Privatization of Foster Care in Kansas: A Cautionary Tale

Abstract

Privatization, or the contracting of government services to the private sector, has existed in child welfare in limited form for decades. Purchase of services contracting has been used to purchase a wide range of child welfare services from the private nonprofit sector, including parenting classes and group home care (Smith, 1989). But the wholesale statewide privatization of child welfare services, using a managed care approach, is a controversial new development. Managed care is revolutionizing health care and mental health systems (Jackson, 1995), but its application to child welfare has been limited to date. Potential advantages of managed care in child welfare include fiscal incentives that support permanency goals and discourage long-term foster care, while potential disadvantages include the lack of control over access, conditions, and interventions that are characteristic of other managed care systems (Feild, 1996). In November 1997 the state of Kansas sponsored an educational workshop on its first-of-a-kind efforts to privatize family preservation, foster care, and adoptions programs, which was attended by more than 200 people from 30 different states (Kansas Action for Children, Inc., 1998). The Kansas Department of Social and Rehabilitation Services (SRS) began the process of privatizing its foster care system in late 1996. Private contracts were awarded to three separate not-for-profit providers to cover five regions of the state. The capitated, or case, rates ranged from $12,860 to $15,504. For this fixed amount the contractor was expected to provide all traditional foster care services, including foster and group home care, reintegration services, and mental health treatment, to all nonjuvenile offenders in state custody. Contractors also were responsible for providing services 12 months after physical reintegration, with no additional state dollars provided if the child re-entered care during that time. The foster care contracts included standards for performance regarding outcomes, including children experiencing a minimum number of placements and children maintaining family, community, and cultural ties (Kansas Department of Social and Rehabilitation Services, 1996). On March 4, 1997, the contractors assumed responsibility for newly opened cases. The study discussed in this article was undertaken at the request of a local juvenile court judge, in her desire to obtain quantitative, objective data about the well-being of Douglas County foster children during the first few months of the state's initiative. In particular, the judge was concerned that foster children under privatization could be spending less time in their first placement, spending more time outside of Douglas County, and experiencing more moves than children before privatization. The study was an unfunded class project supervised by the first author. The central study questions were, How are Douglas County foster children faring under privatization? and How does their situation compare with foster children before privatization? Study Sample Data were compared for two groups of children: (1) children newly placed in out-of-home placement during the first six months of privatization (between March 4, 1997, and August 31, 1997) and (2) children newly placed in out-of-home placement during the same time period before privatization (between March 4, 1996, and August 31, 1996). Thus, it should be emphasized that this report does not concern all of the children from Douglas County who were in foster care, only those who were newly placed during the first six months of the contract. The samples excluded children who came into state custody but did not experience an out-of-home placement and included children who had previously been in foster care and were re-entering the system. Outcome Indicators Choice of indicators was limited to data about outcomes that were available in court files. …