and client consumables;
  5. non-service level staff costs (e.g. team leader and corporate governance costs);
  6. corporate overheads, e.g., IT, finance, human resources and recruitment, insurance, administration, marketing, quality control, and audit and legal expenses; and
  7. NDIS and other compliance costs. 

From Deloitte’s report, it appears that many of the bigger registered allied health businesses have a major structural business problem: high (and rising) fixed costs, a limited capacity to reduce variable costs without affecting service quality or access, a limited ability to increase staff productivity without increased turnover, and of course no room to move on prices. 

The Government’s decision to freeze NDIS therapy prices for another year increases financial pressures on allied health providers. To stay in business, allied health providers must (at least) break even. But we face several difficult choices and tradeoffs as we try to get there:

  1. We can’t lower wages without losing staff to higher paying opportunities, e.g. in the public sector.
  2. We can’t reduce new graduate and early career hiring and support without affecting the future of our professions (onboarding new graduates and building their caseloads requires significant investment and time, which affects average utilisation rates).
  3. We can’t ask frontline staff to see more clients without increasing staff burnout and turnover.
  4. We can’t cut corners on supervision, education and training without reducing the skills of our workforce and the quality of our therapy services.
  5. We can’t recalibrate staffing levels to match fluctuating client demand patterns (e.g. during school holiday periods) without reducing full-time employees and switching to casuals and contractors and reducing continuity of service to some participants.
  6. We can’t reduce investments in corporate governance controls without increasing business and client risks, including to safety.
  7. We can’t narrow our scope of services (e.g., switching to lower-cost supports or private client work outside the NDIS) without reducing NDIS participant access to our services.

For ethical reasons, many of these options and trade-offs are unacceptable for reputable allied health providers.

In the bleak business environment depicted in the Deloitte and the Ability Roundtable reports, it would be logical for:

  1. more registered NDIS allied health providers to deregister, continuing the trend described in the NDIA’s latest Annual Pricing Review;
  2. some allied health providers to downsize and to cut investments to reduce costs; 
  3. some allied health providers to cease working with participants with complex (higher cost) needs and to reduce (higher cost) in-community services to reduce losses; and 
  4. some allied health providers to pivot their businesses to focus on non-NDIS clients to reduce their exposure to NDIS price controls.

Unless allied health NDIS providers find new ways to increase productivity and to re-establish sustainable margins, we may end up with fewer registered allied health providers, fewer larger allied health employers, uneven levels of supervision, training and support for staff across the professions, and fewer options for some NDIS participants to access quality therapy supports. 

NDIS Providers: 5 basic things to know about the NDIS (Getting the NDIS Back on Track No. 1) Bill 2024

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With today’s news, we don’t yet know the final form of the NDIS (Getting the NDIS Back on Track No.1) Bill 2024 or when it will be passed into law.

But, despite the uncertainty and lack of detail on many key points, NDIS providers (including unregistered providers) need to understand some basic concepts to prepare for the big changes ahead:

  • Providers should expect increased regulation, oversight, and enforcement action. The NDIS Quality and Safeguards Commission and the NDIS Commissioner will have expanded powers.
  • NDIS access rules will be clarified so that participants know whether they meet the disability requirements, the early intervention requirements, or both.
  • NDIS pathways will change. The NDIS will work differently for participants accessing early intervention supports compared with participants receiving disability supports for lifelong disabilities. (Future reforms will create a new early intervention pathway.)
  • Significant changes to NDIS supports, assessments, reports, and budgets:
    • “NDIS Supports” will replace “reasonable and necessary supports”, narrowing supports that will be funded by the NDIS.  
    • “Needs-based assessments” will replace diagnoses-based assessments, and produce “needs assessment reports”. 
    • The needs assessment report requirements will be developed in consultation with people with a disability, health and allied health technical professionals and governments. 
    • The “reasonable and necessary budget” will be determined by the needs assessment report and replace line-by-line “reasonable and necessary supports”.  
    • Reasonable and necessary budgets will be composed of “stated supports” (fixed budgets for things like assistive technology and supported independent living), “flexible funding” (e.g. for health or rehabilitations services), or both.
  • Provider boards and senior management must understand their NDIS compliance obligations and work with participants and others to improve their governance and leadership practices to enhance safety, quality, accountability, and responses to risk.

With thanks to the presenters at the Legalwise Seminars’ NDIS Law Intensive on 20 June 2024.

NDIS basics for new small and medium-sized providers: what’s it all about?

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For many small and medium-sized providers of supports and services to National Disability Insurance Scheme (NDIS) participants, the NDIS can be confusing – especially for new providers.

To understand the NDIS, you need to know a bit about the National Disability Insurance Scheme Act (2013) (the Act).

What is the NDIS trying to do?

Among other things, the objects of the Act are to:

  • give effect to some of Australia’s obligations under the Convention on the Rights of Persons with Disabilities;
  • provide ‘reasonable and necessary supports’, including early intervention supports, for participants;
  • enable participants to exercise choice and control in the pursuit of their goals and the planning and delivery of their supports;
  • promote the provision of high quality and innovative supports to enable participants to maximise independent lifestyles and full inclusion in the community; and
  • protect participants from experiencing harm arising from poor quality and unsafe supports or services provided under the scheme.

How does it work?

The Act’s objects are achieved through:

Source: sections 3, 4, and 8 of the National Disability Insurance Scheme Act 2013 (Cth), as amended.

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