- The Washington Times - Monday, December 30, 2002

Privatization of state foster-care systems does not guarantee better efficiency or better results for children and can "cost more than the systems they replaced," according to a study by Children's Rights Inc., a legal advocacy group in New York.
Still, with 25 states pursuing privately run child-welfare programs, a review of the lessons learned should come in handy, said Madelyn Freundlich, a co-author of the study and analyst at Children's Rights, which describes itself as "advocates for abused and neglected children in failing foster care systems."
"Maybe they can do it right, right from the start," she said.
States have long been frustrated with their child-welfare systems because many seem to mismanage cases constantly, lose children or keep children in foster-care limbo for years, child-welfare analysts say. Privatization has emerged as an alternative because it has worked in health care, trash collection, prison operations and child-support enforcement.
However, "child welfare is very different from health care," said Urban Institute analyst Rob Geen.
In health care, companies know what equipment, services and drugs cost, so they can accurately estimate what it will cost to provide health care to a group of people.
That's not the case with child welfare, where there's limited data on specific costs, said Mr. Geen, who is a co-author of a new Urban Institute report that finds that overall spending on child welfare in 2000 reached $20 billion.
In addition, Mr. Geen said, in health care, the private company can have the final say on many health care decisions. This isn't the case in child welfare, where both the courts and public agencies not the private contractor have authority over families and children, he said.
Kansas encountered all these problems in 1996, when it switched all its family-preservation, foster care and adoption services to private contractors, according to the Children's Rights study, which will be published as a book in early 2003 by the Child Welfare League of America.
Within a few years, Kansas officials realized that the per-child costs of care had been grossly underestimated, and private contractors, who had capped the amount of money they could receive per child from the state, ran up multimillion-dollar debts and went into bankruptcy.
Kansas also jumped into privatization without the full involvement of the court system or foster parents. "This created many, many obstacles" for private agencies as they tried to move children into permanent situations, Ms. Freundlich said.
The state has since retooled its approach. Private contractors now get paid for each service they render for a child, as in the old system, and there are renewed efforts to work with courts and foster parents to improve outcomes for the children.
Florida, the only other state that is moving entirely to privatization, learned from Kansas' mistakes, Ms. Freundlich said.
Sarasota County, one of Florida's pilot privatization programs, "has a very strong community presence and extremely strong service network," she said. As a result, Sarasota has reduced the length of time children stay in foster care and improved the quality of their care, the study found.


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