Privatization in Practice: Case Studies of Contracting for TANF Case Management. Public and Private Agencies Must Find Effective Ways to Coordinate Services


Even when TANF case management is privatized, public agencies always play a role in providing services to welfare recipients  including conducting case management not related to employment and overseeing TANF case processing functions, such as eligibility determination. In sites where the entire TANF program is privatized, government agencies still determine food stamp and Medicaid eligibility.

Coordinating the services provided by the public and private agencies can be challenging. Typical problems that arise include: inefficiencies in service provision when the performance of the one agency depends on the work of another, lack of prompt sharing of information about clients or changes in policy, losing clients as they move from one agency to another, and poor working relations between public and private agency staff. Colocation of staff alleviates some of these potential problems, but may exacerbate tensions that arise because of differences in pay, rules, or professional cultures. Coordination between agencies can be improved by cross-training staff, holding regular staff meetings, and ensuring shared access to data systems.

These lessons offer important guidance to public agencies facing the challenges of privatization. For those agencies that have already privatized TANF services, and for those considering doing so, the experiences described and lessons gathered in this report highlight potential pitfalls of privatization and suggest strategies for contracting out services successfully. However, many significant questions remain for future research to address. These include:

  • Do TANF recipients receive more effective services from private organizations than from public agencies?
  • Do some types of private organizations provide better services than others?
  • Does privatization save taxpayers money, given the new responsibilities it places on public agencies?

Answers to these questions will allow public agencies to make informed decisions about the future direction of welfare privatization.

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