This is the NDIS story its origins, key features, implementation so far and the challenges which still lie ahead.

Transcription

1 Origins, Implementation and Challenges for Australia s National Disability Insurance Scheme 10 th International Conference on Priorities in Health Care In 2010, Robbie Mockler, who had a very serious brain haemorrhage at birth, 31 years ago, and now has profound cerebral palsy, and his mother Mary, made his life story public. They are amongst our closest family friends. In an under-stated, almost detached way, they explained the lack of dignity that people with disability experience in Australia every day. The need to beg for services. Being shut out of an ordinary life. In doing so their voices were amongst the first of the countless personal stories which led Australia to introduce a National Disability Insurance Scheme (NDIS) on 1 July last year and which is transforming the way Australia s disability services are funded and structured. The NDIS is the most significant social and economic policy reform in Australia since the introduction of universal health insurance in the 1970s. It takes analytical and practical frameworks and processes that have been developed through no-fault accident compensation insurance schemes and applies them to disability more generally. Implemented well, it has the potential to be of international significance. It is a massive and complex task that will take years to build, refine and get right. When fully implemented, in about 5 years, over 400,000 Australians with significant and permanent disability under the age of 65 will be direct beneficiaries of the Scheme and well over 1 million family members and carers will benefit indirectly. But in fact every Australian will benefit because the scheme will provide universal disability insurance to the entire population and so protect Australians in the event of being born with or acquiring a non-age related significant and permanent disability. It is essential community infrastructure and is the answer to the prayer: By the grace of God, go I. 1

2 The Scheme will add around $8 billion, in current dollars, to government spending on disability. This is the equivalent of 0.5% of GDP or 2% of total government spending in Australia and therefore represents a very substantial shift in national resources, at a time of fiscal restraint nationally and internationally. Remarkably the driving force behind this reform came from outside government, was embraced by all political parties in the most divided Commonwealth parliament in Australia s history, supported by all State governments and was legislated post the Global Financial Crisis. Of course, while citizens can advocate for change it is governments who legislate and so this reform would not have happened without the leadership and vision of Australia s current and former Prime Ministers and their Disability Ministers. They must be applauded. The NDIS is therefore an exemplar of how individuals can change society irrevocably for the better and which I hope will inspire you to champion change and seek to improve public health policies and priorities in your countries. This is the NDIS story its origins, key features, implementation so far and the challenges which still lie ahead. Historical Context Since the late 1990s, disability spending by governments in Australia has been growing at 7% to 8% per annum in real terms, but this growth in spending has not kept pace with growth in demand. This dynamic of rapidly rising but still insufficient spending has been driven by profound demographic changes. It has four key elements, which are not unique to Australia. These are: 1. Very rapidly increasing life expectancy of people with disability, which has been rising more than for the population as a whole, due to improved medical and health care, 2. An ageing baby boomer population of parents, 3. Increasing female participation in the workforce, and 2

3 4. Reduced family sizes impacting the available stock of family carers. As a result, demand for disability services in Australia has been rising rapidly, as the community s capacity to provide informal care has been falling and, for the first time, people with disability have begun to generally outlive their parents, rather than predeceasing them by many years. Ageing parents have then become too old to provide care, passed away or been forced to relinquish their adult child with a disability. With 80% of supports for people with disability being provided informally by families and friends and 20% by governments, every 1 percentage point decline in informal support capacity has led to about a 5% increase in demand for government funded disability services. This perfect storm has led to more and more of the resources of the disability system being consumed in providing emergency responses, often in crisis, at high cost and leaving too little funding available to support lower urgency cases and so increasing the risks of further crises in future. Crisis management and insufficient investment in long term capacity building such as early intervention have in turn led to very poor outcomes for people with disability, their families and carers. According to the OECD, 45% of Australians with a disability are living at or below the poverty line, the worst performance of any OECD country. Australia s performance in terms of employment of people with disability ranks in the bottom third of OECD countries and carers are twice as likely as the population as a whole to experience a physical disability or to be living in poverty. Australia has therefore adjusted particularly poorly to these demographic trends, which are also clearly apparent in many other countries. They, too, will require a strong long term policy response, as improving health care leads to longer lives but not necessarily good quality lives. Therefore, from both an international and a health sector perspective, there is great potential interest in the outcomes from the NDIS. 3

4 Productivity Commission Inquiry into disability care and support In 2010 and 2011 Australia s most distinguished independent economic think-tank, the Productivity Commission, conducted an inquiry into disability care and support. In its final report the Productivity Commission concluded that Australia s disability system was under-funded, inefficient, fragmented and gives people with disability little choice. It recommended that Australia introduce a National Disability Insurance Scheme and concluded that the economic benefits of the Scheme would significantly outweigh the costs, estimating that the NDIS would add close to 1% of GDP, primarily through increased employment opportunities for people with disability and their carers. Subsequently, in 2012, PricewaterhouseCoopers studied the trends in government spending on disability over the past 20 years and concluded that, in the absence of the NDIS, the cost to government budgets of disability would increase to $35-45 billion, which is two to three times the expected costs of the NDIS. It also estimated that while the NDIS would add to budget costs in the short term, from 2023 or less than a decade from now, it would be less costly than not introducing the NDIS. Disability policy therefore became a mainstream economic issue as well as a social policy and rights issue. It also became a political issue. Every Australian Counts Central to disability moving from the margins of political discourse to the mainstream was a public campaign called Every Australian Counts, which attracted over 150,000 members. This campaign cost just $4.5 million over three years and was funded by disability service organisations. The real heroes were the people with disabilities who told their personal stories with courage and great dignity. People like Robbie and Mary. The NDIS campaign was based on four simple interlocking elements which are universally relevant: 4

5 First, the selection of language and the framing of an issue on your terms, as George Lakoff has identified in Don t think of an elephant, is essential for change, especially big changes like the NDIS. The description of the old disability system as broken and the campaign name which evoked images of people with disability not counting were examples of this, while the terminology of insurance made the NDIS relevant to all Australians. Second, economic analysis is the principle framework for determining public policy in Australia today, as it is in most countries. There are many worthy causes but unless policy ideas, especially costly ideas, can run the gauntlet of Treasury and Finance departments they will not be implemented. The NDIS framed disability as an economic issue for the first time, not just a social policy or human rights issue, and having the Productivity Commission independently endorse the NDIS as an economic reform was critical to this conclusion. Third, big reforms are based on unity and because the NDIS provides support based on needs it unified the disability sector. The sector had long been split between people with disability, carers and service providers and between the many different disability types. Suddenly, the NDIS gave everyone a common cause, a common claim, while also appealing to the community s sense of a fair go. Fourth, technology was used brilliantly by the campaign organisers. With a single click they could reach 150,000 people who then ed Australia s political leaders, demanding action at key points in the campaign. The Campaign s strong, timely and urgent voice was decisive in triggering change. Ten years ago these voices would not have been heard, because the organisers would have still been licking stamps! The NDIS campaign would also never have succeeded without strong theoretical and practical underpinnings. It therefore did not just satisfy sectional interests; it is outstanding public policy. Theoretical and practical underpinnings to the NDIS The economic theory in support of the NDIS was developed in the 1960s by Professor Kenneth Arrow in his seminal American Economic Review paper, Welfare in the face of Uncertainty (American Economic Review 1962), for which he was awarded the Nobel Prize in Economics. Arrow proved that universal health insurance 5

6 is more efficient than private insurance and in his definition of insurance cover he included a category which he described as failure to recover. While such terminology would now be seen as too medical an approach to disability and offensive, along with such descriptors as homes for the incurables, there is no doubt that through this terminology Arrow clearly recognised the importance of insurance for permanent disability. Implicit in his linkage with health insurance is that when most people enter hospitals or seek medical treatment they emerge well and fully fit. However, there is a group who have a different experience, who have permanent disability and their on-going needs, should be covered through universal social insurance. For anyone who doubts the benefits of universal health insurance, I note that Australia, which has had universal health insurance at its core since the mid-1970s, spends about 10% of GDP on health and achieves much better outcomes than the US which consumes 20% of GDP on health care, largely through private insurance arrangements. Therefore the economic and social prizes in getting these insurance structures right are very large. Adam Smith, one of the great free-market economists, said we are both selfregarding and other-regarding. This and the fact that the NDIS is deeply based on equity has helped the NDIS to win support across the political spectrum. Amongst philosophers, John Rawls, has argued that public policies should be set by looking through what he called the veil of uncertainty. None of us know when we or our children, grand-children or friends might acquire or be born with a disability. The NDIS provides protection in the event of that risk becoming reality and so meets Rawls test of uncertainty. In addition to these theoretical underpinnings, the NDIS draws on long practical experiences with no-fault accident insurance schemes, which first started to cover workplace injuries in Germany in the1890s, and which have been extended to nofault motor vehicle accident compensation schemes in many countries. In Australia and NZ there are now over 500 years of experience with accident compensation scheme management and actuarial analysis and it is this knowledge on which we are establishing and building the operations of the NDIS. 6

7 The introduction of the NDIS also closely followed Australia becoming a signatory in 2009 to the UN Convention on Rights of Persons with Disability and is a central component in the way in which Australia is honouring its commitments under this agreement. Key Features of the NDIS The key features of the NDIS are its governance arrangements, eligibility criteria, benefit structures, insurance approach and that it directly funds scheme participants rather than service providers, and this control and choice is leading to a contestable market which will over time lead to much greater efficiency and effectiveness. NDIS Act (2013) and Governance The NDIS has been established under the NDIS Act (2013), which created a new independent organisation, the National Disability Insurance Agency (or NDIA), and its Board to manage the Scheme. The shareholders in the Scheme are the Commonwealth and State and Territory governments; nine shareholders in total. The funding for the Scheme is sourced largely through the consolidated revenues of its government shareholders, but also includes an addition of 0.5% to Australia s universal health insurance levy, the Medicare levy, which is directly contributed by all personal income tax payers. The tax increase to fund the NDIS was also legislated in 2013 and was overwhelmingly supported by the community and so is testament to the effectiveness of the Every Australian Counts campaign. The National Disability Insurance Agency s Strategic Plan outlines the Vision, Mission and goals of the Agency - to optimise the independence and social and economic participation of people with disability, for the NDIS to be a world-leader, for the Scheme to be sustainable, based on control and choice and to build the confidence and trust of all stakeholders. Eligibility All Australian citizens who are born with or, before the age of 65, acquire a significant and permanent disability which affects mobility, communications and/or self-care are eligible for the Scheme. The Scheme also covers early intervention. 7

8 Intellectual, physical, sensory, psychosocial and therefore persistent, episodic disability are all included. Functional needs are the basis of eligibility. This contrasts with the old disability system in which where, when, how a disability was acquired or the name of the disability determined support. Equity and fairness are therefore key principles which underpin access to the NDIS. Participant Benefits The functional approach to assessment of needs which is used by the Agency is based on life goals and recognises that needs change, especially at life transition points, e.g. leaving school. The assessment and planning process is based on the strengths of participants, rather than a deficit model, and recognises that a quality life is based on loving relationships, friendships and essential formal supports. Scheme benefits include personal care and support, equipment, therapy, home and car modifications and are based on what the NDIS Act describes as Reasonable and Necessary Benefits. Benefits are not capped and the Agency seeks to invest in individual participants personal, social, material and knowledge capital and in families by nurturing and supporting them in their caring roles. It should be noted that the NDIS does not provide income replacement, unlike some social insurance models in Europe. It is therefore complementary to Australia s principal income support measure for people with disability who cannot work, the Disability Support Pension and recognises the individual nature of the effects of disability on costs of living. Control and Choice The NDIS provides funding directly to people with disability, rather than funding disability service providers, and so gives them the power to choose the services that best meet their needs. As a result at least 93% of NDIS expenditures will be contestable. 8

9 The structure of support packages is very flexible package with three broad categories of capital items, including equipment, investment or capacity building and consumption or personal supports, meaning that participants in the Scheme have high level of control and choice over their individualised funding packages. There are also very flexible nominee provisions to allow for impaired decision making capacity, as about 70% of NDIS participants, so far, have an intellectual disability. Already, a new disability eco-system is developing. This will require new information sources to inform choice. Technology is likely to play a major role. For disability service providers and workers in the sector, a huge structural and cultural adjustment lies ahead, as the sector has traditionally been block funded by governments and now power will shift to individuals as they become empowered consumers. Over time, new market places for diverse services will emerge leading to increased efficiency and innovation. The NDIS is insurance not welfare The importance of the insurance model to the NDIS is crucial to understand. Any one of us, rich or poor, can have our life turned upside down by a severe and permanent disability. Individually, the risk of being severely or profoundly disabled before the age of 65 is low, but the consequences for those unfortunate enough to be so can be catastrophic. But by paying premiums to the NDIS through the Medicare Levy and general taxes, Australians are now sharing the risk and helping each other. Pooling the risks make them affordable for all. And by operating like an insurance scheme, using rich data to make continual actuarial assessments of costs and effectiveness, the NDIS is able to continually improve. 9

10 This process of data analysis and continuous improvement has already benefitted the NDIS, informing significant changes in design every 6 months since the Scheme s inception. The NDIS is like computer software releases. Each version offers improvements and each of its successors are based on user experiences and research. The potential for further improvement was always recognized and is being operationalised through a learn-build-learn build approach by the Agency. In insurance terms this is part of the prudential governance of the Scheme, in which the Scheme Actuary plays a central role through data analysis. There is one further benefit of the insurance model. Because it calculates and seeks to minimise the cost of supporting participants over their lifetimes rather than just twelve months, as part of annual budget cycles, the NDIS is able to invest in people with disability, as well as support them. Through education, training, employment and providing new equipment like hoists and communications technologies, the independence of participants can be lifted in life-transforming ways, resulting in better quality of life and huge eventual savings for the Scheme. Examples to date include a 20-year-old man whose mother no longer has to contemplate leaving her job to support him full-time, because the NDIS was able to give him a technology and training package that has made it easier for him to be understood and to look after himself so much better. Another young man with a spinal cord injury needed the support of two carers per day to assist him in and out of bed and to help with daily activities. Under the NDIS a ceiling track hoist was installed in his home which immediately reduced his dependence, while also reducing the costs of supporting him by more than $1 million over his lifetime. The national aspect of the NDIS creates additional gains, because as every insurance expert knows: the bigger the risk pool the more efficient the scheme. 10

11 Launching and Building the NDIS Since 1 July 2013, the NDIS has been operationalised in seven trial sites around Australia. The results to date are outstanding across all the key measure on which the Scheme should be judged. We are on schedule, on budget and most importantly making a difference to the lives of people with disability, their families and carers. We expect to reach 10,000 approved plans next month. The Scheme Actuary in her first Annual Financial Sustainability Report, at the end of June, concluded that the results for the first year of the Scheme are consistent with the original cost estimates from the Productivity Commission. Participant satisfaction is very high with around 95% of participants saying they are satisfied or very satisfied with the Scheme. As a result many thousands of lives have already changed for the better. These achievements are really quite remarkable given that the NDIS is such a large and complex reform. We have also built the National Disability Insurance Agency and now employ about 500 staff, more than half of whom have identified as having a lived experience of disability and 11% have a disability. This gives me great confidence, because it means that working in the Agency is not just a job, it is a cause in which our staff passionately believe. It also demonstrates that we practice the inclusion we preach. Challenges ahead Over the next 18 months, which will bring the NDIS to the end of the trial period around an additional 20,000 participants will enter the Scheme. Then the NDIS will transition to the full Scheme, when a further 400,000 people will join the Scheme. The challenges in this build-up are enormous as it will be necessary to assist disability service providers to adjust, ensure that Scheme participants can make informed choices and find a large number of new care workers at the same time that 11

12 demand is increasing from health and aged care, deregulate prices and ensure that there are quality services in rural and remote areas of Australia. Ensuring that complementary systems like health and education fulfil their universal service obligations to people with disability will be essential to ensure that the costs of the NDIS do not blow out. Those who are at the margins of eligibility for the NDIS will also need to be adequately supported. Otherwise these people will either become more disabled or start trying to prove how disabled they are to get into the Scheme. So getting this right is critical to the Scheme s sustainability and equity. This is particularly important in areas like mental health where small amounts of episodic support can be the difference between stability and full psychosis and long term outcomes can be unclear for many years. However, I am confident that the lessons from the trial phase so far and the experience we will gain in the next 18 months will put the Agency in a strong position to deliver the full Scheme successfully. On a personal note, my oldest son was born with cerebral palsy 30 years ago. He and his youngest brother, who also has cerebral palsy, has taught me an enormous amount, for which I am enduringly grateful. They have brought me into contact with a side of life in Australia and other countries, which I otherwise would not have known. Lives characterised by endurance, resilience and compassion, but also blighted by discrimination and exclusion. It is why I have used all of my experience and energy to campaign for the NDIS. It is why I am championing the NDIS now and why I am totally committed to the good governance, good management and full delivery of the NDIS. There is still a mountain to climb over the next few years as the NDIS is fully rolled out across Australia. But I hope its establishment, progress and potential gives you the hope, courage and resilience to tackle the big health priorities of the future that are the focus of this conference. 12

13 Thank you. Bruce Bonyhady AM Chairman, National Disability Insurance Agency 13