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Market monitoring and coordinating NDIS markets

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NDIS markets are not yet working for all participants

The NDIS has transformed the way disability supports are delivered. Shifting from a government, block-funded model to a market-based model with individualised funding - where funding follows the participant and not the provider - has enabled participants to have more choice and control over the providers they work with and what supports they access.

With this shift came a significant increase in scale and diversity of demand for services and significant market development. Over 390,000 participants are now receiving disability supports for the first time.203 But this growth has not been sufficient to secure access to quality services for all participants, across all locations. Past reviews of the NDIS indicate a range of ongoing market challenges that reflect more than just transition issues (Figure 10).

Moving from block funded arrangements removed governments’ responsibility for coordinating access to support. The shift relied on participants, their families, providers and intermediaries having the capacity and capability to co-ordinate supports in an already complex environment, with limited (or at least unclear) protection for participants where markets fail.

For some NDIS supports, it has often been difficult for participants to find suitable service providers, and for providers to achieve economies of scale and to ensure continuity of supply.

There is a lack of options and choices, I’m struggling to find options near us that will help build independence towards future employment, build connect to community, friendships etc. Everything is far away.

- Carer and person with disability 204

For these supports, competition between multiple service providers has not been able to effectively ensure access to supports for all participants and in all locations.

Sometimes the number of providers or participants in the market is too small for competition between multiple service providers to work well or at all. We call this a ‘thin market’.

Thin markets have left some participants with limited, or no, access to supports or certain types of supports. As far back as 2017, the Productivity Commission found thin markets have been, and will continue to be, a persistent feature of the disability support sector. In the absence of government intervention there will be greater shortages, less competition, and ultimately poorer outcomes for participants.205

Figure 10: Past reviews of the NDIS indicate a range of ongoing market challenges that reflect more than just transition issues206
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Attempts to steward the market have been limited

The National Disability Insurance Agency (NDIA) has tried different ways to improve access to supports. This includes testing in a small number of areas:

  • sharing information for participants and providers to find and connect with each other; and
  • ways to help participants find and buy supports as a group.

To date these efforts have been too narrow. The NDIA’s own evaluation of their thin market trials suggests providing better information alone is not sufficient to overcome challenges. Rather, governments must be more active and flexible to help ensure markets work for everyone.

Ensuring NDIS markets work for everyone is hindered by an incomplete picture of those markets. There is a lack of comprehensive, accurate and timely information about who is delivering supports and services and what supports are being delivered due to the current NDIS payment system. Coupled with fragmented feedback on service safety and quality, it is challenging for governments to understand what the markets look like and how they are working.

In addition to the challenges around access in remote and First Nations communities (discussed below), we’ve heard from participants about the continuing issues in accessing allied health supports in regional and rural parts of Australia. Over 33 per cent of participants - who have been in the scheme for at least one year - are not accessing any therapy supports in small and medium rural towns, despite having funding for these supports.207

I am in a regional area of 60,000. It is almost impossible to get services here for things such as OT's or speech pathologists - given these people are also required for approval of any spending - it is becoming quite unworkable.

- Extracted Participant Quote from Australian Association of Psychologists Inc208

Governments need to do more than just set the rules of engagement or act as a funding body. As market stewards, governments should also oversee these markets and intervene when necessary. These are social markets where governments need to monitor outcomes and carefully balance considerations of efficiency, effectiveness and equity.209

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