State Innovations in Child Welfare Financing. Decisionmaking


In medical managed care models, there is the assumption that, for most ailments, a correct method exists for determining the most effective treatment. This has proven to be a hard assumption to justify. In fact, Eddy (1994) reports that “in general, observers looking at the same thing will disagree with each other or even with themselves from 10 percent to 50 percent of the time.” The assumption is even more unlikely to translate into the field of child welfare because of the difficulties in problem definition and a lack of research on best practice and the correctness of decisions. There is evidence of considerable disagreement among experts in the child welfare field as to the proper decision in particular cases (Schuerman, Rossi, and Budde, 1999).

Another challenge to the assumptions that underlie managed care is that social workers and agencies are not the final decisionmakers. For children in state custody, judges have the ultimate decisionmaking authority. They may order additional services, refuse a recommendation to return a child home, or delay the termination of parental rights when the agency is trying to move the child toward adoption. Hence, social service agencies that contract under managed care have limited control over the amount of services that will be provided. Judges are less subject to fiscal incentive structures that are designed to implement policy intent. This gap between the risk that agencies assume and the control they have over decisions is a problem that is likely to plague child welfare managed care.

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