The Issue of Equity in the Market

Markets are all well and good, but with the NDIS, we have to be careful that we don’t sacrifice equity in the name of efficiency, writes Associate Professor Gemma Carey.

Market approaches to social service delivery have been used in a range of areas in Australia, including employment and vocational education and training. Where once, these services were all provided by government, a slew of service providers from different sectors now provide them.

Despite less than desirable results, governments are not slowing down the roll out of markets within social service settings. The latest and, arguably, most extensive use of markets is the National Disability Insurance Scheme (NDIS).

Launched in 2013, the NDIS will see the establishment of Australia-wide disability markets, aimed at giving people with permanent and lifelong disabilities greater choice and control over services and supports using a personalised funding model.

What’s particularly challenging about the use of markets in this space is the issue of equity. In the private sector, the main concern of markets is efficiency. For governments, however, there is a responsibility to also ensure equitable access and care. One of the dangers of using markets for the delivery of care services is the sacrificing of equity in the name of efficiency gains. This is particularly challenging in the context of the NDIS because of the broad range of needs experienced by participants, coupled with huge geographical spread of the population.

“One of the dangers of using markets for the delivery of care services is the sacrificing of equity in the name of efficiency gains.”

Scheme implementers have acknowledged that the creation of markets and sub-markets that can cater for this complexity will take time: “developing a strong, contestable market for disability supports is a long term project”. Arguably, given the geographic diversity (coupled with factors such as the complex needs of participants), without government intervention these markets may not develop at all, or at the very least are likely to develop in highly uneven ways.

Does personalisation of services work?

While the evidence regarding personalisation approaches to funding and care (such as the NDIS) is in its infancy, current research indicates that in some contexts personalisation can lead to greater satisfaction and continuity of care and a more effective use of public resources.

In the United Kingdom, where participants in personalisation schemes opt-in, the uptake has been quite low. Williams and Dickinson (2015) argue that this cannot be put down to a lack of interest, but rather reflects the capacity of individuals to engage in personalised care and of professionals and carers to support people to engage. Most importantly for the Australian context, Williams and Dickinson found some key differences in who is taking up support and likely benefiting from it.

In the UK, the highest rate of take up has been people with physical and sensory impairments, with people with mental health problems and neurological impairments the least likely to opt-in. Similar patterns can be seen in the Australian accident and injury compensation schemes, which the NDIS is based on. These schemes have higher take up by people with physical disabilities rather than neurological impairments such as acquired brain injury. This suggests that personalisation of care can widen inequities between people with different types of disabilities, as well risk entrenching existing inequities which, for example, stem from extrinsic factors such as geographical location.

Stewarding markets – the failsafe approach?

In recent months the Commonwealth government and Productivity Commission began to talk about government needing to play “a stewardship role” for the NDIS. This is particularly important for areas where thin markets may emerge. Thin markets refer to markets that have few or no providers to service a particular need, and can be driven by a wide range of factors. While stewardship to help address thin markets sounds good, what does it actually mean?

There is a great deal of ambiguity around the concept of stewardship. At the most basic level, market stewardship captures a range of roles through which governments can or should be active in public sector markets. To narrow this down, Gash (2014) suggested when it came to stewardship for markets:

• new providers must be able to enter the market and grow;
• providers must be competing actively, and in desirable ways;
• providers must be able to exit the market;
• those choosing services (whether service users or public officials choosing on their behalf) must be able and motivated to make informed choices; and
• (as in all modes of service delivery) levels of funding must be appropriate to achieve government objectives.

In order to successfully achieve this, governments must be able to:

• engage closely with users, provider organisations and others to understand needs, objectives and enablers of successful delivery;
• set the “rules of the game” and allow providers and users to respond to the incentives this creates;
• constantly monitor the ways in which the market is developing and how providers are responding to these rules, and the actions of other providers; and
• adjust the rules of the game in an attempt to steer the system (much of which is, by design, beyond their immediate control) to achieve their [government’s] high-level aims.

“Currently it is unclear how these groups will work together to ensure they have detailed knowledge of how the market is functioning and where thin markets or market gaps may be developing.”

At present, responsibilities for the NDIS sit across different levels of government and government agencies. This includes Commonwealth government, state governments, the National Disability Insurance Agency and the newly announced Quality and Safeguards Commission. Currently it is unclear how these groups will work together to ensure they have detailed knowledge of how the market is functioning and where thin markets or market gaps may be developing.

Without coherence around reporting and responsibilities for market stewardship, the NDIS risks creating and growing inequities. We have to ensure we are not sacrificing equity in the name of efficiency if the NDIS is going to deliver on the original vision of strengthening the human rights for people with a disability.

About the author: Associate Professor Gemma Carey is a research director at the Centre for Social Impact, UNSW Sydney.