NDIS blowout a reminder of government inefficiency

If the road to hell is paved with good intentions, the National Disability Insurance Scheme represents a flashing neon billboard along the way. Established with the best of intentions to help the most needy, the NDIS has become another example of how the involvement of government works against efficiency and acts as a honey pot for less scrupulous operators.

In many ways, the NDIS has become a repeat of the Rudd government-era Building the Education Revolution scheme in which education outcomes were confused with the need for overpriced infrastructure. Benchmarks for government tenders can bear no relationship to what is going on in the commercial world. In the end, compliance and administration become an end in themselves, soaking up a disproportionate amount of the funds intended to solve a community need.

The difference between the global financial crisis-era BER and the NDIS is that the NDIS is a permanent program. It is demand-driven and growing strongly, despite government efforts to restrict that growth to 8 per cent a year. Without surgery, the system will consume an unreasonable proportion of the federal budget and quickly become unsustainable. If that happens, the big losers will be those it was designed to assist – people with serious, permanent disabilities who had been left vulnerable before the NDIS was introduced.

Some of the problems with the NDIS are well documented. These include the way in which state governments were quick to withdraw funding for programs that were then shifted on to the federal government tab. Another problem has been mission creep, which has seen the system expand beyond servicing the most needy to support conditions it was never designed to address. Once implemented, welfare programs are difficult for government to withdraw and quickly become considered an entitlement for those who receive them. A third area has been fraud and overpricing by service providers working in the scheme. All of these areas have been the target of some reform. State governments are being pressured to restore some funding. Yet despite tough words, the commonwealth has been reluctant to properly bite the bullet on eligibility.

One area that has not received the attention it deserves is the explosion in the private sector bureaucracy that acts as a gatekeeper to recipients. As health editor Natasha Robinson reports on Friday, billions of dollars a year in NDIS funding is being soaked up by middlemen plan managers charging “trail fees” and support co-ordinators who command hourly rates on par with junior doctors. The “trail fees” alone charged by plan managers tally more than $1bn annually, reducing the funding for direct services provided to people with disability.

While reforms to shore up long-term sustainability of the NDIS have focused on cracking down on fraudulent providers and tightening eligibility, much bigger sources of waste are going unchecked. There has been little scrutiny on plan managers and support co-ordinators, as well as on the quality and value of service provision generally. A specialist support co-ordinator with no or limited formal health or disability training receives funding of $190.54 an hour in the city, or $285.80 an hour in very remote communities, to help participants choose and access services. Additional costs can include flights, accommodation and vehicle hire that can exceed the actual cost of service to the recipient.

Government must act decisively to restore integrity to the NDIS and refocus it on what it was intended to be. Unless it does so, it will lose public support and put the most vulnerable back at increased risk.