c. Emerging cost pressures
''The Commission compared trial and transition data on participant numbers and package costs with the assumptions in the NDIA’s modelling to better understand how the scheme is tracking in terms of costs...''
For most disabilities, participant numbers broadly match the modelling assumptions for all but the largest disability groups — there are more children with autism and intellectual disability than expected.
Average package costs (for plans effective from 1 July 2016) are higher than the modelling assumptions (after accounting for disability, age and level of function). Breaking this down further:
the average package provided to participants with low levels of function is less than expected ($120 000 compared to $150 000)
the average package for participants with medium levels of function is higher than the modelling assumptions ($56 000 compared to $41 000)
participants with high levels of function are receiving higher packages on average than the modelling assumes ($29 000 compared to $11 000).
Utilisation rates are lower than expected. Underutilisation is currently offsetting the increase in scheme costs attributable to higher prevalence rates for children and higher than expected package costs.
The report outlines a significant risk for the sustainability of the NDIS scheme due to its cost pressure. NDIS was designed to introduce market competition from providers to replace the costly old model of 'block funding'. The intended effects are shown on the following table:
GRS has positioned the affordability as one of the highest priorities of our service. Based on our experience of working in the public system, we have continuously seen numerous government driven funding scheme 'run dry' and they ended up significantly reducing their scope of service in order to 'survive'. As a provider we are very glad that the government is considering to introduce public competition to gradually deregulate the cost but we are also concerned about the possibility of providers' tendency to charge maximum rate they are allowed because NDIS could afford it at the moment. We would like to offer a reasonable and affordable cost projection to our service recipients that even if the NDIS reduced the budget in the future that they do not have to 'cut corners' to sacrifice their much needed therapy to compensate for the shortfall of their essential care.