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What does NDIS mean for your business?

What does NDIS mean for your business?

“Is this the Beginning of the End for Not for Profits?”

 

Many of the 2,000+ not for profit organisations involved in the National Disability Insurance Scheme (NDIS) are asking whether it will herald the end of small NFP disability services providers.

Questions are beginning to arise!

Do NFPs have sufficient client volumes to survive?

How will they manage the emerging cash flow risks created by customer choice and control?

Are they efficient enough to deal with increased competition? If efficiency becomes the order of the day, will NFPs be forced to trade off of care for cash?

Will it become increasingly difficult to attract skilled and competent staff members who are able to meet the demands of working in a flexible and competitive market?

How can NFPs stay solvent in a market in which margins are squeezed and future funding is uncertain?

 

Previous Trends

If the trends in Australia are the same as those experienced in the United Kingdom, one can expect to see a significant reduction in the number of NFPs that remain competitive and viable within the scheme. Many of those that are viable will have formed new partnerships, alliances and mergers with other providers.

When you look at the impact other national schemes, such as Jobactive, one of the things you quickly learn is that new business models and efficiencies will need to be found in order to meet the potential lowering of costs and the changing market dynamic.

How to Thrive in the New Environment

The NDIS is a social innovation.

It comprehensively rewires and restructures the disability support sector. NFP service providers will need to engage in some innovation and restructuring themselves if they are to thrive in the new environment.

At the very least, NFPs of all shapes and sizes need to:

  • Develop and implement new and sustainable models of service delivery that meet the needs of customers.
  • Invest in the implementation and streamlining of organisational systems and processes to achieve cost efficiencies.
  • Keep corporate overheads low.
  • Develop and provide products and services that demonstrate and deliver value to customers by actually meeting their needs.
  • Create a strong brand and marketing capability
  • Attract, develop and up-skill a workforce for the future.
  • Be an evidence-based organisations capable of demonstrating the achievement of participant outcomes and goals.

Who will Survive?

So is it the beginning of the end for Not for Profits? No, not all but it certainly will be for those who don’t find ways to innovate and restructure their business to meet the changing face of the disability sector in Australia.

NDIS Business Readiness – Navigating Change

NDIS Business Readiness – Navigating Change

The Challenge of Change

 

On July 1, 2016, the National Disability Insurance Agency (NDIA) commenced the rollout of the National Disability Insurance Scheme (NDIS). If things go according to the NDIA’s and State Government’s plans we will over the next three years see some 450,000 participant’s transition from state-funded arrangements to full funding under the NDIS. The speed of change for clients and service providers will be rapid and profound. Business Readiness is imperative for NDIS service providers.to survive the changes.

The Nature of Change

The NDIS is a market-driven scheme, where providers compete for the delivery of services that meet the participants support needs, including how, when and where those supports are delivered.  Funding will no longer be controlled by providers and this in itself will challenge the very fabric of organisations sustainability.

We now find ourselves in a growing market where it is stated there are growth opportunities for all. Growth is good but if service providers are not business ready & cannot deliver the services for the prices identified in the NDIA’s Price guide and for a profit they will not survive.

Whilst opportunities do exist for service providers, a challenge for them will be the speed at which the scheme is being rolled out. Given that service providers are not used to dealing with rapid change the speed is beginning to severely test not only their capability to respond but also the NDIA’s resolve as well.

This is especially true if the systems or payment arrangements established by the NDIA do not respond to and fails to manage the significant number of participants and providers entering the scheme and being dependent the NDIA portal and payments system in a timely manner.

This concern was recently borne out with the system problems experienced by the NDIA and its portal at the commencement of the rollout of the entire NDIS.

 

Business Readiness & the challenge today

The majority of service providers across the full-service spectrum are Not for Profit.  Organisations are struggling with Business Readiness and their ability to address the significant structural and organisational reforms necessary to survive under the NDIS  whilst remaining viable and competitive.

For many years the disability services sector has operated under what appears now to be more generous state-funded arrangements where payments were in advance. Today providers are needing to restructure their businesses to be viable and efficient in a situation where profit ‘Margin’ is now paramount in order to survive in a market, driven by competition and consumer choice and payments in arrears.

The concept of ‘Individualised Funding’ and ‘Person-Centred Care’ appears to be more challenging and costly for providers than first thought, primarily due to the significant capital investment required in implementing systems that help organisations to gain the efficiencies required to remain competitive.

Providers involved in service delivery today are having to find the funds and resources necessary to develop and implement systems capable of managing not only the individual service booking and billing processes, but rostering, payroll and finance. To achieve this they are struggling to find the money to implement the IT systems in a timely manner that will improve and streamline the management of participant’s information, supports, organisational staff, and billing.

Putting this aside organisations are struggling to meet the changes necessary to survive in the short term let alone the longer term. Not all organisations have adequate cash reserves to survive let alone implement expensive IT solutions. The implementation of these systems is not only costly but time and resource heavy.

Most disability services providers (like many human services providers) simply do not have the capital to meet these challenges and the government does not appear to be providing sufficient funding in the same way it would assist other industries when they are being reconstructed on such a scale.

This is the challenge of change.