DSC’s Annual NDIS Conference 2024

Sydney & Online, March 26-27

Psychosocial Disability

Recovery Coaching Price: Can It Work?

Team DSC

After years of feedback from people with a psychosocial disability and from the mental health sector, the NDIA responded in July 2020 by introducing the new support item Psychosocial Recovery Coach (Recovery Coach).  Recovery Coaching has now made its way into plans across Australia.

Unfortunately, the introduction of this promising support has been overshadowed by concerns around the price limit. The standard rate for Recovery Coaching per hour is $80.90, 29% less than the flat rate available to purchase Support Coordination at $104.14. 

The Agency recommends Recovery Coaches have a minimum of two years’ experience in mental health and/or a Cert IV in Mental Health [Peer Work] or other relevant training, while the same standards are not applied to a Support Coordinator, whether they are working with someone with a psychosocial disability or not.

At DSC, we’ve been providing training on Recovery Coaching to a diverse range of people from across Australia keen to get into the market or just to learn more about the support.  Without exception, each group asks, “Hang on, the Agency wants to pay less for a service that has more responsibility and requires more skills than a Support Coordinator?  It doesn’t make any sense.” And yes, prima facie, that is the case, but is there more to it than that?

Support Coordination market

Eighty-four percent of people with a psychosocial disability have Support Coordination allocated to their plans.  It is the highest allocation proportionally across disability types (a close second at 76% are people with Acquired Brain Injury) and it’s the second-largest dollar allocation at $167m per annum. So, we’re not talking pocket change here.  There are naturally very good reasons for this level of investment, not least that people with psychosocial disability often have complex and changing circumstances, increased levels of isolation due to their disability and multiple mainstream service systems in their lives.

In contrast with Support Coordination, people with a primary psychosocial disability can access Recovery Coaching should they request it.  Theoretically, that takes us to 100% of the market (as at 30 June, 37,795 people) rather than the current 84% (as at 30 June, 31,748).  It’s likely to be a bigger marketplace, especially as we’ve seen plans where people have Recovery Coaching with secondary psychosocial disability, which is really encouraging.  Based on the recommended Recovery Coach introductory allocation of 100 hours per person per year, that is $8,090pa compared to an average of $5,260pa for Support Coordination.  So, back-of-the-envelope calculation … that could be a $300m market, without any growth in participant numbers.

Something else to consider for providers is the allowance for higher rates for different times of the day or week.  Recovery Coaching can head up to $113.49 and even $178.68 on Saturdays and public holidays, respectively. So, whilst we know award wages climb at these times, the Supports Coordination line item doesn’t compensate providers for working outside the standard Monday-Friday 9-5 gig.  These options allow people to access supports at times that better suit them, and also give more scope for providers to deliver a more responsive service.

Margin

The potential for a bigger marketplace is great, but if it costs more to deliver than providers make or their margins are so thin that effort is better spent elsewhere?  That doesn’t help anyone.

The price certainly presents some challenges for established providers of psychosocial Support Coordination.  Their business model has been built on the $100.14 rate; people have been employed based on this hourly rate and overheads committed. 

Existing providers of psychosocial Support Coordination will need to make some decisions: Do they absorb the cost, do they employ new people on different terms to existing staff, do they blend their service to take on Support Coordination for other people with different circumstances and Recovery Coaching to soften the blow?  Given we have seen the introduction of Recovery Coaching in plans increase slowly and incrementally since July (with only 30% of people we surveyed having seen the support in a plan), this could be an option over time.

The Agency’s recommendation for formal training and professional development, alongside the need for good reflective practice in the Recovery Coaching service model, places further downward pressure on any margins, reducing the time available for billable hours and increasing labour costs.  Supervision and ongoing learning and development for Recovery Coaching are essential.  We wouldn’t recommend anyone deliver this service without this in place, and for some organisations this is enough for them to consider pulling out of Recovery Coaching based on the price of $80.90.

I’ve spoken with established organisations that see this as an opportunity to provide a better and more holistic service where experienced support workers can step up to being a Recovery Coach rather than their Support Coordinators ‘taking a step down or sideways’.  Of course, the challenge or decision to be made here is what level of investment is needed to bring support workers up to speed on all the NDIA administration and Support Coordination functions required as part of the role.

Compounding all this is the timing of Recovery Coaching price information.  Organisations’ budgets were developed and approved way before the FY21 Price Guide was released.  Often Support Coordination margins subsidise corporate overheads, some loss-making services, or provide for the provision of fully subsidised services for people where gaps exist or where people don’t have an NDIS plan.

Comparative service in Mental Health

Many of you would remember the days of Partners in Recovery (PIR), Personal Helpers and Mentors (PHaMs) and other government community mental health programs.  PIR, for example, allowed for around 100 hours per person per year at the ~$80.00 mark, and today state-based programs offering recovery-oriented services are priced at similar rates, albeit block-funded. 

Looking to Medicare, we can see that Mental Health nurses can bill up to $75 per session with a patient; however, this is for 30-minute sessions. But Mental Health nurses are highly trained and skilled individuals. When comparing this to a Recovery Coach, where the level of qualifications required are lower, $80.90 doesn’t seem too far off.

Other NDIS services in the capacity-building space have hourly rates of around $62.00 per hour; it’s only when you start looking into counsellors, nurses and allied health professionals that you see hourly rates over $100.00.

From the capacity-building section in the Price Guide, it’s really only the Supports Coordination item that appears to be the anomaly in terms of qualifications vs price vs funding allocation.

An emerging marketplace

Whilst existing providers of Supports Coordination battle with budgets and business models, something else is happening in the marketplace.  Many groups of people are expressing an interest in offering Recovery Coaching and are positive about the future and what they can offer to people, all at $80.90.  There appears to be groundswell of mental health professionals, paraprofessionals including experienced peer workers, and former Partners in Recovery staff who are keen to get back into the game and set up their own practice or become a sole trader.  With low overheads, and no need for expensive office space, experienced people forming small businesses are set to take advantage of this new and growing marketplace.  This poses another risk for existing providers – they could see their best staff set up on their own or in a small practice with the aim of working with the people they have built strong connections with over the years.   

Supply

One thing is certain, the addition of Recovery Coaching in the Price Guide has got individuals and sole traders excited for the future.  That said, we’re hearing at this initial stage that supply is very thin on the ground, and in some cases it’s almost impossible to source a Recovery Coach even in Sydney and other metro areas.  As with all support staff, it’s not just about finding a coach, it’s about finding the right coach for you. 

Now, due to all the Price Guide and portal scaffolding, it is possible for a Supports Coordinator to deliver Recovery Coaching and claim for hours delivered at $80.90.  It’s in the same registration category, but they will have to make a service booking for Recovery Coaching as it’s always a stated item in people’s plan.  The question is, will Supports Coordinators choose to continue to work with the same person at the lower rate?  In some ways it seems like a no-brainer to continue – you have an established relationship, the hard work of rapport-building is done and the total revenue available is greater.  In addition, there is a real risk that the Supports Coordination market will shrink over the next 12–18 months. 

Final thoughts

Whilst the transition will not be easy for existing providers of psychosocial Supports Coordination, it’s worth providers undertaking scenario planning on the cost of not delivering Recovery Coaching.   An established customer base is an asset and with new entrants joining the market all the time, it will not be long before the customers go elsewhere or competitors scale up. 

It looks like we have some initial supply issues for Recovery Coaching. With the new support item being a stated support, there is going to be little flexibility for people with complex and changing needs, and a potential for supports to drop off – particularly if the Supports Coordinator can’t or won’t work for the lower rate.  This period won’t last forever, though.

Whatever happens, Recovery Coaching is here to stay and on balance, it’s a welcome addition to the Scheme.  People with psychosocial disability and the sector itself have spent years lobbying the government to acknowledge the unique needs of the Scheme’s third-largest cohort of participants. This is only the beginning of a suite of reforms and work happening behind the scenes to see good psychosocial practice and thinking further integrated into the NDIS world.