Mental health cost blowout to hit NDIS

The charity to be headed by Julia Gillard has declared the $22bn NDIS will fail the mentally ill and cost more.

Former PM Julia Gillard is the new head of Beyondblue. Picture: Stuart McEvoy.

Shadow Treasurer Chris Bowen maintains the National Disability Insurance Scheme is fully funded, despite the charity to be headed by Julia Gillard declaring the $22 billion National Disability Insurance Scheme will fail the mentally ill and cost more than projected.

In a direct rebuke of the design and costings of the program that has become the chief legacy of her Labor government, Beyondblue has made a submission to a parliamentary inquiry into the NDIS, warning “estimates suggest that current funding models will fail to provide care to all who need it’’.

Ms Gillard will chair the mental health advocacy group from July after having been a ­director for two years.

Mr Bowen insisted claims that the NDIS was not fully funded were “a myth of the Liberal government”.

“Of course as a system develops and emerges, you are going to find new challenges in it,” he told ABC TV.

“Mental health is one of Australia’s health epidemics. We have a couple, we have diabetes and obesity, and we have mental health issues.

“It’s a good thing that mental health in particular is so much more on the national agenda.”

The submission from Beyondblue, threatens to embarrass Labor. Under Ms Gillard’s prime ­ministership, Labor insisted the scheme was fully paid for.

The Gillard government raised the Medicare levy by half a percentage point to pay for some of the NDIS before bundling a series of savings — from private health, retirement incomes and “other long-term savings” — into a 10-year plan the government said fully funded the scheme. Labor, however, double-counted some of the savings in an effort to deliver a surplus that never eventuated.

The Medicare levy rise will fund less than half of the commonwealth’s $11.2bn contribution in 2019-20 and a funding gap of ­almost $7bn a year will emerge in later years, according to government projections.

State and territory governments, which also receive money from the levy rise, fund the rest of the scheme but are not respon­sible for cost overruns.

The Gillard government’s last- minute decision to include mental health in the NDIS has drawn criticism from mental health experts including Patrick McGorry, who leads the youth mental health research body Orygen, and peak industry groups. Beyondblue, currently chaired by Jeff Kennett, said estimated numbers for the NDIS have likely been undercooked, leading to a budget blowout because these people should be “appropriately resourced”.

Conservative estimates in the health sector put the blowout in cost to the NDIS at $500 million a year because of the decision to include mental health.

“Ultimately, is it likely that far more people with a mental health condition and associated psychosocial disability will be eligible for the NDIS than has been anticipated and this needs to be ­understood and appropriately resourced, rather than controlled through tightening eligibility,” Beyondblue says.

The core issue is that original projections for the scheme were modelled by the Productivity Com­mission before the addition of people with “permanent” ­psychosocial disabilities.

The commission, when it ran the numbers, appears to have taken estimates from the number of people with a primary psychiatric disability who accessed psychiatric services in 2011-12, which was 56,733. Adjusted for population growth, that is now 64,000.

About $1.8bn was spent on federal, state and territory-funded community mental health programs in 2012 and the NDIS is ­expected to have a budget of about the same amount, to help a much smaller number of people.

The Australian previously has revealed about 100,000 people who once accessed these individually funded services — who are all classed as having severe mental illnesses such as schizophrenia — will not make it into the NDIS under tougher eligibility criteria.

“Anecdotal evidence from the communities where the initial trials of NDIS were carried out, indicate consumers were encouraged to present ‘on their worst day’ in order to improve their chances of being deemed eligible for supports,” Beyondblue says.

“This practice undermines the work of the mental health sector in driving system reform towards delivery of recovery-focused care.”

Beyondblue is critical of the failure of two parallel reforms — the NDIS and changes to mental health services arising from the 2015 National Mental Health Commission’s review — to work in tandem. Beyondblue concludes people will be left worse off.

“Most people with a mental health condition and associated psychosocial disability are likely to derive benefit only from the mental health reforms, and some may actually be disadvantaged by the disability reforms,” the submission says.

“It is clear that this complexity needs to be addressed so that no one with a mental health condition and an associated psycho­social disability is worse off and, indeed, that more such individuals are better off.”

Community Mental Health Australia executive director Amanda Bresnan said many of the issues facing both sectors were the result of sloppy policymaking done in a rush.

“If your primary indicator is that you have to sign up hundreds of thousands of people by such-and-such a date, then things that should be happening, like quality of care, end up falling by the wayside,” she said. “If you have to slow down the pace, then slow down the pace.”

The NDIS began in the lead-up to the 2013 federal election, a year earlier than the Productivity Commission recommended, and is locked into a schedule that will see it add more than 400,000 ­people in just three years.

“This should not be about the numbers (signed up) because that tells us nothing about the quality of the support people are receiving,” Ms Bresnan said.

A spokeswoman for Beyondblue said the organisation “stands by” its submission.

Social Services Minister Christian Porter is inclined to wait for a PC review of costs before making a judgment on the numbers. “The review will provide advice on longer-term cost projections and sustainability issues prior to commencement of full scheme,” a spokeswoman said. “The minister will await the final report, due later this year, but one important and positive early experience is that NDIS participant numbers nationally for people who enter the scheme with a mental health disability are so far generally consistent with the Productivity Commission’s original forecast.”