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Avoiding a Crisis in Disablity Services

By Dexter Duncan

Most Australians have heard about National Disability Insurance Scheme (NDIS) as a major policy change from our Federal political leaders.   Many have also heard stories of individuals that are impacted from the change and why they deserve better.   The below and subsequent articles take a macro level look at three (3) giant outcomes from the NDIS that you probably did not know.

In short, the three end results of NDIS are a more efficient service delivery, greater self-determination for the disabled and huge increase in jobs for disabled and folks in disablity health sector.     We’ll go through these three result of NDIS in more detail:

1. NDIS Avoids financial and support crisis – The economic and fiscal benefits to funding NDIS

2. NDIS Cements Goal Based Funding – measuring purpose based outcomes.  With funding weighted on developing independence and inclusion in community, service providers need to measure results. (see part 2: The 2nd Outcome of NDIS You Probably Didn’t know)

3. NDIS provides equitable and fairness enabling more jobs and greater productivity – More people supported, More funding, More Jobs (see part 3: More Jobs and Productivity)

Outcome 1: Avoiding Financial “Basket Case” Disaster

One alternative to funding the NDIS is to do nothing, leaving everthing the same.    Although some states would fair better than others (such as NSW), the overall consequence would be disasterous.   In short, we’d end up spending more taxpayer dollars to support fewer people in crisis situations.       It would also be a disaster for the quality of life for a large sector of society.

As seen from this chart from Price Waterhouse Coopers (PWC), our government(s) are incented to provide funding towards independence and community to avoid a high cost crisis developing.    Without the extra planning and stress of including community and encouraging independence, the state ends up funding emergency-mode support for a limited group of people. The crisis involves aged carers (usually moms) turning over support to the state due to their inability to continue providing support.   Without extra funding to change the system now, the disablity support system acts more like a high-cost triage emergency department vs. the NDIS model which is similar to taking preventative approach and getting support from community GP doctors and specialists.

NDISScenario 1 assumes keeping everything the same with cash flows only adjusted for GDP.

Scenario 2 is modeled after the NSW Stronger Together 2 (ST2) proposal.

Scenario 3 is modeled using NDIS and other reforms.

 

As can be seen from the PWC chart, the “do nothing” approach (scenario 1) ends up costing two to three times more in the long run, while providing less services.    The cost difference is $15 Billion for NDIS versus $35 to $45 Billion under scenario 1.   The crisis situation spiral is typified by the parent or carer who can no longer assist, forcing the government to inherit a crisis situation and reallocating resources away from other respite and care recipients.  The compound effect of multiple crisis, turns the disability service into a triage like emergency care service (e.g. high cost for few) where a planned approach for a larger base of people build the independence and community support needed to share and reduce long term “crisis” costs.   (For a great overview of the problem NDIS is solving, read the PWC report highlighted below.)

For those more economically minded, this cost savings and avoidance of crisis mode for disablity sector is reason enough to support NDIS.     How these dollars are spent will be measured in a goal based system which is covered in next article.

Outcome 2: Goal based Funding

Outcome 3: More Jobs – 

References:

1. Above Chart is from Price Waterhouse Coopers, “Disability expectations: Investing in a better life, a stronger Australia“,

2. The Productivity Commission, “Disablity Support Chapter 20: The Benefits of reform

For more information about the NDIS – Click here to chat with one of our consultants.

2 thoughts on “Three things about Australia NDIS you probably didn’t know

  1. Pingback: The second thing about NDIS you probably didn’t know | Cloud Nerve Network

  2. Pingback: The 3rd thing about Australian NDIS you probably didn’t know | Cloud Nerve Network

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