Privatization in Practice: Case Studies of Contracting for TANF Case Management. Factors Affecting Which Case Management and Processing Functions are Privatized


In deciding which TANF case management and processing functions to privatize, at least two factors came into play in the study sites. The first was consideration of the relative strengths and abilities of the public and private agencies. Some study sites that chose to privatize only employment case management viewed the public agencies as having all the skills and expertise necessary to determine eligibility. However, the existing public agency staff was seen as not having the expertise or, equally important, the mindset to conduct the more intensive employment case management required by welfare reform.

Table II.2
Typical Caseloads of TANF Case Workers at Public and Private Agencies(a)
Site Caseloads for Case Workers at Public Agency Caseloads for Case Workers at Private Agencies
Delaware 180-225 50-150
Hennepin County 200-350 70-90(b)/25(c)
Lower Rio Grande Valley 200-300 40-90
San Diego County 140-160 80-125
a TANF case management is not shared between the public and private agencies in Palm Beach County or in Wisconsin.
b Tier I services for traditional TANF recipients
c Tier II services for long-term TANF recipients

The importance placed on service integration was the second factor in the decision about privatizing. Many TANF programs embraced the idea of one-stop shopping. However, because the law requires public employees to determine eligibility for food stamps and Medicaid, a fully integrated assistance system cannot be wholly privatized. Sites have reacted to this in different ways  some moved away from privatizing TANF eligibility in order to keep the eligibility functions integrated; others chose to privatize all TANF services, separating TANF eligibility determination from that for food stamps and Medicaid.

In Texas, efforts were made to privatize case management and processing across all programs and functions, including eligibility determination for TANF, food stamps, Medicaid, and child-care subsidies. However, after its application to the federal DHHS for the necessary waiver in 1997 was rejected, Texas has instead kept all eligibility determination functions housed within the state Department of Human Services, forgoing full privatization of the TANF program. State law requires that the workforce investment boards, including the one in Lower Rio Grande Valley, contract out operation of the one-stop centers where employment-focused case management is provided. Wisconsin also sought to privatize a fully integrated assistance system. After the Texas waiver application was denied, the state decided to forgo integration across assistance programs but pursue privatization of the full TANF program.

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