State Innovations in Child Welfare Financing. Maintaining Accountability and Effectiveness


Are things getting better for children and families?

In child welfare, there appears to be an awareness that fiscal considerations should not be allowed to outweigh objectives of improved well-being of children and families; i.e., a more important goal than controlling costs is improving services for children and families. In fact, spending increased under several of the initiatives. Although data systems are rarely adequate for allowing state and local agencies to monitor results, establish performance standards, and link performance to financial incentives (see previous subsection), many states are taking steps toward establishing accountability for performance and results. However, not much is known definitively about the effects of the initiatives.

Some states have mechanisms in place to monitor their initiatives. Wisconsin, for example, tracks its initiative in Milwaukee County through extensive state monitoring and fiscal reviews that include analyses of permanency plans to ensure goals are being met. As previously noted, it will be important to maintain the focus on child and family well-being as fiscal reforms continue to try to improve efficiency and system performance.

Most of the initiatives track at least some measures covering established child welfare outcomes (i.e., safety, permanency, and well-being). The way those outcomes are measured depends on the specific initiative’s objectives and target population. For example, Georgia’s Project MATCH’s standards are that 40 percent of the children will improve their functioning and be discharged to a less restrictive placement setting, and a 20-percent reduction will occur in the frequency with which children harm others. A few states have established systems for linking financial rewards and penalties to outcomes. In New York, for example, the Safe and Timely Adoptions and Reunifications (STAR) program provides flexible dollars that agencies can allocate to a broad array of services to achieve timely permanency for children in placement. Agencies can obtain flexible dollars if they are able to show improvements in the length of stay for children in their care; improvement is defined as an increased discharge rate into permanent homes without a corresponding increase in re-entries and transfers to other agencies.

Although positive outcome changes have been documented in several of the states with fiscal reform initiatives, it usually is unknown whether the changes can be attributed to the fiscal reforms because the initiatives have not been rigorously evaluated. Illinois experienced a dramatic reduction in caseload, from over 51,000 to less than 30,000 in 3 years, after implementing the Foster Care Performance Contracting initiative. Milwaukee County, Wisconsin, has begun to see shorter placements for new families and some cost savings. However, these trends have not yet been documented or analyzed by an evaluation, and isolating the impact of each initiative is difficult, especially in places where multiple initiatives are operating.

Where initiatives have been evaluated, findings are mixed regarding outcomes. These initiatives include:

  • Arizona’s Family Builders Program, where an evaluation showed that the initiative did not increase children’s safety in their homes overall, although families who accepted services experienced a slight but statistically significant decrease in the risk for child abuse and neglect (Arizona Office of the Auditor General, 2000);
  • Colorado’s Boulder County initiative, where evaluation findings show that managed care has not yet had a discernable effect on outcomes for children and families (Mercer, 2000);
  • Florida’s Community-Based Care initiative, where early evaluation findings show that initiative counties did at least as well as the comparison counties on the outcome indicators and they spent fewer dollars on direct child welfare services (Paulson et al., 2002); and
  • Kansas’s privatization initiative, where the evaluation has found that most of the state’s performance standards have been achieved by the contractors, with the notable exceptions of (1) rates of re-entry into care within 12 months of reunification, and (2) permanent placement within 6 months of referral, where performance has been consistently below standards (James Bell Associates, 2001).

Several other initiatives have evaluations currently under way, and more will be known about the effects of fiscal reforms when those evaluations are concluded. Fully ensuring accountability for outcomes and attributing outcomes to fiscal reforms requires rigorous evaluation. However, performance assessment (carefully defining and consistently tracking specific outcomes and performance indicators) or performance contracting (tying performance on outcomes to financial rewards and penalties) can serve as an interim step on the way to evaluation or as a way to monitor overall trends in outcomes. Fundamentally, it is essential to stress that fiscal considerations, and attention to proximate system performance indicators, not be allowed to overshadow objectives of improved well-being of children and families. Quality-control mechanisms that ensure continual attention to those objectives must be enforced.

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