Pricing for a viable disability services sector
With the release of the McKinsey ‘Independent Pricing Review’ recommendations recently there is now need for even more clarity over pricing and claims. McKinsey & Company stated in their Report that the "recommendations will have a positive impact on provider economics, improving overall industry margins by 2% to 4%, with even higher margin improvements for providers serving participants with complex needs or in rural, remote and very remote areas".
- Price changes are coming and are estimated to cost the scheme between $250m and $420m per annum over the next 12-24 months.
- Adding a third tier to the complexity loading of 10%, to account for higher level of skills/experience of workers and additional training required
- Changing the therapy prices to better reflect different therapy types, and introducing a second tier of pricing for therapy assistants
- ·A model of Transitional Support for Overheads (TSO) in the form of a 2-3% increase in the price cap of 1:1 attendant care for the next 12 months
Of course, this will add further complexity to the pricing scheme. NDIA has indicated that these changes should be implemented within the next 6 months, most likely on 1 July 2018. Centro ASSIST will remain a source of information, and will be continually updated as the inevitable changes are implemented.