In most markets, we expect government enforcement actions to present serious risks and challenges to businesses. Even the threat of an investigation can derail business goals, damage reputation, and significantly reduce customer confidence.

Therefore, assuming the auditing agency is effective, it is reasonable to conclude that any compliance and enforcement actions speak to underlying quality issues in the organisation. But, unsurprisingly and concerningly, this does not appear to be the case in the NDIS.

In this article, we review the revenue growth of organisations between 2021 and 2022; however, this time, we split the cohort based on whether they had received a compliance notice from the NDIS Quality and Safeguards Commission. Again, the results will shock you.

Empathia Group compared eight organisations with a combined 2022 revenue of $1.4 billion and compared the average growth between organisations that have and have not received compliance notices. The results speak for themselves:

Revenue growth and growth rate between cohorts

There is no other way to put it; organisations with notices generated 443% more growth in the period.

A quick note on methodology, we originally wanted a matched pairs design, and this is as close as we could get. However, as it turns out, some of the largest providers have received notices, and it wasn’t easy to find comparators of similar size. It is also important to note that there is significant variation in how these organisations are run but to see such a stark distinction has concerning implications.

We need to talk about quality

There is an objective lack of concrete quality metrics in the NDIS. Even if they did exist, it is doubtful that they would reliably communicate them to stakeholders. You can see this for yourself when you search for services on common aggregators like Karista; in our searches, nearly all reviews show five stars. These results shouldn’t be possible in a market where there are real differences in client outcomes.

Despite this gap, you would still expect that the negative publicity generated by enforcement action would flow through to end users and be at least marginally visible in metrics. Discovering the opposite is concerning.

From our perspective, this is unacceptable, considering that the Organisation for Economic Co-operation and Development (OECD) consider Australia’s general enforcement environment quite effective. Clearly, we’re not advancing the equality agenda if markets for people with disability don’t function like everyone else’s.

Why don’t outcomes matter in the NDIS?

While there are many disappointing reasons why client outcomes aren’t being prioritised, the following two are particularly frightening, and should drive industry action.

1. Conflicted intermediaries are the norm in the NDIS

A brief review of the NDIS registered provider list will show that nearly 100% of support coordination providers are registered for other services. It also won’t shock you to discover that internal referral rates are much higher than chance would dictate.

This is not a provider driven issue. Instead, it’s a classical game theory issue, where providers can’t afford not to refer internally since their competitors will happily accept their referrals while maximising their own internal flow.

While we’re aware of some organisations that take their stance on independence seriously, we know there is overwhelming bias across the sector. If the Agency would like to prove us wrong, it would be extremely simple to reveal this for core segments. For example, in Supported Independent Living (SIL) it is just a matter of providing placements within the year, that had support coordinators prior to the placement, by provider and coordinator. This can be completely anonymised, and we will do the analysis for free.

2. Participants, families, and advocates do not have good data to use in making purchasing decisions

Most products within the NDIS are relational services where it is challenging to evaluate anticipated quality. Many NDIS participants don’t have a say in who they work with or get an opportunity to meet them beforehand. Even if they could, the best interview processes only explain 0.58% of performance variation (Schmidt and Hunter 2006), which means that service provision, in the best case, is a leap of faith.

Consider that a UK study demonstrated that the average person spends 40.5 days deciding on their next car purchase. This process involves watching endless YouTube reviews and taking several test drives. Consumers have easy access to objective data on fuel efficiency, and vehicle reliability – they can even test out the cup holders. Disability support is a crucial component of someone’s life, and the quality difference has tremendous impacts.

We need real data now and we need objective evidence that when an intermediary is utilised, that the customer’s preferences have been matched to this data.

What could this look like?

Human services are complicated, and the end product is a confluence of many factors across an individual’s time in an organisation.

When we endorse organisations, we expect the following benchmarks to be met:

● Adequate induction
● Safe staff engagement levels
● Adequate staff supervision
● Adequate staff training
● Strong, active governance
● Evidence of practice leadership
● Evidence of the pursuit of outcomes that matter to the client
● Effective behaviour management controls

It isn’t a matter of having effective policy. While desktop auditing is an important part, we’re most interested in the rate of the above benchmarks in sites. Without rates, there are no benchmarks, and of course, we cluster around five stars for all services.

Nevertheless, many NDIS participants do not require support to make purchasing decisions and will freely and actively move between providers. We don’t want to get in their way at all.

However, for those needing assistance, we urgently need real data, unbiased intermediaries, and a strong framework for an evidenced, supported decision making process.

If you’re interested in understanding the real quality of your organisation, book a call or reach out to our team.