State Innovations in Child Welfare Financing. Objectives


The initiatives were motivated by a large range of factors. Some were the result of court and state mandates to change practice, improve outcomes, and/or spend less money. Others addressed large and growing permanency backlogs that persisted despite intensive efforts and in the face of ASFA requirements. Concerns about families in crisis and children who languished in foster care or overly restrictive placements for extended periods underlaid many initiatives. In response to these concerns, the initiatives were implemented to achieve two types of objectives: (1) better outcomes for children and families and (2) system goals such as service flexibility and spending the dollars more effectively—both of which often involved obtaining more or enhanced services for the same amount of money.

Improving outcomes for children and families usually entailed redirecting resources from maintaining children in care to achieving permanency outcomes--preventing placement, reunifying children with their families more quickly, shortening length of stay in placement, reducing recidivism. The initiatives in Illinois and New York City have this type of objective, and both focus on their entire foster care caseloads (excluding children in residential treatment centers and specialized foster care). These initiatives provide fiscal incentives or rewards to agencies that meet standards or show improvements in permanency outcomes for children in care. Arizona uses a different means to improve outcomes by preventing placement; its fiscal reform initiative provides services to potential- and low-risk families only. The objective of Kansas’s initiative, which involves its entire child welfare caseload, is to use performance-based contracts to enhance child safety and well-being.

Massachusetts Emphasizes Networking and Informal Supports

Lead agencies in Massachusetts’ Family-Based Services Initiative develop local networks to provide a broad range of formal and informal social services for families at risk of having children placed in out-of-home care. They also coordinate with educational, housing, and cultural resources that serve families. A key factor is a flexible service budget that is able to respond to changing client needs without burdensome administrative contract amendments. The initiative also emphasizes informal family and neighborhood supports as a primary component of each family’s service plan. Their rule-of-thumb is that 75 percent of treatment should come from family, faith, and friends, and 25 percent should come from funded services.

One type of system goal involved gaining the flexibility to implement interagency or public/private partnerships and provide a broad array of services. These initiatives emphasized collaborations and community-based approaches as well as maximizing the use of other resources and enhancing federal reimbursements. For example, the initiative in Boulder County, Colorado, is an interagency collaboration established to provide the flexibility to “serve kids as Boulder County kids, not as DSS kids or juvenile corrections kids.” The initiative in Massachusetts provides a flexible collaborative response to family needs by customizing services based on community needs and resources. Minnesota’s PACT-4 collaborative pools funds from county agencies, school districts, and private partners in four counties to provide integrated, community-based services. Missouri’s initiative integrates funding from various state child-serving agencies to support comprehensive, coordinated services for children likely to be served by multiple state agencies. Often, the objective was cost neutrality, spending the dollars more effectively and providing flexibility to enhance outcomes for children and families.

Achieving system goals such as spending dollars more effectively usually involved implementing programs to prevent high-cost placements and ensure placement in the least intensive and least restrictive setting possible and appropriate. Developing local provider networks and enhancing community services were usually components of these initiatives, which generally targeted children requiring a level of care higher than regular foster care. For example, Tennessee’s initiative focuses on children who need a level of service higher than regular foster care; it provides fiscal incentives to agencies to provide services in the least restrictive settings and thus achieve savings for the state by avoiding high-cost therapeutic placements. Alameda County, California’s Project Destiny focuses on severely emotionally disturbed (SED) children. It provides wraparound services to shorten length of stay in expensive residential treatment. Money saved by preventing or shortening high-cost placements generally was not used to reduce child welfare spending; instead, it was used to enhance services, serve more children, or improve the system's capacity in another way.

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