What are the insurance-based principles on which the NDIS is built?
The Scheme is based on a social insurance or investment approach to the provision of support and as such there are a number of insurance principles applied to the design and implementation of the NDIS. These principles outlined below are consistent with principles applied to the economic assessment of health care and pharmaceutical interventions:
Actuarial estimate of long-term costs
This estimate will be a living reflection of emerging experience of utilisation and cost, and will assist the Board and NDIA to ensure the NDIS is financially sustainable. The aggregate annual funding requirement will be estimated by the NDIS Actuary's analysis of reasonable and necessary support need, including a buffer for cash flow volatility and uncertainty. The aggregate funding requirement will comprise equitable resource allocation at an individual and sub-group level, and will be continually tested against emerging experience. This will require a comprehensive longitudinal database.
Long-term view of funding requirements
Unlike historic welfare schemes, the NDIS will focus on lifetime value for scheme participants, and will seek to maximise opportunities for independence, and social and economic participation, with the most cost-effective allocation of resources. This will align the objectives of the NDIS with those of participants and their families.
Investment in research, innovation and outcome analysis
The NDIA will support insurance-based governance through a long term approach with the objective of social and economic participation, and independence and self-management, for participants. One example of work being undertaken in this space includes the enhancement of reference packages. These provide guidance on the types of supports that are commonly provided and increase the flexibility for participants. The development and implementation of an Outcomes Framework which measures the extent to which participants are achieving their goals, is another example.
Investment in community participation and building social capital
To further support long term investment, the NDIA will invest at a systemic level in addition to providing for individual supports. The NDIS will support the development of community capability and social capital so as to provide an efficient, outcomes-focused operational framework, local area coordination and a support sector which provides a high quality service and respects participant social and economic participation and independence. This includes
(a) encouraging the use of mainstream services to increase social and economic participation of people with disability, and (b) building community capacity and social capital, which will be particularly important for people with disability who are not participants.
The ongoing implementation of the National Disability Strategy by governments will support this work.
[1} Source - NDIA 2015 – 2019 Corporate Plan p.7