What are the commercial implications for disability service providers of the National Disability Insurance Scheme (NDIS)?

Approximately 1.2m people in Australia live with severe and profound disabilities. Many of these people receive no formal care and have been disadvantaged through high levels of unmet needs. The introduction of the National Disability Insurance Scheme (NDIS) is designed to address the shortcomings of previous systems and provide disabled people with the level of support they need to improve their quality of life.

The most profound change introduced by the NDIS is in respect to funding arrangements. Currently, charities and service providers receive block funding from the government that enables them to provide services to their clients. The NDIS will see a phased introduction of a direct funding model based on consumer choice, where people with disabilities will be given their own funds and will themselves, or with the assistance of an intermediary, make their own choices about the types of services they receive, how those services are delivered and who delivers the services.

This shift in decision making-power and expenditure authority will empower individuals with much greater control over the support they need and, it is hoped, drive diverse, high quality and innovative services driven by consumer demand.

The NDIS will result in dramatic changes for charities and disability service providers who have to re-think and re-shape the way they work to reflect the new funding model and deliver a customised service to the people they support. This choice-driven landscape will create a new level of competition amongst service providers resulting in uncertain cash flows and will require service providers to think more commercially. Some established organisations may fail to respond and as a result, disappear. New organisations are likely to emerge and even propser.

When faced by major change, many organisation’s go straight to ‘task’ and contemplate structure, people and process issues before having a crystal-clear view of how the organisation will provide value to clients and how it will differentiate itself from its competitors.

Differentiators, by definition, only exist if they are sufficiently important to influence the behaviour of a prospective client and cause them to positively discriminate in favour of one service or product over another.

In an environment where customers see similar service providers with similar products with similar benefits, price becomes the key differentiator. Failure to offer meaningful differentiators will condemn the business to increasingly price-based competition and diminishing financial returns that can undermine the viability of the organisation.

For disability service providers facing the profound changes resulting from the NDIS roll-out, having a well developed value proposition and competitive strategy is essential as it provides the platform upon which everything else – organisational structure, pricing, customer service, workforce planning, business processes and customer service – rests, and will be the key determinant of success in the NDIS environment.

About the Author
Michael Evett has over 25 years executive management and board experience and a record of top-line and bottom-line growth in private, private-equity and public companies in the oil and gas, B2B and manufacturing sectors.

EvettField Partners work with medium-large organisations to develop and implement initiatives that enable increased growth, performance and value. EvettField Partners is currently working with Not For Profit organisations in the lead up to the introduction of the NDIS by ensuring the businesses are fully equipped to deal with the changing industry landscape. For a free initial telephone scoping session, call 02 9299 8883 or visit www.evettfield.com.au for more information.