Market Capacity Framework: An Approach for Identifying Thin Markets in the NDIS

Abstract

Markets are fundamental to the success of the National Disability Insurance Scheme (NDIS). It is through diverse and robust disability markets that participants can exercise choice and control, thereby delivering on the goals of the scheme. Following the introduction of the NDIS we have seen unprecedented investment in growing and developing disability markets across the country. However, as the scheme is being rolled out, we are seeing markets emerge that do not have enough providers or sufficient capacity to meet demand and ensure competition takes place. This has led to debates about thin markets – a term used in various ways by different stakeholders to describe market deficiencies ranging from low numbers of providers, to immature markets, to market failure. Observation and foresight of the various market issues in the NDIS has drawn attention to the importance of effective market stewardship within the NDIS.

To date, questions of how and who will steward NDIS markets has been raised by a number of high profile reviews into the scheme (1,2). These reviews have consistently called for clarity over who is responsible for market stewardship (e.g. Commonwealth Government and/or the National Disability Insurance Agency), and what actions or activities should be deployed in response to thin market problems. However, there is little evidence, locally or internationally, to guide policymakers on how to effectively steward markets within a scheme such as the NDIS. This is concerning, because without robust markets the NDIS will fail to deliver on its goals of choice and control for all participants.

Keywords: NDIS, National Disability Insurance Scheme, Quasi Markets