RSM Australia

Making disability services viable within an ‘NDIS world’

Knowing ‘thy core mission’ is the key to surviving the transition to a NDIS environment.

Dedication to delivering excellence around a narrower range of ‘efficiently-priced’ services is the new mantra underpinning sustainable disability services within the brave new National Disability Insurance Scheme (NDIS) world. NDIS environment

The trouble is disability service providers are struggling to cross the Rubicon from being ‘caregivers to beneficiaries’ to running customer-service oriented businesses. 

As a result, most providers in this space will, almost by default, require the assistance of independent third parties dealing with multiple complexities associated with their new commercial realities. While the NDIS pricing model is arguably the single biggest challenge, other factors now at play include organisation structure, competitive market dynamics; plus evolving and changing services to match the NDIS pricing model.

Having assisted over 50 disability service providers in the ACT, Victoria and Queensland transition their operations for an NDIS environment, it’s clear that management is struggling to maintain disability services at the National Disability Insurance Agency (NDIA) efficient and competitive price-points.


New NDIS culture demands different skill-sets

In fairness to the sector, the skills-sets upon which executive and management were hired – based on years of hands-on experience in the field – means they’re ill-equipped to facilitate needed structural change that has seen the former disability services model turned on its head. Instead of continuing to deal with ‘beneficiaries’, disability service providers are being forced refocus on customers - or risk losing them to competing providers.

With disability services now encouraged to emulate commercial  sectors, such as hospitality – where the accent is more around ‘bums-on-seats’ and occupancy – management must quickly acquire expertise around business operations, marketing/branding, PR, business/financial modelling, customer services and greater transparency around efficient pricing.

Given that the NDIS signals the end of long-standing industry practices around block funding, it’s hardly surprising the move towards a competitive “fee-for-service” model requires huge structural changes.

Owing to the difficulty transitioning their operations for an NDIS environment, a number of disability service providers have already been forced to close down.  Sadly, all too often it’s only the chief financial officer who recognises how unsustainable their existing operations are - unless they rapidly change.


Transitioning journey starts with soul-searching around ‘core mission’

While the disability services sector is increasingly aware of its need to restructure around the NDIS pricing model, too few providers have the internal capability to enact the needed changes. Before management can make the needed changes, it first needs to honestly assess what their primary mission is and how they propose to deliver to it.

By honestly assessing what their core mission is management will start to recognise what services they need to rationalise and maintain. It might be tough love, but providers that don’t take a more business-minded approach to promoting their core mission, are unlikely to survive within a competitive market for disability services.

Only once providers have realistically assessed their core mission are they able to start modelling how the services, deemed critical to this mission, can be delivered at an ‘efficient’ unit price.

The removal of block funding arrangements, together with ongoing uncertainty around individual funding plan arrangements – relative to the services being received – means competitively price services are paramount to providing future sustainable disability services.


Getting the costings right

NDIS environmentHaving facilitated numerous strategic reviews in recent years, we’re witnessing a clear pattern emerge around NDIS restructuring. Many providers have, albeit reluctantly, decided to continue subsidising services in the misguided hope that pricing will change, and without considering the long-term financial impact of operating services at a loss within a high-growth market. 

Comprehensive service planning based on sound financial modelling and market intelligence - that informs organisations of the true impacts of scale and market potential - are critical skills required to successfully navigate the changes in disability services.

Successfully transitioning to the NDIS environment brings with it myriad pricing, governance, business model, workforce, IT infrastructure, client relationship and marketing implications.

Given that transitioning to an uncertain NDIS environment is problematic at best, disability service providers should seek external expertise in assessing the myriad options confronting them, from amalgamation and downsizing, through to finding alternative funding sources.


Have a question around transitioning into a NDIS environment?

If you would like to know more about NDIS, contact Kirsty McGovern-Hooley, alternatively get in contact with your local RSM office today.


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