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- The NDIA’s thin market trials suggest market facilitation alone is not sufficient to overcome challenges in thin NDIS markets
- Box 1 Defining remote areas
- A more active and flexible approach to market stewardship of the NDIS market is needed
- Finding 1 Market stewardship efforts to date have been too narrow
The NDIA’s thin market trials suggest market facilitation alone is not sufficient to overcome challenges in thin NDIS markets
In 2019, the Disability Reform Council (DRC) acknowledged the need to use a more flexible approach to address market challenges following the development of the NDIS Thin Markets Framework commissioned by Department of Social Services (DSS).
The Council agreed to use a more flexible approach to address market challenges in the NDIS, recognising that a ‘one-size-fits-all’ approach to delivering the NDIS is not suitable to address market gaps faced by certain geographic locations, particular cohorts or disability support types.[7]
The NDIA subsequently undertook 13 thin market trials across each state and territory as agreed with the DRC. Twenty-six additional thin market projects have also been initiated by the NDIA where potential supply gaps have been identified.
The trials focused on mechanisms to improve market information, assisting participants to pool funding or using direct commissioning arrangements to purchase supports at a group level (Figure 6).
An evaluation of the trials found market information provision was not sufficient to overcome challenges in thin markets[8], implying more active interventions were needed (Figure 6).
Coordinated funding proposals (CFPs) demonstrated some success in improving access to services for remote and very remote communities. CFPs allowed participants to pool their demand by collecting their funding and coordinating what services they needed. This helped participants to attract providers to deliver specific services, deepening the market. However, most CFPs have focused on one-off functional assessments and/or assessments to support ongoing therapies. Testing CFPs across a wider range of support types and locations is needed.
The success of CFPs were found to rely heavily on support coordinators working together. For example, the Mornington Island Thin Market Trial saw an increase in average participant plan expenditure from $652 in the year before the CFP commenced to $7,027 in the year after the CFP commenced. Improvements were largely attributed to the ongoing engagement of the CFP working group with NDIA assistance (Case Study 1).
The evaluation, however, highlighted mixed success in being able to get support coordinators to work together. This was reported to be a factor in some CFPs not proceeding.
With some CFPs not progressing, it is unclear whether CFPs can overcome market coordination issues to ensure continuity of supply and support investment in local service delivery in remote communities.
NDIA have recently released resources for participants, families, carers, and support coordinators to develop and use CFPs to access safe, quality supports they need. Monitoring the uptake of, and associated outcomes from, CFPs will be key to determining whether they can overcome market coordination issues and deliver on what is most important to participants[9].
Direct commissioning trials were applied in a handful of circumstances and with mixed success (Figure 6). While the evaluation found that direct commissioning increased assurance of demand for service providers in the few trials undertaken, the increase in NDIS spending was marginal outside of the one very remote trial.
In the very remote trial, the increase in spending may not have reflected an increase in participant use of supports. Parts of the community were unclear about how the NDIA captures, monitors and responds to feedback on how well the directly commissioned service is working for participants in the community[10]. This included feedback about how culturally safe and appropriate the supports are.
The NDIA thin market trials have also not addressed the underlying drivers of thin markets – particularly in how they relate to market settings, including price settings – which has resulted in limited success in improving participant outcomes[11].
NDIA’s approach to identifying, prioritising and intervening in markets is largely informed by data on utilisation and participant spend. There is limited visibility of the unregistered provider market and little market sounding to understand the nuances in these areas.
NDIA’s approach is currently not public. Publicly available market monitoring data is not enough for communities to raise issues or respond to emerging thin markets. It is unclear how participants and providers can raise concerns about thin markets and this is creating uncertainty about the continuity of supply when markets fail.
Importantly, the evaluation of the thin market trials did not follow best practice Indigenous evaluation approaches.[12] The lack of First Nations voices makes it difficult to make any robust conclusions, and learn from what has or has not worked for these communities.
| Market facilitation to improve connections between providers and participants, such as focused engagement and sharing targeted market information | Market facilitation has featured in almost all 39 thin market trials since 2019. There is no evidence that, on average, market facilitation trials increased participant use of NDIS supports or strengthened local NDIS markets above all other activities undertaken by the NDIA or other market intermediaries. Feedback from service providers and support coordinators indicated that market facilitation activities were insufficient to encourage greater service provision and to overcome systemic market challenges – such as workforce shortages and participants’ limited understanding of the NDIS. |
|---|---|
| Coordinated funding proposals (CFP) to enable participants to pool NDIS funding to more efficiently secure services from providers | CFPs have been, or are being, trialled across nine remote and very remote communities. Trials have shown success at pooling participant demand, particularly for participants to access one-off functional assessments. CFPs help service providers – mainly based outside the community and travelling by road or air – to mitigate demand uncertainty, and share travel and administration costs. However, to understand the potential of CFPs, they need testing across a wider range of support types and locations. Main challenges with CFPs appear to be the logistical challenge for service providers to coordinate service delivery across multiple support coordinators who are not always based in the community. |
| Direct commissioning directly contracts providers to deliver support to a participant or a group of participants | Only three trials used direct commissioning. Only one trial was run in a remote context, and it was limited to community, social and civic participation supports. While it is still too early to assess, the NDIA expects a projected increase of around 119% (or over $10,000) in average annual participant expenditure for these supports. For non-remote trials, direct commissioning had only a marginal increase in use of NDIS supports – that is, an increase of less than $250 per participant each year. Providers also reported substantial financial and administrative burden arising from additional claiming processes and reporting requirements. |
A more active and flexible approach to market stewardship of the NDIS market is needed
The NDIA has been using a ‘least interventionist approach’ to achieve a better functioning and sustainable market, despite recognising some thin markets may require several market interventions to be delivered iteratively over a long term.
This approach, however, reflects a more rigid and time-limited application of a stewardship framework more suited to private sector markets.
Social services, including the NDIS which is fully funded by government, are best described as ‘quasi markets’. These markets require a higher level of market intervention relative to private sector markets.
Governments do more than just set the rules of engagement or act as a funding body. As market stewards, governments also oversee these markets and intervene when necessary. They need to monitor outcomes and carefully balance considerations of efficiency, effectiveness and equity[15].
Alternative commissioning approaches in the NDIS are yet to be explored extensively despite the pressing need.
… rigid adherence to individualisation can have a negative effect, particularly when it is clear that some participants cannot access the supports they need, even when a robust market has been established.
Past reviews and inquiries have repeatedly called for alternative commissioning approaches to be explored where market approaches are failing – particularly for remote and very remote communities (Figure 7). Yet only three trials used direct commissioning, and only one was undertaken in a very remote context.
The market coordination tools, which have been used throughout the thin market trials, have an important role to play in the broader delivery of the NDIS and in building these market structures. They lay the groundwork for future approaches to thin markets and highlight implementation considerations and challenges.
