Last week QAMH policy staff attended the Brisbane NDIS Provider Viability Summit, presented by DSC. The Summit highlighted the unavoidable reality that NDIS providers face tight margins, unrealistic cost assumptions and difficult conditions. Nonetheless there are also opportunities for all providers to reduce inefficiencies and doing so is critical to any provider wishing to be sustainable in the future. With an (unofficial) expected timeline of at least two years before we transition to foundational and navigator supports, the message was clear: providers need to be agile, lean and know their customers and business inside-out if they want to survive.

The Ability Roundtable Financial and Workforce Benchmarking data set the scene for the Summit. This shows that in 2023, more than half of NDIS providers were operating at a loss, with 75% making less than 2% profit, indicating the need to review cost models. Key cost/profit drivers include a rise in workers’ compensation premiums, maximising efficiency of billable time (i.e. utilisation), the ratio of fulltime staff within the workforce, and achieving the right balance in supported independent living (SIL) expenditure. Here, the sweet spot was identified as spending no more or less than 75% on direct support worker costs. Overall, this data shows profitable providers typically have lower overheads, invest in corporate marketing, and strategically allocate resources, spending less on areas management and investing purposefully in technology.

There are also big shifts ahead which providers need to prepare for. The new NDIS legislation is expected to streamline processes but may pose compliance challenges for providers delivering certain supports. The move to foundational supports is something that providers should be preparing for now. The session also addressed the need for providers to prepare for economic shifts, noting the convergence of aged care and NDIS, and the critical role of flat management structures and self-governed teams. Backend and payroll opportunities and risks were discussed, focusing on optimising workforce utilisation and investing in leadership. A key theme was that maximising profitability involves controlling costs by optimising rostering efficiency and maximising revenue by correctly claiming items from the Pricing Arrangements and Payment Limits (PAPL) guide. Key takeaways include the importance of taking actions to reduce costs, preparing for hybrid payment models, aligning with the cost assumptions of the Disability Support Worker Cost Model (DSWCM), and understanding operational funding versus non-recurrent funding.

Providers were urged to understand the future direction of policies, coach employees effectively, scrutinise payroll for savings, and have a thorough understanding of their organisation and unique value proposition. Collaboration among providers was highlighted as a potential strategy for leveraging knowledge and resources to drive positive change. The overall message emphasised the need for providers to adapt to changing economic conditions, work towards profitability, and stay informed of legislative changes and industry trends.