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Why are providers ditching Support Coordination?

A green exit sign on a yellow background

In the last few months three major Melbourne providers have announced they will cease Support Coordination services. We take a deeper look into why that might be happening.

Without a doubt, the last two years have been difficult for many organisations delivering services under the NDIS. Apart from the turmoil caused by covid19 there have been significant changes to pricing, greater scrutiny through the ongoing Royal Commission, and escalating concerns about the sustainability of the scheme.

While it's no surprise that some organisations would not be able to weather this uncertainty, what is concerning is the number of significantly large and high profile organisations that are choosing to call it quits.

Merri Health

In recent news, Merri Health announced that they would no longer be providing Support Coordination, although other NDIS services will reportedly continue.

In 2020 they reported a record 225 clients on page 6 of the annual report and it all seemed quite positive for it continuing.

Me Well / Neami

Another recent exit is from mental health specialists, Me Well. In 2015 long-standing and respected Neami National established Mental Health and Wellbeing Australia (Me Well) to be their dedicated NDIS service. There are just a handful of such organisations in Victoria so it's concerning to lose one in a very limited market.

This was the announcement posted on Me Well's website:

Yet it was only a year ago that Me Well and Neami were stating their ongoing commitment to NDIS services in their annual report.

Uniting Vic Tas

Last week Uniting informed staff and consumers that Support Coordination services in metropolitan east and the north east regional office of Wangarrata would cease in January 2022. This is a significant program and the news will affect hundreds of participants, families, and staff alike.

Uniting also closed its metropolitan 'Live-Work-Recreation programs in late 2020 as part of a major restructure to its disability services and just last month Uniting announced it would be transferring its substantial residential services in Melbourne's east to other organisations. 20 Supported Independent Living (SIL) residential services will be acquired by Scope while the four neurological support homes will go to Yooralla. Up to approximately 100 residents are affected.

Disability services once accounted for 14% of the organisation's employee head count - 538 out of 3786 according to page 42 of it's 2020 Annual Report. With all these closures it's abundantly clear that disability no longer holds the same priority for the organisation.

There have likely been many more exits over the last couple of years as the sector consolidates from rapid growth, staff shortages, financial pressures, mergers, and restructures.

So why are they exiting?

One plausible answer is simply that these organisations could not adjust to the new playing field created by NDIS, an adjustment that must be focused on profitability even in the not-for-profit domain.

Commercial businesses tend to have a lean management and cost structure. Unfortunately, many traditional not-for-profits are still struggling to transition away from the safety net of the old block funding model that afforded them the flexibility to over-employ and over-service to maintain otherwise unviable operations.

Another answer is found in the industry life cycle model:

A diagram showing the four phases of the industry life cycle; emergence, growth, maturity, and decline
The Industry Life Cycle (source: Strategy for Executives)

The NDIS is more than 8 years old now, but it is has only been rolled out fully in Melbourne for one third of that time. While other areas, especially the original trial sites, have had substantial time to adjust, many Melbourne services are still struggling in the growth phase while the rest of the sector has moved into the start of the maturity phase.

This move requires a significant review of costs (trim the fat) and a stronger marketing position to differentiate from other service providers competing for the same dollars. It is sometimes identified as a seperate 'consolidation' phase or commonly known as the 'shakeout' because it is just like shaking a dusty rug to clean it up.

In the mature phase, the buyer is boss so providers must be leaner (for consumers that shop around on price) and better at meeting consumer needs (service satisfaction). In the NDIS world the buyer is no longer the government providing block funding; it's now an individual consumer with distinct needs, wants, and goals, and a specific budget to match.

Sole traders and small providers are different

One of the reasons My Coordinator was founded was to offer a genuine opportunity for consumers to design their own service instead of trying to fit into a corporate-designed box. We aim to do that by listening to the needs and goals of the individual and offering a bespoke service that meets expectations.

The other advantage of sole traders and smaller organisations is that there is minimal management structure and all employees are directly involved in revenue-earning services. The larger an organisation becomes, the greater the expenses become for infrastructure, legal services, finance, human resources, marketing, IT, and general administration.

Growth necessarily creates increasing layers of management to oversee many departments and teams while reducing the profitability of person-centred services. The end result is that management puts pressure on individuals to work harder (bill more) while wages stagnate to control costs.

This is a recipe for failure and it explains why many employees are choosing to break away to work for themselves.

How will this end?

It's likely we can expect many more closures, mergers, and takeovers as the sector struggles to find a sustainable balance between profitability and the people it is meant to be serving. But one thing for certain, people with disabilities have more power than ever before to determine how they are supported, who does it, and at what cost.

Only the service providers that are agile and open to co-design will survive.

Disclosure: the writer is a former employee of Uniting Vic Tas.


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