Many people familiar with NCCPR know that I used to be a reporter, and it was my reporting on child welfare that led me first to write a book on the topic (Wounded Innocents, (Prometheus Books: 1990, 1995) and then into advocacy. And some journalists know that I covered my first child welfare story as a journalism student in 1976.
What I have not had occasion to mention before is one of the things that got me so interested in the topic: A May, 1975 five-part series in the New York Daily News, the first installment of which ran under the headline “Big Money, Little Victims.”
The series was full of genuinely shocking revelations about New York City children trapped in foster care and the sometimes-appalling conditions in which they lived. But that wasn’t new. What set this series apart was how reporters William Heffernan and Stewart Ain connected the dots, and traced the problems back to financial incentives - specifically the fact that private agencies which, then as now, handle almost all foster care in New York City, were paid for every day they kept a child in their “care.” Send the child home, or get the child adopted, and the money stopped.
Among the findings:
● “…[M]any private [child welfare] agencies regularly deny thousands of children the chance of finding permanent homes so that they can continue to collect millions of dollars each year in city child support payments.”
●“…[C]hildren … have become the lifeblood of these private agencies, which thrive on the millions of dollars the city pumps into them each year. These agencies systematically keep the children in their jurisdiction so that a constant level of government funding is maintained.”
The series documented how children were held in foster care needlessly, with no help for birth families and no moves to get them adopted. It documented the enormous power of the private agencies with their blue-chip boards of directors filled with prominent members of the city’s business, civic and religious elite, and how they effectively ran child welfare in New York with almost unlimited power and no accountability – a perfect example of what the late Jack Newfield called “the permanent government.”
The series documented the role of financial incentives in telling detail, complete with at least one “smoking memo” in which an agency acknowledged that it preferred collecting per diems day after day to the one-time flat fee which existed at the time for getting a child adopted.
I still think this series is the second thing anyone interested in learning about child welfare in New York should read – right after they finish New York Times reporter Nina Bernstein’s magnificent book The Lost Children of Wilder (Pantheon: 2001).
From time to time since 1975, another revelation would surface, like the deposition in a 1990 lawsuit in which a social worker said that “I have been advised by a foster-care agency caseworker that her facility has imposed a three-month moratorium on discharges, because it was not receiving sufficient referrals to fill its beds.”
And from time to time, the city would try to change the per diem system, only to have pilot projects scrapped by the power of the private agencies and their onetime opponent-turned-ally, Marcia Lowry of Children’s Rights Inc.
But in all the time since “Big Money, Little Victims,” no newspaper I know of, in New York City or elsewhere, ever again zeroed in on the crucial issue of financial incentives.
There is nothing more important in child welfare reform than changing financial incentives. When I offered 35 recommendations for change in my book, number one was: Change the financial incentives. In fact, on any “top ten” list, changing financial incentives should be one through nine.
Now, at last, New York City is trying again. According to a story in Thursday’s New York Times, The Administration for Children’s Services plans to replace per diem reimbursement with a formula giving private agencies a flat amount based on what they’re getting now. The agencies would get far more flexibility concerning how to spend that money, so they could use more of it to help families get their children back, and to help foster families take care of children who otherwise would have to go into group homes and institutions – options that are both more expensive and far worse for children. The agencies also would estimate the cost savings from reducing the use of those group homes and institutions, and ACS would pass those savings on to the agencies to use to bolster services. ACS says that means that for most agencies, their budgets would increase 15 to 20 percent in the first year they join the program.
In addition, ACS will revamp the way private agencies are monitored, stationing specially-trained city workers at the agencies both to see how those agencies really perform and to help them do their jobs better.
That Times story alludes briefly to the fact that Illinois saw success through changing financial incentives. Here’s what happened: The foster care population statewide fell from more than 50,000 in 1997 to under 17,000 today. Independent court-appointed monitors (put in place because of a consent decree) found that as foster care plummeted, child safety improved.
It’s a bold, courageous move for any child welfare agency, but especially for an agency that has been under as much pressure as ACS. And it is another indication that for all its failings in how it responded to the death of Nixzmary Brown and other tragedies, failings I’ll discuss next week, ACS remains far better than most of its big-city counterparts. (The current ACS Commissioner, John Mattingly, formerly worked for the Annie E. Casey Foundation, which helps to fund NCCPR).
Indeed, it is easier to implement a change like this when the number of children taken from their parents is falling. In New York City it is rising. That ACS is moving ahead with this reform also makes me hope they feel the surge in removals has peaked.
But this change won’t come easily.
Hell hath no fury like an agency denied its per diems. And the scare tactics already have begun. Not that anyone is saying no to changing financial incentives. As usual, they’re trying to “yes, but…” it to death.
Marcia Lowry, who once was a leader in making systems more progressive and now leads efforts to hold them back, raises the specter that agencies won’t take more difficult children. But there is just as much incentive to try to avoid such cases under a per diem system – there’s even a name for it, “creaming,” as in skimming the cream. And ACS has made creaming more difficult than it used to be.
The head of the trade association for the city’s private agencies already is hinting darkly that under this system his agencies might feel pressured to return children home too soon.
How odd. In all the decades that they’ve operated under a per diem system these same agencies have insisted that money never, ever affects their decisions, and they never would even think of holding onto a child for too long. In fact, New York’s existing system for monitoring agencies penalizes them if too many children they return home have to come back into foster care. And, if anything, the new monitoring system is likely to reduce errors in all directions.
So here’s what to expect:
If they can’t stop the new system, the private agencies will lie low for a year or so, and then start a whispering campaign. They’ll blame every death of a child “known to the system” on how they supposedly were pressured to return that child home too soon.
They will base this smear campaign on the assumption that reporters and the public have very short memories. They’ll assume that everyone will forget that the number of such deaths hit a record of 45 in 2006. That’s up 50 percent over 2005 – and of course that was before any change in the per diem system.
Even such a large change over just one year can be a fluke. But I can’t see how one can have it both ways – either fatalities tell you something about overall system performance, or they don’t. (It’s not so much ACS that wants to have it both ways as it is a certain large, influential news organization).
The deaths “come at a time when” the city is taking away significantly more children than the previous year, which, one would think might “raise questions about” all those additional removals, but that’s another story — one I’ll get to next week.
Oh, and to William Heffernan, who now is a novelist, and Stewart Ain, now at The Jewish Week – congratulations. Looks like that series finally got results.