What It Is…
The National Disability Insurance Scheme (NDIS) is viewed to be among the most significant social reforms of its generation. Following the completion of the trial phase, the NDIS commenced the initial stages of the planned national rollout on the 1st of July 2016. It is believed that it will impact almost every aspect of the disability service providers’ business and, more importantly, enable the consumer to choose, manage and control the assistive services they require to lead a life that is fulfilling to them. A societal change of this degree will cause a lot of confusion, resistance and require transition time. It is vital to be informed and learn how to operate individually or as a business within the new NDIS environment effectively.
The national rollout commenced in July 2016 and the time for local implementation will vary depending on the region. It is predicted that by 2020 the NDIS will be fully operational across the country, where approximately 450,000 people will be supported by the scheme. An increase in the Medicare levy will help support the $25 Billion required annually to fund the initiative once rolled out.
What Has Changed…
Until the NDIS came into force, ‘block’ payments from the government agencies were made directly to the service providers, in advance, each quarter. This block funding was used to provide services to clients of the organisation. Under NDIS those same clients, people with a disability, will now be able to control the funding they are eligible to receive. They may elect to manage their finances personally, through a third party provider or through the National Disability Insurance Agency (NDIA) directly. This has a substantial impact on the disability sector and more specifically service providers that will likely require major organisational and structural change. The diagram below outlines the three methods that the funds can now be managed, how payment is made and who controls the finances.
The Impact for Consumers and Service Providers
The implicit competition between service providers will become far more overt with organisations now needing to attract and retain clients. The market forces involved will challenge organisations to reconsider their business models, innovate and enhance their service offerings. This, in turn, will drive industry change, growth and development.
Clients will have;
- Access to better and more personalised care
- Control over what service aligns with their developmental goals, and
- The ability to allocate the funding they receive where they would prefer.
Service providers will now receive their payment in arrears on an individual level. This dramatic reform places the demand, control and choice squarely with the client. Service providers will have to consider how to better ensure clients and client service is at the forefront of their strategy and business approach and assume a commercial mindsight in a not-for-profit environment. A provider’s ability to attract and retain customers will become critical. It may be essential to enhance the quality, flexibility and personalisation of the service offering to meet the demands of the new customer-centric market. Similarly, the organisations themselves will need to focus on efficiency, cash flow and operating costs to be able to survive working in arrears.
At TMS Consulting, we are supporting service providers to anticipate and prepare for this major organisational change and informing the restructuring that may be required. We are helping organisations to better understand the potential impact of the NDIS on their operations, delineate the changes required and establish an organisational structure and strategy that will support long-term success in the new environment.
Does your organisation need assistance? Contact us at firstname.lastname@example.org.