LEADING audit, tax and advisory firm BDO is urging disability care providers to act now or risk losing market share once the National Disability Insurance Scheme (NDIS) is fully implemented on 1 July 2016.
BDO’s National Leader for Consulting Karina Collins said she was worried many organisations were simply underprepared for the impending changes, particularly given the launch date of the NDIS was just one year away.
The NDIS will shift purchasing power in a government-based system and put the money and decision making capability in the hands of the consumer to choose their provider.
The new scheme creates a market economy in which NFPs will need to compete with each other and with private enterprises, such as BUPA and Serco, to secure sufficient market share and maintain financial sustainability.
Ms Collins said NFP disability providers need to closely consider their operations now, and stressed the importance of a well-defined transformational strategy to prepare for the NDIS roll out next year.
“Given the complexity of the NDIS transition and drastic impact the change will have on the sector, providers need to account for all market changes and interdependencies,” Ms Collins said.
“For example, if they’re exiting one market post-NDIS, what flow-on effects will this have on other markets? How much revenue will be lost in comparison to what new revenue will be created?
“They’ll need to run sensitivity analysis and modelling across all aspects of their business like financing, resourcing and personnel.”
Ms Collins is worried that with such drastic changes on the way, organisations — particularly smaller ones who have never had to consider this side of their business — are already behind the eight-ball.
The changes will significantly alter the way many not-for-profits carry out disability services and will impact all facets of their organisation from financial performance, strategy and funding levels to IT systems, marketing, employee resourcing and communications and client service.
“This means those organisations whose operations don’t adapt to the new system simply won’t be able to compete in the market,” she said.
“Because of the competitive landscape for specific disability services, as well as the finalisation of some grant and block funded programs that charities relied heavily on, some may find themselves facing new cash flow challenges.
“They'll need to get up to speed with invoicing and reporting requirements, creating a possible strain on staff members.
“I think overtime we’ll see more formal partnerships and increased M&A activity across the sector.”