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Annual Price Review Pulse Survey shows most providers reconsidering their futures
11/07/2024
What you need to know
- Following the release of the Annual NDIA Pricing Review on 28 June, we opened a Pulse Survey to gauge the mood of NDS members and ask whether their services would be affected.
- We received more than 1200 responses from small to large organisations and from every state.
- The response was overwhelmingly negative, with 84 per cent of respondent organisations saying that they are “actively reconsidering their future” due to the new price limits.
- Seventy-five per cent are “considering stopping some or all of their disability services.”
- Withdrawal of services will most affect participants with complex, high-intensity or behavioural support needs and those in regional and remote Australia.
When the Annual NDIA Pricing Review (APR) was released on 28 June, NDS was scathing about the NDIA’s disregard of the financial plight of disability service organisations delivering quality services. The 3.19 per cent rise announced for 2024-25 — barely covering the recent wage decision — fell far short of what providers need to be viable after many years of rising costs.
Although we knew from our 2023 State of the Disability Sector report, released in December, how tight margins were for providers, we wanted to get their immediate reaction to the decision and whether the decision would affect services. The Pulse Survey of providers revealed that their thinking has shifted from finding ways to cut budgets without cutting corners to seriously considering cutting services entirely.
Unhappiness and anger over pricing is unmistakable in many responses: “The NDIS price system is a cruel joke that is putting the most vulnerable at the most risk and slow[ly] crushing the quality providers to death” [multi-state provider].
The survey drew responses from small to large operators from every state. Of the 1258 responses to the question, Are you actively reconsidering your organisation's future as a result of the new price limits? 84 per cent (1062) said yes and just 10 per cent said no.
The second question dealt more directly with service delivery: Are you considering stopping some or all of your disability services as a result of the new price limits? Three-quarters of respondents said that they were thinking about cutting services, 14 per cent said they didn’t know, and just ten percent said no.
The third question asked those who are considering cuts to services for more detail about the types of services they might cut, when they might cut them, the effects of their cuts to regional and remote services, and how many participants might be affected.
Their responses gave a complex picture of service delivery, with financial and other pressures coming from all sides and a range of strategies under consideration for survival.
For one WA provider, the APR decision was just one more reason to stop supporting NDIS participants altogether, citing “lack of clarity, additional time requirements, no stable supports, poor NDIS staff training, payment limits below other funding … and the seemingly very dodgy push to move to large providers...”
But for most providers, costs rising faster than prices is the crucial issue. One Victorian organisation claiming a loss of $870,000 in the last financial year, said that price increases did not cover the 1 July wage increases for long-term staff, “without beginning to consider insurance, energy bills, Workcover, etc … If we don’t turn things around in the next 12 months, we will likely close before end of FY24–25…”
One regional NSW provider, who is considering its options, admits that closing its doors is one of them: “This [would] impact significantly not only [our] participants and their families but also the staff that would be out of a job.”
As we have seen in previous surveys, unrealistic pricing unfairly affects registered providers, who have extra compliance costs: “I am being forced to de-register my business as I can no longer afford the costs associated with this expense.” [Vic. provider].?
In the past, many organisations have cross-subsidised services, moving funds from one area with profits to NDIS services that are making a loss. The survey shows that financial juggling of this type has reached its limit: “While in previous years the slight margin we receive through SIL was able to subsidise other services, this year shrinking funding has meant we can no longer rely on this” [NSW provider].
As narrow margins turn into losses, providers look to cut travel to support participants: “Will no longer travel further than what is billable. Used to absorb this expense” [SA provider]. Many rightly pointed out that limiting travel will hit regional and remote services most.
Another solution being considered is downsizing — “To save the business [we] will need to reconsider size of business, moving to smaller premises” [Qld provider]. Laying off staff is now an option for many organisations: “[We] will need to reduce hours for all staff, if not make them redundant, with no price increase for capacity-building supports” [NSW provider].
Other providers are moving their businesses away from disability to aged care, where “[t]he wages are higher so it's easier to attract staff, pricing is higher and the margins are better. And there is less red tape and less likelihood of unreasonable fines being imposed” [Multi-state provider].
And those participants at gravest risk of cuts are those needing the most support. One NSW provider will be telling participants who depend on complex, high-intensity supports that they will soon “cease any unfunded supports, … reduce unfunded nursing support, reduce ratios in SIL that have previously been covered and now not funded in plans, [and may make] … changes to staffing (use of agency, etc).”
For participants with complex behaviours, the pricing does not recognise the specialist skills to support them: “Given the inability to claim high-intensity support for participants with complex behaviours, we will be looking to cease servicing these existing participants and refusing to accept new participants with complex behaviours” [Tas. provider].
And participants in regional, remote and rural areas will feel the brunt of withdrawn services: “65 [per cent] of our clients are rural and remote. If we close our doors there aren't any other local providers to fill the gap. [Six] years of price freeze, with current inflation, is killing us” [SA provider].
Many providers, however, are determined to keep providing high-quality services, even if it means losses: “I will survive, as I am prepared to weather the storm. But it is going to destroy some good, small companies. Do you know who ultimately pays the price? Disability clients” [Qld provider].
NDS wishes to thank everyone who took part in the survey.
We are strongly advocating with the NDIA and government for immediate action on prices. It is time to take the politics out of pricing and to take a best-practice approach that is independent, transparent and supports participant outcomes.