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.