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Market failure and the National Disability Insurance Scheme

By Rebecca Vassarotti - 7 September 2017 6

The establishment of the National Disability Insurance Scheme (NDIS) in 2013 was a milestone for Australia and has been one of the most significant health reforms seen in this country since the introduction of Medicare last century.

The aims of the NDIS are laudable and rightly ambitious, aiming to support Australians with a significant and permanent disability achieve a better life through access to the supports they need. The Scheme was designed to place people with disabilities at its heart, and banked on a marketised system to deliver services, improve quality and drive innovation within the disability sector. Control and choice are driving mantras of the scheme and its introduction included a move from a system of block funding services to operating on a system where individuals are provided with funding to purchase the supports they determine they need. It is a deeply regulated market, however, with the National Disability Insurance Agency (NDIA), a government statutory agency regulating access to the market through assessing potential clients, regulating the level of resourcing provided for individuals, regulating the rules and costs for services provided through the scheme.

The scheme has been operating in the ACT since 2014 and has been fully implemented in the Territory since 2016. Given we are one of the first jurisdictions to be fully operational and given the scale of this reform, it is unsurprising that we have experienced some challenges in how NDIS has rolled out. It is important that we now assess how well the scheme is meeting the objectives of control and choice and reflect if there are any adjustments that we need to make.

Marketisation and competition are premised on the fact that demand will drive services, and competition will positively impact on both efficiency (ie cost) and quality. However, we are starting to see some areas of potential market failure. For instance, this week, Marymead, one of the few remaining services that provide overnight respite to young people with disabilities, announced that they would no longer be able to provide this service to many Canberra families. They pointed to inadequate funding provided by the NDIA for this type of service and stated that despite many discussions with the Agency, they have not been able to find a cost structure that meets community expectations around duty and care for staff and clients.

There is an argument that this is how the market should be operating, and overnight respite is a hangover from a system that wasn’t working properly in the first place. In a world in which the NDIS was delivering a new paradigm of caring, people with disabilities would be adequately supported within their community, and families would not be in the situation of needing respite to sustain them in intensive and undervalued caring roles. If the NDIS was working this way, there would not be the need to fund band-aid solutions such as respite to help families cope, and instead adequate supports would enable families to have typical and normal relationships with their family members. We are a long way off from this reality however, and this transitional phase has demonstrated that we are probably falling short with providing the right level of resourcing and support, with huge increases in complaints regarding the NDIA in the last 12 months being reported – primarily due to dissatisfaction with the planning process, where decisions are made regarding how much funding and what supports people with disabilities can access.

While we continue to operate in a deeply regulated market, Governments cannot abdicate their duty of intervening when the market starts to fail. This is one of these times, and we need to see swift action to ensure that there are services provided to our local community and that choice and control do not diminish as a result of the introduction of the NDIS.

I think there is a role for Government to work with the NDIA and others to ensure we don’t see market failure in parts of our local disability sector. What do you think?

What’s Your opinion?


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6 Responses to
Market failure and the National Disability Insurance Scheme
Petronius 11:30 am 08 Sep 17

The model of the NDIS appears to be set up so that an individual in need of assistance is assumed to have the executive capabilities, or has support of agents with executive capabilities, to mount a case to the NDIS for services; similarly with accessing and managing providers as an approved client. This bureaucratic model fails to respond to those such as the mentally ill who often do not have appropriate executive capabilities or willing competent agents. In the past such services were provided by ‘block funding’ to mental health advocates and service providers. It was a lot easier to obtain services from these bodies as they often sought out those in need and had the freedom to monitor needs. For a person with mental illness it is difficult to marshal the presence of mind to mount a case with the NDIS. The mental illness also might be spasmodic or under-diagnosed. Even if the application succeeded working in a market driven model is more problematic for those with distressed minds. I wonder if the mentally ill should ever have been included in the same NDIS model and that a more flexible non-market driven model would have been appropriate.

dungfungus 11:01 am 08 Sep 17

As I understand it, services provided under the NDIS cease at age 65. This appears to be a major flaw in the plan as older people with disabilities are impacted more by the onset of old age.

Given the cost blowouts and the reported level of complaints the whole scheme appears to be a failure, not unlike the NBN. Both schemes were well intentioned but both were not subject to a business plan and both were unfunded.

The “old” system may have been seen by some as inadequate but it did work with most support coming from family carers and volunteers within the community. It was certainly delivering a better outcome that the “nationalised” version we now have.

wildturkeycanoe 9:20 am 08 Sep 17

I’d like to know what families can do when these services are cut. Can they find alternative options if they are wealthy enough to afford it, or is self funding respite care not an option because the services just won’t be there any more? If the latter, it is a seriously bad situation, not to say that this whole thing stinks. Health in this country has gone to the dogs and the government is solely to blame because of their Americanised attitude of “user pays”. This only leads to the lower classes having no health care at all. But how as a nation can we do anything about it? All the bleating and protesting in the world will not change our leaders’ stance on these kinds of issues.
I really hope that those who need this respite do not lose the service, or the relationships with the carers that undoubtedly take time to form. That is what will be missed the most.

Rebecca Vassarotti 8:08 am 08 Sep 17

viking princess said :

I am a bit confused about where you are coming from Rebecca? You seem to support families who are about to have their child’s respite service terminated and others who will only be offered limited reduced services from next month and yet there is this…..

“…and overnight respite is a hangover from a system that wasn’t working properly in the first place..”?

Maybe you need to speak to some families with children and young people with special needs, especially those with high needs that demand one to one attention 24/7 for their own safety. You seem to imply that if the “system” worked properly, respite care would not be necessary? You call respite a “band-aid”? Seriously?

There are many families who would be happy to speak with you and enlighten you why respite services are essential and much needed to maintain that child or young person being kept in their own home and not forced into long term residential care. I think we all agree that is not in the best interests of any child?

Before the NDIA came along my child had all the respite services she needed. Now the service is on the verge of being heavily cut and actually non existent for many high need children and young people.

There is no such thing as “typical and normal relationships” with a moderate to severely disabled child. That child affects every relationship in that household which is why short term overnight accommodation is so vital to families.

“It is important that we now assess how well the scheme is meeting the objectives of control and choice and reflect if there are any adjustments that we need to make.”

Well said! That assessment needs to be done immediately before services are cut next month. Urgent action is needed.

Hi Viking Princess. Thanks for your comments. Please don’t interpret my comments as suggesting that families don’t need overnight respite care – to the contrary, I recognise how vitally important they are which was the motivation for writing the article. In relation to your highlighted passage, I was just trying to express that if there was adequate funding and appropriate supports able to be accessed by families, strategies such as respite wouldn’t be required but recognising that the system is falling far short of this.

Michelle Pearson 6:26 pm 07 Sep 17

As a practitioner here in canberra, the NDIS is a great system that is being wrung dry by practitioners charging way more than they would normally charge. It is an unsustainable funding system that should never have been set up the way it has. They had access to an amazing system which can not be overcharged and uses the current item numbers that all practitioners must use. That system being Veterans Affairs. Why I ask the government did you not just tag on to that system and save millions of dollars in the set up and force all parties taking part to be accountable and use a set fee rate? This way the NDIS would become a sustainable funding program for people with disabilities. My opinion only of course! Roast me if you wish.

viking princess 5:57 pm 07 Sep 17

I am a bit confused about where you are coming from Rebecca? You seem to support families who are about to have their child’s respite service terminated and others who will only be offered limited reduced services from next month and yet there is this…..

“…and overnight respite is a hangover from a system that wasn’t working properly in the first place..”?

Maybe you need to speak to some families with children and young people with special needs, especially those with high needs that demand one to one attention 24/7 for their own safety. You seem to imply that if the “system” worked properly, respite care would not be necessary? You call respite a “band-aid”? Seriously?

There are many families who would be happy to speak with you and enlighten you why respite services are essential and much needed to maintain that child or young person being kept in their own home and not forced into long term residential care. I think we all agree that is not in the best interests of any child?

Before the NDIA came along my child had all the respite services she needed. Now the service is on the verge of being heavily cut and actually non existent for many high need children and young people.

There is no such thing as “typical and normal relationships” with a moderate to severely disabled child. That child affects every relationship in that household which is why short term overnight accommodation is so vital to families.

“It is important that we now assess how well the scheme is meeting the objectives of control and choice and reflect if there are any adjustments that we need to make.”

Well said! That assessment needs to be done immediately before services are cut next month. Urgent action is needed.

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