4.1
This chapter sets out the main reasons provided for introducing independent assessments. The NDIA and the Government argued that independent assessments were necessary and would lead to:
Greater plan flexibility;
Improved fairness and equitability in funding decisions and reduced postcode inequality;
Reduced potential for 'sympathy bias'; and
Improved financial sustainability of the NDIS.
4.2
The chapter should be read alongside Chapter 3, which sets out what the Productivity Commission (2011) and what the Tune Review (2019) said about independent assessments.
Increased plan flexibility
4.3
The NDIA argued in its submission that independent 'assessments will… ensure participants receive a more flexible plan budget based on their functional capacity to access the services they need and help pursue their individual goals and aspirations'. In particular, independent assessments would inform an overall personalised budget, which would no longer mean the NDIA would make funding decisions about each individual support, and result in participants being 'able to use their funds more flexibly—a critically important feature of the basic design of the NDIS'. Further:
…the rollout of independent assessments is intended to ensure that the people the NDIS was intended to support are supported to become participants and go on to receive a personalised plan budget which they can then use flexibly, with more choice and control.
4.4
Mr John Walsh AM, a former Associate Commissioner of the 2011 Productivity Commission inquiry, noted that the current system, framed as it is by the 'reasonable and necessary' test, leads to decreased flexibility in plan funding allocation:
The practice of testing every support component and unit at a 'reasonable and necessary' level creates an anathema for both participants and planning staff, and inevitably constrains flexible use of plan budgets, because participants are restricted in their choice and control to items and prices in the NDIS Support Catalogue...Lack of flexibility as a way of controlling services and cost is a natural consequence of a system without consistent and equitable resource allocation at the package level...There are countless examples of seemingly reasonable purchases (often very inexpensive assistive technology items) being declined by NDIA delegates… to be sometimes replaced by more expensive items which the participant has not chosen.
What evidence said
4.5
Submitters to the inquiry argued that the tools and the process of independent assessments itself were inflexible and not tailored to individual circumstances. For example, 3D Support suggested that it was 'unclear…how Independent Assessments can be defined as more flexible, given they'll be mandatory. What's being abandoned here are the ideals of choice and control…' Similarly, Australian Disorders of the Corpus Callosum (Aus DoCC) argued that:
…the implementation of mandatory assessments with a stranger where a score dictates funding levels and the person has no ability to see, confirm or challenge the information gained, is the absolute opposite of what we would consider empowerment, choice and control or flexibility.
4.6
Many expressed their support for increased plan funding flexibility in itself, though were not supportive of independent assessments in their form proposed. However, Every Australian Counts questioned 'why this increased flexibility has been tied to the introduction of other reforms such as compulsory assessments. It is not clear why one cannot be done without the other'. Similarly, Professor Bruce Bonyhady argued at the Melbourne hearing that:
…plan flexibility is absolutely critical, but it is not dependent on independent assessment. Those rules could be got rid of, removed, at a stroke of a pen. In fact we saw that during COVID when participants were allowed to purchase support coordination out of core supports, and clearly that was so that people could actually have a chance to spend their plans more effectively.
4.7
On this point, Mr Walsh argued that 'in the context of scheme sustainability, full flexibility of support packages for participants is critically dependent on the active presence' of independent assessments that would inform reasonable and necessary funding packages, rather than individual support items.
4.8
Others were sceptical of the benefits of funding flexibility if this translated into less funds overall for participants' needs. The grandmother of a participant argued that there was 'no advantage of a flexible plan if it is underfunded'. Similarly, one participant was concerned that increased plan flexibility would come at the cost of overall funding amounts:
Every time I have heard the NDIA speak about 'spending flexible funding flexibly' it has been as an attempt to excuse an inadequate total amount of funding for a participant's reasonable and necessary disability supports… There is a lot of talk in the discussion papers about how people will be able to use all their non-fixed funds flexibly. While the blending of funding across the current 15 categories into simply 'flexible' and 'fixed' is a good step in the right direction, having an inadequate funding package based on level of impairment rather than level of disability support actually needed will not be 'fixed' by having the ability to spend what funds they receive flexibly.
4.9
Allied Health Professions Australia echoed these concerns, arguing that it appeared clear that a major aim for independent assessments 'and the introduction of flexible budgets, is to increase automation of the planning process to reduce the need for planners to make as many individual decisions about participant plans'.
4.10
However, Mr Martin Hoffman, the CEO of the NDIA, identified 'three pillars' to the reforms proposed to the Scheme by the Productivity Commission:
…an overall funding package, fully flexible use of that package and the assessing of that overall funding package with consistent, independent assessment—paid for by the scheme—of capacity, support need and life circumstances. The three are inextricably linked, as a way to deliver a modern, progressive disability support service.
Improved consistency and fairness in decision-making
4.11
The issue of inconsistent decision-making about what supports and how much to fund in participant plans is not new. The committee has previously examined this issue at length in, for example, the Final Planning Report, tabled in December 2020. The NDIA stated in its submission that inconsistent decision-making and inequity in plan budgets was a key reason for introducing independent assessments, noting that:
…almost half of current NDIS participants have been required to source their own evidence of their functional capacity, which has contributed to inconsistent decisions based on the quality of the evidence provided.
This has meant there is a lot of variability in the amount, type and quality of information people assemble. Furthermore, they have to meet the expense of this themselves...This has also meant those with greater resources (time, money, the support of family) or a better capacity to understand and navigate the complexities of assembling the information can have an advantage over those with fewer resources or who find the process challenging, confusing and frustrating.
4.12
In answers to questions on notice, the Minister and the NDIA highlighted quarterly data for the period ending March 2021 showing that people 'with lower socio-economic status on average have lower plan budgets than those with a higher socio-economic status—which suggests those who have greater means have greater access to assessments and reports'. The response also suggested that where 'a person lives has also been shown to influence a person's ability to produce information required to support decisions about their eligibility for the NDIS and their plan funding'.
4.13
At the Canberra hearing on 18 May 2021, the Minister for the NDIS argued that 'your postcode and your socioeconomic circumstances absolutely drive the likelihood of your outcome, and that is just not acceptable and it is not fair'.
4.14
On 2 August 2021, the Government, in answers to questions on notice, provided the committee with extensive data on the number of participants per postcode and per electorate with the average and plan budget amounts per postcode. This information has been published on the committee's website. It indicates, for example, that the 27 NDIS participants living in the postcode of 2382, which takes in an outer regional area including the town of Boggabri in New South Wales, had an average plan budget of approximately $22,481 as at March 2021, while the 117 participants living in the postcode of 2095 (Manly and East Manly in Sydney) had an average plan budget of $77,340.
4.15
It should be noted that a key limitation of the postcode data is that it does not include detail about the participants with higher support needs and their families who have moved from rural and remote regions to metropolitan areas to be closer to services on account of the person's disability, particularly because of a lack of services in rural and remote areas.
4.16
The NDIA also noted that if a participant is not able to provide evidence of functional capacity through reports that they have sourced themselves, 'the NDIA completes internationally recognised general standardised functional assessments with participants or their representatives'. This approach, it suggested, has resulted 'in inconsistencies and variability in the scope, type and quality of information provided'. The NDIA estimated that those who are able to afford assessments from medical professionals have been spending in aggregate around $140–$170 million a year, 'making them out of reach for many', with the results of these assessments 'being influenced by where a person lives or their ability to describe their circumstances and needs'. The NDIA's estimate did not include a per capita or median spend per participant who privately paid for an assessment, so it is difficult to contextualise the aggregate spend.
4.17
The NDIA further argued that inconsistencies in information requirements were leading to some participants being categorised as having lower functional capacity subsequent to them receiving supports from the NDIS:
…when looking at the same group of participants over 5 years, the number of participants reporting high function has decreased, while those reporting medium and low function has increased. The NDIA's view is that this is not generally reflective of participants' function decreasing, but rather indicative of the current inconsistent methodology and data collection on functionality. This reflects the importance of independent assessments, to ensure there is a consistent way to assess and understand the needs of participants.
What evidence said
4.18
Some submitters acknowledged that independent assessments in themselves could lead to more consistency and fairness in decision-making, subject to certain qualifications. The Queensland Government, for example, suggested that if 'designed and implemented appropriately and in accordance with the Tune Review recommendation and findings', benefits from the introduction of independent assessments could include 'greater consistency in NDIS decision-making'. The Physical Disability Council of NSW was of the opinion that in 'terms of addressing inequities resulting in supports and funding', free assessments would be 'a major benefit for people who otherwise have to pay for specialist reports', although it did 'not support a model based exclusively on [independent assessments]'.
4.19
Others did not believe that independent assessments alone would lead to greater consistency and fairness in NDIA decisions. Some argued that it was planners and LACs who were making inconsistent decisions despite evidence provided by participants or that inconsistent decisions were a product of 'fundamental defects of the NDIS ICT Systems, processes and overall operating model as a consequence of the absence of an ethics framework and absence of co-design'.
4.20
Still others questioned whether independent assessments themselves would lead to fair and consistent outcomes as hoped. Brain Injury SA suggested that the proposed changes had 'the potential of creating a more complex, inconsistent, and inequitable scheme, driven by a speedy roll-out and lacking sufficient time for trial and feedback', while the Coalition of Disability Advocacy Organisations was of the opinion that the proposed changes could 'further disadvantage those who are already struggling to navigate NDIS processes'. In particular, the latter questioned how an independent assessment in such a short period of time could 'effectively assess not only a person's functional capacity, but also their support needs and environmental context', especially those who had complex communication needs, and who had complex circumstances.
4.21
A further issue raised was whether consistent decision-making is even possible in the context of individual situations, or whether it should be equated with equity given the importance of providing reasonable and necessary supports to each participant, based on their own circumstances. For example, Mr Dougie Herd, the Chair of the ACT Disability Reference Group, argued:
…let me say this as a participant, as an adviser to the ACT government, as somebody who is chief executive of NDIS registered providers supporting 200 people with disability and their families and as somebody who for two years worked for the National Disability Insurance Agency to help launch the scheme 10 years ago: very simply, nobody, nobody is putting me in a box and giving me a score. I'm an individual with rights enshrined by the Parliament here as part of the United Nations Convention on the Rights of Persons with Disabilities, which was ratified by this place, again unanimously. If the National Disability Insurance Scheme now thinks that it is going to give me a score on the basis of the WHODAS 2.0, 36-question test, the National Disability Insurance Agency is wrong—completely and totally wrong.
4.22
On the question of decreased functioning over time, Associate Professor Kylie Burns from Griffith University pointed to research that suggested 'the process of accessing schemes or common law claims can be so traumatic for some people that it impacts on their health in a negative fashion'. She further noted that while there was not specific research on the impact of the independent assessment process on the functioning of people with disability, there was research indicating that poor processes can have an adverse impact on people's health.
4.23
Some submitters suggested that inconsistencies in decision-making based on independent assessments could arise because of a range of factors, including:
the backgrounds of assessors and their expertise in particular disability types;
whether the person with disability has an appropriate support person present;
what sort of activity the person undertakes during the independent assessment;
the person's socio-economic status;
the location of the assessment; and
whether the assessor can communicate directly with the person (including whether an interpreter is required).
4.24
Every Australian Counts acknowledged the importance of fairness, consistency and decision-making, but queried how independent assessments would achieve these goals:
People with disability and their families want the NDIS to be fair. They also want it to be consistent. But the government and the NDIA have provided no information, modelling or evidence for their claim that the introduction of compulsory assessments and accompanying changes to planning and funding will make things fairer and more consistent. In contrast the NDIA and the government have simply asserted that they will. Given the significant impact that these changes will have on the lives of people with disability, our community is gobsmacked and angry that these changes are being introduced without any evidence to demonstrate they will actually fix the problems we all want to see resolved.
4.25
Children and Young People with Disability Australia (CYDA) argued that independent assessments will not solve current issues about fairness in access and planning decisions because:
…the requirements of individuals to seek out and pay for diagnostic reports and other evidence (that is written appropriately) remains unchanged. If anything, the introduction of the independent assessments is just an additional step that people with disability now must take.
The proposed independent assessment process predominately requires individuals to self-report during the assessment and includes input from other stakeholders/informants in individuals’ lives. This means people who have access to greater personal resources, such as a formal education, strong English and literacy skills, and strong social networks to inform and support them before and throughout the process, are more likely to understand the process and advocate for themselves appropriately—and there is a risk that these people therefore [will] receive better outcomes through the process as their needs will be more appropriately reflected. This is equally relevant to children and young people with disability, where the parent/caregiver/family’s access to resources and familiarity with the service system is likely to be an advantage.
4.26
CYDA further flagged concerns that the independent assessment model relied 'on the assumption there is a benign and supportive adult or key informant in the lives of each NDIS participant/applicant', and noted that this may not be the case for children and young people in environments such as out of home care, or who do not have adults who have the capacity to support them. CYDA called for further information from the NDIA about how the process would be set up for such participants.
4.27
3D Support drew the committee's attention to an Administrative Appeals Tribunal (AAT) case in 2020, in which the AAT weighed evidence from a participant, Ms Jennifer Ray, from multiple health professionals to support her access request, against a three hour assessment of functional capacity carried out by an occupational therapist who was selected by the NDIA. The AAT suggested that the NDIA relied on this assessment without obtaining 'an opinion from a paediatrician, clinical psychologist or a psychiatrist, experienced in the assessment of pervasive developmental disorders'. The AAT found that:
While a functional assessment is certainly of value for a general assessment of whether Mrs Ray met the 'disability' access requirement, this type of therapist is not appropriately qualified, as indicated by the NDIA itself in List A, to provide a precise medical diagnosis for Mrs Ray’s condition(s).
Avoiding sympathy bias
4.28
The NDIA in its submission suggested that the potential for a health care professional who has known an individual for a period of time to overstate an individual's needs 'poses a risk for appropriate and equitable decision making'. It highlighted the 2011 Productivity Commission report's argument that assessors should 'be independent of the person being assessed to reduce the potential for '"sympathy bias"'. The Productivity Commission contended that GPs and others who had previously treated and supported a participant should not undertake assessments, drawing from experiences of Victorian Civil and Administrative Tribunal (VCAT) appeals related to Transport Accident Commission benefit decisions to argue that 'treating professionals are often placed in an invidious position when asked by their patients to make an assessment that determines the person's eligibility for benefits'.
4.29
Many submitters and witnesses to the inquiry questioned the idea that professionals known to a person suffer from 'sympathy bias', and suggested this had little or no research basis. Enable Plus, for example, argued that the section of the Productivity Commission's report titled 'Maintaining professional objectivity' did not have any references to peer-reviewed research, and a lone study referenced elsewhere in the report concerned 12 support workers, not registered health and allied health practitioners, with the people with disability who were assessed all being in residential care.
4.30
The first Independent Assessment Framework document, released by the NDIA in August 2020, argued that health professionals have the potential for 'sympathy bias' if they have an existing relationship with participants, and referred to an Australian study by Guscia et al which 'found that support measures "may significantly overestimate support needs when raters know they are being used for funding purposes"'.
Response from submitters
4.31
Submitters to the inquiry questioned the evidence base and relevance of the Guscia et al study, noting, for example, that it included 'only 29 disabled people surveyed by their support workers, not allied health professionals, with a questionnaire administered two years apart', all within the one residential facility, and that the questionnaires were not the tools that the NDIA had proposed to use.
4.32
Some suggested that independent assessments would be biased towards an employer (and against participants). The Hopkins Centre & Law Futures Centre, for example, suggested that particular factors in the independent assessment process, such as short time frames, key performance indicators (KPIs), payment mechanisms and levels of assessor training and expertise could lead to bias. Ms Marie Johnson similarly argued that:
…in the effort to avoid 'sympathy bias'—a pejorative statement lacking any evidence—the Independent Assessment introduces biases that are grossly more damaging. That is, dangerous biases driven by the considerable time pressure, KPI pressure and a 'disability agnostic' paradigm that compromises the consideration of the whole person.
4.33
Others—including allied health professionals—argued that there are already mechanisms in place to regulate sympathy bias and conflicts of interest for allied health professionals, including from their existing regulatory bodies. Ms Pieta Shakes suggested that sympathy bias was a response by providers to people with disability in recognition of the challenges that many face:
As a clinician, I must comment on the suggestion that provider’s reports are misguided through 'sympathy bias'… [T]he statement is…interesting as it suggests to me that there is an awareness that people with a disability face constant systemic challenges and that their providers may be inclined to want to reduce the burden of those challenges. Disability is not something that warrants sympathy or pity. If the supports for disabled people were appropriate without fight, stigma was gone, and the wider society was accessible, the many things the NDIS was to work towards—there could be no claim to 'sympathy bias'.
4.34
Some pointed to the benefits of a relationship between allied health professionals and consumers—for example, Allied Health Professions Australia highlighted 'a contrasting view, based on extensive evidence' in the health system and 'extensive research showing the importance of relationships between consumers and health professionals for good health outcomes'. Mrs Michelle McGarrigle from the Corangamite Reference Group argued that:
I doubt anyone in this room would like their health and their future for the next year to five years to be decided by someone that they've just met on the street as opposed to someone that has worked with them.
4.35
One occupational therapist pointed to research indicating the potential for harmful outcomes if assessors were not known to individuals:
International studies have in fact provided evidence of the potential for harmful outcomes when disability assessment is conducted via a point-in-time standardised checklist by a mandated assessor. These harmful outcomes include increased rates of suicide, increased mental health impacts and increased reliance on prescribed medication (Barr, 2015).
4.36
Blind Citizens Australia argued that because some participants or potential participants, such as in rural, remote and hard to reach populations, would have been able to have an assessment done by someone they knew, due to thin markets:
…all participants should be afforded the same opportunity to have a truly robust assessment completed by a professional known to them, who will have greater insight into their functional capacity across time, including day-to-day fluctuations, or even, fluctuations in a more discrete period of a single day. This will ensure that sympathy bias does not lead to unfair advantage for some participants, at the integral expense of all participants having a level playing field.
4.37
The Hopkins Centre & Law Futures Centre suggested that 'often there is a tendency to overstate the benefits of standardisation to achieve consistency and social-related values such as equity and fairness'. It called for 'processes that derive comprehensive understanding of complex needs and complex contexts with valid assessment mechanisms and clear values to generate transparent decisions'.
4.38
Speech Pathology Australia emphasised that allied 'health professionals are specifically trained to use their clinical judgement, in conjunction with assessment tools, as assessment tools are not 100% reliable, even if they are standardised'. It further contended that tools are only one aspect of the assessment process, along with context, contributing factors, background history as well as the clinician's own knowledge and experience.
Response from the Government
4.39
Mr Martin Hoffman, the CEO of the NDIA, told the committee at the hearing in Geelong in May 2021 that the need for objective assessments is:
…not meant to be critical or negative about any given situation or any given professional, at all. It's just a recognition that, where a physician or a therapist or an allied health professional has an ongoing treating relationship, there is the potential for identification with the participant and wanting the best outcome for that. Where that involves a financial decision, the practice around the world for many decades has been to use a form of independent assessment, as recognised right up front in the work of the Productivity Commission.
4.40
In answers to a question on notice concerning sympathy bias, the NDIA provided the committee with an annotated bibliography of ten sources that it suggested emphasised the importance of assessments being carried out by independent assessors (which did not include the Australian study by Guscia et al discussed above). These sources are summarised in Table 4.1. The committee briefly considered several of these sources, their relevance and the extent to which their conclusions could be applied to the reforms proposed for the NDIS, depending on their context, size and relevance, as outlined below.
The literature on personalised budgets and individualised funding
4.41
The study the NDIA cited by Flemington et al, which was a mixed-methods review of 73 other studies of individualised funding in Western countries, involving data for a total of 14,000 people, focused on the impact of individualised funding for people with disability. The review was not concerned with sympathy bias or assessments and did not describe how assessments should be implemented. However, the authors did note that some people with disability may feel a sense of 'guilt' that they are asking for too much, taking funding away from someone else or burdening the system, and suggested that:
This burden and guilt, sometimes reported from recipients of individualised funding, could potentially be avoided if a universal, robust and equitable resource allocation system was in place, whereby every individual is assessed on the same basis, rather than subjective and informal assessment processes often described in the findings reported here.
4.42
The study by Carter Anand et al was a review of personalised budgets in government programs in the United Kingdom, the United States, the Netherlands, Canada and Australia, following the Irish Government's announcement of its intention to move to a personalised budget model for people with disabilities. This study was concerned with personalised budgets in different jurisdictions and as such, did not focus on sympathy bias or independent assessments. The study concluded that funding for personalised 'budgets should be based on an objective assessment of people's needs, with the option of individual self-assessment as part of the process'. It also made the following points:
People with fluctuating conditions have reported problems with self-assessment;
Difficulties may arise for people with disability in completing the assessment process, and those with intellectual disability need an advocate to help fill out forms and assess; and
The people being assessed may have concerns that giving the 'wrong' answer could impact on the level of their personal budget.
4.43
Of relevance for the personalised budget model that the Commonwealth Government proposed to implement in tandem with independent assessments (see Chapter 2 of this report for further discussion of the proposed personalised budgets), the study's authors acknowledged the following limitations of a personalised budget model, although it should be noted that this study was published eleven years ago and pre-dated the NDIS:
The evidence base for personal budgets is limited; thus, it is difficult to draw strong conclusions about the implementation, management and impact of personal budgets;
Consideration of a personalised budget model should be prefaced with an acknowledgement that a 'one model fits all' approach is unlikely to be adequate; and
Evidence suggests that personal budgets are not appropriate for everyone with disability.
Literature on independent medical evaluators in legal settings
4.44
The third article that the NDIA cited, by Schofferman, was an opinion piece with some review of the literature on how expert witnesses and independent medical evaluators should manage their objectivity and conflicts of interest in medical-legal work (e.g. trials). The article noted that conflicts of interest are 'inevitable', 'cannot be completely avoided' and 'are not inherently negative', but may 'have the potential to lead to unconscious bias'. It further argued that despite 'striving to be neutral, independent, and unbiased, there remains an unconscious pressure to report results in favor of the employer'. The author suggested that the 'greatest potential for bias exists among physicians who devote the majority of their practice to performing medical-legal evaluations and who perform most or all of these evaluations for one side' in legal cases.
4.45
The article by Waldman et al described the differences between treating physicians and physicians called to give expert evidence in legal settings in Canada. The authors suggested that:
…expecting an opinion from an objective or unbiased contracted physician each time documentation regarding medical conditions is required by a third-party is overly onerous and unnecessary. Indeed, in many cases, there is merit to including valuable information from the treating physician who has first-hand information about their patient's diagnosis and the treatment plan. An independent assessor almost universally will request information from the treating physician for this reason. Physicians are professionals and in general can be relied upon to provide an honest opinion…
4.46
The article focused on issues that may arise when a treating physician also takes on the role of an expert witness, and suggested that 'under infrequent but important circumstances the bias for the patient inherent in the doctor-patient relationship will impact on the treating physician's ability to assist a decision-maker in a meaningful way'. It argued that the duty of a treating physician is to their patient, while the duty of a medical 'expert is to provide unbiased information to the decision-maker to assist the decision-maker in adjudicating a case'. It also noted that 'there is clear case law that indicates that the duty of an expert is to the decision-maker'. The authors suggested the following processes to assist in managing bias:
Objective testing to supplement patient interviews and other subjective aspects of the assessment;
Consideration of all available information with time for a thorough review of that information;
A thorough explanation of the rationale for the opinion; and
A stated consideration of the impact on bias.
4.47
The article suggested that information provided by treating physicians 'can be very important in the decision-making process' and there 'is no reason to discount information provided by treating physicians'. It also noted the limitations of using an independent assessor, including limited patient contact and access to medical information.
Literature on long-term care and independent assessments in the Netherlands
4.48
The article the NDIA cited by Bakx et al examined whether independent assessments impacted the take-up of long-term care in the Netherlands (including among the elderly). The authors noted that 'only very few individuals take up an amount of care that is close to the maximum amount they are eligible for', indicating that 'assessment rules or the assessor's interpretation may be too generous'. The article suggested that the 'limited effect of needs assessment' on the maximum amount of care used by eligible individuals 'in the Netherlands also raised questions about the effectiveness of the independent assessment in other countries'. The authors further acknowledged that independent assessments in some instances 'may effectively block some people from using care altogether', and called for further research in this area. They concluded that variations in uptake between population groups were 'associated with the patient's personal and household characteristics and his or her region of residence'.
4.49
Despite this conclusion, a separate study published by one of the authors of the above article that was published the previous year found 'no evidence that eligibility assessment procedures systematically favor the elderly with higher income', but acknowledged 'evidence of horizontal inequity along other dimensions than income', such as regional disparities. The study did 'not find that higher income, wealthier, or higher educated elderly are able to better navigate the needs assessments procedure'. It also found that 'poorer elderly convert a larger share of their entitlements into actual use'.
4.50
The study further noted that 'assessors could make decisions more favorable to some categories of the population', citing other research that found that bureaucrats and case workers in other settings may make decisions that are more favourable for some cohorts of applicants. It acknowledged that there 'is little empirical evidence available on what types of procedures do favor equity in access', but concluded that in the Netherlands at least, 'entrusting the needs assessment to an independent agency…is effective in limiting socioeconomic inequity' in long term care access.
4.51
The final source that the NDIA cited in their annotated bibliography was also authored by two of the authors of the 2021 article by Bakx et al on long-term care in the Netherlands, and was published in 2016. This study examined in detail whether independent assessments may help to offset the risks of supply-side moral hazard (that is, increased demand for health care that may arise when individuals do not have to pay for it). It also discussed the reasons to delegate assessments to independent assessors in long-term care (including aged care and disability care) in the Netherlands. The authors noted that independent assessments and auditing of them are costly and time consuming. However, the main advantage of independent assessments is that they reduce 'the bias in the assessment resulting from provider preferences in recommending a certain treatment'. They found that only 'very few individuals' used 'care close to the full amount or beyond' what they were eligible for.
4.52
It should be noted that the authors of the most recent Dutch study argued that 'if independent needs assessment does not impose a binding constraint on [long-term care] use, it is highly unlikely that it reduces moral hazard'. They concluded that 'this would remove an important reason for organizing the independent needs assessment'. The Netherlands has moved away from a centralised independent needs-assessment model in recent years.
Table 4.1: Summary of NDIA annotated bibliography on academic literature related to independent assessments
|
|
|
|
|
|
|
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Fleming et al
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Mixed-methods systematic review
|
2019 (reviews studies from 1992–2006)
|
Europe, the USA, Canada, Australia
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73 other studies of individualised funding (involving data for a total of 14,000 people)
|
This study concerned the impacts of individualised funding models, and was not concerned with independent assessments
|
|
Carter Anand et al
|
Working paper
|
2012
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UK, USA, Canada, the Netherlands, Australia
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Not relevant
|
This study examined how personalised budgets have been implemented by governments in various jurisdictions and made only brief mention of independent assessments
|
|
Schofferman
|
Personal opinion incorporating some review of the literature
|
2007
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Not stated; context appears to be the US
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Not relevant
|
This article concerned independent medical evaluators in medical-legal work (e.g. legal trials), not assessments for disability programs, and acknowledged that it is part-opinion piece
|
|
Waldman et al
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Review article (theoretical and descriptive)
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2020
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Canada
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Not relevant
|
This article concerned the role of physicians in civil and criminal proceedings compared with treating physicians, and not assessments for the purposes of government programs
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|
American Academy of Psychiatry and the Law
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Practice guidelines by a professional body for practising forensic psychiatry
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Adopted 2005
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US
|
Not relevant
|
A practice guideline for physicians practising forensic psychiatry. However, it briefly mentioned disability evaluations. It stated that 'sensitivity to differences between clinical and legal obligations remains important', and suggested that 'referral to another evaluator is preferable' to a dual role
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|
Productivity Commission
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Government report
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2011
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Australia
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Not relevant
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See discussion earlier in this chapter
|
|
John Walsh AM
|
Submission to Joint Standing Committee on the NDIS
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2021
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Australia
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Not relevant
|
This submission set out arguments in favour of an independent assessments regime by the former Associate Commissioner for the 2011 Productivity Commission inquiry
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|
Bakx et al
|
Cross-sectional study drawing on a nationwide administrative dataset
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2021
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The Netherlands
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600 000 individuals eligible to receive home care in the Netherlands for 13 week periods in 2012
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This study focused on whether independent assessments constrained demand for (and influenced take-up of) long-term care in the Netherlands. The majority of individuals eligible for home care were elderly
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Tenand et al
|
Cross-sectional study combining administrative data and survey data
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2020
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The Netherlands
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154 709 individuals
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Study concerned the full non-institutionalised elderly population in the Netherlands, and examined a previous system of independent assessments which has since been superseded by new programs
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Douven et al
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Cross-sectional study using administrative dataset
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2016
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The Netherlands
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592 363 individuals eligible for home care
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Included both the elderly and people with disability
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Source: National Disability Insurance Agency, answers to questions on notice, 4 May 2021; Fleming, P., McGilloway, S., Hernon, M. et al., 'Individualised funding interventions to improve health and social care outcomes for people with a disability: A mixed-methods systematic review', Campbell Systematic Reviews, 2019: 3; Janet Carter Anand, Gavin Davidson, Geraldine Macdonald and Berni Kelly, 'The transition to personal budgets for people with disabilities: A review of practice in specified jurisdictions', Dublin: National Disability Authority, 2012; Jerome Schofferman, 'Opinions and testimony of expert witnesses and independent medical evaluators', Pain Medicine, vol. 8, no. 4, 2007; Jeffrey Waldman, Tyler Oswald, Eric Johnson and Sarah Brown, 'Independent assessors in contrast to treating physicians as expert witnesses in Canada: Comparing duties and responsibilities', The Journal of Forensic Psychiatry & Psychology, vol. 31, no. 4, 2020; Pieter Bakx, Rudy Douven and Frederik T. Schut, 'Does independent needs assessment limit use of publicly financed long-term care?', Health Policy, vol. 125, no. 1, 2021; Marianne Tenand, Pieter Bakx and Eddy van Doorslaer, 'Eligibility or use? Disentangling the sources of horizontal inequity in home care receipt in the Netherlands', Health Economics, vol. 29, 2020; Pieter Bakx, Rudy Douven and Frederik T. Schut, Does independent needs assessment limit supply-side moral hazard in long-term care, CPB Netherlands Bureau for Economic Policy Analysis, CPB Discussion Paper 237, 2016; Pieter Bakx, Rudy Douven and Frederik T. Schut, 'Does independent needs assessment limit use of publicly financed long-term care?', Health Policy, vol. 125, no. 1, 2021; Mr John Walsh AM, Submission 175 to inquiry into independent assessments, Joint Standing Committee on the NDIS; Productivity Commission, Disability Care and Support—Overview and Recommendations, No. 54, August 2011; American Academy of Psychiatry and the Law, 'Ethical guidelines for the practice of forensic psychiatry', May 2005, https://aapl.org/ethics.htm (accessed 22 July 2021).
Financial sustainability
4.53
The current and former Federal ministers for the NDIS consistently argued that independent assessments were essential to ensure the financial sustainability of the NDIS. The Commonwealth portion of funding for the NDIS is taken from the Consolidated Revenue Fund. This cost is partially offset by payments to the Commonwealth from the DisabilityCare Australia Fund (DCAF), which is funded by a permanent increase to the Medicare Levy from 1.5 per cent to 2.0 per cent, which took effect from 1 July 2014. Estimates from the Department of Finance indicate that the Commonwealth will receive $4 billion per annum from the DCAF from 2020–21 to 2024–25, while estimated total Commonwealth outlays on the NDIS over the same period exceed $74 billion.
4.54
One of the general principles of the NDIS Act is that the Ministerial Council, the Minister, the Board, the CEO and any other person or body performing functions and exercising powers under the Act must have regard to 'the need to ensure the financial sustainability of the National Disability Insurance Scheme'. The NDIA is required under legislation 'to manage, and to advise and report on, the financial sustainability of the National Disability Insurance Scheme including by…identifying and managing risks and issues relevant to the financial sustainability' of the NDIS.
4.55
Under the Act, the NDIA is required to include details about the financial sustainability of the NDIS in its Corporate Plans. The previous Corporate Plan available to the committee at the time of drafting this report (2020–2024) contained the following specific goals and examples that the NDIA stated would help to ensure 'Scheme costs remain financially sustainable’:
Utilise independent assessments and improve decision-making tools to drive the application of equitable access and consistent reasonable and necessary funding decisions;
Address cost escalations that are significantly higher than inflation;
Collaborate with state and territory governments to ensure links to broader mainstream and community systems align; and
Ensure the Agency operates within the scheme’s insurance principles (e.g. invest early, with a focus on lifetime cost).
4.56
In its submission, the NDIA acknowledged that public discussion about the introduction of independent assessments had featured 'regular reference to the sustainability of the NDIS'. In its supplementary submission, it stated that independent assessments will 'form part of how the NDIA will manage the scheme within the parameters of the funding made available by all governments', and outlined further detail about the financial sustainability of the NDIS:
…[I]f recent rates of growth in average payments and new entrants are extrapolated, without mitigating actions, total overall Scheme costs could potentially be in excess of $40 billion within three years…
Funding for the NDIS is shared between the Commonwealth and state and territory governments, with Commonwealth funding uncapped and the states capped with a 4% annual increase. On current projections, the Commonwealth's contribution will reach more than 61% by 2024–25.
Despite the recent increase in funding, the current trajectory of Scheme costs poses real risks to its long-term sustainability, with both the participant population and average participant budgets and payments increasing well above original projections.
4.57
Multiple media sources, whether supportive of independent assessments or not, acknowledged during the course of the inquiry that the financial sustainability of the NDIS is a major concern—with one outlet, for example, calling on this committee to examine this issue in particular.
4.58
In 2017, the Productivity Commission reviewed NDIS costs, including 'the sustainability of scheme costs…and how to manage any potential cost overruns'. The Commission stated that it 'examined costs in light of the benefits and impacts of the scheme on the lives of people with disability, and Australians more generally, using a wellbeing framework' and highlighted the importance of considering costs to the community in the context of Scheme outcomes.
4.59
The Productivity Commission noted 'an extraordinary level of commitment to the success and sustainability of the NDIS' shared by people with disability and their families, governments, the sector and advocates. It argued that 'the ultimate cap—and test of financial sustainability—is taxpayers' continuing willingness' to pay for the NDIS. It further contended that if 'the financial sustainability of the scheme is given priority over the other objectives of market development and participant outcomes, then the scheme’s objectives will not be achieved'.
4.60
The Productivity Commission noted that the 'NDIA does not have a reserve to manage fluctuations in expenditure'. It referenced the proposed NDIS Savings Fund, which was to receive redirected savings, contributions from NDIS underspends and other sources of funding. The Productivity Commission argued that access to reserves 'allows insurance companies to make upfront investments aimed at reducing scheme costs over the longer term'. It recommended that governments commit 'to providing a pool of reserves for the National Disability Insurance Agency' to help ensure the financial sustainability of the scheme.
4.61
In August 2019, state and territory treasurers wrote to the Commonwealth Treasurer, the Hon Josh Frydenberg MP, to express their concern about the transparency and financial sustainability of the NDIS. The letter noted that state and territory bilateral agreements required the establishment of an NDIS Reserve Fund in 2019–20, and raised the following concerns:
The Commonwealth's contribution to the NDIS 'lacks transparency on how it is calculated and adjusted for actual costs over time';
'The Commonwealth may seek to reduce its commitment to the NDIS and to offset its future contributions with unspent contributions'; and
There is a 'risk that the Reserve Fund may not be established as intended from both Commonwealth and State and Territory contributions (but instead, mainly consist of State and Territory contributions'.
4.62
The letter called on the Commonwealth to make the following commitments:
A clear and consistent calculation methodology for Commonwealth NDIS contributions;
Greater transparency of future Budget estimates for NDIS payments, including of updated estimates and key NDIS funding parameters (which were under embargo);
A reconciliation of variations to NDIS payment estimates in 2018—19;
Additional information in monthly NDIS invoices to enable states and territories to conduct their own financial reconciliation to better understand fluctuations in scheme costs; and
A quarterly report on the scheme's financial sustainability to the former Disability Reform Council (now Disability Reform Ministers' Meetings) with actuarial forecasts and information on provisions to the NDIA, market sector health and investment strategies, with the full annual financial sustainability report from the Scheme Actuary to be shared as a starting point.
4.63
In answers to questions, the Minister and the NDIA informed the committee on 2 August 2021 that the Government had not established an NDIS Reserve Fund because it has been:
…referred to the Council of Federal Financial Relations (CFFR) as part of the broader review of existing funding arrangements between the Commonwealth and the states.
At the Disability Ministers Meeting of 24 July 2020, state and territory ministers agreed to formally submit advice on the design of the Reserve Fund to CFFR. CFFR will further consider the implementation of the Reserve Fund once states have submitted advice on the design of the Reserve Fund to CFFR, or indicated they will not be doing so.
In the meantime, current arrangements continue whereby unspent NDIS contributions from the Commonwealth and the states remain with the National Disability Insurance Agency.
Concerns raised in evidence
4.64
Some submitters argued that the main reason for introducing independent assessments was 'cost cutting' to achieve financial sustainability. Many questioned whether independent assessments would be the best way to achieve financial sustainability while taking into account the other goals of the scheme.
4.65
Others expressed scepticism about the NDIA's use of data to argue that there are issues with scheme sustainability. For example, Professor Bruce Bonyhady suggested that in the absence of the full financial sustainability reports from the NDIS actuary, which would outline the assumptions underpinning cost drivers, it is 'quite possible that the current concerns about scheme costs might be completely misplaced'. The Victorian Council of Social Service argued that the NDIS 'has not been utilising the full amount of its budgeted annual expenditure inclusive of participants plans and there has in fact been a significant under expenditure'.
4.66
Some submitters flagged concerns that independent assessments would impose additional costs, not just to the NDIA but to other areas as well. Ms Pieta Shakes argued that the introduction of independent assessments would require 'additional financial resources', not only through funding the organisations contracted to provide independent assessments, but also Freedom of Information request and appeals, along with additional costs for services and supports to address increased mental health needs arising from independent assessments.
4.67
At the Canberra hearing on 20 May 2021, the ACT Minister for Disabilities, Emma Davidson MLA, expressed concerns about the actuarial assumptions underpinning the financial management of the NDIS:
As a key shareholder in the scheme, I've not seen detailed financial statements from the Commonwealth, and I have not had the opportunity to get a detailed understanding of the scheme costs…
I keep hearing about the costs of the scheme and that if we could only look at the detail we'd understand why the government is doing what they're doing, but, frankly, I haven't actually seen that detail, so it's pretty hard for me to speak to.
4.68
The Western Australian Government in its submission called for 'a balanced approach to financial sustainability that supports the best possible participant experience and outcomes, and does not unnecessarily restrict access'. It noted that 'NDIS actuarial estimates of financial sustainability are limited by virtue of a lack of long-term data required to fully inform an insurance model'. The WA Government suggested that further 'evaluation of causes other than evidence of functional capacity, driving the cost of NDIS supports, should be undertaken'. It proposed a focus on the long-term benefits of the NDIS, and argued that comprehensive data modelling and early investment 'to achieve the best long-term outcomes for people with disability and the community must remain integral to the insurance approach'.
4.69
The Victorian Council of Social Service called for 'a range of options and pathways to [be] identified, modelled, costed and tested'. It argued that without such an analysis, 'there cannot be confidence that the selected approach is the best approach'. Ms Fiona Sharkie from the Australian Autism Alliance questioned:
…how can we in our collective conscience decide to put 500 000 vulnerable people with disability through a system in which we don't know whether their needs are going to be met and whether the long-term sustainability of the NDIS will be achieved?
4.70
Young People in Nursing Homes National Alliance called for the Government to focus on broader issues, not just NDIS expenditure, to realise the full benefits of the Scheme:
The judgement by the Productivity Commission in its 2011 report that the NDIS would deliver a net economic benefit to Australia was predicated on the ability of the scheme to unlock efficiencies and reduce duplication in a range of existing government programs. Redesigning the NDIS to only deliver a reduction in its own expenditure and shift costs, while ignoring calls to work with State and Territory jurisdictions and the mainstream service systems they are responsible for to realise these macro-economic benefits, is short sighted and poor economic management. Under such circumstances, the scheme cannot deliver the economic benefit envisaged.
4.71
Ms Catherine McAlpine from Inclusion Australia suggested that one reason average plan budgets may be increasing is because the assumptions made about disability were incorrect, and 'that actually we're now creating a workforce that starts to understand disability. And maybe disability is more complex than people even realised'.
4.72
The Minister for the NDIS at the Canberra hearing on 18 May 2021 gave the committee further detail on the increased costs of the NDIS:
It's a scheme that has been based in its development on a number of assumptions, particularly in relation to numbers of participants and participant costs that have not all proven to be correct. To be quite frank, it is now a scheme that is on an unsustainable growth trajectory at 12 per cent per annum. I know that together we've got to find a sustainable growth trajectory so the scheme itself endures for many generations to come.
4.73
The Minister and the NDIA, in answers to questions on notice provided on
2 August 2021, indicated that increased costs for the NDIS compared with earlier projections, including projections by the Productivity Commission, had occurred because of:
Participants being allowed to remain in the scheme after reaching the age of 65;
The inclusion of specialised school transport and personal care in schools;
The number of children with development delay accessing the scheme;
The provision of some disability health-related supports;
The ability of people under 65 who are significantly and permanently disabled because of medical misadventure or general accidents to apply for the NDIS (earlier assumptions assumed that the National Injury Insurance Scheme would be fully implemented by the states);
Differences in the mix of participants, including higher numbers of children with autism and developmental delay;
Growth in the number of participants, which is expected to exceed the 2017 Productivity Commission estimates; and
Higher average expenditure per participant than anticipated.
4.74
In a speech on 22 July 2021, the Minister explained that the 'costs of the NDIS are now on a trajectory far greater than was foreseen when the Scheme was designed and legislated'. The reasons for this, she stated, were increased average payments per participant and a 'greater number of people entering the Scheme than was initially projected'. She argued that contrary to the assumptions in the 2017 Productivity Commission report, which indicated that per participant costs would increase by about 2.5 per cent per annum, the 'average payment per participant has increase by 12.5 per cent per year for each of the past three years'.
4.75
The Minister in the same speech further flagged concerns that the NDIS 'is in danger of moving away from the insurance principles on which it was founded', specifically 'around providing early intervention and taking a lifetime approach to supporting participants with serious and permanent disability'. She argued that 'under the insurance approach, we would expect to see costs stabilise or even reduce over the longer term per participant. This hasn't been the case'.
4.76
The Minister acknowledged a lack of provision for community-based support for people with disability who are not eligible for the NDIS. She contended that:
A functioning community based support system would contribute to the sustainability of the NDIS by ensuring people with disability have improved access to community and mainstream supports as their first point of call.
It would be a tragedy for all four and a half million Australians with disability if the NDIS became their only option.
The services specifically for people with disability, through the NDIS and otherwise, are not and should not be the only focus for improving the lives of people with disability.
4.77
In answers to questions on notice provided on 2 September 2021, the NDIA stated that officials would be providing state and territory disability ministers, through the Disability Reform Ministers Meetings, with a forward work plan and interim report on the cost drivers and underpinning assumptions of the Annual Financial Sustainability Report in October 2021. A more substantive report is due in December 2021. The Minister also stated on 3 September 2021 that a task force had been established 'to do a really deep dive into sustainability issues but particularly the cost drivers, the modelling and the assumptions'.
4.78
This chapter has examined the key reasons presented by the Government for introducing independent assessments, as well as comments and issues raised about these reasons in evidence, and the research basis that the Government provided to the committee. The committee's views and recommendations concerning the matters raised in this chapter are outlined in Chapter 9.