“Cut the Headlights, Summers a Knife...”
Part 5: Systemic Failures in the NDIS
This is the final stanza in our 5 part series on the National Disability and Insurance Scheme.
If you're just catching up, I'd suggest beginning with our first article, Introducing Absolute Power within the NDIS.
Evidence check — 10 September 2026
This article was published in December 2024 and has not been rewritten. The dated notes below score it against the evidence now available — where later evidence supports the argument, where policy changed the ground underneath it, and where a claim does not hold up. Part 5 of five.
Physiotherapy Valuation in the NDIS Space
The NDIS, while transformational in its ambition, has inadvertently created systemic inefficiencies in the valuation of physiotherapy. At the heart of this issue are several key failures:
1. Undervaluation of Expertise
Physiotherapists—especially those operating at the top of their scope—have been grossly undervalued. The capped rates under the NDIS fail to reflect the skill, expertise, and time required to deliver high-quality care for complex participants.
2. Over-Servicing to Compensate
This undervaluation has driven a culture of over-servicing. Providers are incentivised to compensate for low rates by maximising billable hours, often at the expense of genuine care outcomes. The result is significant cost blowouts and a funding model that prioritises volume over value.
3. A Need for Specialisation
The current system operates as a volume-based market in a niche field that desperately requires specialisation. Participants with complex needs are often serviced by practitioners operating outside their scope, leading to suboptimal outcomes.
4. The Barbell Strategy as a Solution
A barbell approach, where practitioners work at the top of their scope while lower tier therapists handle routine tasks, offers a sustainable path forward. This model ensures that participants retain autonomy while the system operates more efficiently.
The Misalignment of Market Forces
Participants seeking quality care often equate the capped rate of $193.99/hour with high-value service. In reality, this rate is insufficient to sustain even a new graduate in a health field, let alone experienced specialists.
Evidence check — 10 September 2026
The number has moved, and the argument is still contested
The rate quoted above was correct in December 2024. It is now $183.99 an hour. The NDIA cut the physiotherapy price limit by $10 an hour in the 2024–25 Annual Pricing Review and consolidated the state-based differentials into a single national rate; the 2026–27 review left it unchanged.
The two sides do not agree on the facts, and the dispute is live. The Australian Physiotherapy Association, relying on an independent Nous Group review it commissioned, holds that $183.99 sits well below sustainable market rates — putting the 75th percentile market rate at $215 to $259 an hour and the 70th percentile private health insurance session fee at $236.50 an hour — and argues that benchmarking NDIS work against Medicare and private health data understates the complexity, travel and coordination the scheme requires. APA, NDIS pricing for physiotherapists.
The NDIA’s own monitoring reaches a different conclusion. It reports that to 31 December 2025 the price reduction did not disrupt participant access or accelerate provider exit: participant numbers held to pre-change trends across states and remoteness categories, average participants per provider stayed broadly stable, and provider numbers continued a gradual decline that predated the pricing change. Its benchmark also depends on a session-length assumption it revised between reviews, from 45 minutes down to 35, on which basis $183.99 sits “broadly within the plausible benchmark range”. NDIA Annual Pricing Review 2026–27.
Where that leaves the argument. The exit predicted in this article has not appeared in the NDIA’s physiotherapy data to the end of 2025, and we are not going to claim otherwise. Two things sit beside that. The NDIA reports physiotherapy provider numbers in gradual decline throughout the period, a decline it attributes to something other than the price change. And a provider count says nothing about which clinicians remain — the claim made here was about senior and titled practitioners leaving, and nobody publishes that. Meanwhile the pricing gap the APA documents has not been closed, and the NDIA’s own benchmark rests on an assumption that moved between reviews. This is an open question, and neither side has settled it.
This misalignment forces businesses to adopt unsustainable practices:
- Volume-Based Operations: Providers rely on high throughput, often at the expense of care quality.
- SEO-Driven Business Models: Many businesses optimise for online visibility rather than clinical excellence, offering little more than government-funded handouts under flashy brand names.
The lack of oversight compounds these issues, enabling a distorted market that fails both participants and taxpayers.
Recommendations for Reform
Rather than commissioning another 338-page think-tank report, the system needs actionable change. Drawing from the Working Together in the NDIS report, here’s what’s required:
1. Re-Evaluate Practitioner Valuation
Align funding with practitioner expertise and participant complexity. High-value practitioners should be adequately compensated for their specialised skills.
2. Adopt a Barbell Framework
Deploy expertise where it’s most impactful—specialists for planning and acute care, intermediaries for oversight, and allied health assistants for day-to-day implementation.
3. Enable Ethical Business Models
Support ethical SMEs that prioritise patient outcomes over profit margins. These businesses should be the cornerstone of the NDIS, not an afterthought.
4. Conduct a Comprehensive Review
A full-scale independent review of the system’s financial and clinical inefficiencies is overdue. A leader like Ken Henry could bring the necessary depth and independence to this process.
The Reckoning Ahead
The NDIS faces a critical inflection point. What was designed to improve access and choice has, in many ways, constrained both.
- Access: Capped rates have driven many quality practitioners out of the system, leaving participants with fewer options.
- Choice: Participants are often left with providers focused on volume rather than quality, undermining the scheme’s intent.
As we face a $40 billion program—nearly half of national hospital expenditure—the stakes couldn’t be higher. Ethical business owners have a unique opportunity to rise above these challenges, attracting top-tier therapists and positioning themselves for a sector-wide restructure.
Evidence check — 10 September 2026
The sustainability case, independently made
In June 2025 the Grattan Institute published Saving the NDIS, concluding that the scheme “has grown too big, too fast”: $42 billion in 2023–24, average growth of about 24% a year from 2020 to 2024, and a projected cost above $58 billion by 2028. Grattan’s judgment was that moderating growth to the National Cabinet target of 8% would not by itself make the scheme sustainable, and that the measures being relied on to hit it “risk hitting the target but missing the point”. Grattan Institute, Saving the NDIS, June 2025.
That is the same conclusion this article reaches, from a different direction and with the numbers attached. Where Grattan parts company with it is on what to do: Grattan’s answer is firmer boundaries, fairer plan budgets and a tier of foundational supports outside individual packages — a rebalancing of who the scheme is for, rather than a repricing of who delivers it. Both can be true, and neither has happened.
Meanwhile, unscrupulous providers are shifting to adjacent markets, where undoubtedly the rorting of participants in these schemes will continue. This exodus will also create further instability in both sectors, as oversupply in alternative markets (such as Home Care Packages) drives prices down and creates challenges for those genuinely engaged in the process.
Sustainability As The Foundation
The NDIS can no longer afford inefficiency and mismanagement. Reforming physiotherapy valuation and service delivery is not just a financial imperative—it’s a moral one. By adopting a barbell strategy, incentivising quality care, and supporting ethical providers, the NDIS can fulfill its promise to Australia’s most vulnerable.
The reckoning is here.
For the genuinely ethical business owners, it’s an amazing opportunity.
For the unscrupulous...
it's ooh, woah. It’s a Cruel Summer.
Why This Matters:
Despite numerous government reports and think tank publications exploring the NDIS, truly actionable solutions have remained elusive. Recent policy changes, such as the removal of Music and Art therapists, have inadvertently harmed participant wellbeing while failing to tackle the system's fundamental inefficiencies. Often, these decisions, although presented as evidence-based, tend to reflect political convenience rather than genuine reform. The strategy of targeting smaller providers to cut costs sidesteps the larger, structural issues at the core of the program.
Over the past decade, the NDIS has evolved into a $40 Billion+ initiative. Yet, it has become synonymous with inefficiency, unethical practices, and fraud. This state of vulnerability demands immediate attention. Meaningful reform is urgently required to protect participant outcomes and safeguard taxpayer investments.
At Culture of One, we hold accountability, transparency, and ethical leadership as paramount for governments, providers, and all stakeholders involved. This series provides a comprehensive exploration of the sector’s challenges and opportunities. It’s not a quick read, but it is a necessary one for anyone committed to understanding and improving the landscape of disability care in Australia.
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