Assessing the Context of Permanency and Reunification in the Foster Care System. 3.3 Systems Reform


Today there are a number of ideas for reforming the child welfare system that compete for attention. We appear to have a rich menu of possibilities but little agreement on what to try next. Some of the current ideas include:10

Divided Systems. Some jurisdictions are focusing on the front end of the system and experimenting with differential responses to reports of maltreatment. Two separate processing streams are available for reports, one investigative and law enforcement oriented and the other oriented toward assessment and support of the family. The first system is available in very serious circumstances when it appears the criminal justice system should be invoked. But it is thought that most cases of maltreatment can be handled in the second system which avoids determination of blame and instead focuses on how the family might be helped to attain better functioning. Cases in the second stream avoid the "investigation" that is usually the initial response to a report of maltreatment. A differential response system is being tried in Missouri and in a few other jurisdictions.

Alterations in Financial Structure and Performance Responsibility. This approach is based on the belief that problems in the functioning of the child welfare system are the result of suboptimal relationships among responsible organizations, particularly the relationships between the public child welfare agencies and the private agencies that provide much of the service under contract with the public agencies. Hence, the approach focuses on restructuring those contracts. One motivation for this restructuring is the belief that the financing of foster care (based on open-ended federal appropriations) encourages placement in the first place and discourages termination of placement once the child is in care. Hence, we should alter the incentive structure for agencies responsible for providing foster care to encourage quicker termination of that care. This can be accomplished through managed care contracts, modeled after managed care arrangements in medical care, in which flat-rate payments are made for service to a group of children or families for a period of time, instead of payments for particular services provided. An example of such contracts is the agreement by a private agency to serve a group of children in foster care for a fixed sum. The incentive structure is thus changed through a rearrangement of the financial risks the parties undertake. If a child is in foster care for a shorter period of time than expected, the agency "makes money" while if the child is in care a longer time, the agency loses money. The incentive is to reduce the time a child is in placement. An early example of a child welfare, managed care program is HomeRebuilders in New York City.11

A second motivation for altering organizational relationships is the observation that traditional contracts with agencies specify the services to be delivered, rather than the outcomes to be achieved. This leads to performance contracting, in which payment and contract renewal is based on the achievement of goals defined in terms of outcomes, such as terminating placements for a certain proportion of cases covered by the contract. Illinois, together with some other jurisdictions, employs performance contracting in some of its contracts.

However, as in medical managed care, when financial incentives drive the system of care, quality of service may suffer, so mechanisms for assuring quality are often added to managed care and performance contracting. Unfortunately, in arenas such as child welfare, the measurement of quality of service is often problematic, and so it is unclear whether quality assurance programs will succeed.

10.  Other system reform practices not discussed here include strategies to redesign and restructure the foster care system such as those initiatives ongoing in Oregon, North Carolina, and Ohio.

11.  See the HomeRebuilders Evaluation on the World Wide Web at