Ground-Breaking Study on Privatization of Child Welfare Services Shows Some Benefits but Rarely Grea

PRESS RELEASE

The Policy Department of Children's Rights, a non-profit advocacy organization, released today the first national study on the effects of privatization on child welfare services. Unlike other studies, which have taken a theoretical or "macro" look at the privatization of child welfare services, the two-year Children's Rights study, entitled Privatization of Child Welfare Services: Challenges and Successes, examines how privatization has played out in reality. Through a careful assessment of the strengths and weaknesses of six different privatization initiatives, the study reveals both benefits and negative consequences of privatization on children, families and the child welfare system itself. At a time when growing numbers of public agencies are entering into new types of arrangements with private, for-profit agencies to provide services to children and families, the study offers important policy and practice recommendations based on "lessons learned" which can serve as a blueprint for child welfare privatization initiatives in the future.

"Although lower costs and greater efficiency often provide the rationale for privatization initiatives, we were surprised to find that these results typically were not achieved in the jurisdictions we studied," said Madelyn Freundlich, co-author of the study and policy director for Children's Rights. "We hope that our findings will give public and private child welfare agencies a clear understanding of the lessons that other such agencies have learned through experience."

Using a case-study approach, the report focused on privatization initiatives in Kansas; Florida (emphasis on Sarasota County); Missouri; Hamilton County, Ohio; Wayne County (including Detroit area), Michigan; and Maine. The report identified a number of themes from which 17 recommendations were developed to help other communities appropriately plan, develop, implement, finance and evaluate privatization initiatives. Among the lessons learned were:

*Cost savings cannot be expected when child welfare services are privatized.
*Greater efficiency is rarely achieved through privatization of child welfare services.
*Success in privatization depends on setting a few, simple outcomes and performance targets.
*Strong, high-level leadership is key to ensuring privatization efforts are developed and sustained.

The state and county initiatives were chosen by Children's Rights, with the help of an independent advisory committee of experts from the public and private child welfare sectors who have experience in social service design and delivery and government contracting issues. They reflect diverse approaches to privatization in terms of the target population, structure and design, services and financing methodologies. With the advisory committee's oversight and assistance, Children's Rights based its analysis on interviews with key participants in privatization initiatives (who varied depending on the initiative, but typically included public and private agency representatives) and reviews of program descriptions, written reports, evaluations and other materials. The committee and the individuals who were interviewed reviewed each case study before it was finalized.

The lessons about privatization derived from the study indicate that privatization has yielded mixed outcomes thus far: certain aspects have proved effective while other features have led to extremely poor results. As an example, the study found that a number of initiatives attempted to use financial penalties to "punish" private agencies that failed to achieve outcomes without clearly defining the desired outcomes. By contrast, in Wayne County, Michigan, the public agency used financial incentives to reward the private agencies' achievement of clearly specified outcomes, with the result being a remarkable reduction in the time to achieve permanency for children in foster care.

The study made clear that given the needs of children and families served through the child welfare system, privatization raises complex issues that do not require consideration in other privatization efforts. "This is not about transportation or trash collection, but children and their families' lives," said Sarah Gerstenzang, co-author of the study and policy analyst at Children's Rights. "The public will always be held accountable for these services, no matter who is delivering them."

The study, made possible by a $100,000 grant from the Annie E. Casey Foundation, builds on Children's Rights' broad knowledge of the child welfare systems, gained through the several lawsuits it has brought in states and counties across the United States over the last 20 years. It considers the privatization efforts in three locations in which Children's Rights has been involved (Kansas; Kansas City, Missouri, and Florida), as well as efforts in child welfare systems where Children's Rights has played no role. Children's Rights' interest in studying privatization resulted in part from its opportunities to observe firsthand the effects of privatization. Copies of the final publication, to be published by the Child Welfare League of America (CWLA) Press, will likely be available by the end of 2002 and will be distributed nationwide. Children's Rights also plans to share its findings at major child welfare conferences.

"Privatization is a complex and often controversial topic," said Charlotte McCullough, an expert on child welfare privatization and a member of the advisory committee for the study. "The lessons learned through this study are presented in an objective, straight-forward manner that will stimulate critical thought among administrators and policymakers on both sides of the privatization debate."

[An executive summary of the study and fact sheet on the privatization of child welfare services can be obtained from Geoffrey Knox (212-229-0540) or Jennine Meyer (212-683-2210). To order a final copy of the report (to be released in early 2003), please contact CWLA at (202) 638-2952.]

Children's Rights works throughout the United States in partnership with national and local experts, advocates and government officials to document the needs of children in the care of child welfare systems. Children's Rights helps develop realistic solutions and, where necessary, uses the power of litigation to ensure that reform takes place.