Are service providers ready for the National Disability Insurance Scheme roll out?

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Are service providers ready for the National Disability Insurance Scheme roll out?

Service and care providers answer the question

Service providers exhibit a medium readiness for the July 2016 National Disability Insurance Scheme (NDIS) roll out but note finding quality staff will be the biggest issue.

Our recent paper,How consumer driven care is reshaping the community care sector, outlined the likely impact on the sector with the roll out of Customer Directed Care (CDC) and the National Disability Insurance Scheme (NDIS). This paper focuses on service providers and the carer workforce, what is important to them and how they may be impacted.

The environment in which service providers operate in is changing. Over the coming years the government will roll out CDC for aged care and the NDIS for disability support. All home care packages moved to CDC in July 2015 with funding assigned to providers. From February 2017, the funding will be assigned to the individual consumer, giving them the ability choose their service provider and change to a new provider if desired. As of July 1, the NDIS roll out began across the country, with implementation to be completed by July 2019. These changes will impact approximately 54,000[1] carers and 25,000[2] service providers across Australia.

How ready are service providers?
Specialised staff allocation

As NDIS and CDC come into effect, customers will have more choice over their carers. The customer’s expectations of the carer will become more demanding, with requests for workers with specialised skills, certain personality types, or cultural backgrounds. Success in this area is dependent on the service provider’s ability to match the right staff to their clients and will therefore, require a larger workforce pool.

“I had to leave a service provider as they were sending me all over town, backwards and forwards to look after clients, they really needed to get their act together, I think they thought it was ok as they were not paying the travel costs, it’s just not.” – Personal Care Worker

Attracting quality staff

Service providers indicated that it was difficult to attract quality staff. As specialised demand increases from customers, skilled care workers will become more selective of their employers. Of the personal care workers interviewed, the main motive behind selecting a service provider was shift availability, with a view to sustaining a regular income. This can be inhibited by enterprise bargaining agreements (EBAs) that do not match the flexibility requested by customers.

“Shift availability is most important to me. To make up the hours I have to do morning and night shifts which is restricted under my EBA.” – Personal Care worker

Scheduling accuracy

Service providers interviewed indicated that they currently have the ability to accurately schedule staff and do not see this as a constraint with the incoming NDIS and CDC changes. Many of the larger service providers have embraced technology to assist in staff allocation while small providers are looking to implement new scheduling tools.

“We are using technology to manage timesheets and scheduling, we find we our current scheduling to be efficient enough for us. Finding staff to cover shifts is more of an issue than scheduling.” – Service Provider

Maintain service levels within cost profile

With the introduction of NDIS and CDC, funding for a service is provided on a per item basis. Providers will no longer receive block funding to cover their overheads or cross-subsidise loss-making services. Service providers must improve their operational efficiency in order to remain profitable under NDIS and CDC with all costs covered by the service item fee. This is especially relevant to the NDIS as the scheme has implemented tight pricing restrictions for the immediate future.

“We are only choosing services that pay more than $40per hour otherwise we cannot cover the cost of delivery.” – Service Provider

“I just don’t know who will be picking up the unprofitable services to those most in need, that is a real gap in this system.” – Service Provider

Itemised billing and accurate storage of customer information

Under NDIS and CDC rules, more visibility is required around billing for services. Service providers must also store accurate and detailed customer information to allow for transparency and efficient delivery of services. Many organisations will need to update their systems to allow for itemised billing and customer data storage. Many larger organisations are well on their way to either a systems upgrade or use of cloud based software to address this requirement. However, smaller organisations don’t yet have a solution and are either looking for providers with whom they can merge or are considering exiting the industry all together.

This also presents opportunities for large providers to offer back office support systems such as HR, IT and payroll on a fee for service or itemised model. This means that smaller providers can pay for these systems on a usage basis, reducing the need to high capital costs.

“We cannot manage the new requirement for itemised billing so have recently merged with a larger organization.” – Service Provider

How can service providers respond to this change?

In order to respond to the new environment, service providers will need to assess their capabilities as an organisation and ensure that their value proposition is in line with market demands. To attract the right workforce, there are options to partner with other providers or look for alternative ways to access staff such as workforce aggregators or 457 visa policies. Providers can also look to change the structure of their workforce through EBA renegotiation and balancing permanent and part-time staff to adapt to the flexibility demanded by their customers. As funding moves to an itemised basis, providers should assess their operating model and service mix to achieve maximum efficiency per hour or service delivered. They will also need to consider their technology capabilities as they move to itemised billing.

“We have implemented a 457 program in order to employ quality staff from overseas, it is expensive but necessary to get the quality workforce we require.” – Service provider

Lynne Pezzullo, Deloitte Access Economics, Health Economics and Social Policy leader comments, “We are seeing the introduction of ‘fee for service’ funding in the disability care sector having a dramatic effect on service providers. The shift from block funding to an itemised basis of funding is affecting the way services are delivered, putting pressure on non-profit organisations to find more innovative ways to monetise their assets and reassess their service offerings to become more sustainable under the new system. In many cases they must fundamentally change core aspects of service delivery, governance and structure in order to ‘future-proof’.”

1 Deloitte estimates
2 NDS Business Confidence Survey 2014, Australian Department of Social Services 2014
3 Australian Government: National Commission of Audit, The National Disability Insurance Scheme
4 Australian Government: Department of Social Services, Aged Care Reform
5 Deloitte interviews 

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